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eDiscoveryDaily

eDiscovery in Arbitration Has Become Less…Arbitrary – eDiscovery Trends
 

When you think of eDiscovery, you typically think of it as it relates to litigation – two sides of a case requesting and producing electronically stored information (ESI) as one means of identifying evidence designed to lead to resolution of a lawsuit.  But litigation is just one method for dispute resolution.  Another method is arbitration.  But, do arbitrators really “get” eDiscovery?

According to a new article in Corporate Counsel (Arbitrators Finally 'Get' E-discovery, written by Josh M. Leavitt), they finally do – thanks to the issuance of new rules (though some of those rules have actually been around for a while).  Leavitt observes that proponents of arbitration have considered the cost and delays of discovery “inconsistent with core principles of arbitration such as efficiency and cost-effectiveness” and that it was “not uncommon to go through substantial arbitrations without participating in anything remotely resembling either a federal e-discovery conference with opposing counsel or a prearbitration conference where the arbitration panel engaged the parties in meaningful and technically sound discussions about e-discovery.”

The end result was often either an ineffective, costly and/or manipulated discovery process.  However, as Leavitt notes, arbitral bodies JAMS and the American Arbitration Association (AAA) “now have protocols for e-discovery, as do several of the international arbitration providers”.

JAMS

The former Judicial Arbitration and Mediation Services, now known as JAMS, Inc., published in January 2010 its Recommended Arbitration Discovery Protocols to “provide JAMS arbitrators with an effective tool that will help them exercise their sound judgment in furtherance of achieving an efficient, cost-effective process which affords the parties a fair opportunity to be heard.”  Also, Rule 16 of JAMS Comprehensive Arbitration Rules (also added in 2010) covers topics such as preliminary conferences, formats of production, metadata, custodians and cost shifting.

American Arbitration Association (AAA)

Last October, the AAA added new rules R-22 and R-23 to its Commercial Arbitration Rules and Mediation Procedures, which establishes parameters for arbitrators to manage exchange of ESI, impose ESI search parameters and make cost allocations and sanction noncompliance.  Also, the International Centre for Dispute Resolution® (ICDR), the international arm of the AAA, has published a 3 page Guidelines for Arbitrators Concerning Exchanges of Information to establish the authority for arbitrators to manage ESI and impose sanctions for noncompliance with their ESI orders.

With these resources available, arbitrators can make the process of eDiscovery less…arbitrary.

So, what do you think? Have you managed discovery in arbitration? Was it efficient?  Please share any comments you might have or if you’d like to know more about a particular topic.

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.

Despite 18 Missing Emails in Production, Court Denies Request for “Discovery on Discovery” – eDiscovery Case Law

In Freedman v. Weatherford Int’l, 12 Civ. 2121 (LAK) (JCF) (S.D.N.Y. Sept. 12, 2014), New York Magistrate Judge James C. Francis, IV denied the plaintiff’s request to, among other things, require the defendant to produce “certain reports comparing the electronic search results from discovery in this action to the results from prior searches” – despite the fact that the plaintiff identified 18 emails that the defendant did not produce that were ultimately produced by a third party.

Case Background

In this securities fraud class action, Judge Francis had previously denied three motions to compel by the plaintiffs seeking production of “(1) ‘certain reports comparing the electronic search results from discovery in this action to the results from prior searches’; (2) ‘documents concerning an investigation undertaken by [the] Audit Committee’ of [the] defendant…; and (3) ‘documents concerning an investigation undertaken by the law firm Latham & Watkins LLP’.”  In denying the motions, Judge Francis stated that “Although I recognized that such ‘discovery on discovery’ is sometimes warranted, I nevertheless denied the request because the plaintiffs had not ‘proffered an adequate factual basis for their belief that the current production is deficient.’”

However, Judge Francis granted reconsideration and asked for further briefing on the second item, based on the plaintiffs’ presentation of “new evidence, unavailable at the time [they] filed their [earlier] motion, which allegedly reveals deficiencies in [Weatherford’s] current production.”

Eighteen Missing Emails

The new evidence referenced by the plaintiffs consisted of 18 emails from “critical custodians at Weatherford” that were produced (after briefing on the original motion to compel was complete) not by the defendants, but by a third-party causing the plaintiffs to contend that Weatherford’s production is “significantly deficient.”  The plaintiffs contended that “providing them with a “report of the documents `hit'” by search terms used in connection with the Latham and Audit Committee Investigations will identify additional relevant documents that have not been produced here.”

