Spoliation

Willful E-Mail, Browsing History Spoliator Hit With Default Judgment; Prejudice Cited

Veolia Transportation Services Inc. v. Evanson, D. Ariz., No. CV 10-01392-PHX-NVW, 11/29/11

Key Holding: Complete loss of a defendant's hard drive image, and willful deletion of e-mails and internet browsing history merited a default judgment sanction in a tort suit involving anonymous e-mails.

Key Takeaway: A court may determine that a default judgment spoliation sanction is necessary when willful spoliation results in extreme prejudice to the moving party if the case were tried on its merits.

The U.S. District Court for the District of Arizona Link granted a default judgment sanction Nov. 28 against a defendant who intentionally deleted numerous e-mails and browser history records on a computer the day before turning it over for production, and failed to preserve an image of her hard drive (Veolia Transportation Services Inc. v. Evanson, D. Ariz., No. CV 10-01392-PHX-NVW, 11/29/11).

Judge Neil V. Wake said there was ample support showing that defendant Lydia Evanson's destruction of evidence was willful from her actions and earlier misrepresentations to plaintiff Veolia Transportation Services Inc. Given the prejudice that would likely result from trying the case on its merits following Evanson's spoliation, Wake said only a default judgment sanction would adequately “protect Veolia from prejudice and sufficiently deter destruction of electronic data” in general.

Suspicious E-Mail Deletions
Several anonymous and defamatory e-mails were sent to Veolia employees disparaging the company, and contained internal e-mails attached between Evanson and a supervisor. Evanson was terminated from Veolia two months prior to when the anonymous e-mails were sent to Veolia employees.

Veolia filed suit for a number of tort claims against “John Does I-VII,” and sought pre-service discovery to obtain the identity of the e-mail senders. Evanson was served with a subpoena requiring the production of her computer hard drives, though Evanson said in a sworn declaration that she did not send the anonymous e-mails, and knew nothing about them or how the Veolia internal e-mails were obtained by the anonymous sender.

Evanson's computer hard drive was imaged by Lightstone Solutions, but Lightstone deleted the image a month later when Evanson failed to pay to keep the image stored. Evanson installed a new hard drive in her computer after Lightstone returned it to her, but failed to inform Veolia of the replacement, or of the destruction of the image of the prior drive.

After a subpoena of the anonymous e-mail sender's internet service provider revealed that the e-mail had been sent from Evanson's home, she admitted she took the internal Veolia e-mails after her termination, and that she had logged on to the anonymous e-mail account. Veolia subpoenaed Evanson's computer hard drive again, at which point Evanson informed Veolia of the earlier hard drive replacement.

A forensic examination of Evanson's computer hard drive revealed that, immediately prior to the drive's production, the internet browsing history had been deleted, all sent and other e-mails were deleted from the computer's e-mail program, and all sent e-mails from Evanson's AOL account were deleted. Veolia amended its complaint to add Evanson as a named defendant, and filed a motion for sanctions asking the court to render a default judgment against Evanson. Evanson did not respond to the motion.

Duty to Preserve, Culpability Established
The court said Evanson had a clear duty to preserve her hard drive's contents after she was served with Veolia's initial subpoena. However, Wake said Evanson failed to fulfill that duty when she had her computer hard drive replaced, and defaulted on the payment of the storage fees for the previous drive's image, effectively destroying it.

The court also noted Evanson's multiple deletions of e-mails and internet browsing history from her computer immediately before turning the computer over for forensic analysis. Wake said this demonstrated that “Evanson acted at least willfully here, and likely in bad faith.”

Wake also said it was likely that the evidence lost was highly relevant to Veolia's suit considering “the spoliation itself and surrounding circumstances,” and therefore the loss was prejudicial. Given the record, the court said sanctions were indeed appropriate.

Default Judgment Necessary
The court acknowledged that a default judgment sanction was only appropriate in the most egregious of circumstances. Wake said when considering a default judgment sanction, a court must weigh the interests of expeditious resolution of litigation, the risk of prejudice to the movant, the court's interest in deciding cases on their merits, and the applicability of lesser sanctions.

Wake determined that Evanson's spoliation was willful, and an inference of bad faith was reasonable. Wake said the lost evidence was highly prejudicial against Veolia in deciding the case on the merits, and as a result, no lesser sanction than a default judgment was appropriate. The court ordered Veolia to submit a damages estimate at a subsequent default hearing.

DOES THE E-DISCOVERY RULING IN KPMG CASE SET DANGEROUS PRECEDENT?

