Electronic Discovery

eDiscovery Case Law: Read Inadvertent Email, Get Disqualified from Case

Lesson of the day: When you receive an inadvertently sent privileged email, read it and don’t disclose receipt of it, you can get kicked off the case.

In Terraphase Engineering, Inc., et al. v. Arcadis, U.S., Inc, the court disqualified defendant’s in-house and outside counsel for their handling of a disputed privileged email that was inadvertently sent by the plaintiffs’ counsel to the defendant and shared with defendant’s outside counsel.  For more information regarding this case, check out this Law Technology News article.

When a group of employees left Arcadis to form a competing company, relations between the two soured quickly and led to litigation.  Just prior to filing their lawsuit, the plaintiffs’ attorney sent a strategy email to his clients, which contained an attachment that, according to the former employees, included “Plaintiffs’ privileged recitation of background and comments to and from legal counsel.” Unfortunately for the attorney (or maybe fortunately, as it turned out), the email system’s auto-complete function (which completes a saved email address as soon as you begin entering it) entered an old Arcadis email address for one of the employees, which wasn’t caught before sending. The email and the attachment went directly to Arcadis, which had been monitoring the plaintiffs’ email accounts since they resigned from the company.

Arcadis’ in-house counsel read the email and the attached document and apparently shared the email with their general counsel and Arcadis’ outside counsel (Gordon & Rees, LLP), neither of whom notified the plaintiffs’ attorney that they had received the email.  Arcadis’ counterclaim contained certain information that caused the plaintiffs to suspect that Arcadis and its counsel had reviewed their privileged communications, and Arcadis, when confronted, acknowledged that it had received the email and agreed to destroy all copies, but refused to identify who reviewed the e-mail.  Eventually, the plaintiffs filed a motion for a protective order to disqualify Arcadis’ counsel and prevent Arcadis from using the email or the attachment during the case, stipulating that attorneys are prohibited from using privileged material that they receive from an opposing party, and are under an ethical obligation to immediately notify the opposing party when such information is received.

Arcadis opposed the motion, arguing that in-house and outside counsel only conducted a cursory review of the email and attachment, and stated that it was not privileged because it was sent “unsolicited” to the plaintiff’s work e-mail, in which he had no reasonable expectation of privacy. Arcadis also argued because the information itself was not privileged and would be disclosed during discovery, the plaintiffs would suffer no irreparable harm. And, since there was no active litigation between the parties when Arcadis received the email, they argued that the rules of professional conduct did not apply.

The court rejected Arcadis’ arguments and ruled for the plaintiffs, disqualifying Arcadis’ outside counsel and the in-house counsel who reviewed the emails, also ruling that Arcadis’ general counsel must be “removed from all aspects of the day-to-day management of the case, including . . . making any substantive or strategic decisions with regard to the case.”.  Arcadis was also ordered to dismiss its counterclaim and the plaintiffs were awarded their costs and fees in connection with bringing the motion against Arcadis.

A copy of the order can be found here.

So, what do you think?  Have you ever been burned by an inadvertently sent email?  Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Case Law: Deliberately Produce Wrong Cell Phone, Get Sanctioned

 

In Moreno v. Ostly, No. A127780, (Cal. Ct. App. Feb. 22, 2011), the California Court of Appeals affirmed the trial court’s award of monetary sanctions imposed against the plaintiff and her law firm in the amount of $13,500 for counsel and plaintiff’s discovery misconduct related to the preservation of text messages.

The plaintiff sued her former law firm employer alleging sexual harassment, retaliation and failure to pay back wages.  She claimed that a partner at the firm “forced himself on her sexually” on a daily basis and that she was fired when she notified the partner that she wished to sever the “intimate aspect of their relationship.”  In discovery, defendants sought copies of relevant e-mails and text messages between the plaintiff and the partner.  After the parties' meet and confer efforts failed, the court ordered the plaintiff to produce her personal computer and cell phone for inspection.  The inspection revealed that the cell phone produced was different from the one plaintiff had during her course of employment.  When questioned regarding the discrepancy, plaintiff’s counsel responded that the defendants would have to undertake further discovery efforts to determine what happened to the relevant equipment.  The plaintiff’s attorney conceded that many of the text messages on the prior phone had been used against the defendants before the EEOC, but had not been preserved prior to the disposal of the cell phone.

