New Approaches for Defensible Early Case Assessment and Data Culling

The most effective way to understand how to effectively conduct an ECA is to walk through a hypothetical case such as follows:

Alpha Corporation manufactures semiconductor devices, primarily flash memory and embedded controllers. It imports semiconductor chips from third parties located in Asia and assembles the final products in domestic plants located in the United States. One of Alpha's embedded chips is used in a popular hybrid car for electronic braking and stability control. Six months ago, the National Highway Traffic Safety Administration (NHTSA) informed the manufacturer that it was investigating allegations of accelerations in the braking system caused, in part, by the defective chip. Compounding that issue, more than 200 claims have been filed against Alpha, and a federal court judge in Detroit just approved the formation of a formal class action case. The initial meet-and-confer negotiations are scheduled to begin in 90 days.

The biggest questions in the scenario above for legal teams are two-fold:

1. How can Alpha meet the production deadlines for the NHTSA investigation, which typically involve extremely short timeframes, while protecting the intellectual property and privileged information that might be related to the class-action litigation?
2. How can Alpha control the costs of the e-discovery related to both the investigation and the class-action claim that has been found to involve more than 50 employees and an estimated three terabytes of ESI, which is stored in the U.S., on cloud-based back-up systems and in global offices in Asia?

Phase 1: The Quick Scan

Ideally, Alpha Corporation would have issued legal holds as soon as the first claims were filed by the individual parties to ensure all potentially relevant evidence was preserved for both the litigation and investigation. To do so effectively, the legal team would have initiated a “quick scan,” or early data analysis (EDA) to uncover who worked on the product's design, the significant date ranges involved, where the ESI was stored, the data volumes/types and search terms.

The workflow would include:

• Interviewing potential custodians. Issuing e-mail-based interviews that can be answered remotely by potential custodians to learn more about the issues and evidence involved. All responses would then be tracked in an automated e-discovery system;
• Locating potential data sources. Uncovering the potentially relevant evidence by mapping the company's IT infrastructure to the identified custodians to identify all potential data sources, accessibility issues and potential data privacy concerns (if located outside the U.S.);
• Assessing the data. Scanning and analyzing the potential data to determine relevance and scope. This can be done by testing sample search terms related to the matter to help the legal team gain a quick snapshot of the potential risks and liabilities that the pending actions represent, including data volumes, file types and date ranges; and
• Developing cost scenarios. Using the data garnered from the initial analysis to develop various cost scenarios for collection, processing and review to better understand the scope of the case.

The initial EDA would enable Alpha's legal team to accurately determine the case strengths and weaknesses in advance of the production request from NHTSA and initial meet-and-confer negotiations in the class action.

Phase II: The Deep Scan

Following the initial EDA, Alpha's legal team would then be able to conduct a more in-depth “deep scan” of the evidence to learn about the important aspects of issues involved in the case, including potentially relevant intellectual property, privilege and privacy concerns. It is imperative that legal teams become aware of these issues at the earliest point in litigation before significant collection and review costs have been incurred. This can be done with the following processes:

• Evidence and issue analysis. Running keyword and conceptual searches across the identified ESI will help the legal team to more accurately identify the issues, risks and details related to the litigation or investigation;
• Defensible culling and collection. Initiating a collection of the preserved evidence. Newer technologies are available that can collect ESI upon identification, maintaining chain of custody information, and simultaneously eliminate system files, duplicates and non-relevant files, as well as process the data for direct upload into an internal or third-party review platform;
• Evidence preservation. Storing the collected evidence in a central “vault” that maintains defensible preservation of the collected ESI and supports refresh collections as new evidence is identified; and
• Scenario reports and documentation. Running detailed reports and establishing documentation that supports the arguments, cost scenarios and arguments for negotiating favorable scope of discovery with governmental agencies and third-party claimants during meet-and-confer negotiations.

Managing a Successful Outcome

By taking this two-phased approach to early case preparation, often termed as “in-place” ECA, legal teams can more effectively defend against costly litigation and investigations, like the ones that Alpha faced in the scenario above, and be better equipped for FRCP 26(f) meet-and-confer negotiations. Newer e-discovery technologies and workflows are playing a critical role in this process. For example, if through the analysis, arguments and documentation, Alpha's legal team successfully argued that only 10 of the custodians were truly relevant to the matter, the amount of data involved could be reduced by as much as 80%. Secondly, through newer, automated culling and collection technology, the evidence could be further reduced by another 60% prior to production. That equates to a 92% reduction to 245 gigabytes of ESI.

