photograph by Brian Cohen
qubit
qubit - bit-x-bit's E-Discovery Newsletter
Published approximately ten times each year, qubit is our publication on computer forensic and e-discovery issues. Covering such diverse topics as “Discovering the Identity of Anonymous Internet Posters; Balancing the First Amendment against the Right to Sue for Defamation” (May 2009) “Closing the Barn Door after the Animals Have Run Away? Recovering Protected Electronic Communications” (August 2008) and “Mining for Metadata: Ethical Considerations” (October 2007).
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Federal Circuit Reverses Taxation of ESI Expenses Where Parties Entered into Cost-Sharing Agreement, and Finds Abuse of Discretion Due to Lack of Evidence that Documents Were In Fact Produced
Susan Ardisson, Esq
(January 2012)
The Federal Circuit recently held in In re Ricoh Company, Ltd. Patent Litigation, 661 F.3d 1361 (Fed. Cir. 2011) that the prevailing party in a patent case was not entitled to $550,000 of expenses related to electronically stored information (ESI) which had been “taxed” as “costs” under 28 U.S.C. Section 1920(4) by the district court. First, the appellate court disallowed more than $234,000 of taxed costs because the parties had entered into a cost-sharing agreement during litigation.
Middle District of Pennsylvania Rules Duty to Preserve Arose Five Years Earlier When EEOC Complaint Filed, But Refuses to Impose Sanctions for Spoliated ESI
Susan Ardisson, Esq.
(November 2011)
The United States District Court for the Middle District of Pennsylvania recently held that the defendant had a duty to preserve electronically stored information (ESI) more than five years before the plaintiff filed his complaint for age discrimination and retaliation in 2009. In Culler v. Erick K. Shinseki, Secretary of the United States Veterans Affairs, Civil Action No. 3:09-0305 (Aug. 26, 2011), citing Zubalake v. USB Warburg, LLC, 220 F.R.D. 212 (S.D.N.Y. 2004), the court held that the filing of the plaintiff’s first EEOC complaint in 2004, claiming that his position “downgrade” was the result of age discrimination, triggered the defendant's duty to preserve...
ABA Ethics Opinion: Lawyer’s Duty to Protect Confidentiality of Email Communications with Client
Susan Ardisson, Esq.
(October 2011)
Counsel, are you emailing your client at work? Or does your client access the email you send to her personal account from her office computer or BlackBerry? Addressing the possibility that the confidentiality of these communications may be “jeopardized” in such situations, on August 4, 2011, the ABA’s Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 11-459...
Computer “Clean-Up” Constitutes Spoliation: Court Orders Forensic Exam, Grants Adverse Inference Instruction and Awards Attorneys’ Fees
Susan Ardisson, Esq.
(September 2011)
In a trade secret case, the defendant testified that he conducted a “clean-up” of his Dell computer follow-ing the issuance of a TRO and preliminary injunction against him. The defendant’s housekeeping activities on his computer included the deletion of certain financial information and evidence of his subsequent contacts with the plaintiff’s customers in violation of the TRO and preliminary injunction. Armed with this information, the plaintiff in AMG National Trust Bank v. Reis, 2011 WL 3099629 (E.D. Pa. July 22, 2011) moved for contempt and for sanctions based on the defendant’s spoliation of evidence. Commenting on the defendant’s conduct, the AMG court concluded that “the evidence strongly suggests that his purpose in deleting the files was to pre-vent their discovery.”
Defendant’s Computer Printout of Facebook Messages Excluded as Evidence: Authentication Requires Corroborating Facts
By Susan Ardisson, Esq.
(August 2011)
Authenticating electronic evidence such as email, text messages and Facebook postings offer unique challenges for parties and the courts. Recently, in State v. Eleck, 2011 WL 3278663 (Conn.App. August 9, 2011), the court held that authentication requires more than simply printing out a copy of the proffered Facebook postings.
Keyword Searching and Other Related ESI Charges Disallowed as Taxable Costs Under 28 U.S.C. §1920
By Susan Ardisson, Esq.
(July 2011)
The court in In Re Scientific-Atlanta, Inc. Securities Litigation, 2011 WL 2771296 (N.D. Ga. July 6, 2011) recently joined the overwhelming majority of courts that have disallowed, under 28 U.S.C. Section 1920, substantial ESI processing and searching costs to a prevailing party.
