OPINION: Gov’t Officials And Cybersecurity Accountability

Last week, I offered my two cents about the misguided criticism of the U.S. State Department and Hillary Clinton regarding the alleged email “scandal” (aka circus) and concluded with the following: “So the real question is, should governmental agencies and their officials be held, de facto, to more lenient standards than private litigants, as appears to be the case in these circumstances?”

This question is even more relevant now that Clinton officially launched her presidential campaign over the weekend. I can’t help but think of the Robert De Niro and Dustin Hoffman movie “Wag the Dog.”

To keep this simple, I wonder what the right response will be when someone along the campaign trail asks what was done to protect any highly sensitive information that was in Hillary’s personal email account? Were there safeguards in place to prevent the possibility of a data breach, whether by a 15-year-old computer whiz or, far worse, a terrorist organization? Would a sufficient response be to indicate that the very reason for deleting the entirety of the personal email server, which was announced just two weeks ago, was to protect us all from a possible cyberattack? Not from my perspective. Would it be sufficient to respond that Clinton cannot answer a question that necessarily requires an official response from the State Department? Perhaps. And maybe that’s the proper extent of Clinton’s accountability, if there was any to begin with.

In any event, no response is likely to assuage the possible concern that a cyberattack may have occurred at some point during the several years that Clinton was using the personal email account for government affairs. Maybe there were safeguards in place and maybe there weren’t. We’ll probably never know. What we do know is that generic email servers that many of us use may be, and have often been, hacked or corrupted with viruses. Whether the “ClintonEmail.com” server used by the State Department and its official had adequate security protection in place remains an open question. So too is accountability for answering the foregoing.

In a time when cyberattacks are rampant and huge companies like Target Corp., Wal-Mart Stores Inc., Sony Corp., Anthem Inc., Premera Blue Cross, just to name a few, are in a position of defending lawsuits due to data breaches, and are spending enormous amounts of money in doing so, I ask again whether governmental agencies and their officials should be held to lower standards of care.

It goes without saying that while many of the private-entity data breaches of late could severely impact those individuals whose private information was leaked, any data breach that might expose highly sensitive government information could put every member of society at risk.

Again, I don’t have an opinion as to whether the State Department and/or Clinton appropriately used a personal email address — nor do I really care — but I have to wonder if whoever gave the directive to permanently delete the personal email server did so in part both to obviate the pending lawsuits demanding further disclosure from the State Department (since there’s no longer anything to disclose), and relatedly, to suppress the public’s interest and attentiveness as to the alleged “scandal” in favor of more important things, like a successful presidential campaign.

Originally published in Law360 on April 14, 2015.

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OPINION: Most Clinton Critics Are Missing The Point

Hillary Clinton’s self-maintenance of a personal email account for use in her capacity as a government official has raised questions about whether the State Department inadequately investigated the existence of official government business records or Clinton improperly failed to disclose the existence of the personal email account. But those questions miss the point. If circumstances similar to the Clinton email “situation” came to light in the course of private litigation, there would be hell to pay. Intentional disposal of information that was not even preserved is far more relevant than what was — or was not — disclosed.

Clinton also allegedly delayed disclosure of records from that same personal account. Both issues stem from requests made pursuant to the Freedom of Information Act as early as 2012.

There remains a salient issue that has seemingly been overlooked. How do our society’s critics keep missing the mark? The problem is not the use of a personal email account, but rather an issue of accountability.

It is possible that the State Department, Clinton and her aids did a perfect review of every single record on her personal email server before unilaterally deciding to delete tens of thousands of “personal” emails from that server, and then more recently, deleting any trace of electronic records that previously existed on that “personal” server. A simple assurance that all “relevant” communications had been printed and disclosed as required under FOIA and deemed appropriate by the State Department and/or Clinton (a distinction without a difference) is sufficient. Or is it? Read more ›

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The Peck(ing) Order for Predictive Coding Stays the Same

In his March 2, 2015 order issued in Rio Tinto PLC v. Vale S.A., et al., No. 14-Civ-3042 (S.D.N.Y.), Magistrate Judge Andrew Peck brought the world of predictive coding back to the future.  Quoting the first line of the order directly, “[i]t has been three years since my February 24, 2012 decision in Da Silva Moore v. Publicis Groupe & MSL Grp., 287 F.R.D. 182 (S.D.N.Y. 2012) (Peck, M.J.), aff’d, 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012).”  There is a strong element of déjà vu here: Peck also began his seminal Da Silva Moore decision by quoting himself, then from articles he had authored on the subject.   As you may know, Peck’s Da Silva Moore decision had a snowball effect, including the effort by one party to request, and when that was unsuccessful, to force, Peck to recuse himself.  The judiciary was unreceptive, and the unhappy party’s efforts up the chain—to the point of filing a petition for the United States Supreme Court to weigh in on the issue (which was denied)—were fruitless.

