Toxic Tort Litigation Blog : Toxic Tort Lawyer & Attorney : Epstein Becker Green Law Firm : Product Liability, Contamination, Pollution

Connecticut state courts have not provided a rule to address electronic discovery that would give guidance to litigants in a manner similar to the federal rules. In a significant decision, issued on November 18, 2011, the Hon. Barbara Brazzel-Massaro, who sits in Complex Litigation in Stamford Superior Court, ruled in Innis Arden Golf Club, Inc. v. O’Brien & Gere Engineers Inc., et al., that federal rules concerning electronic discovery may provide guidance that may be useful to Connecticut courts.

In this case, the defendant filed a motion to compel arguing that the electronic production of over 60,000 documents by the plaintiff did not provide an orderly or readable response. In particular, the defendant requested that the court order the plaintiff to re-produce the documents with accurate document separation, proper load files and pertinent metadata.

In granting the motion, the court held in pertinent part:

It is clear that the plaintiff produced the documents in mass without any designation as to which documents were responsive to which product request. The documents were not organized or indexed in a manner that would be sequential based upon the content but were simply given to the defendant to sort out. Even without considering the electronic difficulties, this manner of discovery is not sufficient. This type of discovery does not further the intent of discovery but only creates a stumbling block for the opposing party who has all of these documents and no where to go. The federal rules require that the documents are organized or labeled to correspond to the categories in the request. It is obvious that this was not done and has left the defendants with a mass of documents without a particular connection to the production requests.

The court ruled further that the plaintiff should produce electronic discovery in a load file with pertnent metadata, but with defendant bearing the $550 cost of creating the load file. Perhaps most importantly for litigants who may be involved in future electronic discovery disputes in Connecticut, the court held that “the metadata is an important source for the defendants as part of the orderly production of the electronic discovery.”  In so ruling, the court has created an expectation that ESI should be produced with metadata, which contains valuable information, and load files, which can expedite the organization on software of large productions. 

For those of us who work on document-intensive litigations, take note of Magistrate Judge Andrew J. Peck's (SDNY.) opinion released on February 24, 2012 in Monique Da Silva Moore, et al. v. Publicis Groupe and MSL Group, Case 11 Civ. 1279 (ALC)(AJP). Judge Peck's decision may be the first federal court opinion approving the use of computer-assisted review in place of  “eyes on” document review. Citing recent studies, Judge Peck states “while some lawyers still consider manual review to be the 'gold standard,'  that is a myth, as statistics clearly show that computerized searches are at least as accurate, if not more so, than manual review….While this Court recognizes that computer-assisted review is not perfect, the Federal Rules of Civil Procedure do not require perfection.”

In a thoughtful guest blog on the Forbes.com site, (from which post the photo is reproduced here)Matthew Nelson discusses the significance  (or not) of both Judge Peck's case and a second case in the Northen District of Illinois, the Hon. Nan R. Nolan presiding.  In that case, Kleen Products LLC v. Packaging Corporation of America et al, the plaintiffs are seeking a court order requiring defendants, among other things to use predictive coding technology in responding to their discovery requests. 

Computer assisted review, or, as it is sometimes called, predictive coding, employs the use of a sample set or “seed set” which is reviewed for responsiveness. The “seed set” can then be made available to opposing counsel to approve the responsive/non-responsive determinations made. Interestingly, at least in this case, the court noted that  “All of this review to create the seed set was done by senior attorneys (not paralegals, staff attorneys or junior associates).” The seed set is then fed into a program that creates a logic (based on the seed set determinations) and extrapolates to the universe (the negotiated set of data). Predictive coding, in essence, attempts to take the place of burdensome, expensive and time consuming document review.

As the opinion suggests, predictive coding will not work in all cases. According to Judge Peck, “What the Bar should take away from this Opinion is that computer-assisted review is an available tool and should be seriously considered for use in large-data-volume cases where it may save the producing party (or both parties) significant amounts of legal fees in document review.”  While the court discussed possible objections under the FRCP, FRE 702 and Daubert, the court did not sufficiently address what happens when one party wants to use predictive coding and the other party objects.  In the case,  to protect privileged documents that would conceivably be swept in by the computer logic, the parties entered into a clawback agreement which was entered as a court ordert. Unfortunately, in government investigations, parties do not always have the opportunity to have a court enter such an order. So, predictive coding should be used cautiously – perhaps still requiring some “eyes on” document review in handling governmental investigations. 

