Predicting the Future of Predictive Coding

By
Allison L. Krupp

Federal – Civil Practice / E-Discovery

Key Points:

  • The computerized process of predictive coding is an appealing option in today's computer age.
  • Due to the lack of case law discussing the subject, predictive coding may have difficulty finding its way into the court system.

Predictive coding involves taking electronically stored information ("ESI") and organizing and prioritizing it according to its relationship to discovery responses, attorney-client privilege and designated issues before and during the discovery process. Kerschberg, Ben, E-Discovery and the Rise of Predictive Coding, http://www.forbes.com/sites/benkerschberg/2011/03/23/e-discovery-and-the-rise-of-predictive-coding/ (March 23, 2011). First, a senior lawyer reviews a sample of the ESI and chooses which documents in the sample are responsive to the request. Steven Hunter, E-Discovery: Cutting Costs With Predictive Coding, Inside Counsel (September, 2011). This step is repeated until the computer is "trained" to apply the lawyer's conclusions across the whole document set. Next, the predictive coding software distinguishes what is relevant from what is irrelevant. Finally, the chosen documents are subjected to a final "human quality review" and produced to the opposing party. This process is particularly appealing in the computer age, when the volume of discoverable information in a single case can be staggering.

A popular theme throughout many law reviews and other articles discussing this issue is predictive coding's relationship to Federal Rule of Civil Procedure 26, relating to Duty to Disclose. The 2006 amendments to the Federal Rules were enacted to address the burden involved in producing ESI. Bennett Borden, Four Years Later: How the 2006 Amendments to the Federal Rules Have Reshaped the E-Discovery Landscape and are Revitalizing the Civil Justice System, 17 Rich. L.J. & Tech. 10 (Spring, 2011). Among the changes to Rule 26, it now requires that ESI be included in the list of information parties produce pursuant to initial disclosures. Thus, parties must now consider ESI much earlier on in the case. The amendments also permit a party to withhold otherwise discoverable information that is not reasonably accessible due to burden or cost, subject to the other party's right to file a motion to compel. While the Rules do not specifically mention predictive coding, I imagine its availability to attorneys could potentially alter what is considered "reasonably accessible." Because the software can save not only time but also a great deal of money, what is considered reasonably accessible could suddenly change. However, I would not classify this as being imminent. Furthermore, the federal rules and courts are unlikely to "endorse" a particular type of technology due to judicial ethical rules and because its use and application would greatly vary from case to case. Chris Dale, Judge Peck and Predictive Coding at the Carmel eDiscovery Retreat, http://chrisdale.wordpress.com/2011/08/02/judge-peck-and-predictive-coding-at-the-carmel-ediscovery-retreat/ (2011).

Another federal rule commonly discussed alongside predictive coding is Federal Rule of Evidence 502, adopted in 2008. Rule 502(b) provides that disclosure of privileged information does not act as a waiver of the attorney-client privilege if "(1) the disclosure is inadvertent; (2) the holder of the privilege took reasonable steps to prevent the disclosure; and (3) the holder of the privilege promptly took reasonable steps to rectify the error." David J. Lender & Hon. Andrew J. Peck, Ten Key E-Discovery Issues to Watch in 2011: Expert Insight to Manage Successfully, HuronLegal (2011). Notes to the Rule state that using technology to perform privilege reviews may constitute taking reasonable steps: "Depending on the circumstances, a party that uses advanced analytical software applications and linguistic tools in screening for privilege and work product may be found to have taken 'reasonable steps' to prevent inadvertent disclosure." To date, the decisions addressing this issue have held that technology did not satisfy the "reasonable steps" test. However, the courts have also indicated that technological solutions may be adequate if proper "quality assurance testing" is established. Meaning that samples from both the privileged and unprivileged results were tested and were statistically accurate. Therefore, technology such as predictive coding could potentially satisfy the courts.

Courts have not yet evaluated or supported the use of predictive coding. Steven Hunter, E-Discovery: Cutting Costs With Predictive Coding, Inside Counsel (September, 2011). Their silence has in many ways discouraged attorneys from using the technology since no one wants to be the "guinea pig." However, while courts have not issued opinions relative to its use, judges have not been completely silent on the issue. U.S. Magistrate Judge for the Southern District of New York, Andrew Peck, has spoken and written about the technology. Judge Peck encourages the use of predictive coding and argues that it is most effective when the opposing party is aware you are using the technology and is in agreement. Chris Dale, Judge Peck and Predictive Coding at the Carmel eDiscovery Retreat, http://chrisdale.wordpress.com/2011/08/02/judge-peck-and-predictive-coding-at-the-carmel-ediscovery-retreat/ (2011).

The majority of legal articles and law reviews appear to embrace and even welcome technology like predictive coding. However, one article cautioned against placing too much reliance on it. The author stated, "Practitioners will learn that 'Predictive Coding' is just that–predictive, and that all predictions contain the inherent risk of being wrong. This is why they are predictions, not facts." Erik Laykin Duff & Phelps LLC, Man and Machine: A Look Forward Into the Future of eDiscovery, Metropolitan Corporate Counsel, Vol. 19 No. 8, p. 13 (August, 2011). He then conceded that the overall benefits may outweigh the risks and encouraged its use to the extent attorneys proceed with caution, using a "trust but verify" approach.

I do not foresee predictive coding being included in the federal rules in the near future. However, if it becomes a more accepted practice, the courts may consider it when distinguishing what is "reasonably accessible" from what is not. The time and cost of sorting through millions of pages of documents could be significantly reduced. Therefore, if a party is using predictive coding technology for discovery purposes, a court may take that into account when determining whether they have to produce certain documents. Furthermore, it could be considered when determining if the attorney took "reasonable steps" under Rule 502. However, because it does not appear many attorneys are using the technology for fear of being sanctioned if it is not effective, I doubt it is something to worry about now or in the near future. While it may be considered if used by the parties in a particular case, it is unlikely that the federal rules or courts would mandate or endorse its use.
 

*Allison is an associate in our Harrisburg, Pennsylvania, office who can be reached at 717. 651.3510 or alkrupp@mdwcg.com.

Defense Digest, Volume 18, No. 1, March 2012