The defendants filed a motion for terminating and monetary sanctions or, in the alternative, a willful suppression of evidence jury instruction.  The trial court awarded monetary sanctions, finding the plaintiff and her counsel deliberately withheld the fact that the plaintiff failed to preserve her cell phone data, causing opposing counsel and the court to expend unnecessary resources.  The court found plaintiff’s counsel’s conduct willful and his explanation citing a conflict between the duty of loyalty to the client and the duty of candor to opposing counsel and the court “not very credible.”

The court of appeals concluded the trial court's award of monetary sanctions was supported by substantial evidence, and was well within the discretion of the court.

So, what do you think?  Are you aware of any other blatant examples of evasive discovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: eDiscovery Case Law Update, by Littler Mendelson P.C.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Working Successfully with eDiscovery and Litigation Support Service Providers: Evaluating Quality

Yesterday, we talked about evaluating service-provider pricing.  That, of course, is just part of the picture.  You need a service provider that can and does provide high-quality work that meets your expectations.

This can be hard to assess when you are evaluating a service provider with which you don’t have prior experience. And, unfortunately, it’s just not possible to know up-front if a service provider will do high-quality work on any given project.  You can, however, determine whether a service provider is likely to do high-quality work.  Here are some suggestions for doing so:

  1. Ask for references, and check them.  Ask for both end-user references and for people who were the point of contact with the service provider.  And ask for references for projects that were similar in size and scope to your project.  Later in this blog series, I’m going to give you some suggestions for doing an effective reference check.
  2. Look at their procedures and processes.  This is important for tasks that are labor intensive, and for tasks that are heavily technology based too.  Look at intake procedures, workflow procedures, and status-tracking procedures.
  3. Look at the type and level of quality control that is done.  Find out what is checked 100%, what is sampled, what triggers rework, what computer validation is done, and what is checked manually.
  4. Ask about staff qualifications, experience and training.
  5. Ask about project management.  A well-managed project will yield higher-quality results.  For certain types of projects, you might also require interviewing the project manager that will be assigned to your project.
  6. Evaluate the quality of your communication with the service provider during the evaluation process.  Did they understand your questions and your needs?  Were documents submitted to you (proposals and correspondence) clear and free of errors?  I might not eliminate a service provider from consideration for problems in this area, but I’d certainly question the care the service provider might take with my work if they didn’t take care in their communications with me.

What has been your experience with service provider work quality?  Do you have good or bad experiences you can tell us about?  Please share any comments you might have and let us know if you’d like to know more about an eDiscovery topic.

Working Successfully with eDiscovery and Litigation Support Service Providers: Evaluating Price

 

When you are looking for help with handling discovery materials, there are hundreds of service providers to choose from.  It’s important that you choose one that can meet your schedule, has fair pricing and does high-quality work.  But there are other things you should look at as well. 

In the next few blogs in this series, we’re going to discuss what you should be looking at when you evaluate a service provider.  Note that these points are not covered in order of importance.  The importance of any single evaluation point will vary from case to case and will depend on things like the type of service you are looking for, the duration of the project, the complexity of the project, and the size of the project.

Let’s start with Price.  Obviously, costs are significant and the first thing most people look at when doing an evaluation.  Unfortunately, many people don’t look at anything else.  Don’t fall into that trap.  If a service provider offers prices much lower than everyone else’s, that should sound some alarms.  There’s a chance the service provider doesn’t understand the task or is cutting corners somewhere.  Do a lot of digging and take a close look at the organization’s procedures and technology before selecting a service provider that is comparatively very low-priced. 

There’s another very important consideration when you are comparing service provider pricing:  not all pricing models are the same.  Make sure you understand every component of a service provider’s price, what’s included, what’s not, what exactly you are paying for, and how it affects the bottom line.  Let me give you an example.  Some service providers charge per GB for “input” gigs for electronic discovery processing, while others charge per GB for “output” gigs.  Of course, the ones that charge for “input” gigs charge a lower per gig price, but they are charging for more gigabytes. 

Understand how a service provider’s pricing is structured and what it means when you are evaluating prices.  It’s always a good idea to ask a service provider to estimate total costs for a project to verify your understanding.

In the next blogs in this series, we’ll look at other things you should be looking at when selecting a vendor.