The greatest benefit achieved with in-place ECA is the ability to form the foundation of defensible e-discovery practices because it helps legal teams establish the initial scope of the project and identify any intricacies associated with the particular matter early on in the process.

Legal teams can be better equipped to address the following questions with opposing counsel and governmental agencies:

• What are the key issues in the matter?
• What keywords and search terms are relevant to those issues?
• What business units or departments does this matter involve?
• Who are there key custodians potentially relevant to the complaint?
• What is the volume, type and format of the ESI involved in the matter and where is it located?
• Are there issues surrounding the accessibility of the information?
• What are the applicable dates and timeframes associated with the complaint?
• Are privilege or IP issues likely to arise?
• Is there and significant overlap between this matter and ongoing cases?
• What is the potential e-discovery costs related to the complaint?

In many instances, information garnered with ECA prior to collection will be enough to prompt an early settlement or some other course of legal action before significant e-discovery costs are incurred. Effective ECA will also enable the legal team to more favorably defend against overly broad or burdensome e-discovery requests where costs are disproportionate to the potential value of the case.

Early case assessment (ECA), data culling and e-discovery costs are some of the most widely discussed topics in the legal industry. Yet, the methodologies of how to implement effective ECA and data culling, what's entailed and when implementation should begin, are extremely inconsistent. Traditionally, ECA and data culling are treated as isolated, linear steps in the e-discovery process. In reality, they are multi-tiered practices comprising several interconnected tasks that, when done correctly, streamline all phases of e-discovery. Plain and simple, ECA is a dynamic process. If utilized correctly, ECA can help legal teams understand their case and dramatically reduce litigation costs.

There are numerous aspects of how to initiate ECA. A primary factor entails proactively interacting with the potentially relevant evidence before official document review. At the outset of a matter, ECA provides visibility into electronically stored information (ESI), helping legal teams determine the scope, risks and costs of the pending action. The traditional approach for ECA has been to collect all potentially relevant ESI at the outset of a matter before analyzing its relevance. While this approach can aid in early evidence preservation, it is fraught with inefficiency since a high percentage of the collected data, such as duplicate documents and irrelevant system files, is typically not responsive to a matter.

e-Discovery technology has evolved to allow parties to quickly garner critical information about a case with regards to data volumes and types, in some cases without collecting the actual data. As cases progress, early data analysis can also be used to unearth the truly relevant evidence required for making informed case decisions and preparing for Federal Rules of Civil Procedure (FRCP) 26(f) “meet-and-confer” negotiations.

The most effective way to understand how to effectively conduct an ECA is to walk through a hypothetical case such as follows:

Alpha Corporation manufactures semiconductor devices, primarily flash memory and embedded controllers. It imports semiconductor chips from third parties located in Asia and assembles the final products in domestic plants located in the United States. One of Alpha's embedded chips is used in a popular hybrid car for electronic braking and stability control. Six months ago, the National Highway Traffic Safety Administration (NHTSA) informed the manufacturer that it was investigating allegations of accelerations in the braking system caused, in part, by the defective chip. Compounding that issue, more than 200 claims have been filed against Alpha, and a federal court judge in Detroit just approved the formation of a formal class action case. The initial meet-and-confer negotiations are scheduled to begin in 90 days.

The biggest questions in the scenario above for legal teams are two-fold:

1. How can Alpha meet the production deadlines for the NHTSA investigation, which typically involve extremely short timeframes, while protecting the intellectual property and privileged information that might be related to the class-action litigation?
2. How can Alpha control the costs of the e-discovery related to both the investigation and the class-action claim that has been found to involve more than 50 employees and an estimated three terabytes of ESI, which is stored in the U.S., on cloud-based back-up systems and in global offices in Asia?