On November 7th, the Chamber of Commerce filed an amicus brief in an uncertified wage-and-hour class action against the accounting firm KPMG, warning that if U.S. District Judge Colleen McMahon of Manhattan federal court adopts the order of a magistrate judge, the ruling would set "a dangerous precedent" that will be of "profound significance to businesses in America." In addition, the Washington Legal Foundation and the International Association of Defense Counsel have also filed their own amicus brief, asserting that the magistrate's ruling could fundamentally distort class-action litigation by potentially making it cheaper to settle a case than to comply with discovery orders. So why all of this backlash against a preliminary discovery ruling? On October 11, 2011, U.S. Magistrate Judge James Cott issued an order resolving a dispute between KPMG and Outten & Golden, the law firm representing two proposed classes of entry-level auditors who claim the accounting firm owes them overtime wages. The dispute concerned the hard drives of potential class members and the amount of electronic information that KPMG would have to preserve.

The parties agreed that the plaintiffs could use sampling software to limit the electronic information, but they could not agree on the sampling criteria or the number of computer hard drives to include in the sample. KPMG’s lawyers moved for an order limiting the sample size to 100 randomly selected hard drives, but Judge Cott would have none of that.

Instead, Judge Cott ruled that KPMG had to preserve each and every hard drive of every potential class member, stating that "prudence favors retaining all relevant materials.” Pointing to the seminal e-discovery ruling, Zubulake v. UBS Warburg, the magistrate judge reasoned that because McMahon, the district judge, hasn't yet ruled on class certification in the KPMG audit associate case, every entry-level auditor in the opt-in action is a potential "key player" under Zubulake, whether in the Manhattan class action or in another case that could be filed depending on how McMahon ultimately defines the class. It’s fairly clear that the magistrate judge is expected to revisit the hard-drive preservation issue after McMahon ruled on the class certification issue, but KPMG expressed its discontent in its own brief to the district judge.

The audit firm said it has already spent $1.5 million to preserve the hard drives of about 2,500 potential New York class members who have left KPMG, at a cost of $600 per drive. Complying with Cott's order, KPMG said, would cost millions more. More significantly, the Sidley lawyers wrote, Cott imposed a duty that would essentially preclude businesses from ever getting rid of anything. The Washington Legal Foundation brief took KPMG’s argument one-step further:

By imposing a sweeping preservation order on a class-wide basis in a case that currently is limited to three named plaintiffs, the magistrate judge has imposed substantial costs that KPMG can avoid only by entering into a settlement agreement – thereby undermining the public policy favoring merits-based resolution of disputes."

The Chamber of Commerce asked McMahon to step in so Cott's order wouldn’t set a "dangerous" precedent. The brief explained: "His decision, if not overturned, would exert an inordinate influence on how practitioners perceive the law. Every decision on the subject of discovery is important, because courts so sparsely write about it, as discovery disputes tend to be fact-bound and often settled. More significantly, however, because of the threat of sanctions, a decision – like the magistrate judge's – that overstates the duty of preservation will effectively become the law. 

Text Messages Are Inadmissible, Pa. Court Says (9-28-2011)

Unauthenticated text messages may not be admitted as evidence in trial, the Pennsylvania Superior Court has ruled, adding to the state's body of case law regarding the evidentiary boundaries of electronic communications.

In granting a new trial to defendant Amy N. Koch, a unanimous three-judge panel found there was no evidence showing Koch wrote the drug-related text messages police found on her phone. The court also decided the texts constituted inadmissible hearsay.

One former prosecutor predicted the decision would be "fertile" ground for future arguments over the admissability of electronic communications.

"Glaringly absent" in the case of first impression was evidence -- be it testimony or clues from the texts identifying Koch as the author -- that Koch wrote the messages, the panel found. Koch admitted to owning the phone, which police seized during a 2009 drug search of her home, but successfully argued the state lacked evidence tying her to the texts. A detective admitted that some of the messages found on the cell phone referred to Koch in the third person and "were clearly not written by her," according a 20-page opinion filed this month.

But the district attorney of Cumberland County, Pa., said the texts should have been viewed as a factor in the state's "totality of circumstances" argument and likened the messages to an "owe sheet" police look for in drug busts.

The court in  click here for case document Commonwealth v. Koch cited a number of relevant cases from North Dakota to North Carolina, finding that courts have required more than establishing ownership in order to prove authorship -- an evidentiary standard mirroring that of non-electronic documents under the state rules of evidence.