Putting aside the theatrics, the recent Rio Tinto order may prove to be as important as Peck’s willingness to go out on a limb in Da Silva Moore.  Back then he was the first judge to formally bless the use of predictive coding—deeming it “judicially-approved in appropriate cases”—paving the way for widespread use and acceptance of technology assisted review (“TAR”).  Peck aptly notes in Rio Tinto that since his Da Silva Moore order, the case law has developed to the point that it is now “black letter law that where the producing party wants to utilize TAR for document review, courts will permit it,” citing to courts in jurisdictions across the country that have all followed his lead.  Read more ›

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Cut The Crap: Cooperate Under Rule 26 or Look Like a Fool

An order issued by the court in Armstrong Pump, Inc. v. Hartman, 2014 WL 6908867, No. 10-cv-446S (W.D.N.Y. Dec. 9, 2014) provides a valuable lesson to all litigants—failure to cooperate under Rule 26 is no longer just unacceptable…it’s embarrassing.  In considering a motion to compel in the context of overly protracted discovery proceedings littered with delay and dispute, the court expressed “frustration with the continual and growing animosity between the parties, an animosity that has slowed the progress of the case and that has required repeated judicial intervention.” The court also noted its need to “manage the parties’ inclination to raise the stakes” and didn’t hesitate to mention that the parties’ “bickered” at oral argument about “who would get the last word.”

If that isn’t enough of a message, the court pointed out that certain of the movant’s brief citations amounted to a “disingenuous hint” that opposing counsel should be suspended “without actually saying so.” It’s as if the parties turned the notion of cooperation under Rule 26 on its head and in doing so pushed the court’s patience too far. The order aptly referenced the fact that the court system is only as good as the sum of its parts; in other words, without fairness amongst and between counsel, the system inevitably breaks down.

The Armstrong Pump order summarized the court’s reaction in one word: “Enough.” My reaction is similarly blunt: FINALLY.  In my view, this order is worth a read by any litigator involved in discovery—especially eDiscovery. The message is simple: each and every time a litigator feels his or her blood pressure rising because of an unnecessary discovery dispute, it’s worth taking a deep breath. Slow down. Stop. Litigators don’t serve a client’s best interests by becoming embroiled in nonsensical and childish discovery disputes.

As litigators, we should never compromise our roles as zealous advocates. But we also serve no benefit to our clients by forgetting what many of us first learned in the sandbox: the difference between mountains and molehills. The court in Armstrong Pump had reason to be particularly agitated since the non-moving party had plainly ignored prior orders requiring that the parties avoid piecemeal discovery productions to the extent possible.  The court also used the order to remind the moving party of the fact that the court would apply similar scrutiny to the moving party if necessary, i.e., it’s a two way street.

At bottom, we’re past the point where courts will tolerate the unnecessary bickering in discovery, and the Armstrong Pump order demonstrates that fact unequivocally. We all have a responsibility to act like adults, respect our profession, respect each other, and above all serve our clients without the distraction of unwarranted child’s play.

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Two Basics: Don’t Accept Candy From Strangers and Avoid Falling Into the “Document Dump[s]”

A recent order issued by M.J. Paul Grewal in Venture Corp. Ltd., et al. v. Barrett, No. 5:13-cv-03384, 2014 WL 5305575 (N.D. Cal. October 16, 2014) provides a useful reminder for all litigators: “Rule 34 (Producing Documents, Electronically Stored Information, and Tangible Things) is about as basic to any civil case as it gets. And yet, over and over again, the undersigned is confronted with misapprehension of its standards and elements by even experienced counsel. Unfortunately, this case presents yet another example.”