What has been your experience with service provider work?  Do you have good or bad experiences you can tell us about?  Please share any comments you might have and let us know if you’d like to know more about an eDiscovery topic.

eDiscovery Trends: Despite What NY Times Says, Lawyers Not Going Away

 

There was a TV commercial in the mid-80’s where a soap opera actor delivered the line “I’m not a doctor, but I play one on TV”.  Can you remember the product it was advertising (without clicking on the link)?  If so, you win the trivia award of the day!  😉

I’m a technologist who has been working in litigation support and eDiscovery for over twenty years.  If you’ve been reading eDiscovery Daily for awhile, you’ve probably noticed that I’ve written several posts regarding significant case law as it pertains to eDiscovery.  I often feel that I should offer a disclaimer before each of these posts saying “I’m not a lawyer, but I play one on the Web”.  As the disclaimer at the bottom of the page stipulates, these posts aren’t meant to provide legal advice and it is not my intention to do so, but merely to identify cases that may be of interest to our readers and I try to provide a basic recap of these cases and leave it at that.  As Clint Eastwood once said, “A man’s got to know his limitations”.

A few days ago, The New York Times published an article entitled Armies of Expensive Lawyers, Replaced by Cheaper Software which discussed how, using ‘artificial intelligence, “e-discovery” software can analyze documents in a fraction of the time for a fraction of the cost’ (extraneous comma in the title notwithstanding).  The article goes on to discuss linguistic and sociological techniques for retrieval of relevant information and discusses how the Enron Corpus, available in a number of forms, including through EDRM, has enabled software providers to make great strides in analytical capabilities using this large base of data to use in testing.  It also discusses whether this will precipitate a march to the unemployment line for scores of attorneys.

A number of articles and posts since then have offered commentary as to whether that will be the case.  Technology tools will certainly reduce document populations significantly, but, as the article noted, “[t]he documents that the process kicks out still have to be read by someone”.  Not only that, the article still makes the assumption that people too often make with search technology – that it’s a “push a button and get your answer” approach to identifying relevant documents.  But, as has been noted in several cases and also here on this blog, searching is an iterative process where sampling the search results is recommended to confirm that the search maximizes recall and precision to the extent possible.  Who do you think is going to perform that sampling?  Lawyers – that’s who (working with technologists like me, of course!).  And, some searches will require multiple iterations of sampling and analysis before the search is optimized.

Therefore, while the “armies” of lawyers many not need near as many members of the infantry, they will still need plenty of corporals, sergeants, captains, colonels and generals.  And, for those entry-level reviewing attorneys that no longer have a place on review projects?  Well, we could always use a few more doctors on TV, right?  😉

So, what do you think?  Are you a review attorney that has been impacted by technology – positively or negatively?   Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Case Law: Spoliate Evidence, Don’t Go to Jail, but Pay a Million Dollars

 

As previously referenced in eDiscovery Daily, defendant Mark Pappas, President of Creative Pipe, Inc., was ordered by Magistrate Judge Paul W. Grimm to  “be imprisoned for a period not to exceed two years, unless and until he pays to Plaintiff the attorney's fees and costs that will be awarded to Plaintiff as the prevailing party pursuant to Fed. R. Civ. P. 37(b)(2)(C).”.  Judge Grimm found that “Defendants…deleted, destroyed, and otherwise failed to preserve evidence; and repeatedly misrepresented the completeness of their discovery production to opposing counsel and the Court.”

However, ruling on the defendants’ appeal, District Court Judge Marvin J. Garbis declined to adopt the order regarding incarceration, stating: “[T]he court does not find it appropriate to Order Defendant Pappas incarcerated for future possible failure to comply with his obligation to make payment of an amount to be determined in the course of further proceedings.”

So, how much is he ordered to pay?  Now we know.

On January 24, 2011, Judge Grimm entered an order awarding a total of $1,049,850.04 in “attorney’s fees and costs associated with all discovery that would not have been un[der]taken but for Defendants' spoliation, as well as the briefings and hearings regarding Plaintiff’s Motion for Sanctions.”  Judge Grimm explained, “the willful loss or destruction of relevant evidence taints the entire discovery and motions practice.” So, the court found that “Defendants’ first spoliation efforts corresponded with the beginning of litigation” and that “Defendants’ misconduct affected the entire discovery process since the commencement of this case.”

As a result, the court awarded $901,553.00 in attorney’s fees and $148,297.04 in costs.  Those costs included $95,969.04 for the Plaintiff’s computer forensic consultant that was “initially hired . . . to address the early evidence of spoliation by Defendants and to prevent further destruction of data”.  The Plaintiff’s forensic consultant also provided processing services and participated in the preparation of plaintiff’s search and collection protocol, which the court found “pertained to Defendants’ spoliation efforts.”