"In the majority of courts to have considered the question, the mere fact that an e-mail bears a particular e-mail address is inadequate to authenticate the identity of the author; typically, courts demand additional evidence," Judge Mary Jane Bowes wrote for the court.

And, although text messages are "somewhat different" because they are "intrinsic" to an individual cellular phone, Bowes acknowledged that doesn't mean more than one person cannot use the same phone.

As a result, courts deciding similar cases have required either witness testimony pegging an author to a document, or that the document itself contain "factual information or references unique to the parties involved," Bowes said.

During Koch's trial, a Cumberland County Common Pleas Court judge allowed the texts to be admitted over a defense objection, Bowes said. The trial court, she said, ruled that any doubt regarding their author went to the weight of the evidence, rather than its admissibility.

But Bowes dismissed that reasoning, noting that "authentication is a prerequisite to admissibility."

That police found the phone on a table near Koch was "of no probative value in determining whether she authored text messages days and weeks before," Bowes said.

Koch was sentenced to 23 months' probation after being convicted of possession of controlled substance with intent to deliver as an accomplice and possession of a controlled substance as an accomplice.

In addition to disregarding the lack of evidence about the texts' author, Bowes said the trial court also erred on the basis of hearsay when it admitted the texts.

She rejected the state's argument that the texts were not "offered for the truth of the matter asserted" and, therefore, were not hearsay.

During trial, the state argued the texts were offered to "'prove the fact that these things were said on this phone,'" making it more probable that Koch intended to sell marijuana when she possessed it, as opposed to personal use, according to Bowes.

But Bowes said the only relevance of the messages was for the state to show Koch possessed with an intent to deliver, adding that the evidentiary value of such messages "depended entirely on the truth of their content."

On top of the evidence being improperly admitted, Bowes said the state also used it to lend credence to the detective's testimony that the texts indicated a drug exchange and that the transaction did occur.

But the "mere existence of the text messages themselves was not enough to prove PWID," she said. "The jurors had to believe the actual text of the text messages, that is, the matters asserted therein, to grasp what the text messages were offered at trial to prove."

Had the state been able to prove Koch were the author, Bowes said, the texts could have been admitted under state hearsay rule for admissions of a party opponent.

The panel cited a number of decisions from jurisdictions nationwide on the developing area of law regarding text messages and electronic documents, many of which held electronic communications to the same authenticity standards as paper evidence. Particularly instructive to the court was In the Interest of F.P., a 2005 Pennsylvania Superior Court case in which the court decided circumstantial evidence may be used to authenticate a document (electronic or otherwise) "where the circumstances support a finding that the writing is genuine," Bowes said.

In the case, the court decided there was sufficient evidence to authenticate instant messaging transcripts between two minor students, identified only by their alleged screen names -- Icp4Life30 and WHITEBOY Z. According to Bowes, the F.P. court relied upon testimony from the victim, WHITEBOY Z, alleging that the defendant was Icp4Life30, a handle that had sent him threatening messages. During a mediation between the victim and defendant, the defendant never denied sending the messages, Bowes said. She also noted the contents of the messages identified the defendant by his first name in one instance.

Based on this evidence, the court decided it had enough to identify Icp4Life30 as the defendant and authenticate the transcripts.

Importantly, Bowes said, the F.P. court "rejected the argument that e-mails or text messages are inherently unreliable due to their relative anonymity" because the "same uncertainties existed with written documents."

Therefore, the F.P. court held that evidence regarding electronic communications could be authenticated within the framework of existing state rules of evidence and declined to create new rules regarding the admissibility of electronic evidence, Bowes said. The court decided that such evidence would be evaluated on a "case-by-case basis," she added.

'GLARINGLY ABSENT EVIDENCE'

According to the opinion, a confidential informant tipped off police that Koch's brother, Norman Koch, was selling cocaine out of the North Middleton Township, Pa., house that he shared with Koch and her boyfriend.

After a trash search yielded two baggies containing marijuana and cocaine residue, North Middleton Township Det. Timothy Lively applied for a search warrant of the house, which was executed on March 25, 2009.

During the search, police found two bags of marijuana and $700 in a dresser drawer containing "male socks and underwear," various marijuana paraphernalia, a small bag of marijuana in a basement freezer, and scales containing marijuana residue on top of the refrigerator.

Police seized Koch's phone, as well as her brother's. After Koch's text messages were transcribed, the state offered testimony and a transcript of what it said reflected 13 drug-related texts.

This came over objections as to authenticity and hearsay, according to Bowes. A jury found Koch guilty as an accomplice to the PWID and possession charges. She was acquitted of conspiracy to commit possession with intent to deliver.