The parties apparently had the right idea to start—they tried to meet and confer to reach a document and ESI production protocol.  But the parties had different stories about the course of discussion in those meet and confers, and most importantly, plaintiffs couldn’t dispute the fact that they subsequently produced approximately 41,000 pages—some on a flash drive and others via email—without any identifying information.  Plaintiffs’ decision to do so was spurred by defendant’s request that documents and ESI be produced in a manner identifying the specific request(s) to which they were responsive. Plaintiffs saw this as a deal-breaker and unwisely upped the ante; they failed to include so much as a custodial index or a summary of the documents produced.

The court fairly noted that “[e]ven in the days of paper measured by the carton and large, cold-storage warehouses, the document dump was recognized for what it was: at best inefficient and at worst a tactic to work over the requesting party.”  So the court properly ordered plaintiffs to “try again,” requiring them to organize the production in some way (e.g., labeling each individual document and/or providing custodial and/or other organizational information compliant with F.R.C.P. 34) and producing a load file enabling access to the native files and metadata.

Frankly, this is all obvious.  But it’s a good lesson for all of us: remember not to forget the simple things.  While proportionality and cooperation win the day in the eyes of most courts these days, it’s worth a reminder that even if adversaries are difficult to deal with or uncooperative, that won’t justify failure to comply with basic requirements under the Federal Rules. If an adversary is stubborn, uncooperative, unreasonable or all three, stay above board.  Courts would of course rather that parties cooperatively resolve looming discovery disputes, but generally will step in to at least facilitate a resolution when cooperation is not an option.

Bottom line: always remember the basics.  For example, don’t accept candy from strangers…except, of course, on Halloween.

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Tread Lightly: eDiscovery Greed May Leave You With None At All

On July 14, 2014, the Court in United States v. University of Nebraska at Kearny (No. 4:11CV3209) took a significant step in support of Federal Rules 1 and 26.  Magistrate Judge Cheryl R. Zwart denied plaintiff’s motion to compel defendants to use plaintiffs’ proposed search terms to cull electronically stored information (ESI) for review and production.  The Court’s order effectively discharged defendants’ obligation to produce any ESI.  And the Court issued this order notwithstanding both that 1) the parties had agreed to a stipulation summarizing protocol for the production of ESI shortly after the outset of the case, and 2) plaintiff previously produced ESI as part of its production to defendants’ discovery requests.  In short, plaintiffs’ unwillingness to fairly compromise as to the breadth of search terms aimed at reasonably limiting the scope of ESI production came back to bite.

The Court’s reasoning for its decision centered around three primary concepts .  First, the government failed to provide the Court with any cost/benefit analysis with respect to the sought-after discovery or a sound articulation of how the cost and burden required to comply with plaintiff’s demands could be justified.  Plaintiff did not demonstrate a reasonable likelihood of uncovering relevant and admissible evidence nor did it suggest some form of reasonable cost allocation under the circumstances.  Second, as the Court noted, the complaint in the underlying case is limited to alleged violations of the Fair Housing Act (FHA) in connection with prohibiting students from living with emotional assistance animals in university housing.  But the government’s proposed scope of production would extend well beyond that subject and compromise the privacy of individuals with no relationship to the lawsuit.  The Court was unpersuaded by the government’s argument that the expanded scope was permissible and necessary to elicit evidence of comparator practices that could demonstrate institutional and/or patterned discrimination.  Third, and most notably, the Court took a uniquely unorthodox approach by promoting more traditional discovery mechanisms as adequate substitutes for ESI discovery, stating that “[s]earching for ESI is only one discovery tool…the court is convinced ESI is neither the only nor the best and most economical discovery method for obtaining the information the government seeks.”  Even further, “[s]tandard document production requests, interrogatories, and depositions should suffice—and with far less cost and delay.”

It is worth noting that the Court had virtually no appetite for the government’s one alternative proposal to their own search term protocol, which would require defendants to produce the complete universe of collected ESI without filtering, which the government argued would be appropriate with a claw-back agreement in place.  Aptly noted by the Court, this proposal alternative might reduce costs, but would heighten the risk of privilege concerns and would also necessarily result in overbroad and improper disclosure of private personal information unrelated to the lawsuit.