Judge’s Ruling

However, Judge Francis disagreed, stating “the suggested remedy is not suited to the task. The plaintiffs admit that of those 18 e-mails only three, at most, would have been identified by a search using the terms from the investigations.”  He also cited Da Silva Moore, noting that “[T]he Federal Rules of Civil Procedure do not require perfection…Weatherford has reviewed “millions of documents [] and [produced] hundreds of thousands,” comprising “nearly 4.4 million pages,” in this case…It is unsurprising that some relevant documents may have fallen through the cracks. But, most importantly, the plaintiffs’ proposed exercise is unlikely to remedy the alleged discovery defects. In light of its dubious value, I will not require Weatherford to provide the requested report.”

So, what do you think?  Was the decision justified or should the defendant have been held to a higher standard?  Please share any comments you might have or if you’d like to know more about a particular topic.

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.

“The Decade of Discovery” On Tour – eDiscovery Trends

A few months ago, we told you about an intriguing documentary about eDiscovery that premiered in the New York area.  Now, that documentary is making the rounds and may be coming to a theatre near you.

The Decade of Discovery was written and directed by Joe Looby, who, according to his LinkedIn profile, served in the U.S. Navy’s Judge Advocate General Corps, practiced as an environmental enforcement attorney for New York state and was a founder of the forensic technology practices at Deloitte and FTI.  His film production company is called 10th Mountain Films, named in honor of his father, who served in the 10th Mountain Division, a U.S. Army ski patrol that fought in World War II.

Described as a “documentary about a government attorney on a quest to find a better way to search White House e-mail, and a teacher who takes a stand for civil justice on the electronic frontier”, Looby notes in a radio interview with the Mid Hudson News that the documentary includes comments by “a government attorney, a teacher, seven judges and two professors”, which includes several well-known names in eDiscovery: U.S. District Judge Shira Scheindlin, of the Southern District of New York, Jason R. Baron, former director of litigation for the U.S. National Archives and Records Administration and now of counsel at Drinker Biddle & Reath, and the late Richard Braman, founder of The Sedona Conference, among others.  Looby refers to those who have advanced tremendous progress made over the past decade in eDiscovery practice as “true American heroes”.

The movie addresses the considerable advancements to address problems like this in both the government and litigation arenas.

Now, the movie has some additional showings scheduled in other parts of the country, including South Carolina, Florida, Chicago, Washington DC, San Francisco and Houston (yay! – I already have tickets).  You can get more information on scheduled showings – and view the trailer – here.

So, what do you think? Is this a movie you would like to see? Please share any comments you might have or if you’d like to know more about a particular topic.

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.

Apple Recovers Part, But Not All, of its Requested eDiscovery Costs from Samsung – eDiscovery Case Law

Apple won several battles with Samsung, including ultimately being awarded over $1 billion in verdicts, as well as a $2 million sanction for the inadvertent disclosure of its outside counsel firm (Quinn Emanuel Urquhart & Sullivan LLP) commonly known as “patentgate”, but ultimately may have lost the war when the court refused to ban Samsung from selling products that were found to have infringed on Apple products.  Now, they’re fighting over relative chicken-feed in terms of a few million that Apple sought to recover in eDiscovery costs.

On December 5, 2013, Apple submitted its Bill of Costs seeking a total of over $6.2 million in three categories of taxable costs: “printed or electronically recorded transcripts;” “exemplification and the costs of making copies;” and “[c]ompensation of interpreters.” Samsung filed objections on January 24 of this year. Apple then filed an Amended Bill of Costs on February 6, 2014, waiving and withdrawing certain costs, including the costs related to its sanctions motion against Samsung. Apple’s Amended Bill of Costs sought a total of nearly $5.9 million in costs (of which, nearly $1.5 million related to eDiscovery costs).  Yet, on February 20, Samsung again filed objections.

On June 6, the Clerk taxed costs in the amount of $2,064,940.55, disallowing: $193,884.17 in transcript costs $3,346,652.74 in costs for exemplification and copies and $282,500 in compensation of interpreters.  Both parties sought judicial review of the Clerk’s assessment with Apple requesting that the Court increase the costs award to the full amount requested in their Amended Bill of Costs and Samsung making multiple arguments against the assessment of costs, including the fact that they were appealing the award, Apple only received a partial recovery and that millions of dollars requested were either untaxable or unjustified.