Following the panel's Sept. 16 decision, Koch awaits a new trial.

After reviewing the record, the panel determined the admission of the texts could have reasonably contributed to the jury's verdict.

"This is not a case where the commonwealth presented overwhelming properly admitted evidence regarding [Koch's] involvement in drug transactions," Bowes said, adding that the prosecution's case rested on the texts and evidence that drugs were found in Koch's shared bedroom and other areas of the house.

But Cumberland County District Attorney David Freed said the texts should have been allowed because they indicated a certain level of drug activity on Koch's part and, at the very least, showed Koch's liability as an accomplice.

And while the case did reflect a "novel issue" in the state, Freed said the state focused less on the technology, and more on the argument that the texts reflected an "indicia of drug dealing."

Freed spoke on behalf of Matthew P. Smith, who tried the case for the state. Freed said the state is leaning toward applying for a reconsideration before an en banc panel of the Superior Court.

Michael O. Palermo Jr., who represented Koch, did not return a call requesting comment.

FERTILE GROUND

Matthew T. Mangino, a criminal practice columnist and former Lawrence County, Pa., district attorney, said the decision will give prosecutors a "roadmap" as to how to get text messages admitted in court. Mangino called Koch the type of case that is "fertile for argument" as technology continues to reshape the legal practice.

"These are the kind of things there's going to be a lot more arguments on," he said. "We're moving to a situation where we are using e-mails and texts more and more and putting the post office out of business with electronic communications."

But Leonard Deutchman, a cyberlaw columnist, disagreed with the court's reasoning, adding the trial court properly admitted the texts. Any question regarding their authorship, he said, was for a jury to decide.

Based on the current legal standards, he said, the evidence proving authorship of such text messages would be stronger than that which shows drugs belong to a person after the drugs are found in a home he or she shares with other people.

"I think that because drugs are old and text messages are new, that the court is treating text messages in a way that it shouldn't be and not understanding that [phones] should be treated like any other artifact," Deutchman said.

He said that by merely transcribing the texts and offering them as evidence, the state's approach was "pretty low tech."

One approach Deutchman suggested was to match entries in the phone's call log with the times of the text messages.

"What if the call log had a call to her mother?" he said. "Was somebody else calling her mother?"

"Maybe," Deutchman said. "But that goes to weight and not admissibility."

Trends (Sept. 15, 2011)

Judges Losing Patience With Lawyers Deficient in E-Discovery Core Competency

 What Judges Expect From Lawyers During Rule 26(f) Meet and Confer

Bottom Line: Lawyers conducting litigation must have knowledge of e-discovery issues and technology.

Familiarity with e-discovery issues is a “core competency” for litigation attorneys, Magistrate Judge Frank Maas of the U.S. District Court for the Southern District of New York said Sept. 15.

 In no other area of the law will attorneys come before a judge and profess ignorance, Maas said. “There is no excuse for lawyers lacking knowledge of e-discovery issues and technology,” he declared.  Maas and Ronald J. Hedges, formerly a magistrate judge with the U.S. District Court for the District of New Jersey, set forth some of their expectations for lawyers that appear before them during a Fed. R. Civ. P. 26(f) “meet and confer” session concerning the electronic discovery process in civil litigation.

‘Technologists' Welcome to Meet and Confer
Hedges and Maas clarified that participation at the meet and confer sessions before the magistrate judge is not necessarily limited to attorneys. Often, the magistrate judge would like the attorneys to bring along their “technologists.”

Technologists are people who are knowledgeable about ESI, such as e-discovery counsel, a law firm or client employee familiar with the client's electronic technology, or information technology vendors.  Attorneys also have the responsibility to prepare their technologists for what will be expected of them in the meet and confer sessions, Maas said.

Hedges posed the possibility that the magistrate could direct the technologists to resolve certain e-discovery matters among themselves without the presence of attorneys. Maas agreed that while such an order could be helpful, he understands that attorneys may not be comfortable with allowing their technologists to meet outside the presence of counsel. Maas also doubted that he would have the authority, if the attorneys did not consent, to direct the technologists to meet without counsel.

 Cooperation Is Essential
Hedges and Maas stressed cooperation as the way to limit the costs of litigation. This is particularly true in what they described as “non-asymmetrical” cases involving two big parties. Otherwise, costs can mushroom out of control, Maas said. Cooperation requires that the attorneys have sufficient technological knowledge to know what to ask for.  But what if counsel tells the magistrate judge that the clients would like to skip e-discovery altogether? Hedges asked Maas whether he would ever grant counsel's request to forgo e-discovery.

