Will Recent Court Approval of Computer-Assisted Document Review Spur Acceptance in Antitrust Investigations?

Despite the increasing burden of e-discovery, private litigants and parties before the U.S. antitrust agencies have been cautious about embracing new e-discovery technologies to assist in identifying what documents are responsive to discovery or government requests.The reasoning is simple: concern that the software will miss documents that are critical to the case.This skepticism now faces a growing body of evidence demonstrating that the historic approach –"linear" document-by-document review, perhaps aided by the use of keyword searches – is no better, and likely is less accurate, than computer-assisted review.  A leading federal court has now endorsed this empirical evidence.  Last month in Da Silva Moore v. Publicis Group, Magistrate Judge Andrew Peck of the Southern District of New York issued an important opinion involving the use of computer-assisted"predictive coding" in electronic document productions.

In a variety of cases, Judge Peck has been at the forefront of assessing challenges and solutions of e-discovery.  Judicial endorsement may spur public acceptance of these software tools by the antitrust enforcers in the Federal Trade Commission and Department of Justice.

Generally speaking,"predictive coding" uses human reviewers' examination of a subset of documents to"train" computer algorithms to review and"predict" what other documents are responsive. Employing this type of technology is becoming necessary to handle the growing volume of emails and other electronically stored information that most companies generate today.  Many parties have been wary of using new e-discovery technologies absent agency and court approval.  Relying on new technology can be especially tricky in the context of merger review.  An antitrust agency could take the position that, having used certain technologies, the parties have not"substantially complied" with a Second Request.  This could delay an agency decision on the merits and threaten overall timing of the deal, and there is no suitable recourse for merging parties.

Da Silva Moore appears to be the first court approval of the use of such computer-assisted technology.  The decision offers some support for parties proposing to use these tools in litigation or in response to a government agency request for documents. The document collection in Da Silva Moore involved over three million emails and other electronically stored information. The defendants had proposed using predictive coding, and the parties reached an agreement on use of the software, subject to the plaintiffs' right to object.  In approving defendants' use of predictive coding, Judge Peck weighed (i) the parties' agreement on the use of computer-assisted review, (ii) the large number of electronic files to be reviewed, (iii) the demonstrated superiority of predictive coding over traditional alternatives, (iv) the need for cost effectiveness and proportionality called for by the Federal Rules of Civil Procedure, and (v) the transparency in search protocol proposed by the defendants.

Judge Peck concluded 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."

Although the same reasoning applies to government antitrust investigations, as a practical matter Judge Peck's decision will likely have more immediate influence in litigated cases:

  • Private litigants are more likely to agree to use of new technologies than are the antitrust authorities.  The Da Silva Moore parties had detailed parameters for the process (such as the confidence level that would be used and the size of the sample set) and engaged in an iterative process that gave plaintiffs the chance to evaluate how the software as performing.  Neither the FTC nor DOJ has stated whether it would participate in similar cooperative exercises or otherwise embrace the use of predictive coding.
  • Merging parties may not want to share documents with a government agency for advance vetting, as it could lead to the agency making a broader request or raise other disputes about relevance or other issues, in a context where there is no good recourse to a neutral arbiter.  More than in litigation, reaching the end of a merger review usually is a priority for the parties, and this back-and-forth could consume days if not weeks.
  • Without a clear statement from each agency, various staff within each agency will bring differing views on whether to accept alternative review tools, leaving parties uncertain about the outcome of a proposal to use this tool.

Nevertheless, judicial acceptance of predictive coding is a first step along the path towards FTC and DOJ, not to mention courts and agencies in other contexts, accepting these and other software tools as valuable tools for e-discovery.

The FTC already has acknowledged the importance of these new technologies.  In January 2012, the FTC published proposed revisions to the Commission's Rules (open for public comment until March 23).  One area for revision is how to address electronic discovery.  Citing the widespread use of electronic materials and the need to improve the efficiency of its investigations, the FTC stated,"Document discovery today is markedly different than it was only a decade ago . . . .  Searches, identification, and collection all require special skills and, if done properly, may utilize one or more search tools such as advanced key word searches, Boolean connectors, Bayesian logic, concept searches, predictive coding, and other advanced analytics."  The FTC also proposed additional"meet and confer" obligations, which could lead to transparency like that cited in Da Silva Moore.  The DOJ has not ventured into this area publicly.

The decision in Da Silva Moore has been anticipated by lawyers dealing with large e-discovery matters, and it may spur progress at the antitrust agencies.  As Judge Peck himself recognized, decisions like this will help clear the path for greater use of these tools: "Counsel no longer have to worry about being the 'first' or 'guinea pig' for judicial acceptance of computer-assisted review."

Lawyer Contacts

For more information, please contact your principal Jones Day representative or either of the lawyers listed below. 

Craig A. Waldman
San Francisco / Silicon Valley
+1.415.875.5765 / +1.650.739.3939

Ryan C. Thomas

Carmen G. McLean

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