I am at the Masters Conference, a leading e-discovery conference. This a real-time report on the session Helpful Insights & Observations from the Corporate & Government Perspectives.
Panelists:
– David Shonka, FTC
– Paul J. Bohr, SEC
– Fred Block, SEC
– James Maroulis, Oracle
– Wendy Butler Curtis, Orrick
– Monica Palko, BearingPoint
Q: Do companies treat government requests differently?
A: It depends. Factors: is it an investigation or about a contract, which agency, scope of request. A company may more willingly turn over certain docs to government to than to commercial party. With government, less likely to fight to not turn over certain docs.
Q: Government, please comment on above.
A: As investigators, we don’t always know what we need at outset. Being understaffed, we may start with broad requests to start because we don’t have resources to narrow. Call us to discuss – we will negotiate our document requests, in all types of matters (antitrust second requests, investigations, and commercial matters). Companies should make available their IT experts, lay out how they store date, provide org chart, and a plan of how to approach the matter. Agencies look for helpful guidance from litigants. Especially in HSR matters, companies need to cooperate to close deals quickly.
Q: How many companies come to government meetings properly prepared?
A: Some staff won’t come to a meeting unless company brings the IT people.
Q: To gov’t lawyers: are you receptive to cost considerations in doc productions?
A: Yes. SEC is supposed to consider cost-benefit in its investigations. SEC will look both at dollars at stake and the programmatic goal in an investigation. SEC will provide resources in some instances to get access to data (e.g., if it is investigating a “pump and dump” operation, it might offer to image drive and review it, segregating any privileged docs). But Oracle has found that as third-party witness to insider trading cases has found some government document requests extremely burdensome.
At FTC, proportionality is a big consideration. For a mega-merger, agency cares less about production costs. The best way to control cost of production is with upfront negotiations.
Q: What happens to data once turned over to the government?
A: FTC: We provide instructions on how to produce. For example, Excel in native file format. Sometimes we have agree to having a hosting company provide access to documents. Internally, we use Summation and Concordance. Once matter ends, we return or dispose of materials unless they have become a government record. We work with parties on disposition. But there are regs that do allow for other agencies to gain access to records.
SEC: We have standard data delivery guidelines. For review, we use Concordance. Then we start reviewing. [Ed. note: Why doesn’t the government use concept search tools?]
Q: How important is it for private parties to document their production efforts?
A: FTC: It’s critical. The requirement is reasonable steps. You have to show you were reasonable. This includes litigation holds, production efforts, and chain custody. Oracle: document your “blind alleys” and why you might not have collected certain documents. Know why you did what you did. Have an audit trail of all your actions. That can be critical to show, for example, that you might have overlooked a critical doc because it was reviewed early in case before anyone could have understood its true import. Consensus of both private parties and agencies: document as much as you can about the entire discovery process (including lit hold notices and search terms).
The more you can document, the easier it will be to show that you took reasonable steps. Monica of BearingPoint points out that this is one value of using a vendor: the vendor is accustomed to documenting; moreover, vendor can testify with an expert who knows how to do this.
SEC rep says that it makes him nervous when a private party uses more than vendor because vendors take different approaches. So it’s not enough just to document, consider who is doing the work.
Q: Does government have tools beyond Concordance and Summation?
A: SEC: in certain instances, we can use systems that do more than Concordance and Summation.
Q: Do you struggle with ongoing preservation costs when cases go quiet.
A: Audience member: we had a case go quiet when we were spending $80k/month on preserving data. We went to an archiving solution. Outside counsel did communicate with the government, which was comfortable with the archive solution
FTC: Don’t assume that government will just forget about the case. But sometimes attorney may forget to send letter to close matter. So private side should check.
Oracle: We don’t want to take chance of reminding agency that a matter may still be open.
SEC: We may decide not to take action against the company. But that could put at risk ongoing investigation of an individual involved. We consider company requests to archive or change how it saves data to reduce cost as long as it’s preserved for the ongoing investigation.
Oracle: If you do get a closing letter, then take the opportunity to destroy records. But audience member suggests that matter could still come back to life.
Q: What is gov’t perspective on advanced searching tools?
A: It goes back to early discussions about data production. FTC is not likely agree to search terms at the outset because it does not have a good sense of the playing field. But if party is prepared to talk about searching custodians, specific terms, and sample results and can then show how this has been tested, then we might sign off on concept or Boolean searching. FTC is looking at new tools.