Maas responded that he would be amenable to such a request as long as it was clear that it was the choice of the parties. Again emphasizing his lack of tolerance for attorneys who refuse to get up to date on technological issues, Maas said that if the request is made because the attorney does not have the capability of conducting e-discovery, “that is a different story.”

 Future of E-Discovery
Maas and Hedges made several points regarding the future of e-discovery:

• Automated review of documents is almost a certainty. Although technological advances are expected to limit the percentage of available e-documents that attorneys will have to review, a fully automated system is probably not a reality. Judges will still expect relevancy judgments to be made by the attorneys.

• The federal rules of procedure will be reworked. Hedges and Maas suggested that the reworked rules might better define when the obligation to preserve e-documents begins and ends, and address the types of sanctions that are appropriate for preservation obligation failures.

• E-discovery will become more commonplace in criminal cases.

 Maas and Hedges spoke on a panel on “Leveraging Technology to Reduce the Challenges of Discovery,” sponsored by Virtual LegalTech.

Client Files (8/20/11)

Lawyer Who Destroyed Firm's Computerized Files With Intentional Self Interest Disbarred

Disbarment, not suspension, is the appropriate sanction to impose on a lawyer who altered or erased computerized client records and misappropriated his law firm's resources as part of a scheme to lure away firm clients to his new solo practice, a closely divided Maryland Court of Appeals declared Aug. 19 (Maryland Attorney Grievance Comm'n v. Keiner, Md., Misc. Docket AG No. 24, 8/19/11).

Although three judges called for an indefinite suspension, the other four decided that nothing less than disbarment would do, notwithstanding evidence of the lawyer's depression and dependency on alcohol. Writing for the majority, Judge Mary Ellen Barbera explained that the presumption of disbarment in cases of intentional criminal misconduct may be mitigated by disability only when the condition was the “root cause” of the misconduct, was “debilitating,” and made the lawyer utterly unable to act appropriately.

The court also distinguished an earlier decision in which it handed out a 90-day suspension to a lawyer who spirited away a firm's client files to start a new practice. Unlike the present matter, the majority said, there was no evidence in that case that the lawyer was motivated by personal gain.

Exit Strategy
Gregory Raymond Keiner worked as an associate at The Law Offices of Evan K. Thalenberg in Baltimore, primarily handling lead paint litigation. After working at the Thalenberg firm for five years, the court said, Keiner decided he wanted to open his own practice.

In order to hit the ground running, Keiner came up with a scheme he believed would make it easier for Thalenberg clients to follow him to his new practice. He began falsifying and deleting documents in the firm's client files to make it appear that cases had been closed for lack of merit, but he continued to work on the cases on the side in the expectation that the clients would stay with him when he left the firm. Keiner also used the law firm's databases, as well as its postage and office supplies, to locate and solicit some 200 potential clients, the court said.

After he was found out and fired, Keiner was hospitalized and diagnosed with depression and alcohol dependence.

The hearing judge found that although Keiner was never charged with a criminal offense, his conduct contravened Maryland's criminal statute against unauthorized access of and tampering with computers. The judge also determined that the lawyer violated Maryland Rules of Professional Conduct 1.4(a) and (b), on communication, and 8.4(a) (rules violation), 8.4(b) (criminal act reflecting adversely on fitness), 8.4(c) (dishonesty, fraud, deceit), and 8.4(d) (conduct prejudicial to administration of justice).  Although concluding that Keiner's alcohol abuse and depression adversely impacted him, the judge said the diagnosis was not so severe that it rendered the lawyer unable to control himself and obey the rules.

Malady Must Be Debilitating
Because Keiner admitted the violations, most of the Maryland high court's discussion centered on the question of what sanction to impose. Keiner argued that a suspension was appropriate given his debilitation, lack of disciplinary record, remorse, absence of injury to clients, and good reputation.

Bar counsel, on the other hand, insisted that disbarment was appropriate, citing Maryland Attorney Grievance Comm'n v. Vanderlinde, 773 A.2d 463, 17 Law. Man. Prof. Conduct 400 (Md. 2001), which held that nothing less than an “utterly debilitating” mental or physical malady that renders a lawyer unable to act in accordance with the law will be viewed as a compelling extenuating circumstance for intentional dishonesty and other serious criminal offenses.

A majority of the court agreed with bar counsel and ordered Keiner disbarred.

