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Court Instructs Parties to Utilize Predictive Coding, Requires Show of Cause to Avoid It

Posted in CASE SUMMARIES

EORHB, Inc. v. HOA Holdings, LLC, No. 7409-VCL (Del. Ch. Oct. 15, 2012)

Following argument on partial summary judgment and a motion to dismiss in the Delaware Court of Chancery on Monday, Vice Chancellor J. Travis Laster turned to the topic of a scheduling order and, apparently without outside provocation, addressed the issue of predictive coding:

The Court: Thank you.  Why don’t you all talk about a scheduling order for the litigation on the counterclaims.  This seems to me to be an ideal non-expedited case in which the parties would benefit from using predictive coding.  I would like you all, if you do not want to use predictive coding, to show cause why this is not a case where predictive coding is the way to go.

I would like you all to talk about a single discovery provider that could be used to warehouse both sides’ documents to be your single vendor.  Pick one of these wonderful discovery super powers that is able to maintain the integrity of both side’s documents and insure that no one can access the other side’s information.  If you cannot agree on a suitable discovery vendor, you can submit names to me and I will pick one for you.

One thing I don’t want to do – one of the nice things about most of these situations is once people get to the indemnification realm, particularly if you get the business guys involved, they have some interest in working out a number and moving on.  The problem is that these types of indemnification claims can generate a huge amount of documents.  That’s why I would really encourage you all, instead of burning lots of hours with people reviewing, it seems to me this is the type of non-expedited case where we could all benefit from some new technology use.

Transcript of Motion for Partial Summary Judgment, Motion to Dismiss Counterclaim and Ruling of the Court at 66-67, EORHB, Inc. v. HOA Holdings, LLC, No. 7409-VCL (Del. Ch. Oct. 15, 2012).

Following this exchange, counsel were asked if they had anything else they wished to discuss, to which both responded they did not.  Watch this blog for further developments in this case.