Keeping Client Secrets While Using Cloud Computing Resources: Ethical and Technology Considerations
By Joseph Decker, Esq. and Scott Ardisson, CCE
(April 2011)
Lawyers, litigators and corporate counsel alike are charged with the ethical obligation to maintain and safeguard the confidentiality of their clients’ information. A casual survey of the deluge of legal articles on “cloud computing” would reveal that “protecting client confidences” is the topic that is discussed most frequently. But sometimes the relatively straightforward ethical issue is being “clouded” by “the sky is falling” commentary.
Court Offers to “Friend” Witnesses for In Camera Review of Facebook Photos and Postings
By Susan Ardisson, Esq.
(March 2011)
With more than 500 million active Facebook users sharing photos and posting information about significant (or insignificant) events on Facebook walls, one of those users may include the Magistrate Judge in Barnes v. CUS Nashville, LLC dba Coyote Ugly Saloon, 2010 WL 2265668 (M.D. Tenn. June 3, 2010). In a novel approach to resolving an electronic discovery dispute, the Court offered to create a Facebook account in order to friend” two witnesses for an in camera review of their Facebook profiles which purportedly contained photographs of them and the plaintiff dancing on top of the defendant’s bar.
California and Illinois Courts Rule Employees Have No Expectation of Privacy in Personal Email and Electronic Communications on Company Computers
By Susan Ardisson, Esq.
(February 2011)
When faced with company manuals providing that employees have “no right of privacy” in personal communications created on company computers, courts in California and Illinois in the past month sided with employers. Rejecting the employee’s claim of privilege in Holmes v. Petrovich Development Company, LLC, et al, 2011 WL 117230 (Cal. Ct. of App. Jan. 13, 2011), the court pointedly stated that “emails sent via company computer…were akin to consulting her lawyer in her employer’s conference room, in a loud voice, with the door open….” Similarly, in Shefts v. Petrakis, 2010 WL 5125739 (D.C. Ill. Dec. 8, 2010), the court held that the president of a telecommunications company “did not have a reasonable expectation of privacy in his communications” after the company’s employee manual went into effect.
Phasing the Review and Production of ESI: A Measured Approach
By Susan Ardisson, Esq.
(December 2010)
Phasing or sequencing electronic discovery is one solution that can appeal to both sides in litigation. While this option has always been availa-ble, recent case law and commentary suggest that its use is likely to increase as parties look for ways to handle the ever growing volume of potentially rele-vant electronic evidence and the costs associated with its preservation, review and production. Re-cently, the court in Tamburo v. Dworkin, 2010 WL 4867346 (Nov. 17, 2010) refused to issue a stay of all electronic discovery requested by the defendants, and instead ordered the parties to conduct electron-ic discovery in phases. Citing recent commentary from the Sedona Conference, the Tamburo court directed the parties to “actively engage in coopera-tive discussions to facilitate a logical discovery flow.”
Amended Federal Rule Protects Drafts of Expert Reports and Certain Communications Between Expert and Counsel
By Joseph Decker, Esq.
(November 2010)
Effective December 1, 2010, the drafts of an expert’s report and certain communications between counsel and an expert will no longer be discoverable by opposing parties in federal court under the new amendments to Rule 26 of the Federal Rules of Civil Procedure.
Qualcomm, the Rules and the Duties of Counsel
By Susan Ardisson, Esq.
(August 2010)
The epic e-discovery case, Qualcomm v. Broadcom Corp., 2010 WL 1336937 (S.D.Cal. 2010), culminated in April 2010, after a post-trial sanction phase which lasted over a year and involved the production of over 1.6 million documents, a dozen depositions, and a three day evidentiary hearing. The facts of this well-known case will not be repeated here, except to remind the reader that the court imposed $8.5 million in sanctions against the plaintiff, Qualcomm, due to the company's conduct during discovery. Qualcomm failed to produce thousands of electronic documents which undermined Qualcomm's patent infringement case.
Failure to Issue Litigation Hold Does Not Prevent Defendant from Seeking Protective Order Under FRCP 26(b)(2)(B): Court Rejects 'Bright Line Rule'
By Susan Ardisson, Esq.