The majority pointed out that in Maryland Attorney Grievance Comm'n v. Palmer, 9 A.3d 37, 26 Law. Man. Prof. Conduct 754 (Md. 2010), the court had extracted from Vanderlinde a three-step test for evaluating whether a mental disability is sufficiently mitigating to avoid disbarment:

• It must be “conclusive, and essentially uncontroverted” that the lawyer had a serious and debilitating mental condition.

• The condition must have served as the “root cause” of the misconduct.

• The disorder must have rendered the lawyer utterly incapable of complying with the law and professional responsibility rules.

The majority agreed with the hearing judge that Keiner's ailments didn't satisfy this test and that the other mitigating factors the lawyer cited weren't compelling enough to avoid disbarment. It pointed out that Keiner admitted under cross-examination that “his depression and alcoholism had not caused him to neglect any of his clients' cases or rendered him unable to otherwise function at a high level in his legal and financial affairs.”

Motivated by Personal Gain
It also rebuffed Keiner's claim that suspension was appropriate under Maryland Attorney Grievance Comm'n v. Potter, 844 A.2d 367, 20 Law. Man. Prof. Conduct 176 (Md. 2004), where the court imposed a 90-day suspension on a departing associate who secretly removed two client files and destroyed his firm's computer records for those clients in the middle of the night.

Although both cases involved destruction of client files in preparation of leaving a firm, the majority said, Potter was inapposite because the lawyer there believed that he was acting in his clients' best interests. According to the lawyer in that case, the clients wanted to keep him as their attorney and he was concerned that the law firm might act to thwart their choice.

By contrast, the majority said, Keiner was motivated by personal gain.  In a dissent joined by Chief Judge Robert M. Bell and Judge Joseph F. Murphy Jr., Judge John C. Eldridge argued that an indefinite suspension was appropriate. The facts of this case are not significantly different from those in Potter, Eldridge said.

Daniel Clements of Salsbury, Clements, Bekman, Marder & Adkins, Baltimore, argued the matter for Keiner. Bar Counsel Glenn M. Grossman, Crownsville, Md., argued on behalf of the attorney grievance commission.

Willful Spoliation Sanctions

February 28, 2011- Simerly v. Pulte, No. 09CV-0089-Georgia; In Forsyth County Superior Court Judge Jeffrey S. Bagley has issued an order for sanctions against Pulte Home Corp. for destroying e-mails and other electronic evidence in an environmental lawsuit. 

While the sanctions will be determined in an upcoming hearing scheduled for March 31^st, it has been estimated by the plaintiff’s attorneys to be in the range of $400,000 which will make it the largest willful spoliation of electronically stored information in Georgia history.  Will this turn out to be yet another example of outside counsel's absent supervision of the ongoing duty to preserve all relevant ESI throughout the duration of the lawsuit? Even after the explicit order by the court to do so? To read more about this case, click here.

Compliance

2/10/11-Documents in FOIA Requests Must Be 'Searchable,' Federal Judge Rules

In a recent ruling in the Sothern District of New York, Judge Shira A. Scheindlin, lambasted the government for offering "a lame excuse" for their production of non-searchable documents in the matter; National Day Laborer Organizing Network v. U.S. Immigrants and Customs Enforcement Agency, 10 Civ. 3488.  Judge Scheindlin's ruling represents the first such ruling mandating that all federal agencies must turn over documents that include "metadata," which supports reasonable searchability for the requesting party.  Judge Scheindlin also stated that "common sense dictates" that the handling of FOIA requests must conform to "the spirit if not the letter" of the Federal Rules of Civil Procedure, which govern the handling of ESI stored on computers.  For more details on this late breaking news, click here.

Bad Faith Spoliation of ESI
 

1/28/11-Court Affirms Default Judgment Sanction for Bad Faith Spoliation of ESI
Daynight, LLC v. Mobilight, Inc., 2011 WL 241084 (Utah App. Jan. 27, 2011). In this intellectual property dispute, the plaintiff and third-party defendants appealed the district court’s decision to grant default judgment as a sanction for ESI spoliation. Rejecting the argument that the sanction was excessive and unduly harsh, the court noted that Rule 37(g) of the Utah Rules of Civil Procedure concerns discovery violations greater than simple discovery abuse (as opposed to Rule 37(b)(2)) and “does not require a finding of ‘willfulness, bad faith, fault or persistent dilatory tactics’ or the violation of court orders before a court may sanction a party.”

