Predictive Coding Part III – A Look at the State of the Technology, the Impact on Review and Review Attorneys, Case Law, and What the Future Holds

PART III of IV: A High-Level Overview of Predictive Coding Case Law and Its Impact on the Use of Predictive Coding

This is the third of four blogs on predictive coding that I will be posting.  The first entry focused on how the technology and use of predictive coding has changed and where exactly it stands in the industry today.  The second entry discussed the impact predictive coding has had on contract review attorneys.  This third installment will cover some case law on the topic. Finally, the fourth will provide predictions about what the future holds for predictive coding.

I am writing these blog entries in part due to my participation in the upcoming ACEDS conference, where I will be speaking on a panel about Information Governance.  If you are interested in the field of eDiscovery and pragmatic discussions about eDiscovery issues framed in the context of real life situations involving real people, I suggest you consider attending the conference, which will be held in Hollywood Beach, Florida, April 27-29.  Additionally, I believe the ACEDS eDiscovery certification is a worthwhile endeavor and certification.  If you would like more information about it, it can be found on the ACEDS website (www.aceds.org), or feel free to contact me as well. 

In many ways, 2012 was the peak of the predictive coding buzz.  It was being discussed at every eDiscovery conference, software vendors were scrambling to develop their own predictive coding technology, link to coding technology platforms, or spin doctoring the capabilities of their product so that it appeared to contain predictive coding functionality, and most blogs had a thing or two to say about the topic, even if they were just token comments.  Case law, or at least case law analyzed and discussed by legal blogs and publications, also seemed to be discussing the technology in some breadth and depth.  The most notable example of this being the Da Silva Moore case in which Judge Peck played a leading, if somewhat controversial, and frankly overstated, role.  But there were others as well.

Since 2012, cases discussing predictive coding have been few and far between, and even those that were heralded for bestowing judicial approval and endorsement of predictive coding in 2012, lacked the finality and power many predicted they would have; although important at the time, the lasting impact of these decisions on the outcome of the matter has been relatively small.  Arguably, we still do not have a seminal predictive coding case, although Da Silva Moore is probably the closest thing we have to it thus far.

Some of the better known cases thus far include:

•  Da Silva Moore: The judge Peck case from 2012 in which he infamously endorsed predictive coding and was subsequently attacked by Plaintiff (often personally and unnecessarily) for doing so.  Although Judge Peck endorsed predictive coding he actually did no more than acquiesce to a plan submitted by both parties to use the technology. Since 2012, the predictive coding aspect of the case has been fairly quiet, and Judge Andrew Carter recently denied the motion for class action.
• Global Aerospace Inc., et al, v. Landow Aviation, L.P. dba Dulles, went a step further than Da Silva Moore.  In Global Aerospace, the defendants wanted to use predictive coding themselves, but plaintiffs objected.  Virginia County Circuit Judge James H. Chamblin, ordered that Defendants could use predictive coding to review documents.  Like Da Silva Moore, the court did not impose the use of predictive coding, rather, the court allowed a party to use it upon request.  In 2013, it became the first case in which a court approved the results of predictive coding.  Although the approval of the results is a success for proponents of predictive coding, the impact of this decision and its power to influence others will likely be limited as the details and results will not transfer to other matters.
•  Kleen Prods., LLC v. Packaging Corp. of Am. went farther yet in that the plaintiffs in Kleen asked the court to force the defendants to use predictive coding when defendants reviewed their own material.  Although an interesting question, it is one the court never ultimately answered as the parties agreed on a protocol leveraging key terms instead.
• Fed. Hous. Fin. Agency v. HSBC, 2014 WL 584300 (S.D.N.Y. Feb. 14, 2014), is another matter from the Southern District of New York, (like Da Silva Moore), in which the court, without much fanfare or publicity (unlike Da Silva Moore) approved of one defendant’s use of predictive coding despite objections from Plaintiff, noting that the technology had a “better track record in the production of responsive documents than the human review.” ---- As an aside, there are certainly studies that suggest this, and at times it is probably true, but not all predictive coding technologies are created equal, and not all implementations of it are created equal.  Just because you use predictive coding does not mean you will be accurate or have better precision and recall than key terms.  You must look beyond the fact that it is predictive coding if you want to know if it is being used properly and if it will lead to solid results; a Ferrari will only get you someplace without getting lost and more quickly than a minivan if the driver of the Ferrari knows where they are going and knows how to drive.
•  EORHB, Inc., et al v. HOA Holdings, LLC, C.A. No. 7409-VCL (Del. Ch. Oct. 15, 2012).  A matter in which a Delaware judge ordered both parties to use predictive coding.
• Anheuser-Busch InBev and Grupo Modelo 2^nd Request is an example of governmental endorsement of predictive coding.  This matter involved the merger and acquisition of these beverage industry giants, who obtained the DOJ’s agreement to use predictive coding on a second set of requested documents.  That agreement likely saved the companies the costs associated with reviewing millions of documents.
• Gabriel Techs. Corp. v. Qualcomm, Inc., 2013 WL 410103 (S.D. Cal. Feb. 1, 2013), suggests predictive coding fees may be recoverable.  In this matter, the court awarded the defendants attorney's fees under 35 U.S.C. § 285 based on plaintiff’s bad faith.  A portion of those fees included approximately $3 million paid for using predictive coding.  In addition to suggesting those fees were recoverable, its silence regarding whether or not to use the technology up front, is also indicative of the trend that predictive coding is de facto accepted by the industry and courts and its use is something not worth arguing before the court.

Why are there so few opinions about predictive coding at this point?  Is it just too common a practice to litigate absent the unusual?  Are the parties simply finding it not worth fighting over and that it does produce a reasonable result?  Yes and yes I would say.  Additionally, the use of predictive coding depends very much on the details of the matter: which technology is used, how it is used, and just as importantly how antagonistic the parties are.  All of that combined means it is difficult for any court to say predictive coding is acceptable across the board except at such a high-level that it is virtually meaningless as a guide or precedent for other matters.  So, while we are bound to see more cases and some opinions where it is approved or endorsed, the value and power of those will be very little as there will almost always be differences in cases that may or may not warrant the use of predictive coding.  Instead, decisions in the future will likely focus on the details and defensibility of implementation and results.

Regardless of case law or court or government endorsement and approval, the reality is that predictive coding is being used even without opinions discussing it or approving it. This use, often by agreement or at least knowledge between parties, but at times covertly, will certainly continue despite the paucity of  opinions touching on it or specifically endorsing it.