(July 2010)
Should a party be precluded from seeking a protective order under Federal Rule Civil Procedure 26(b)(2)(B) on the ground that the requested electronically stored information is inaccessible where the cause of the inaccessibility was the party’s failure to issue a timely litigation hold? This was the issue before the court in Major Tours, Inc. v. Colorel et al. 2010 WL 255727250 (D.N.J. June 22, 2010). Rejecting the “bright line rule” urged by the plaintiff, the Major Tours court refused to hold as a matter of law that a protective order cannot be granted under Rule 26(b)(2)(B) “when the evidence is inaccessible because of that party's failure to institute a litigation hold.” According to the court, “nothing in the plain language of Rule 26(b)(2)(B) requires such a threshold determination of who is at fault for the data having become inaccessible.” Accordingly, the court held, similar to a request for sanctions based on spoliation of evidence, a case-by-case review under Rule 26(b)(2)(B) is required. The court additionally held that the Magistrate did not abuse his discretion when he refused to order the State of New Jersey “to perform over a million dollars worth of discovery on the off chance that it might add to the five year’s worth of discovery already obtained, just because there is some risk that relevant emails were not preserved.”
E-Discovery Computer Consultant’s Fees Recoverable as Costs under 28 U.S.C. §1920(4)
By Susan Ardisson, Esq.
(May 2010)
Acknowledging the “division” of authority, the court in CBT Flint Partners, LLC v. Return Path, Inc., 676 F. Supp. 2d 1376 (N.D. Ga. 2009) awarded under 28 U.S.C. §1920(4) a successful defendant in a patent infringement case nearly $250,000 for the costs incurred in the collection and processing of more than 1.4 million electronic documents and six versions of its source code requested by the plaintiff. In the recently published opinion, the court reasoned that the services provided by the defendant’s electronic discovery consultant, which included the preservation, collection and production of all relevant electronic documents, decryption, as well as extraction of proprietary data and statistical and keyword analysis, were “highly technical” and “not the type of services that attorneys or paralegals are trained for or are capable of providing.” According to the court, the e-discovery consultant’s services are the “21st Century equivalent of making copies.” The court further stated that “[t]axation of these costs will encourage litigants to exercise restraint in burdening the opposing party with the huge cost of unlimited demands for electronic discovery.”
Eastern District of Pennsylvania Permits Defendant’s Computer Expert to Examine Plaintiff's Hard Drive for Documents and Email
By Susan Ardisson, Esq.
(March 2010)
In a case involving a dispute over the denial of a zoning variance relating to the construction of a temple, the United States District Court for the Eastern District of Pennsylvania ruled in Adhi Parasakthi Charitable, Medical Educational, and Cultural Society of North America v. Township of West Pikeland, 2010 WL 1047894 (E.D. Pa. Mar. 16, 2010) that the defendant was permitted to have its computer expert examine the plaintiff’s hard drive for additional electronic documents and email.
Securing Confidential and Trade Secret Information: Battening Down the Hatches
By Brett Creasy
(February 2010)
Companies, large and small, lose millions of dollars every year when employees take confidential and trade secret information. When an employee leaves and joins a competitor and the competitor suddenly signs a deal with a client, not only do eyebrows get raised, but litigation is likely to follow, particularly if the former employee used confidential company information to lure the client away. Many companies overlook some of the easiest and cost-effective ways to prevent the loss of their proprietary and confidential information. In fact, most companies already have the required tools; they just need to use them.
Judge Scheindlin Issues Landmark Decision on Preservation of Electronic Evidence, Spoliation and Sanctions (Special Issue)
By Susan Ardisson, Esq.
(January 2010)
In a 38 page opinion, Judge Shira A. Scheindlin began her discussion and analysis in Pension Committee of University of Montreal Pension Plan, et al. v. Bank of America Securities, LLC, et al. 2010 WL 93124 (S.D.N.Y. Jan. 11, 2010) with the admonition that “[t]hose who cannot remember the past are condemned to repeat it.”* Citing the court’s previous decisions in Zubulake, Judge Scheindlin wrote that:
"By now, it should be abundantly clear that the duty to preserve means what it says and that a failure to preserve records paper or electronic and to search in the right places for those records, will inevitably result in the spoliation of evidence."