Moreover, the court noted that even if such culpability was required, the appellants willfully and in bad faith destroyed ESI, as evidenced by a video wherein the appellants’ employees spoke of their destruction of potentially harmful evidence. In addition, the employees committed such actions as “throwing the laptop off a building; running over the laptop with a vehicle; and stating ‘[If] this gets us into trouble, I hope we’re prison buddies.’” Finding this behavior demonstrated bad faith and a general disregard for the judicial process, the court affirmed the default judgment and award of attorneys’ fees and costs.

Surveillance

1/25/11-Ex-Spouse Violated Stored Communications Act by Using Keylogger to Obtain Former Spouse's Passwords to E-Mail and Social Network Accounts, Miller v. Meyers, W.D. Ark., No. 09-06103, 01/21/11).

This case represents just another example of a trend that is emerging in family law disputes where one party decides to invade the privacy of a former spouse by acquiring passwords to Internet Service Provider (ISP) e-mail accounts and other social network accounts and accessing her private communications.  The actual logging onto a person's private e-mail account without their permission is in clear violation of the SCA statute.  In addition, the defendant is facing another charge of possibly violating the federal Computer Fraud and Abuse Act (CFAA).  For a review of the court's ruling, click here.  

MINING SOCIAL MEDIA FOR EVIDENCE

On January 27th, Reuters reported on the latest litigation tactic in this online age: U.S. lawyers are trying to mine the private zone of social media sites for photos, comments, status updates and other tidbits that might contradict what their opponents are saying in court. Increasingly, judges in civil cases have accepted this tactic and permitted any relevant evidence to be admitted in trial. In fact, at least two recent court decisions have granted broad access to “private” photos and comments – a pragmatic shift in the legal balance between privacy rights and the right to evidence.

Generally speaking, postings on social media sites are governed by the Stored Communications Act, which regulates how private information can be disseminated in non-criminal matters. While courts have construed the law to mean that the sites don't have to hand over users' personal data in response to a civil subpoena, defense lawyers have found ways to get around this potential discovery roadblock by asking judges to order plaintiffs to sign consent forms granting defendants access to their private material. These consent forms are then attached to the subpoena requests and essentially give the site permission to hand over printouts of the private portions of their pages to the defendants.

For instance, in McMillen v. Hummingbird Speedway, Inc., No. 113-2010 CD (C.P. Jefferson, Sept. 9, 2010), defendant, in a personal injury case, sought access to plaintiff’s social network accounts and requested production of his user names, log-in names, and passwords. Such information was vital, according to defendant’s attorney, because the attorney stated that he had found comments and photos suggesting that plaintiff had not suffered a loss of his “enjoyment of life” as claimed in the suit. Plaintiff objected, arguing that the information was confidential. Upon defendants’ Motion to Compel, the court found the requested information was not confidential or subject to the protection of any evidentiary privilege. Specifically addressing the expectation of privacy with regard to Facebook and MySpace, the court found that any such expectation “would be unrealistic.”

The court then analyzed the relevant policies of the two sites, and concluded as to both that, “[w]hen a user communicates through Facebook or MySpace, however, he or she understands and tacitly submits to the possibility that a third-party recipient, i.e., one or more site operators, will also be receiving his or her messages and may further disclose them if the operator deems disclosure to be appropriate.”

Accordingly, the court determined that defendant could not successfully assert that his accounts were confidential. In so holding, the court also noted the possibility that communications could be disclosed by friends of the account holder with whom the communications were shared. As such, the court ordered the production of the requested evidence within 15 days and that plaintiff should not take steps to delete or alter the existing information on his social network accounts. In addition, a similar ruling was handed down in, Romano v. Steelcase, Inc. 2010 WL 3703242 (N.Y. Sup. Ct., Sept. 21, 2010), which involved a woman who claimed she fell off a defective chair. In this case, Defendant sought to discover Plaintiff’s current and historical Facebook and MySpace pages and accounts, including deleted information, in the belief that information posted there was inconsistent with her injury claims. Plaintiff objected to Defendant’s request, arguing, among other things, that her expectation of privacy trumped Defendant’s need for access to the evidence.

After first establishing that the information sought was clearly relevant to Plaintiff’s personal injury claim, the court found that production of her MySpace and Facebook entries would not violate her right to privacy, and that any such concerns were outweighed by Defendant’s need for the information. Specifically, the court noted that both Facebook and MySpace informed users that they were not guaranteed complete privacy; MySpace went so far as to warn users that their profiles and MySpace forums are public spaces. Concluding, the court stated:

"Thus, when Plaintiff created her Facebook and MySpace accounts, she consented to the fact that her personal information would be shared with others, notwithstanding her privacy settings. Indeed that is the very nature and purpose of these social networking sites else they would cease to exist. Since Plaintiff knew that her information may become publicly available, she cannot now claim that she had a reasonable expectation of privacy. As recently set forth by commentators regarding privacy and social networking sites, given the millions of users, “[i]n this environment, privacy is no longer grounded in reasonable expectations, but rather in some theoretical protocol better known as wishful thinking.”

