Filed under: In the News
As a company, we are continuing to nurture our relationship with the Association of Certified E-Discovery Specialists (ACEDS) by sponsoring this year’s ACEDS 2nd Annual Conference. The extensive experience and expertise Pangea3 has in the Litigation arena make us an ideal partner for this organization and the conference. Not only was Pangea3 the first and only LPO charter member of ACEDS but the relationship between Pangea3 and ACEDS was further strengthened in 2011 when Vice President & Global Head of Legal Solutions, Greg McPolin, Esq., joined the organization’s advisory board.
The conference focuses on a variety of issues related to E-Discovery, giving law professionals the opportunity to learn while also networking in the community. Sessions will focus on the global challenges associated with proper management of electronically stored information (ESI), as well as conflicts of law and rules between states and countries.
On the second day of the conference Pradeep Victor, Assistant Vice President, Litigation Solutions at Pangea3 will be speaking on the following panel:
- “Do-It-Yourself (DIY) Discovery – Just do it? Key factors in deciding when doing it in-house or outsourcing is right for you” Tuesday April 3rd from 1:30-2:45pm.
Pradeep is excited about the opportunity to speak on such an important topic in the E-Discovery field. “We’ve been partners with ACEDS from the beginning, and I’m looking forward to returning this year.”
For further information please visit the ACEDS website at www.aceds.org.
March 16, 2012
In his recent opinion in Da Silva Moore v. Publicis Group, Case 1:11-cv-01279-ALC-AJP (S.D.N.Y.), Judge Peck has for the first time judicially accepted the use of computer-assisted review/predictive coding (CAR/PC) tools in an ongoing litigation matter. Despite the buzz and apparent popularity of CAR/PC over the last few years, the two most common questions raised over, and presumably hindering, its use has been: (1) is there judicial acceptance (i.e., is it defensible)? and (2) how easy is it to use? With his recent opinion, Judge Peck has effectively answered one of those questions when he recognized that “computer-assisted review is an acceptable way to search for relevant ESI in appropriate cases.” Id. at 2.
In Da Silva Moore the parties submitted final versions of their CAR/PC protocol on 17-Feb, Judge Peck issued a written stipulation and order last week on 22-Feb essentially accepting defendant’s general CAR/PC protocol, which plaintiffs promptly objected to (the gist of their objections were essentially defendant’s protocol were not transparent enough). While Judge Peck’s order this past Friday did address plaintiff’s objections, I wanted to use this space to summarize some of the key takeaways from his opinion vis-à-vis the use of CAR/PC going forward.
- The Court did not order use of CAR/PC but is accepting its use – “[T]he Court did not order the parties to use predictive coding. The parties had agreed to defendants’ use of it, but had disputes over the scope and implementation, which the Court ruled on, thus accepting the use of computer-assisted review in this lawsuit.” Id. at 2, fn.1.
- The parties must do what is reasonable and proportionate under the circumstances, and not meet some standard of perfection – This is position is codified in FRCP 1 and 26 taken together. “While this Court recognizes that computer-assisted review is not perfect, the Federal Rules of Civil Procedure do not require perfection…. Courts and litigants must be cognizant of the aim of Rule 1, to ‘secure the just, speedy, and inexpensive determination’ of lawsuits…. That goal is further reinforced by the proportionality doctrine set forth in Rule 26(b)(2)(C).” Id. at 21-22.
- The Court endorsed usage of the Sedona Cooperation Proclamation model – “[T]he best approach to the use of computer-assisted coding is to follow the Sedona Cooperation Proclamation model. Advise opposing counsel that you plan to use computer-assisted coding and seek agreement, if you cannot, consider whether to abandon predictive coding for that case or go to the court for advance approval.” Id. at 5.
- Both parties will have to review a “seed” set – “I’m also saying to the defendants … [i]f you do predictive coding, you are going to have to give your seed set, including the seed documents marked as nonresponsive to the plaintiff’s counsel so they can say, well, of course you are not getting any [relevant] documents, you’re not appropriately training the computer.” Id. at 6. NOTE: the parties agreed to do this in Da Silva Moore, but only after first removing privileged documents.