Is this outcome a reactionary step backwards from resolving this sort of dispute through limited-scope ESI production, or is the outcome apt in that it exemplifies intolerance of overreaching and costly eDiscovery demands?  Regardless, and most importantly, the lesson here is simple: cooperation, proportionality and reasonableness are tantamount, and it is critical that attorneys understand how to approach these disputes, especially in light of where they are litigating.  When a court has an understanding and staunch viewpoint sufficient to dispose of a government request—rather than striving to limit the scope of the request—private litigants should certainly proceed with caution before bringing an aggressive eDiscovery demand before the court.

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Reasonableness and Proportionality Win Another Fight for Predictive Coding

On July 22, 2014, Judge Joe B. Brown issued a discovery order in Bridgestone Americas, Inc. v. Int’l Bus. Machines Corp. (Case No. 3:13-1196 M.D. Tenn.), in the plaintiff’s favor, allowing the use of predictive coding to further narrow a document set that was previously filtered from a broader universe of documents using keyword search terms.  The defendant objected to the plaintiff’s use of predictive coding after search terms were agreed to and applied, arguing that the application of predictive coding ex-post would be an unwarranted change to the case management order and unfairly advantageous to the plaintiff.

Magistrate Judge Andrew Peck, who broke the ice for predictive coding in his seminal order in Da Silva Moore v. Publicis Groupe et al. (No. 11-civ-1279 S.D.N.Y.), could use the Bridgestone Court’s Order as promotional material since it largely relies on references to Peck’s “various best practice suggestions,” “excellent article” and numerous rulings on predictive coding.  But the Bridgestone Court ultimately did get it right, stating that “[i]n the final analysis, the use of predictive coding is a judgment call, hopefully keeping in mind the exhortation of Rule 26 that discovery be tailored by the court to be as efficient and cost-effective as possible.”  In other words, reasonableness and proportionality are what matters in a court’s analysis of discovery disputes, including as to predictive coding, whether or not contemplated in a case management order.  Aptly stated, “[t]here is no single, simple, correct solution possible under these circumstances,” which in Bridgestone included the need to review millions of documents even after filtering by search terms.

So predictive coding got the green light from the Court.  The plaintiff was directed to be transparent and open with defendant throughout the process.  In a sense, the Court hedged its Order on another touchstone of Rule 26—cooperation.

The Bridgestone Court reached the right conclusion, but did so on general principles and by riding M.J. Peck’s coattails.  Sure, all is well that ends well, but the Court demonstrated an incomplete understanding of predictive coding.  Indeed, predictive coding often incorporates initial keyword filtering before applying the coding software itself.  Eric Seggebruch of Recommind, a pioneer in the field, noted that “using search terms in the first instance to cull a document set initially is viable, even common,” and that “predictive analytics is a viable method to employ in any situation where keyword culling is otherwise appropriate.”  Seggebruch added, “whether a keyword cull is appropriate prior to implementing predictive coding can depend on a number of factors, such as the type of data, the value of the case juxtaposed to the cost of using advanced analytics, and other factors that are matter specific.”

Keyword culling without predictive analytics is commonplace, and utilizing search terms before applying predictive coding software can increase efficiency and effectiveness in culling large document sets for purposes of preempting identification of the “junk” folder that sits in the corner of every document review dungeon that junior associates hope to never see.

In short, the Bridgestone Court (along with counsel) reached the appropriate conclusion, but without complete knowledge of the realities of how predictive coding is actually used.  Practitioners should make a concerted effort to understand predictive coding for what it is and is not—the failure to do so undermines the very objective that ever-evolving predictive coding tools seek to achieve.

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Spoliation Instruction But No Terminating Sanctions in Coding Trade Secrets Case

The United States District Court for the Southern District of Texas declined to impose litigation ending discovery sanctions for several claims of spoliation, but does plan to issue a spoliation instruction in Quantlab Technologies Ltd. v. Godlevsky, No. 4:09-cv-4039, 2014 U.S. Dist. LEXIS 20305, filed February 19, 2014.