Predictive coding could provide substantial benefits to clients. On the other hand, law firms whose business models depend on leveraging large teams of associates and staff attorneys to conduct document review will increasingly have to explain to their clients why such costly efforts are necessary. Technology may allow medium sized firms to more effectively compete with large firms in cases with substantial discovery. In short, predictive coding makes good sense for the courts, the clients and the Bar. 

In defending a United States defendant in an action involving a foreign accident and foreign claimants, it is almost a knee jerk reaction to file a motion to dismiss on forum non conveniens grounds. In a thought provoking article, “Be Careful What You Ask For – the Forum Non Conveniens Dilemma,” Cozen O’Connor lawyersRichard Dunn and Raquel Fernandez bring this practice into question. Mr. Dunn and Ms. Fernandez urge a different standard for analyzing whether to file the motion. The question that should be asked is whether it is beneficial for the U.S. defendant company to be subject to the laws and procedures in the foreign jurisdiction.

Thus, it is critical to understand the foreign jurisdiction’s law before your client is stuck there in litigation. A few of the considerations to think about include:

(1) Can your client get out of the case on summary judgment? Many foreign jurisdictions do not provide for summary judgment. Therefore, all matters before a court must be tried to conclusion, which may potentially lengthen and increase the cost of proceedings;

(2) How much time will your client have to prepare its case? Some foreign jurisdictions allow a short time for defendant to mount its defense, which may be an important consideration in a complex product liability case where it is necessary to hire and prepare appropriate experts. Moreover, the documentary evidence that supports your client’s case has to be translated into the foreign jurisdiction’s official language; 

(3) Will discovery be allowed? In some foreign jurisdictions, there is nothing akin to the discovery procedures that benefit parties in the United States;

(4) Will expert testimony be allowed? Often, the foreign court will place great emphasis on the government accident investigation report rather than on the expert evidence. In some jurisdictions, your client’s liability may be determined by the government authorities charged with investigating the accident, although they may not be competent;

(5) What is the role of the judge? Is the court the sole trier of fact?;

(6) Are there multiple claimants? You should determine whether all of the claimants involved in the incident can be consolidated before the same tribunal. If each claimant is able to file suit in his or her own locale, the client may need to defend numerous actions before numerous judges in different locations; and

(7) What are the attitudes towards the United States and American businesses in the foreign jurisdiction?

Anti-American bias and corruption figured prominently in Chevron’s environmental litigation in Ecuador. In the early 1990’s, Ecuadorian claimants filed suit in the United States alleging that Texaco’s operations polluted the rain forests and rivers in Ecuador, resulting in environmental and personal injury damages. The lawsuit was dismissed in 2002 on forum non conveniens grounds and the case was refiled in Ecuador the following year. In February 2011, an Ecuadorian court entered an $18,000,000,000 judgment against Chevron (which had earlier acquired Texaco).

Scott A. Edelman, a partner at Gibson Dunn in Los Angeles, made a compelling presentation at a recent IADC meeting concerning serious irregularities and a lack of impartiality in the conduct of that case. Chevron alleges that the plaintiffs’ lawyers are guilty of fraud and misconduct and have filed a civil lawsuit under RICO in New York federal court against the trial lawyers and consultants involved. Chevron’s suit alleges that these attorneys and consultants used the Ecuador lawsuit to threaten Chevron, mislead U.S. government officials, and harass and intimidate Chevron employees, to extort a financial settlement from the Company. Chevron further alleges that plaintiffs built their case through fabricated evidence and a campaign to incite public outrage.

It is likely that the pervasive fraud that permeated the Ecuador litigation would not have occurred in a U.S. federal court. As a result of Chevron’s experience, a U.S. defendant would have to think twice about filing a forum non conveniens motion if there was any likelihood that the case would end up in Ecuador or somewhere similar.

DEC Commissioner Joe Martens told a panel of state lawmakers on February 7, 2012,  that it was “conceivable” that a handful of hydraulic fracturing permits could be issued in 2012 but that a final decision is “months, not years away.”  Martens cautioned that the number of permits that could be issued in 2012 would be “extremely limited” in part due to the “considerable work that remains before we finalize our regulatory framework.”

