Discovery standards on completeness of response do not change when predicting coding is used, federal court held

firstchoicecopiesOn July 13, 2016 the Tax Court basically found that the use of predicting coding does not alter discovery standards for response completeness.

This is the background:

In September 2014 the Tax Court found that

predictive coding is an expedited and efficient form of computer-assisted review that allows parties in litigation to avoid the time and costs associated with the traditional, manual review of large volumes of documents

and granted Petitioners’ request to use predictive coding in responding to Respondent’s discovery request. See here.

Because the response was allegedly incomplete, Respondent served Petitioners with a new discovery request demanding all documents containing any of a series of search terms. The terms  were the same search terms used in a Boolean search during the predictive coding process. Petitioners objected to this new discovery request as duplicative of the previous discovery response.

On July 13, 2016, the court denied Respondent’s motion to compel and agreed with Petitioners stating that “Respondent’s motion is predicated on two myths”.  The first is the myth of human review. “Research shows that human review is far from perfect… To summarize even further, if two sets of human reviewers review the same set of documents to identify what is responsive, research shows that those reviewers will disagree with each on more than half of the responsiveness claims”.

The second is the myth of a perfect response. Even though Respondent sought “a perfect response”, the Tax Court Rules require only a “reasonable inquiry.” The court explained that “when the responding party is signing the response to a discovery demand, he is not certifying that he turned over everything, he is certifying that he made a reasonable inquiry and to the best of his knowledge” and his response is complete. “[T]he fact that a responding party uses predictive coding to respond to a request for production does not change the standard for measuring the completeness of the response.”

 

Dynamo Holdings Ltd. P’ship v. Comm’r of Internal Revenue, No. 2685-11, 8393-12, 2016 WL 4204067 (T.C. July 13, 2016) is available at https://www.ustaxcourt.gov…                                Open PDF

 

For more information, Francesca Giannoni-Crystal.

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