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Federal Court Authorizes Predictive Coding of ESI in Multi-District Litigation Prior to Entry of Centralization Order
Posted in Litigation

Last week, the Federal District Court for the Northern District of Indiana issued an order authorizing use of predictive coding on electronically stored information (ESI) in a multi-district products liability case, despite warnings from the plaintiffs’ steering committee to refrain from conducting discovery until a centralization order was entered.

The defendant, Biomet, had reduced the universe of potentially discoverable documents from 19.5 million to 2.5 million by keyword searches and deduplication processes. It then employed predictive coding to identify relevant documents to produce. Biomet took these actions before entry of a multi-district centralization order. As of the date of the order, Biomet’s e-discovery costs exceed $1 million and will likely total between $2 and $3.5 million.

Claiming Biomet’s initial approach was tainted by not employing predictive coding from the outset, the committee requested an order requiring Biomet to start the entire discovery process all over again with predictive coding to be applied to the original 19.5 million documents, with plaintiffs and defendant jointly participating in that process. The committee believed its demand was justified because it was Biomet who gambled by spending millions on document production that it had been warned not to undertake prior to entry of the centralization order.

However, the court held that Biomet satisfied its discovery obligations under the Federal Rules of Civil Procedure. It further held that to grant the committee’s demand for Biomet to start e-discovery all over again would not comport with the proportionality requirement under the Federal Rules of Civil Procedure. Because the plaintiffs provided no compelling statistical or other basis to support their tainted review argument, the court held that the benefits of discovery proposed by the committee would not equal or outweigh the financial production burden on Biomet, likely in excess of $1 million.

The court addressed the committee’s implicit argument that Biomet was not permitted to rely on proportionality arguments premised on the incursion of incremental costs because Biomet disregarded the committee’s pre-centralization discovery warnings. The court noted that Biomet had no disclosure or document identification obligations to parties in cases awaiting a centralization order. The court therefore concluded that a party that proceeds with discovery in accordance with the transferee court’s directions or standing procedures does not forfeit the proportionality provision of the Federal Rules of Civil Procedure.

To learn more about V. Brandon McGrath and his practice, visit his profile.

  • Partner

    Brandon is an attorney in the firm's Cincinnati office and a member of the Litigation Department. He works with individuals and companies, both large and small, to resolve a variety of disputes and lawsuits. Brandon's practice ...

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