Sanctions

1/24/11-Repeated Conduct Necessitated Harsh Sanctions Over $1 million-(Victor Stanley Inc. v. Creative Pope Inc., D. Md., No. 8:06-cv-02662-MJG, 1/24/11).

Privilege

1/23/11-Employee e-mail to Lawyer via Work Computer, Loses Privilege. In a California sexual harassment lawsuit, an ex-employee appealed an adverse ruling in the California Court of Appeal, Third District in which the plaintiff asserted that her e-mail communications with her attorney were privileged despite her flagrant disregard of her employer's stringent computer use policies.  The appellate court found that the plaintiff's expectation to conduct attorney-client privileged communications when her employer's policy specifically stated that company computers were to be used for business purposes only and that the company reserved the right to monitor and review all communications on their employee's computers was not reasonable.  To read the court's ruling, click here.

Forensic Image v. Original USB Thumb Drive

1/20/11-In Oce N. Am., v. MCS Servs., Inc., 2011 WL 197976 (D. Md. Jan. 20, 2011), the plaintiff sought to compel the production of forensic images of certain USB flash drives.  The images were created by a neutral third-party expert by both parties. Soon thereafter, the original USB thumb drives were destroyed by the defendant. The defendant then refused to produce the forensic images of the original USB thumb drives claiming that the plaintiff's request specified the access to the original thumb drives and not the forensic images of same.  The court rejected defendant's argument reasoning that "if the original thumb drives were discoverable, the forensic images of the thumb drives must also be discoverable.  To read the court's ruling, click here. 

Rules of e-Discovery Guidelines for Delaware Court of Chancery

1/18/11-Delaware Court of Chancery recently released a two-page guideline addressing the preservation of electronically stored information (ESI). These guidelines are a clear indication that the trend in state courts is gaining momentum when it comes to sending a clear and consistent message to attorneys and their clients that the role of ESI in commercial litigation will be taken more seriously.To review the guidelines issued, click here. 

Waived Privilege

1/17/11-S.D. Fla. Jan 7, 2011 in re Fontainbleau Las Vegas Contract Litigation:Production of Network Servers without Review Waives Privilege

This is a tragic example of a poorly planned document production that was totally avoidable had the party used common sense. Instead, the producing party chose to produce complete copies of file server hard drives that it shared with other related entities instead of taking the time to conduct a proper discovery and pre-production review of all relevant documents and things before production. To make matters worse, the production of vast amounts of unrelated ESI was delivered without any provision for a limited review or a clawback agreement to protect some semblance of privilege.  For a copy of the full opinion click here. 

Admissibility

1/14/11-10th Cir. Overturns Pornography Conviction: No Evidence of Images Downloaded Knowingly

The U.S. Court of Appeals for the Tenth Circuit overturned a conviction for receiving images of child pornography on January 5th, 2011, ruling that prosecutors had not presented sufficient evidence beyond a reasonable doubt that defendant knowingly downloaded images on to the computer in his possession (United States v. Dobbs, 10th Cir., No. 09-5025, 1/5/11).

In a two-to-one split decision, despite the fact that over 150 images of child pornography on the computer's memory cache, the testifying computer forensic expert for the prosecutor was unable to provide sufficient evidence that Dobbs had ever accessed the illegal images or that Dobbs had knowledge of the fact that the images were being stored temporarily on the computer's cache memory.  Despite an overwhelming quantity of circumstantial evidence of the defendant's deliberate search criteria he used to search for the child pornography, the absence of supporting evidence linked to consciously saving or accessing the images was sufficient in overturning the prior conviction.

Rules of e-Discovery Amendments  

1/1/11-Starting this year, the adoption of a mandatory meet and confer provision has become effective.  The amendments, affecting Wis. Stat. 802.10, 804.01, 804.08, 804.09, 804.12, and 805.07, were added to address for the first time the discovery of electronically stored information (ESI). Each of these amendments address a number of common issues that arise with e-discovery such as; an obligation to meet and confer, the form of production, and safe harbor from sanctions when ESI is lost due to the routine, good-faith operation of a computer system.  For more details, click here.