- CAR/PC can be expensive – Defendant’s wanted to only produce the top 40,000 documents (which would have cost them $5/doc or $200,000). The Court rejected that by saying “where [the] line will be drawn [as to review and production] is going to depend on what the statistics show for the results … if stopping at 40,000 is going to leave a tremendous number of likely highly responsive documents unproduced, [defendant’s proposed cutoff] doesn’t work.” Id. at 6. “While cost is a factor under Rule 26(b)(2)(C), it cannot be considered in isolation from the results of the predictive coding process and the amount at issue in the litigation.” Id. at 24. “Staging of discovery by starting with the most likely to be relevant sources (including custodians), without prejudice to the requesting party seeking more after conclusion of that first stage review, is a way to control discovery costs.” Id.
- CAR/PC is not meant for all cases, but should be used in “appropriate” cases – “Computer-assisted review appears to be better than the available alternatives and thus should be used in appropriate cases.… In this case, the Court determined that the use of predictive coding was appropriate considering: (1) the parties’ agreement, (2) the vast amount of ESI to be reviewed (over three million documents), (3) the superiority of computer-assisted review to the available alternatives (i.e., linear manual review or keyword searches), (4) the need for cost-effectiveness and proportionality under Rule 26(b)(2)(C), and (5) the transparent process proposed by [defendant].” Id. at 21-22.
Despite the significance of this ruling it’s also important to not lose context. Da Silva Moore is an ongoing matter and as such, may yet yield additional rulings that may further clarify Judge Peck’s positions on CAR/PC. Further, there are other judges and cases out there that may further define the use of CAR/PC tools (see e.g., Kleen Products v. Packaging Corporation of America currently being argued in the Northern District of Illinois where plaintiffs are arguing the court should order defendants to use CAR/PC tools in lieu of keywords).
That said, Judge Peck’s view of the use of CAR/PC is consistent with Pangea3’s view of the same. We embrace and encourage the use of CAR/PC tools when appropriate and believe its use can be a very effective tool when correctly applied. Further, Pangea3 concurs with the position Judge Peck has stated in previous articles and strongly implies in the Da Silva Moore opinion, namely the question of defensibility RE: CAR/PC does not turn on the type of technology used, but rather on the process surrounding use of that technology. To that end, Pangea3 has developed its own CAR/PC protocol that has already incorporated some of the thoughts Judge Peck has articulated in Da Silva Moore, and that Pangea3 applies regardless of the CAR/PC technology utilized. Our documented protocol ensures a consistent, repeatable and therefore we believe, defensible, process governing the application and use of CAR/PC within the review structure. Finally, we believe that our basic review/QC/QA methodology is tailor-made for use with this technology (i.e., our QC/QA process results in a more accurate “seed” set than would otherwise occur without our built-in checks and balances).
February 29, 2012
As the summer ends and we return from our “staycations” it is the time to reflect on litigation flowing from the 2008 subprime crisis. Not a day goes by without the media reporting on a new angle in the three-ring circus that is the “tsunami” of Mortgage-Backed Securities – related litigation. In order to survey the damage, let’s look at how we got here, where we are now, and where we may be going.
The Past: The Great American Class Action and The Running of the Statutes
To understand where we are now, it’s important to take a quick trip down memory lane. At the beginning of 2011, things looked bleak for individual MBS investors as federal judges denied class certification, MBS-trustees sat on their thumbs, hard evidence of individual breaches of reps and warranties was hard to come by, and statutes of limitations continued to run.
In early January, S.D.N.Y Judge Baer denied class certification1 for a group of MBS investors, holding, amongst other things, that: (1) the class had different knowledge levels of the alleged loosening of mortgage-underwriting standards that led to the defaults and the decline in the value of the MBS, and; (2) the investors bought the securities at different times, when different amounts of information was available. In April, the Second Circuit agreed to consider2 an interlocutory appeal of the denial of class, which has yet to be fully briefed.