In a motion brought by the Citco defendants against thirteen plaintiffs for spoliation of evidence and the imposition of sanctions, the court concluded that all thirteen plaintiffs “were either negligent or grossly negligent in meeting their discovery obligations.” Stating that most of the plaintiffs “conducted discovery in an ignorant and indifferent fashion,” the court awarded monetary sanctions against all thirteen plaintiffs and held that the defendants were entitled to an adverse inference jury instruction against six plaintiffs whose failure to preserve relevant electronic evidence was “grossly negligent.”
Former Assistant US Attorney’s Email Communications with Private Counsel Recovered from DOJ’s Email Server Are Privileged
By Susan Ardisson, Esq.
(January 2010)
After granting a motion to intervene, the court in Convertino v. United States Department of Justice, 2009 WL 4716034 (D.D.C. Dec. 10, 2009) ruled that the plaintiff in a Privacy Act lawsuit was not entitled to discovery of various emails sent by Jonathan Tukel, a former Assistant United States Attorney and dismissed individual defendant, to his private counsel at Cadwalader, Wickersham & Taft. According to the court, even though Tukel and his private counsel exchanged emails using Tukel’s DOJ email address, Tukel had a “reasonable expectation” that these email communications were private and were therefore protected by the attorney-client privilege. Noting that the DOJ does not ban personal use of its email and that Tukel did not know that the DOJ could access and save the emails from his account, the Convertino court held that Tukel’s “subjective” expectation of privacy was reasonable under the circumstances. The Convertino court’s ruling is the third decision in recent months to consider whether an employee’s email communications sent to counsel on an office computer are privileged.
Attorney-Client Privilege Waived as to Emails on Client’s Office Email
By Susan Ardisson, Esq.
(November 2009)
As employees increasingly use their office computers to send and receive private communications, including emails with counsel, the courts in various jurisdictions are considering whether the use of these office computers results in a waiver of the attorney client privilege and work product doctrine. Most recently in Alamar Ranch, LLC v. County of Boise, 2009 WL 3669741 (D. Idaho Nov. 2, 2009), the court addressed whether a county employee’s emails sent to and from her attorney on her office computer and via her county work email address were protected from disclosure under the attorney client privilege. The county’s email policy provided that it could review, audit and disclose all employee email. Looking to recent decisions in other jurisdictions, and applying a four factor test, the Alamar court held that that it was “unreasonable” for an employee to contend in “this technological age” that her email communications to her attorney on her office email would not be stored and available for retrieval by the county. Accordingly, the Alamar court held that the attorney client privilege was waived and that the plaintiff was entitled to use the emails.
Court Rejects Employer’s Claimed Right to 'Rummage Through' Employee’s Private Emails Sent to Her Attorney via Company Laptop
By Susan Ardisson, Esq.
(October 2009)
Rejecting a company’s claim that it had the right to review and use an employee’s personal emails sent from a work laptop to her attorney in a discrimination case, a New Jersey appellate court ruled that “the company had no greater interest in those communications than it would if it had engaged in the highly impermissible conduct of electronically eavesdropping on a conversation between plaintiff and her attorney while she was on a lunch break.” In Stengart v. Loving Care Agency, Inc., No. A-3506-08T1 (N.J. App. Div. June 26, 2009) the issue was whether a company handbook which stated that employee email communications on company computers were “not to be considered private or personal to any individual” resulted in a waiver of the attorney-client privilege. In a lengthy opinion, the Stengart court concluded that the employee’s right to privacy was not lost because of her use of a company owned computer, stating emphatically that “property rights are no less offended when an employer examines documents stored on a computer as when an employer rifles through a folder containing an employee’s private papers or reaches in and examines the contents of an employee’s pockets….” The Stengart ruling is contrary to a recent New York decision in Scott v. Beth Israel Medical Center, Inc., 847 N.Y.S.2d 436 (2007) where the court held that “the effect” of such an employer email policy “is to have the employer looking over your shoulder each time you send an email” resulting in a waiver of the attorney-client privilege. (See, “When Company Policy Prohibits Personal Email Use: Looking Over and Employee’s Shoulder” December 2007 issue of qubit.)