California District Judge Lucy H. Koh found that there was “no basis to defer a decision on the bill of costs pending Samsung’s appeal” and also concluded that Apple is the prevailing party because “[t]he large jury damages award in favor of Apple clearly “materially alter[ed] the legal relationship between the parties” in this case. Moreover, Samsung did not prevail on any of its counterclaims.”

With regard to the eDiscovery costs, Samsung argued that 1) Apple failed to prove that these costs were the functional equivalent of making copies and not costs for intellectual effect, 2) Apple’s documentation failed to prove whether the costs requested are tied to documents actually produced to Samsung and 3) Apple’s “extremely high per page e-discovery rate is excessive and therefore impermissible.”

Judge Koh focused in on the second argument, stating that “it is somewhat unclear from Apple’s documentation of its e-discovery costs whether and to what extent Apple’s claimed costs cover only the costs of documents produced to Samsung. However, in the briefing on the parties’ Cross-Motions, Apple acknowledges that many of its claimed e-discovery costs relate to documents not produced to Samsung.”  As a result, she ruled that “Using Apple’s own figures, Apple estimates that it uploaded a total of 18,264,712 pages of which 2,944,467 pages were ultimately produced…Based on this, the Court calculates that approximately 16.12% of Apple’s e-discovery costs were spent on documents produced to Samsung. The Court will therefore award Apple e-discovery costs in the amount of $238,102.66.” [emphasis added]

The awarded eDiscovery costs were part of an overall award to Apple of nearly $1.9 million.

So, what do you think?  Should the eDiscovery portion of the award have been limited to documents Apple produced?  Please share any comments you might have or if you’d like to know more about a particular topic.

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.

Those Pesky Email Signatures and Disclaimers – eDiscovery Best Practices
 

Are email signatures and disclaimers causing more trouble than they’re worth?  According to one author, perhaps they are.

Earlier this week, Jeff Bennion wrote an interesting post on the Above the Law blog (‘Please Consider the Environment Before Printing’ Email Signatures Are Hurting the Environment) where he noted that, about 5 years ago, people started putting ‘Please consider the environment before printing this e-mail’ in their email signature (along with a webdings font character of a tree).

Bennion states that this is “the Kony 2012 of the environmental battles – it’s a noble war, but a pointless battle” and that the printing of emails is only a tiny fraction of the paper that lawyers waste.  Instead, he notes, “the ‘please consider the environment’ email signature is more like one of those ‘I voted’ stickers — both serve no purpose other than proclaiming your self-righteousness for performing a civic duty”.

In fact, per a Time magazine article, the internet accounts for a good deal of the pollution in the world. In a 2011 article, cleantechnica.com reported that there were about 500,000 data centers in the world and each used 10 megawatts of energy a month.  That’s a lot more than 1.21 gigawatts.  Great Scott!

When comparing Word files containing data that might go into an email with the same data that also includes the email signature, Bennion observes that the one with the email signature contains .3 KB more of data than the one without the signature.  He extrapolates that out to 27,000 GB of extra useless data being added to internet storage servers every day (10 million GB per year) over all business emails, while acknowledging that not all 90 billion business emails are including the signature.  “The point is that it is a pointless gesture that, as a whole, does more harm than good”, Bennion states.

And, the same holds true for those confidential and privileged email disclaimers at the bottom of emails, which he observes “take up about 10-20 times more wasted space than the ‘please stop printing your emails’ disclaimer” – “roughly the environmental equivalent of clubbing 3 baby seals a month”.  Some interesting takes.

These email signatures and disclaimers also affect eDiscovery costs, both in terms of extra data to process and also host.  They can also lead to false hits when searching text and affect conceptual clustering or predictive coding of documents (which are based on text content of the documents) unless steps are taken to remove those from indices and ignore the text when performing those processes.  All of which can lead to extra work and extra cost.

So, what do you think?  Do you use “please stop printing your emails” signatures and confidential and privileged email disclaimers?  Please share any comments you might have or if you’d like to know more about a particular topic.

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.