Similarly, in May, Los Angeles federal court judge Mariana Pfaelzer3 held that a class could only bring claims “if named plaintiffs bought into specific tranches of specific offerings.”
Since then the tides have turned. Two judges in the Southern District have upheld MBS-investor class certification and courts have allowed plaintiffs to use statistical sampling in put-back cases.
In June and August two S.D.N.Y. Judges – Rakoff and Crotty4 – issued opinions allowing investors to pursue MBS-class actions against Bank of America and Credit Suisse, rejecting the banks argument that the purchasers couldn’t form a class because amongst them were sophisticated investors aware of the general deterioration in the housing markets and lending practices.
On August 24 – citing the opinions of Crotty and Rakoff – Reuters editor at large Alison Frankel reported5 that “MBS class actions turn[ed] a critical corner” and noted that the decisions will give “ammunition” in the appeal of Judge Baer’s decision6 before the Second Circuit.
With respect to use of statistical sampling and extrapolation to prove plaintiffs’ claims for breach of reps and warranties, on March 25, United States District Court Judge Paula Crotty in the Southern District of New York was the first federal judge to rule7 in favor of that methodology. Crotty held that a plaintiff could use statistical sampling to prove a generalized claim for breach, and was not limited to the loan-by-loan approach described in standard MBS agreements.
The Present: The FHA Lawyers Up and MBS Trustees get “Feisty”
Since August the focus of MBS litigation has been on: the recent volley of lawsuits by the Federal Housing Finance Agency; the increase in litigation brought by MBS trustees and the extent of the exposure to those suits; the running statutes of limitations; and the certification of MBS-investor classes. Below are the highlights in chronological order:
September 1- Due to the surge in MBS related lawsuits, Pangea3 established a taskforce dedicated to MBS-related document review. The taskforce was built upon our experience acquired first-hand through work on dozens of MBS-related litigations and investigations for many of the largest international banks.
September 2 – The FHFA entered the MBS litigation arena when its litigation counsel, Quinn Emanuel and Kasowitz Benson filed 17 suits8 against virtually all financial institutions in the MBS game asserting put-back claims.
September 6 - Analyzing those suits, Reuters reported9 that the 17 suits by the FHFA cite approximately $196 billion in MBS holdings by Fannie Mae and Freddie Mac, but that the claims are more realistically valued at $40 billion – a number calculated by extrapolating the FHFA’s previously estimated percentage loss across the entire set of suits. Furthermore, Reuters stated that the $40 billion number does not include defenses by the banks designed to reduce their exposure dramatically.
September 10 – Bloomberg reported10 that recent decisions in the Southern District of New York, which allow class-action status for MBS investors, may result in banks suing their peer banks over losses from MBS issued by the defendant banks, suits they could not, and would not, have brought on their own.
September 14 – The American Banker reported11 that due to statutes of limitations “[t]he clock is running down on investors looking to sue the nation’s largest banks.” The article noted that the 17 lawsuits by the FHFA were brought before the three-year anniversary of Fannie Mae’s and Freddie Mac’s failure, ensuring they didn’t miss possible deadlines. The article explains though, that with respect to the relevant deadlines, “[l]egal arguments exist for both sides.”
September 15 – Reuters reported that MBS trustees were “getting feisty,”12 foreshadowing a trend of MBS trustees taking action due to pressure from regulators “fed up” with their inaction and MBS investors who are “running out of time on securities claims.” Trustees were finally asserting claims on behalf of the trusts, after coming under serious scrutiny by NY attorney general Eric Schneiderman and Delaware AG Joseph Biden III, which resulted in state fraud claims against trustee BNY Mellon.
September 16 – Bloomberg reported13 that the “mortgage debacle” had already cost the nation’s five biggest home lenders at least $65.7 billion, and that “new claims may push the industry wide total to twice that amount.” Bloomberg’s tally was compiled from regulatory filings, company statements and financial presentations by the nation’s five biggest banks, which have lost, respectively: Bank of America – $39.1 billion; JPMorgan Chase – $16.3 billion; Wells Fargo – $5.09 billion; Ally Financial, previously known as GMAC Inc. – $3.28 billion; Citigroup – $1.9 billion.
