U.S. Magistrate Judge John Facciola, who has served on the U.S. District Court for the District of Columbia since 1997, spoke to a class of law students at the University of Florida Levin College of Law about Technology and eDiscovery Competence.
The Judge reflected on what he has seen over the last 17 years.
According to him, “the change is revolutionary. Being a Judge in 1997 versus being a Judge in 2014 don’t even vaguely resemble each other.”
In March 2012, he was in the midst of putting a statistical package together of all the work he had done that month while on criminal duty when he realized he had not issued a single warrant for anything tactical
In 1997, the warrants he signed were for law enforcement to break down doors in search of illegal drugs and weapons and get them off the street. Today, his criminal warrants consist of accessing Facebook accounts, email accounts and cell site locations. This is a revolutionary change and leads into a discussion on the changes in technology, in which he cites a book called “The Innovator’s Dilemma.”
The author presents a current phenomenon where the management of a company is doing well, returning value to its stockholders and more, only to have something happen and three years later, be out of business. He argues that this is because today’s technology is disruptive. Meaning, it’s not evolutionary or being yielded by the play between social forces and other forces on the existing process. Instead, it is disruptive, and it occurs again and again. Think Sony Walkman versus Apple iPod.
Judge Facciola then ties this phenomena to a piece he wrote called “Eruptions and Explosions” on the startling group of instantaneous eruptions of a new technology. These “eruptions and explosions” have been occurring over time and have dramatically changed the way lawyers, judges and others look at the practice of law and administration of justice.
He reviews the most significant:
Magistrate Judges came into existence in 1938. Over a period of time, District Court Judges grew accustomed to hearing Examiners, as they used to be called, resolve discovery disputes. Today, it’s estimated that 75 percent of cases are resolved by Magistrate Judges. Since decisions are usually reviewed only on abuse of discretion standards, this creates a high discretionary area and leaves a number of cases that are never reviewed or get anywhere because they never make it past the Magistrate Judge. In addition, most cases are settled — only 1 percent of the cases that come before them are ever tried. So when reviewing this area of the law, one will see a curious phenomena where the big cases have been settled and, therefore, never go through the normal appeal process.
In reference to a large civil case he handled that involved every shipment of freight in this country over a 10-year period, he discusses how the District Court Judge appointed two Magistrate Judges who worked in tandem.
He describes this as a very different way to handle a large case with discovery disputes and that this method worked. In fact, it worked again as recently as last week. This is a new mode of judging: The more aggressive the judicial management, the less likely there will be disputes. This is crucial and will be a significant part of the new federal rules. In fact, effective next year, one will not be able to file a discovery motion until one has first called the court and gotten permission to do so.
Magistrate Judges, by virtue of the intensity of their work in this area, became involved in the Sedona Conference. To date, they have produced about 15–17 publications. In fact, “The Seven Principles About Electronic Discovery” is one of the most quoted books in this area.
One of the most important achievements in the Sedona Conference is the “Proclamation on Cooperation,” where members agreed that by coming up with a manner and means of inviting the world to engage in a cooperative enterprise in discovery, they might accomplish something.
The first matter they tackled was the overwhelming cost of discovery. The example Judge Facciola uses is Johnson v. Allstate. Ultimately, the case was settled, but Allstate included in the settlement agreement that plaintiffs would pay the cost of processing the electronically stored information (ESI), which equated to approximately $950,000. The Judge states, “How do you spend a million dollars in a case where the other side throws in the towel?”
The second matter they found was that many discovery disputes are really about nothing — literally. When the information was produced it was hopelessly insignificant. They discovered that the concept of Rule 26 — the fundamental principal of marginal utility that the “what we are going to do has to be justified when its burden is outweighed by its value” — was almost disappearing.
The third matter they found was judges were confronting many situations where knowledge of the case was asymmetrical — a situation where one lawyer knows a lot more than the other — and allegations of hiding information and more would arise. On the whole, they thought encouraging transparency would restore that balance. They found it could resolve discovery disputes quickly, allowing for the merits of the controversy to come forth.
In his opinion, Sedona accomplished quite a bit. Consider how many times “meet and confer” appears in today’s cases. It’s practically a mantra that federal judges are used to. The new rules reflect all the work that has gone into the Sedona Conference and are structured around the concept of proportionality. It’s also important to note that the definition of discovery is completely modified. In the old rules, there were two levels:
1) Relevant information
2) Information that is relevant to the subject matter upon showing of good cause
That language is completely gone in the new rules, as is the language around “reasonably likely to lead to relevance.” Also, the requirements of Rule 26(b)(c)(3) in order to measure burden and cost have been moved into the definition of relevant discovery. In his opinion, the rule changes are not cosmetic and, for his purposes, emphasize how the discovery process has had to change under the pressure of information technology. Judge Facciola believes this is a colossal change.
There are many lawyers who will resist Sedona and disagree, but Judge Facciola states that from a judicial perspective there is a whole new approach to managing discovery today.
Technology & Big Data
The next revolution that he discusses is the memory and processing capacity of computers. Both memory and processing power have exceeded our imaginations with their current capabilities. For example, the iPhone has more than 1000 times more processing capacity than the guidance system of Apollo 11.
Then “big data” happened, and corporations realized that all the data they have been collecting had immense value in predicting the buying habits of its customers. Suddenly this info is valuable because they can sell it. This explains why 30 seconds after one books a flight to Miami, five ads about hotel deals in Miami pop up. This is common practice to Americans today.
What is significant about the search capability is that now lawyers realize these same methods can be applied to search for gigantic data sets of information in discovery. It is a process known as Technology Assisted Review (TAR) or Predictive Coding, in which one allows the artificial intelligence of computers to gather a subset of the documents based on keywords that is relevant to the case.
While it’s still a hard sell to some attorneys, the premise of this method is that it’s almost impossible to review all the data. Judge Peck became the first judge in America to recognize the value of this method and suggest how appropriate it is. Today, there are about 15 domestic decisions expressly approving of TAR. Recently in Dynamo Holdings Limited Partnership and Dynamo GP Inc., Tax Matters Partner v. Commissioner of Internal Revenue, the tax court said it’s a perfectly legitimate approach.
This is fast becoming the way lawyers approach the accumulation of data, its discovery and use, and Judge Facciola doesn’t believe any other method will survive. Today, there is nearly a case a day about the validity of this process and the battle rages on.
Judge Facciola closes with a question he wants all to consider: the notion of cost. He reflects on how deeply distressed he has become by the disappearance of the small company and middle class from the federal courts. He reiterates that only 1 percent of cases are tried, and the cost involved in litigations is out of control. He states that we have to figure it out or resign ourselves to a situation where very few people will be able to get into the federal court system.
What are your thoughts? We welcome hearing them.
By the way, the good Judge wagered $5 that no one in the room could name the last significant Supreme Court decision about discovery. He was right and kept his $5. Would you have won the bet? We’ve got a Starbucks gift card for the first one to give us the correct answer.
Leon Wiser on at 7:49 am
In answer to the Judge’s question, would it be the following since it validated the use of predictive coding?
143 T.C. No. 9
UNITED STATES TAX COURT
DYNAMO HOLDINGS LIMITED PARTNERSHIP,
DYNAMO, GP, INC., TAX MATTERS PARTNER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
BEEKMAN VISTA, INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 2685-11, 8393-12.
Filed September 17, 2014.