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The Benefit of Early Case Assessment in Food Court

Thu, 11/21/2013 - 12:00pm
Ronald J. Levine, Esq., Canaan E. Himmelbaum, Esq., and Michael J. Glick, Esq.

Scores of manufacturers of food and beverage products have become the targets of consumer fraud class actions challenging their use of words such as “all-natural,” “wholesome” and “healthy” on their labels.

Although many of these claims range from frivolous to meritless, the companies still face the prospect of massive document collections and reviews, which often bloat their legal expenditures beyond budget and cut into their already narrow margins. There may be no “silver bullet” to stifle these threats, but there is promising new technology that can be effective in evaluating liability and promoting strategic action early enough to make a difference.

Early case assessment (ECA) promises superior knowledge earlier in the game with rewards of better outcomes and lower costs. There are tools, which can leverage next generation search technology, assist defense counsel in evaluating potential liability and enable strategic planning.  ECA can empower proportional budgeting for litigation or determining reasonable settlement values. For this theory to hold, however, activation of the ECA process should be undertaken as soon as allegations are raised or a complaint is received. 

Against a background of exploding volumes of evidence, the modern litigation battlefield has contained minefields, primed with punishing sanctions for spoliation or other discovery errors, elevating the risk and costs of defending against charges. In the past, data had to be collected and processed before it could be reviewed, essentially front-loading costs before meaningful analysis could take place. By revealing the big picture early on, ECA promoting better and faster strategic decision making early enough in the process to make a material difference in both costs and outcomes.

Take a hypothetical example of a diet-bar manufacturer facing a consumer fraud class action for allegedly misrepresenting claims that its product “promotes good health” and contains “all-natural” ingredients. By the time the plaintiffs’ lawyer has filed the complaint, the key documents — the label, advertising and the publicly available regulatory story — will already have been reviewed and exploited by the plaintiffs. Discovery requests predictably will focus on internal email correspondence in product development, testing, copywriting and marketing areas, as well as financial information on sales, profits and distribution. Understanding what those documents and communications mean to the value of the case is key to making rational decisions and controlling costs.

Initially, ECA can help the legal team by offering an early preview of the evidence. Using the knowledge gained through the ECA process, manufacturers and their counsel are better equipped to perform a cost-benefit analysis to determine whether to proceed with litigation before undertaking the expense of collecting, processing and reviewing data.

In our hypothetical diet-bar suit, the manufacturer will be able to determine if its labeling conformed to FDA regulations, had been reviewed by outside counsel and if its nutritional claims were supported by scientific evidence. It may be able to make out a good argument for early dismissal by demonstrating that the product claims were supportable, and were not false or exaggerated.

Establishing a Discovery Plan

Failure to plan is planning to fail. Insights gained through the ECA process will reveal what evidence is available and what holes need to be filled to mount a successful defense. In Federal Court, the Rule 26(f) conference provides an outstanding opportunity to limit discovery and agree on protocols that can be very advantageous for food product defendants.

Assuming the matter was not quickly dismissed or settled, the parties should arrive at the meet and confer conference with as comprehensive a picture of their data as possible. By surveying the data landscape in advance, parties will obtain the clarity required to conduct an effective conference.  Particular attention should be focused on key players and the volumes and types of data in play. With ECA, counsel can obtain this necessary insight into which terms are most effective at finding items that will ultimately need to be produced, improving planning for discovery as well as communication with opposing counsel. 

Reducing Data Sets

In most cases, a very small percentage of the data will turn out to have any relevance to a given litigation. Experienced litigators know that even a smaller subset of that will ultimately end up in the courtroom. How to find those key documents early on is a key to developing a winning strategy and containing costs.

Many practitioners approach the process by using keywords to filter data to find the key documents.  These efforts may reduce a data collection by, on average, 50 to 75 percent. Reviewers are routinely employed to conduct a document-by-document review of the resulting mass to find the important evidence and to protect privilege, trade secrets and the like. Depending on the type of matter, the issues involved and the review platform, the speed of the review may range from 30 to 70 documents per hour, which, in large cases, can cost millions of dollars.

ECA helps narrow the search for responsive data to specific dates, custodians, sources, key terms, phrases or concepts. By reducing the size of the haystack at an earlier point in the process, litigants can avoid the expense of processing and reviewing a bulk of the documents that would otherwise be determined to have been irrelevant. Utilizing next-generation search techniques and review-enhancement technology can result in a much more efficient review process, with hourly document review rates in the range of 60 to 150 documents per hour or higher. With intelligent filtering of documents, there are fewer documents to collect, process and send to the review team. On average, ECA users reduce data sets by 75 to 90 percent.

Other Applications for ECA

ECA has numerous applications outside the litigation context. For instance, in FDA regulatory matters, it can help identify data that is responsive to government inquiries. During internal investigations, it can isolate data that might indicate noncompliance, assist in due diligence reviews or help identify employee misbehavior. ECA can even help organizations pinpoint potential weaknesses or inconsistencies before they transform into legal problems.

One of the most promising applications of ECA involves the reuse of data. Some ECA tools offer a single, centralized repository where clients can search, organize and export data across matters. These organizations can use modern litigation technology to develop “knowledge bases” that leverage prior identification of important evidence and their review decisions to avoid the time and cost of reprocessing and repetitive review.

The foundation for success in any legal matter is developing a winning strategy.  ECA enables the food and beverage industry to build that foundation by giving them deep visibility into their universe of data. Working smarter in the early stages of discovery leads to better results. 

Ronald J. Levine, Esq. — Ron Levine is partner and co-chair of the Litigation Department at Herrick, Feinstein, LLP. His practice concentrates on complex corporate litigation, especially multi-party actions. With over 30 years of experience, Ron specializes in class-action defense in the consumer products field, with a focus on the food and beverage industry. In addition to counseling on corporate legal and public relations strategies, Ron has chaired high-profile advisory boards and conferences in the food and beverage industry and currently co-authors a monthly newsletter on trends in food industry litigation. He is consulted by the news media and quoted extensively by Reuters and Lawyers USA on food labeling litigation. He received his law degree from Harvard Law School and his undergraduate degree from Princeton University.

Canaan E. Himmelbaum, Esq. — Before his current role as vice president of sales for Advanced Discovery, Canaan practiced law for eight years as both in-house and outside counsel. During his tenure at international nutritional solutions and cheese group, Glanbia (fka BSN, Inc.; London Stock Exchange symbol GLB), he was responsible for important aspects of the company’s litigation portfolio, including e-discovery. Canaan has spoken on panels and has written numerous articles about the e-discovery market since making the transition from legal to sales in 2009. He has been integral in rolling out the Food Litigation e-discovery Initiative at Advanced Discovery and continues to assist food and beverage companies with their ongoing e-discovery needs. Canaan received his law degree and undergraduate degree from the University of Florida.

Michael J. Glick, Esq. — Is senior executive vice president of technology solutions at Advanced Discovery. Over the past 25 years, Glick has focused on creatively implementing processes and procedures in the legal services industry to effectively reduce costs while increasing client service levels and satisfaction. As a pioneer in e-discovery, Michael has synthesized the intersection of legal understanding and technological expertise to provide novel solutions for his clients. He has been instrumental in negotiating discovery stipulations within the Rule 26(f) meet and confer process and has pioneered creative solutions for data minimization, database design and implementation. A frequent speaker on cutting-edge technology issues, Michael received his law degree from Loyola Law School and his undergraduate degree from the University of California, San Diego.

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