The Future: The Second Circuit Will Speak and The Evidence Will Be Sorted
With so many interested parties and moving parts it is impossible to predict exactly where this wave of litigation will head. We could be facing years of laborious fact finding, dramatic public trials, or quick mass settlements. As observers we should look out for the following:
- The opinion of the Second Circuit with respect to the certification of MBS-classes
- The size and frequency of put back claims by trustees
- Motions to dismiss MBS claims for violation of applicable statutes of limitations
Just last week, on September 19, Reuters reported that, due to investor class actions and trustee lawsuits, the banks’ “put-back exposure,” from trustee and investors suits “may ultimately dwarf their securities law liability.” If so, hold on, because this ride has just begun.
Links:
- http://www.reuters.com/article/2011/01/19/markets-assetbackeds-idUSN1926043720110119
- 2. http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202492333999
- http://www.reuters.com/article/2011/05/19/bankofamerica-countrywide-idUSN1926858420110519
- http://www.cohenmilstein.com/cases/231/hemt-mbs-litigation
- http://newsandinsight.thomsonreuters.com/Legal/News/2011/08_-_August/MBS_class_actions_turn_a_crucial_corner/
- http://newsandinsight.thomsonreuters.com/uploadedFiles/National_Litigation/News/2011/06_-_June/baerRALIclasscertopinion.pdf
- http://www.subprimeshakeout.com/2011/05/top-five-reasons-we-havent-seen-the-last-of-the-mbs-lawsuits.html
- http://www.forbes.com/sites/afontevecchia/2011/09/02/fhfa-sues-17-banks-over-massive-mortgage-losses-at-fannie-and-freddie/
- http://newsandinsight.thomsonreuters.com/Legal/News/2011/09_-_September/Banks_face_huge_losses_from_FHFA_lawsuits-analysts/
- http://news.businessweek.com/article.asp?documentKey=1376-LR84AT0UQVI901-5F6TEAVCB8O2C2LTGHRNK3S7IJ
- http://www.americanbanker.com/syndication/statute-mortgage-backed-securities-1042193-1.html
- http://newsandinsight.thomsonreuters.com/Legal/News/2011/09_-_September/MBS_trustees_(finally)_getting_feisty__Wells_sues_Bear_unit/
- http://www.businessweek.com/news/2011-09-16/mortgage-debacle-costs-banks-66-billion-as-suits-sap-profit.html
September 30, 2011
What’s on lawyers’ minds when they think about litigation management and associated strategies and tools? The “State of Litigation Management” report, recently released by LexisNexis, sheds light on current beliefs and attitudes held by both corporate and law firm attorneys.
The overview:
• Balancing large amounts of data against budget limitations remains a critical concern.
• Alternative fee arrangements (AFAs) are viewed as important by both corporate and law firm attorneys – and establishing pricing remains the biggest challenge.
• Keeping up with technology is a big issue for both corporate counsel and law firm attorneys, with younger lawyers showing greater interest in staying on top of new developments.
• Legal technology is vital to case analysis – primary examples include accessing data from mobile devices and using technology to organize key documents.
Some details about addressing these challenges:
• 53% of lawyers in firms and corporations find the “review” and “identification” phases of e-discovery to be the most time-consuming.
• 30% of attorneys in large firms “hire third-party vendors” and 20% “hire people” to manage the costs of e-discovery in 2011.
• 86% of lawyers do not consider outsourcing to overseas for e-discovery review as the biggest issue facing the legal industry today.
• 64% of attorneys want to see case analysis tools integrated with litigation document management.
Looking for more information? The full survey report, “State of Litigation Management,” is available for download here.
July 12, 2011
Were you surprised last week by the major malpractice claim filed against a “Big Law Firm” for “failure to supervise” its contract attorneys—allegedly resulting in the improper production of some 3,900 privileged documents to the federal government? [1] If you are anything like us at Pangea3—and you have worked diligently for years to develop and refine processes to prevent just such a situation—then this lawsuit came as no surprise. If you—inexplicably—have had other things on your mind for the past decade, continue reading on to ensure this fate does not befall you.
