TAR and Second Requests

One of the first tips posted to this site, back on April 29, 2015, was that a 'HSR Second Request' under the Hart–Scott–Rodino Antitrust Improvements Act provides a good opportunity to convince a party to use technology assisted review. The Second Request is a,"Request for Additional Information and Documentary Materials" made by the FTC when it believes that a merger may interfere with competition in a particular market.

Kroll and an attorney at Wachtell Lipton LLP collaborated on a December 2016 presentation on Second Requests, entitled, "The Nuts and Bolts of Second Request Compliance", which is available on the site of the New York State Bar Association. It details the way in which technology assist review can expedite the production of a large number of documents which must take place before a waiting period of 10-30 days will begin before a transaction will be permitted to close.

Second Requests may on average delay the completion of mergers by as long as three months. Substantial compliance is required before the second waiting period can begin and is usually 'extremely burdensome' and can cost 'several million dollars'.

The DOJ and FTC have set guidelines for the discovery process allowing for between 30-35 custodians; recommending 4-6 months of pretrial discovery if the parties end up litigating; and specifying that the discovery should cover a time range of two years prior to and up to 30-45 days before the request. The FTC may require a full privilege log for 5 custodians prior to compliance being acknowledged.

The DOJ's Second Request Model requires that parties provide a written description of search terms or a predictive coding method. It states that:

" For any process that instead relies on predictive coding to identify or eliminate documents, you must include (a)confirmation that subject-matter experts will be reviewing the seed set and training rounds; (b) recall, precision, and confidence-level statistics (or an equivalent); and (c) a validation process that allows for Department review of statistically-significant samples of documents."

The presentation encourages the parties to collect documents before a Second Request is made. Notably it quotes a publication of the DOJ on TAR that specifically endorses its use for Second Requests, "Predictive coding is preferred because the judgments about responsiveness during manual review are less accurate and almost certainly are not consistent among reviewers." See “Technology Assisted Review and other Discovery Initiatives at the Antitrust Division”.

Federal Court Rules on How TAR Is to Be Done

In FCA US, LLC v. Cummins, No. 16-12883 (E.D. Mich. Mar. 28, 2017), Judge Avern Cohn ruled that performing technology assisted review to a full data set, before culling it down by running keyword searches, is to be preferred to culling by keyword searches before doing TAR. The court's brief order cites only one source other than the parties submissions, the Sedona TAR Case Law Primer. Back on October 11, 2016, the Tip of the Night summarized the Sedona Conference's guide, and noted that, "The Northern District of Indiana denied a motion to make a party redo its review with TAR after it had already performed keyword searches, and let it proceed by applying TAR to a set culled down through the use of the keyword searches, but the District of Nevada stated that it was not a best practice to use TAR on documents found with the use of traditional search terms." In Section V, "Disputed Issues Regarding TAR", subsection C, is entitled,"Using Search Term Culling Before TAR". Here the following pro-TAR before keyword searching points are made:

1. N.D. Ind. - In re Biomet M2A Magnum Hip Implant Products Liability Litigation, - predictive coding might find documents a keyword search would not.

2. D. Nev. - Progressive Casualty Ins. Co. v. Delaney - applying TAR only to documents hitting keyword searches, was contrary to the best practices guide of a software vendor.

3. S.D.N.Y. - Rio Tinto v. Vale - Judge Peck said that keyword culling before running TAR would not occur in a perfect world.

The court noted that the parties should have been able to reach an agreement on how to do culling between themselves without involving the court.

Recommind's Database of TAR Law

Recommind has posted a database of key decisions on predictive coding or technology assisted review, here: http://pages.recommind.com/predictivecoding .

The actual decisions from each case are also linked to.