So, what do you think?  Will the defendant pay?  Or will he be subject to possible jail time yet again?  Please share any comments you might have or if you’d like to know more about a particular topic.

Working Successfully with eDiscovery and Litigation Support Service Providers: Introduction

 

If you work in a law firm or a corporate legal department, there will be times when you turn to a service provider to help with handling discovery materials – regardless of the technology and staff resources that you have.  You might look to a service provider to handle work that your department doesn’t do.  Or maybe your own resources are tied up and you just need more capacity.  

Very often, service providers become key members of the litigation team, and critical to the team’s success.  There is, however, a lot that can go wrong – just with the slightest miscommunication.  It is, therefore, important that you have an effective plan in place for engaging service providers when you need help, for working effectively with service provider project staff, and for seamlessly incorporating the work product into the case workflow. 

There are dozens – if not hundreds – of service providers to choose from for any given task on any given case.  Where do you start?  How do you find the one that’s right for your case?  How do you communicate effectively with that service provider?  How do you ensure high quality work, that’s delivered on time and within budget?  We’ll be answering all of these questions in this blog series.  We’re going to cover:

  • Evaluating and Selecting a Service Provider
  • Preventing Problems and Monitoring Work
  • Establishing and Managing a Preferred Service Provider Program in Your Firm
  • Types of Service Providers and Questions to Ask Each Type

In the next post in this series, we’ll start with what you should be looking for when you select a service provider.

What has been your experience with service provider work?  Do you have good or bad experiences you can tell us about?  Please share any comments you might have and let us know if you’d like to know more about an eDiscovery topic.

eDiscovery Case Law: No Sanctions for Scrubbing Computers Assumed to be Imaged

 

When scrubbing data from a computer drive related to litigation, it’s a good idea to make absolutely sure that there is another copy of that data, via backup or forensic image.  Don’t just take someone’s word for it.

In Federal Trade Commission v. First Universal Lending, LLC, No. 09-82322-CIV, (S.D. Fla. Feb. 17, 2011), the FTC investigated the defendants for their mortgage modification practices by alleging that defendants had violated the Federal Trade Commission Act and that defendants had acted in violation of the Telemarketing Sales Rule. For the duration of the investigation, the court appointed a temporary receiver who took control of defendants’ business premises.

During the discovery stage, the FTC wanted to preserve relevant data that was on defendants’ computers and servers by imaging them. When defendants’ were ask about the locations of all relevant computers and servers, they failed to reveal the location of servers with relevant data. As a result, these servers were not imaged and thus the data was not preserved. Due to misleading testimony by defendants, the receiver believed that all computers and servers had been imaged. Because of the incorrect belief that all of the relevant data had been preserved, the receiver permitted defendants to scrub the computers and sell them. It turned out that some of these were the ones that had not been imaged.

Defendants filed a motion to enjoin the prosecution and/or moved for dismissal of the case due to plaintiff’s spoliation of evidence. Defendants asserted that the FTC had either destroyed or caused to be destroyed computer evidence that would prove all of the defendants’ defenses.

The court found no basis for imposing sanctions against the FTC for the destruction of defendants’ computer system and denied defendants’ motion. The court established that it can impose an adverse inference against a party where the court finds that the party has engaged in spoliation of evidence. For this inference to be applicable there has to be a finding of bad faith. A court can make this finding through direct evidence or circumstantial evidence. If bad faith is based on circumstantial evidence, the following prerequisites must be present: (1) evidence once existed that could fairly be supposed to have been material to the proof or defense of a claim at issue in the case; (2) the spoliating party engaged in an affirmative act causing the evidence to be lost; (3) the spoliating party did so while it knew or should have known of its duty to preserve the evidence; and (4) the affirmative act causing the loss cannot be credibly explained as not involving bad faith by the reason proffered by the spoliator.

The court found that there was no direct evidence of bad faith. Further it pointed out that defendants failed to establish bad faith by circumstantial evidence, since the FTC had not destroyed the computer systems, but rather, the defendants did. The court went on to state, that even assuming, arguendo, that defendants destroyed the hard drives due to the receiver’s agent’s instruction, it did not change the fact that neither the receiver, nor the agent is the FTC.