As reported by The American Lawyer, this malpractice case not only highlights outside counsel’s ethical duty to meaningfully supervise its agents, but demonstrates the potential consequences of failing to do so. The article notes that “while it’s understood that lawyers need to supervise vendors, the standards for that supervision remain imprecise.” At Pangea3 we agree: that’s why we have rigorously studied all available ethical guidance and have worked to establish procedures which—we believe—ensure supervision well outside of any grey area. See, e.g., ABA Formal Opinion 08-451, Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services, Aug. 5, 2008 (providing ethical guidance and describing legal outsourcing as a “salutary” trend in our globalized economy).
So how does Pangea3 ensure that outside counsel in our cases provide supervision above and beyond the requirements set forth by these “imprecise” ethical authorities? We achieve this via overlapping processes in which our outside counsel partners are required to:
- draft the review “playbook,” with input from Pangea3’s experienced consultants, which becomes the bible of the review process for our attorneys;
- lead the initiating “kickoff” call, which walks our reviewing attorneys through the “playbook” and numerous example documents;
- respond in real-time to specially crafted “escalation emails” created by experienced reviewers and circulated almost daily, which distill open review issues to their most basic elements. This body of decisions by outside counsel regarding borderline documents creates a constant flow of knowledge transfer between our reviewers and outside counsel, and becomes something akin to an easy to follow “law of the case” that the review team’s first line reviewers follow, and that the “quality checkers” must use to ensure results are consistent.
These methods, and others like them, seamlessly integrate outside counsel into our process from the beginning to the end of each review. They also ensure that outside counsel necessarily exercises meaningful supervision over our review teams.
Furthermore, Pangea3 is the best in the business at ensuring review accuracy. We achieve this uniquely high accuracy by: (1)hiring talented, full-time attorneys after a rigorous vetting process including background checks; (2)providing our attorneys with a clear professional career track; (3) investing heavily in our employees’ development with thorough, rigorous training; (4) providing leadership by U.S. litigators experienced in e-discovery, both on the ground in India, and in the U.S.; (5) utilizing Six Sigma-inspired methods to report on and eliminate errors; and (6) quality-checking, which is more thorough than any other review company—on- or off-shore—we are aware of. Our model does not turn on cutting corners to go faster; rather, our processes ensure that our obsession with quality does not impede our efficiency.
Finally, we adopt a risk-averse approach to privilege review, which locates and codes for “potentially privileged” documents rather than outright privileged ones, and requires a second-level review by outside counsel in order to yield a final privileged set.
If your provider is not making document review this safe and easy for you, maybe it is time to get to know Pangea3.
Reference and Endnote
[1] Company Alleges E-Discovery Malpractice by McDermott
June 16, 2011
If you’ve ever been curious about the faces behind Pangea3, now is your chance to take peak behind the scenes. We recently filmed a video that features employees in both India and the United States. In addition to great footage of our Mumbai office, the video includes snippets from interviews with Pangeans across the company.
After the intro, the video looks at the synergy between Pangea3 and Thomson Reuters, including interviews with executive leadership in both Pangea3 and Thomson Reuters. It segues into the vision that drives Pangea3 and the methods we use to add value for our clients. Finally, since “Pangea3 is fundamentally a company made up of people” (as David Perla, co-CEO says in the video), it finishes with the flavor of Pangea3—the company culture so important to both clients and employees.
To view the video, click here. Enjoy!
June 1, 2011
We are pleased to announce that Pangea3 is now part of Thomson Reuters, the world’s leading provider of intelligent information to businesses and professionals.
Thomson Reuters and Pangea3 are committed to serving the legal workflow needs of corporate legal departments and law firms worldwide. With the expertise, support and global reach of the Thomson Reuters organization and legal products like Westlaw, we are confident that we will be able to provide an even more comprehensive suite of legal services and support for corporate legal departments and law firms worldwide.