An additional hurdle to overcome before hydraulic fracturing can commence in earnest is the need to build up DEC’s regulatory staff to sufficiently oversee the proposed activity.  According to the Ithaca Journal, Commissioner Martens stated that DEC currently employs 16 gas drilling regulators, but estimates that the Agency would need 140 additional regulatory staffers during the first year that permits are issued.  According to the Public Employees Federation (“PEF”), DEC has lost more than 800 full time employees since 2008 because of budget cutbacks.  The PEF represents some 1,700 scientific and technical workers at DEC.  Wayne Bayer, a shop steward for PEF, advised lawmakers that his union continues to support a moratorium on hydrofracking because existing staff shortages at DEC do not support this labor-intensive mission.

Based upon Commissioner Martens’ statements and the comments of Albany lawmakers, it does not appear that any significant hydraulic fracturing activity will be permitted until 2013, at the earliest.  We should look to any new DEC staff hires as a sign of New York’s commitment to allow fracking to commence.

When governmental or quasi-governmental agencies formulate a chemical risk assessment, it is part of their legitimate exercise of public health, policy-oriented regulation.  Regulators often develop risk assessments due to scientific uncertainty concerning the toxicity of a particular compound and utilize conservative risk models in the interest of protecting public health and the environment.  Thus, when a substance is labeled “possibly carcinogenic” or even “probably carcinogenic” by an agency, it may have little or no bearing on general and specific causation issues.

For this reason, risk assessments, and the assumptions that go into making them, have no legitimate place in toxic tort litigation.  Agency classifications and risk assessment certainly cannot legitimately be used by a toxic tort plaintiff to help establish his case-in-chief.  Agency classification and risk assessments are based upon standards that very significantly from the burdens of proof in a courtroom.  Thus, they are not legally relevant and pose a significant risk of confusion to jurors and prejudice to defendants. 

In a compelling article appearing in the Bloomberg BNA Toxics Law Reporter (February 3, 2012) titled, “When ‘Likely’ Does Not Mean ‘More Likely Than Not’: The Dangers of Allowing Government Chemical Classifications and Numeric Risk Assessments at Trial,” Mark P. Fitzsimmons and Leah M. Quadrino at Steptoe and Johnson, and Sneha Desai at BASF, describe how governmental agencies perform risk assessments and how the assumptions employed in reaching these risk assessments can easily mislead lay persons serving on juries in assuming that particular chemicals are carcinogenic to humans when, in fact, they may not be. 

Frequently, plaintiffs seek to introduce as evidence general and specific causation and increased risk.  The authors observe that the critical distinction between a regulatory classification of a chemical and the burden of proof required in court has been widely litigated.  Thus, in Gates v. Rohm and Haas Co., No. 10-108, 2011 U.S. App. LEXIS 17756, *33 (3d Cir. Aug. 25, 2011), the Third Circuit held that, “plaintiffs could not carry their burden of proof for a class of specific persons simply by citing regulatory standards for the population as a whole.” 

Similarly, other courts have excluded expert testimony for relying on regulatory ratings or standards in determining whether a plaintiff’s exposure to a substance above regulatory limits was sufficient to establish causation.  Baker v. Chevron USA Inc., 680 F.Supp. 2d. 865, 880 (S.D. Ohio 2010).  Defense counsel also must be vigilant against a court’s use of numeric risk assessment as a benchmark for determining increased risk.  The takeaway is that “probably” in a regulatory context does not mean “more probable than not” in a tort context.

On January 31, 2012 decision, the Appellate Division, First Department, adopted the federal Zubulake standard for spoliation of electronic evidence in Voom H.D. Holdings v. EchoStar Satellite, LLC, 600292/08.  Voom is the first New York state appellate decision to apply the standard for spoliation of electronic evidence set forth in Southern District Judge Shira Scheindlin’s decision in Zubulake v. UBS Warburg, LLC, 220 FRD 212.  Brendan Pierson wrote an article about the case in the New York Law Journal on February 1, 2012.

We have discussed the heightened sensitivity to E-discovery spoliation in state courts in this space previously.  See blog post titled, “New E-discovery ‘Best Practices’”, (January 5, 2012). 

The First Department’s adoption of Zubulake’s reasoning has far reaching consequences in commercial litigation in state court.  It potentially opens the floodgates to all of the post-Zubulake jurisprudence that has been percolating in federal courts over the past several years.  I predict that New York appellate courts will see a number of interlocutory discovery appeals on E-discovery in coming months.