Furthermore, the court went on that to the extent that defendants’ position could be construed to seek to attribute blame to the FTC for the receiver’s instruction to scrub the computers based on the FTCs misstatement, there was no malicious motive on the FTC’s investigator evident. This was at most negligent, and negligence is not sufficient for an adverse inference instruction as a sanction for spoliation.

Further, the defendants did not demonstrate that the absence of the missing data was fatal to their defense because it was established that alternative sources of information existed.

At last, the court emphasized that the FTC was under no obligation to preserve defendants’ evidence, especially considering the fact that the FTC never had control or dominion over the computers – the receiver did.

So, what do you think?  What are your procedures for ensuring data backup before destruction?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: eLessons Learned Blog.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Best Practices: No Bates, No Problem for Native Files

As today’s document collections are almost entirely electronic in a format used by the native application (i.e., “native files”), it has become more commonplace to produce those original native files to opposing counsel in eDiscovery.  Producing the native files saves costs in converting the files to be produced to an image format (either TIFF or PDF) before production.  And, for the recipients of a production, receiving native files enables them to also receive the metadata associated with those files (as it is contained within the files themselves).  If you don’t understand the benefits of receiving the underlying metadata, try reviewing an image of an Excel spreadsheet and see if you can understand how the numbers were calculated without the underlying formulas.  Not so easy, is it?

However, it seems to “upset the legal apple cart” when attorneys have to contemplate applying Bates numbers to native files.  Because many native file types are not stored in a typical paginated, document-oriented format, it is difficult to impossible to determine the number of pages for each file.  Because attorneys are so used to having a Bates stamp on each page of a document, many are still known to produce (and request production) in an image format, adding costs unnecessarily.  That would be like printing out every email in your Inbox before reading them.

It has become commonplace for parties to agree (and courts to accept) a file-level “Bates” or Unique Production Identifier (UPI) where each file is named with a prefix and a sequential number (just like a Bates number, only they’re not stamped in the file, but used as the file name).  These productions are usually accompanied by a data file, containing metadata for loading into a review tool, which includes the original file name and path of each file being produced.  This form of production has become common for any size of case.

If there’s a concern about referencing individual page numbers at deposition or trial, any files used as exhibits can still be converted to image (or printed) and a number applied.  You could simply use the UPI as the prefix, followed by a sequential number, so page 3 of the 11th file in the production could be stamped like this: PROD000011-00003.  This enables you to uniquely identify each native file, and still correlate the native file with pages when printed.

Of course, when you have to redact files, it’s still more common to convert those files to image and apply the redactions to the images, as redaction of native files (though performed in some cases) has not yet become a widespread practice.  One miracle at a time!

So, what do you think?  Are your productions routinely in native format?   Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Trends: Facebook’s Self-Collection Mechanism

One of the most enlightening revelations resulting from my interview with Craig Ball at LegalTech (published last Friday) was regarding a feature that he mentioned which Facebook added late last year that allows any user to download their information.  I thought it was such a significant bit of information that a post dedicated to the feature (in addition to the coverage in the interview) was warranted.

This feature is available via the Account Settings menu and enables users to collect their wall posts, friends lists, photos, videos, messaging, and any other personal content, save it into a Zip file and download the Zip file.  Craig also wrote about the feature in Law Technology News last month – that article is located here.

When you initiate the download, especially if you’re an active Facebook user, it may take Facebook a while to gather all information (several minutes or more, mine took about an hour).  Eventually, you’ll get an email to let you know that your information is packaged and ready for download.  Once you verify your identify by providing your password and click “Download Now”, you’ll get a Zip file containing a snapshot of your Facebook environment in a collection of HTML files with your Wall, Profile and other pages and copies of any content files (e.g., photos, videos, etc.) that you had uploaded.

Think about the significance of this for a moment.  Now, 500 million users of the most popular social network on the planet (which includes not just individuals, but organizations as well) have a mechanism to “self-collect” their data for their own use and safekeeping.  Or, they can “self-collect” for use in litigation.  In his article, Craig likens Facebook’s download function to Staples’ famous easy button.  How can an attorney argue an overly burdensome collection when you simply have to click a button?

With a social network behemoth like Facebook now offering this feature, will other social network and cloud solution providers soon follow?  Let’s hope so.  As Craig notes in his article, “maybe the cloud isn’t the eDiscovery headache some think”.  Spread the word!

So, what do you think?  Have you been involved in a case that could have benefited from a cloud-based self-collection tool?   Please share any comments you might have or if you’d like to know more about a particular topic.