Phase 1: The Quick Scan

Ideally, Alpha Corporation would have issued legal holds as soon as the first claims were filed by the individual parties to ensure all potentially relevant evidence was preserved for both the litigation and investigation. To do so effectively, the legal team would have initiated a “quick scan,” or early data analysis (EDA) to uncover who worked on the product's design, the significant date ranges involved, where the ESI was stored, the data volumes/types and search terms.

The workflow would include:

• Interviewing potential custodians. Issuing e-mail-based interviews that can be answered remotely by potential custodians to learn more about the issues and evidence involved. All responses would then be tracked in an automated e-discovery system;
• Locating potential data sources. Uncovering the potentially relevant evidence by mapping the company's IT infrastructure to the identified custodians to identify all potential data sources, accessibility issues and potential data privacy concerns (if located outside the U.S.);
• Assessing the data. Scanning and analyzing the potential data to determine relevance and scope. This can be done by testing sample search terms related to the matter to help the legal team gain a quick snapshot of the potential risks and liabilities that the pending actions represent, including data volumes, file types and date ranges; and
• Developing cost scenarios. Using the data garnered from the initial analysis to develop various cost scenarios for collection, processing and review to better understand the scope of the case.

The initial EDA would enable Alpha's legal team to accurately determine the case strengths and weaknesses in advance of the production request from NHTSA and initial meet-and-confer negotiations in the class action.

Phase II: The Deep Scan

Following the initial EDA, Alpha's legal team would then be able to conduct a more in-depth “deep scan” of the evidence to learn about the important aspects of issues involved in the case, including potentially relevant intellectual property, privilege and privacy concerns. It is imperative that legal teams become aware of these issues at the earliest point in litigation before significant collection and review costs have been incurred. This can be done with the following processes:

• Evidence and issue analysis. Running keyword and conceptual searches across the identified ESI will help the legal team to more accurately identify the issues, risks and details related to the litigation or investigation;
• Defensible culling and collection. Initiating a collection of the preserved evidence. Newer technologies are available that can collect ESI upon identification, maintaining chain of custody information, and simultaneously eliminate system files, duplicates and non-relevant files, as well as process the data for direct upload into an internal or third-party review platform;
• Evidence preservation. Storing the collected evidence in a central “vault” that maintains defensible preservation of the collected ESI and supports refresh collections as new evidence is identified; and
• Scenario reports and documentation. Running detailed reports and establishing documentation that supports the arguments, cost scenarios and arguments for negotiating favorable scope of discovery with governmental agencies and third-party claimants during meet-and-confer negotiations.

Managing a Successful Outcome

By taking this two-phased approach to early case preparation, often termed as “in-place” ECA, legal teams can more effectively defend against costly litigation and investigations, like the ones that Alpha faced in the scenario above, and be better equipped for FRCP 26(f) meet-and-confer negotiations. Newer e-discovery technologies and workflows are playing a critical role in this process. For example, if through the analysis, arguments and documentation, Alpha's legal team successfully argued that only 10 of the custodians were truly relevant to the matter, the amount of data involved could be reduced by as much as 80%. Secondly, through newer, automated culling and collection technology, the evidence could be further reduced by another 60% prior to production. That equates to a 92% reduction to 245 gigabytes of ESI.

The greatest benefit achieved with in-place ECA is the ability to form the foundation of defensible e-discovery practices because it helps legal teams establish the initial scope of the project and identify any intricacies associated with the particular matter early on in the process.

Legal teams can be better equipped to address the following questions with opposing counsel and governmental agencies:

• What are the key issues in the matter?
• What keywords and search terms are relevant to those issues?
• What business units or departments does this matter involve?
• Who are there key custodians potentially relevant to the complaint?
• What is the volume, type and format of the ESI involved in the matter and where is it located?
• Are there issues surrounding the accessibility of the information?
• What are the applicable dates and timeframes associated with the complaint?
• Are privilege or IP issues likely to arise?
• Is there and significant overlap between this matter and ongoing cases?
• What is the potential e-discovery costs related to the complaint?

In many instances, information garnered with ECA prior to collection will be enough to prompt an early settlement or some other course of legal action before significant e-discovery costs are incurred. Effective ECA will also enable the legal team to more favorably defend against overly broad or burdensome e-discovery requests where costs are disproportionate to the potential value of the case.