As we move forward, customers can continue to turn to their current service/sales and other business contacts at Pangea3 for information and service.
Both Pangea3 and Thomson Reuters are excited by the new opportunities this acquisition will provide the legal marketplace, and we look forward to serving your needs now and into the future.
Click here for additional information in response to FAQs.
Read Press Release.
November 19, 2010
In a recent Lawyers Weekly article, entitled “Lawyer on Tap,” Angela Priestley writes about the growth of the legal process outsourcing business in Australia, highlighting Pangea3’s recent partnership with Australian firm, Advent Lawyers. Priestley sees LPOs as an increasing presence in Australia, a country where the outsourcing of legal services is a newly growing business. Pangea3 Vice President and Managing Director – Legal Services, Antony Alex, is quoted extensively, clarifying the importance of LPOs. “It’s like attorneys on tap. You turn on the tap and get a whole stream of well qualified, very articulate and very smart lawyers….”
Antony describes a future with a “…leaner, meaner and more efficient way of delivering legal services…a world where general counsels get value for money and, more importantly, their services delivered in a timely manner that makes them more effective and efficient managers of the legal department.” For in-house counsels, the ability to outsource basic but time consuming legal work results in invaluable savings, allowing them to focus on more complex and sensitive tasks. In turn, they have placed pressure on law firms to reduce their bills through LPOs. Though prices are significantly reduced, the quality of work is very high, ensured by Pangea3’s high ratio of experienced and gifted US/UK trained lawyers to Indian lawyers, perhaps the highest in the LPO industry.
John Knox, Managing Director of Advent Lawyers, believes that Australian law firms are both aware that they could be more efficient, and ready to embrace a viable alternative to “having ten backpackers, 12 paralegals and other people all doing a document review.” While some of the Australian lawyers quoted in the article mention quality concerns, Knox believes that with increased familiarity with legal outsourcing, their fears will be dispelled and they will embrace the efficiencies it offers. In her editorial note for Lawyers Weekly, entitled “Outsource or Get Out,” Priestley vehemently emphasizes the significance of LPOs in Australia. “Some mid-tier law firms and innovative general counsels are already realizing the potential of LPO. If large law firms don’t put their hands up to play too, they risk missing the game all together.”
Read the full article entitled “Lawyer on Tap.”
June 22, 2010
Not surprisingly when the recession hit the legal industry, arguments against the billable hour model resurfaced in numerous articles and blogs. The recession has forced many law firms to not only downsize but, in a bid to show an understanding of the pressures corporate counsel face as well as keep their clients happy, firms are also discounting billable hour rates and providing alternative fee arrangements such as flat-fee pricing. But discounting billable hours doesn’t necessarily equate to cost savings.
In an article by the Boston Business Journal, Christopher Mirabile the president of the Northeast Chapter of the Association of Corporate Counsel and other industry experts, discuss the value of discounting billable hour rates. Interestingly one of the arguments against discounting billable hour rates revolves around value and efficiency. Alternative fees and fixed-fee arrangements place the burden of ensuring efficiency on the law firm or legal services provider whereas the billable hour can potentially promote inefficiency. Essentially, no matter how low the billable rate plummets inefficiencies will cost you in the long run.
February 26, 2010
Pangea3 was recently awarded LPO of the Year by India Business Law Journal. We were also ranked as a Top Five LPO provider in every award category including, Best Overall LPOs, IP Services, Legal Support, Contract Services, Litigation Support, and Corporate Services.
As quoted in the November issue of the 2009 IBLJ LPO Awards report, “… Pangea3 is the only LPO provider to win an award in each of this year’s awards categories, often with a marked statistical lead over its rivals. In all five service areas considered by the judges, the company was among the most prominent and highly rated providers.”
The IBLJ results were largely based upon confidential feedback from senior in-house counsel at leading corporations and law firm partners along five key performance criteria: quality, consistency and reliability of service, innovation, ability to tailor services, and value for money. Several of Pangea3’s Fortune 500 clients recognized its high quality and cost-effective legal outsourcing services.
Read More…
December 11, 2009
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