Lawson v. Spirit Aerosystems: Federal Court Blasts “Bloated” ESI Collection, Rendered TAR Ineffective

By John Patzakis

Technology Assisted Review (TAR), when correctly employed, can significantly reduce legal review costs with generally more accurate results than other traditional legal review processes. However, the benefits associated with TAR are often undercut by the over-collection and over-inclusion of Electronically Stored Information (ESI) into the TAR process. These challenges played out in spades in the recent decision in Lawson v. Spirit Aerosystems, where a Kansas federal judge issued a detailed ruling outlining the parties’ eDiscovery battles, use of Technology Assisted Review (TAR), and whether further TAR costs should be shifted to the Plaintiff. The ex-CEO of Spirit Aerosystems brought his suit accusing Spirit of unlawfully withholding $50 million in retirement benefits over his alleged violation of a non- compete agreement.

Lessons Learned from New Technology-Assisted Review Case Law ...

The Lawson court outlined two ways in particular how ESI over-collection can detrimentally impact TAR. First, the more data introduced into the process, the higher the cost and burden. Some practitioners believe it is necessary to over-collect and subsequently over-include ESI to allow the TAR process to sort everything out. Many service providers charge by volume, so there can be economic incentives that conflict with what is best for the end-client. In some cases, the significant cost savings realized through TAR are erased by eDiscovery costs associated with overly aggressive ESI inclusion on the front end. Per the judge in Lawson, “the TAR set was unnecessarily voluminous because it consisted of the bloated ESI collection” due to overbroad collection parameters.

The court also outlined how the TAR process is much more effective when the initial set of data has a higher richness (also referred to as “prevalence”) ratio. In other words, the higher the rate of responsive data in the initial data set, the better. It has always been understood that document culling is very important to successful, economical document review, and that includes TAR. As noted by Lawson court, “the ‘richness’ of the dataset…can also be a key driver of TAR expenses. This is because TAR is not as simple as loading the dataset and pushing a magic button to identify the relevant and responsive documents. Rather, the parties must devote the resources (usually a combination of attorneys and contract reviewers) necessary to “educate” or “train” the predictive algorithm, typically through an ongoing process…” According to the courts’ decision, the inefficiencies in the process resulted in an estimated TAR bill of $600,000 involving the review of approximately 200 GBs of data. This is far too expensive for TAR to be feasible as a standard litigation process, and the problems all started with the “bloated” ESI collection.

To be sure, the volume of ESI is growing exponentially and will only continue to do so. The costs associated with collecting, processing, reviewing, and producing documents in litigation are the source of considerable pain for litigants, including the Plaintiff in Lawson, who will, per the courts’ ruling, incur at least a substantial amount of the TAR bill under the cost-shifting order. The only way to reduce that pain to its minimum is to use all tools available in all appropriate circumstances within the bounds of reasonableness and proportionality to control the volumes of data that enter the discovery pipeline, including TAR.

Ideally, an effective and targeted collection capability can enable parties to ultimately process, host, review and produce less ESI.  This capability should enable a pre-collection early case assessment capability (ECA) to foster cooperation and proportionality in discovery by informing the parties early in the process about where relevant ESI is located and what ESI is significant to the case. And with such benefits also comes a much more improved TAR process. X1 Distributed Discovery (X1DD) uniquely fulfills this requirement with its ability to perform pre-collection early case assessment, instead of ECA after the costly, time consuming and disruptive collection phase, thereby providing a game-changing new approach to the traditional eDiscovery model.  X1DD enables enterprises to quickly and easily search across hundreds of distributed endpoints from a central location.  This allows organizations to easily perform unified complex searches across content, metadata, or both and obtain full results in minutes, enabling true pre-collection ECA with live keyword analysis and distributed processing and collection in parallel at the custodian level. To be sure, this dramatically shortens the identification/collection process by weeks if not months, curtails processing and review costs from not over-collecting data, and provides confidence to the legal team with a highly transparent, consistent and systemized process. And now we know of another key benefit of an effective collection and ECA process: much more accurate and feasible technology assisted review.

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Filed under Best Practices, Case Law, Case Study, collection, ECA, eDiscovery, Enterprise eDiscovery, ESI

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