Plaintiff, Quantlab Technologies Ltd. (“Quantlab”), is a quantitative financial research firm that employed two of the defendants, Dr. Godlevsky and Dr. Kuharsky (“the defendants”), in its research and technology departments.  The defendants wrote algorithms and code that transformed Quantlab from a company on the verge of bankruptcy into a profitable stock trading company.  The defendants were fired from Quantlab in 2007 after they had inquired about the legality of Quantlab’s trading practices.  The defendants then joined a new trading start-up, SXP Analytics, where they also wrote high-frequency trading strategy code to analyze the stock market.  Litigation over whether the defendants were using Quantlab’s trade secrets began in 2007.  The FBI raided SXP Analytics in 2008, seizing hundreds of thousands of files that may have come from Quantlab.  Following the raid, the defendants left SXP Analytics, which was eventually dissolved in 2012. The defendants then attempted to form a new high-frequency trading start-up called Singletick.

The Quantlab trade secret litigation followed the defendants throughout their subsequent career.  Because Quantlab claimed that the defendants relied on its code to develop their own code, Quantlab argued that “each iteration of code written by Defendants since Dr. Kuharsky and Dr. Godlevsky departed from Quantlab’s employ is relevant to determining whether that code was impermissibly based upon Quantlab’s version.”  Id. at *39.  Since litigation had begun as soon as the defendants were terminated and the instant suit was filed in 2009, Quantlab argued that the defendants had had a duty to preserve their computers ever since 2007 and definitely since 2009.

The court took time to set forth the legal standards that apply to issuing discovery sanctions, and then analyzed each claim of spoliation against each defendant individually, reasoning that whether a party has a duty to preserve evidence is a fact specific inquiry.

The first spoliation claim was against SXP Analytics founder, Emmanuel Mamalakis, for wiping and/or giving away 23 computers used by his developers.  The work stations were wiped or given away in 2012 as part of winding up SXP Analytics.  The court found that Mr. Mamalakis had a duty to preserve the work stations even though they had not yet been the subject of a specific discovery request.  Before Mr. Mamalakis got rid of the work stations, he had been served with many Requests for Production.  In light of those, “Mr. Mamalakis should have known that significantly altering or disposing of computers used by SXP employees was unwise.” Id. at *42.  The court rejected Mr. Mamalakis’s arguments that he did not have the requisite state of mind for spoliation because part of his decision to wipe computers was to inexpensively wind up SXP Analytics and that he believed any relevant evidence from the work stations could also be found on the servers, which he kept.  The court found Mr. Mamalakis acted in bad faith “because Mr. Mamalakis intentionally wiped and gave away numerous computers nearly three years after initiation of this lawsuit and concealed it from the court.”  Id. at *48.  The evidence on the workstations was relevant and prejudiced Quantlab because information on the servers would only show the code a developer uploaded to the server and would not contain detailed information about what the developer was looking at when he wrote the code or what versions of the code the developer went through before uploading it to the server.  But the court refused to impose terminating sanctions finding that whether Quantlab would have used evidence from the work stations was still “somewhat speculative” so the evidence was only “moderately relevant” and its loss was only “moderately prejudicial.”  Id. at *53.

The second spoliation claim was against Dr. Godlevsky because when Quantlab requested all computers Dr. Godlevsky had used since 2007, he only provided one laptop.  Quantlab did not allege specific acts of spoliation, but brought a spoliation claim on the theory that “there must be more.”  Id. at *54 [emphasis omitted].  Dr. Godlevsky admitted that he had another personal laptop, which he never used for coding, that he had disposed of after the hard drive had failed and that he had used many USB drives over the years that he did not keep track of.  The court found that Dr. Godlevsky should have known in 2007 that litigation was likely so that he could not be careless with evidence and that he definitely had a duty to preserve since 2011.  Even if Dr. Godlevsky intended to argue that the evidence was not relevant, he still had a duty to preserve it.  The court found that Dr. Godlevsky’s carelessness with his electronic devises constituted bad faith, but not “the most culpable state-of-mind possible.” Id. at *61.  The evidence was likely relevant, especially evidence on devices that had been seized by the FBI and had been connected to computers containing Quantlab code.  But the court declined to impose litigation-ending sanctions because the bad faith was not strong enough.

The third spoliation claim was against Dr. Kuharsky regarding a few specific devices, including one that Dr. Kuharsky had plugged into his computer approximately 50 times.  Dr. Kuharsky admitted that he had a duty to preserve evidence ever since 2007 and the court found bad faith for losing the specific devices.  But like the claims against the other defendants, while the evidence was likely relevant, it was not certain that it would have been used in Quantlab’s case, so prejudice to Quantlab could not be readily determined.  The court determined that loss of the specific devices warranted a spoliation instruction against Dr. Kuharsky, but that there was not a strong enough showing of culpability or prejudice to warrant litigation ending sanctions.

This case serves as a reminder to institute appropriate litigation hold procedures when litigation becomes reasonably likely.

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Connecticut Appellate Court Dismisses Appeal of Discovery Order Finding that the Order Did Not Constitute a Final Judgment


In Radzick v. Connecticut Children’s Medical Center, No. 34952, 2013 Conn. App. LEXIS 454 (Conn. App. Ct. Sept. 17, 2013) the Connecticut Appellate Court dismissed defendant Connecticut Children’s Medical Center’s (“CCMC”) appeal of a trial court discovery order. Francisco A. Sylvester, an employee of CCMC, treated Jonathan Radzick, a minor, for Chron’s disease. Sylvester prescribed Remicade as part of his treatment of Jonathan and Jonathan died from T-cell lymphoma. Paul Radzick, plaintiff and administrator of Jonathan Radzick’s estate, brought suit, alleging that Sylvester knew that Remicade’s manufacturer had circulated warnings about fatal T-cell lymphoma and that Sylvester failed to obtain parental permission to prescribe Remicade for Jonathan.

In discovery, plaintiff sought to determine what Sylvester knew about Remicade and when. Specifically, plaintiff wanted to search three computers Sylvester had access to during the time he treated Jonathan. The discovery dispute centered around electronically stored information (“ESI”) on those three computers. On July 19, 2012, the trial court granted plaintiff’s motion to compel and ordered plaintiff be permitted to image the hard drives of the three personal computers Sylvester had used, and that their contents be forensically examined. The court addressed defendant’s concern that the computers contained confidential patient information and private information from use by Sylvester’s family members by requiring that anyone involved with imaging or investigating the computers sign a protective order. The court also required that the forensic investigation of the computers be conducted by an independent forensic consultant who would be hired and supervised by a discovery master. Sylvester appealed.

The appellate court looked to the two prong test in State v. Curcio, 191 Conn. 27, 463 A.2d 566 (1983) to determine if the July 19, 2012 discovery order was an appealable final judgment. Under Curcio, in order to be appealable, the order must satisfy at least one of these two prongs: (1) the ruling must terminate “a separate and distinct proceeding,” or (2) the ruling must so conclude “the rights of the parties that further proceedings cannot affect them.”

The Court of Appeals rejected Sylvester’s argument that the July 19, 2012 order was akin to other discovery orders that met the first prong in which discovery orders directed at nonparties authorized public disclosure of confidential information. However, the July 19, 2012 order was directed at Sylvester, a party, and protected confidential information of nonparties that may be on his computers by appointing a discovery master and including an in camera review before any information was to be disseminated.

The appellate court held that the July 19, 2012 order also did not meet the second prong, reasoning that the rights of the defendants are not “irretrievably lost” because of the order. In fact, the rights of the defendants may never even be compromised because of the safeguards in the order. The court dismissed the appeal.

This case serves as a reminder of the potential importance ESI can play in the outcome of a case and of the importance of maintaining proper ESI retention and production protocols.

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How Will Proposed Changes to Federal e-Discover Rules Affect Your Practice?

The Federal Rules of Civil Procedure (Rules) may change the case management, scope, and sanctions related to e-discovery in federal courts, starting in late 2015. Proposed changes seek to encourage early and active case management, ensure proportionality in e-discovery, and advance cooperation among parties. 

The Committee on Rules of Practice and Procedure made draft versions of these rules available for public comment through February 15, 2014. The proposed changes to the Rules as related to e-discovery are summarized in this Alert, and all of the proposed changes are available here.

These changes may impact your practice, positively or negatively, depending on who you represent and the nature of the cases you try. Therefore we strongly encourage you to submit comments prior to the February 15 deadline, or to participate in one of the three public hearings on the proposed rules (Washington, D.C., on November 7, 2013; Phoenix on January 9, 2014; or Dallas on February 7, 2014).

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