Text Overlays on Image-Only PDF Files Can Be Problematic – eDiscovery Best Practices

Recently, we at CloudNine Discovery received a set of Adobe PDF files from a client that raised an issue regarding the handling of those files for searching and reviewing purposes.   The issue serves as a cautionary tale for those working with image-only PDFs in their document collection.  Here’s a recap of the issue.

The client was using OnDemand Discovery®, which is our new Client Side add-on to OnDemand® that allows clients to upload their own native data for automated processing and loading into new or existing projects.  The collection was purported to consist mostly of image-only PDF files.  PDF files are created in two ways:

  1. By saving or printing from applications to a PDF file: Many applications, such as Microsoft Office applications like Word, Excel and PowerPoint, provide the ability to save the document or spreadsheet that you’ve created to a PDF file, which is common when you want to “publish” the document.  If the application you’re using doesn’t provide that option, you can print the document to PDF using any of several PDF printer drivers available (some of which are free).  These PDFs that are created usually include the text of the file from which the PDF was created.
  2. By scanning or otherwise creating an image to a PDF file: Typically, this occurs either by scanning hard copy documents to PDF or through some sort of receipt in an image-only PDF form (such as through fax software).  These PDFs that are created are images and do not include the text of the document from which they came.

Like many processing tools, such as LAW PreDiscovery®, OnDemand Discovery is programmed to handle PDF files by extracting the text if present or, if not, performing OCR on the files to capture text from the image.  Text from the file is always preferable to OCR text because it’s a lot more accurate, so this is why OCR is typically only performed on the PDF files lacking text.

After the client loaded their data, we did a spot Quality Control check (like we always do) and discovered that the text for several of the documents only consisted of Bates numbers.

Why?

Because the Bates numbers were added as text overlays to the pre-existing image-only PDF files.  When the processing software viewed the file, it found that there was extractable text, so it extracted that text instead of OCRing the PDF file.  In effect, adding the Bates numbers as text overlays to the image-only PDF rendered it as no longer an image-only PDF.  Therefore, the content portion of the text wasn’t captured, so it wasn’t available for indexing and searching.  These documents were essentially rendered non-searchable even after processing.

How did this happen?  Likely through Adobe Acrobat’s Bates Numbering functionality, which is available on later versions of Acrobat (version 8 and higher).  It does exactly that – applies a text overlay Bates number to each page of the document.  Once that happens, eDiscovery processing software applications will not perform OCR on the image-only PDF.

What can you do about it?  If you haven’t applied Bates numbers on the files yet (or have a backup of the files before they were applied – highly recommended) and they haven’t been produced, you should process the files before putting Bates numbers on the images to ensure that you capture the most text available.  And, if opposing counsel will be producing any image-only PDF files, you will want to request the text as well (along with a load file) so that you can maximize your ability to search their production (of course, your first choice should be to receive native format productions whenever possible – here’s a link to an excellent guide on that subject).

If the Bates numbers are already applied and you don’t have a backup of the files without the Bates numbers (oops!) you’re faced with additional processing charges to convert them to TIFF and perform OCR of the text AND the Bates number, a totally unnecessary charge if you plan ahead.

So, what do you think?  Have you dealt with image-only PDF files with text overlaid Bates numbers?  Please share any comments you might have or if you’d like to know more about a particular topic.

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.

October Case Law Pop Quiz Answers! – eDiscovery Case Law

Yesterday, we gave you a pop quiz for the eDiscovery case law that we’ve covered since the beginning of August. If you’re reading the blog each day, these questions should be easy! Let’s see how you did. Here are the answers.

1.  In which case was a request for predictive coding NOT approved by the Court?:

A. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

B. Dynamo Holdings v. Commissioner of Internal Revenue

C. In re Bridgepoint Educ., Inc., Securities Litigation

D. Predictive Coding was approved in ALL of the above cases

2.  In which case did the Court state that searching for ESI should not be deemed a replacement for other discovery mechanisms?:

A. United States v. Univ. of Neb. at Kearney

B. Boston Scientific Corporation v. Lee

C. Mazzei v. Money Store

D. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

3.  In which case was a party sanctioned for failing to preserve data in a readable form?:

A. United States v. Univ. of Neb. at Kearney

B. Boston Scientific Corporation v. Lee

C. Mazzei v. Money Store

D. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

4.  In which case did the Court liken the plaintiff’s fall back willingness to compromise to “Eddie Haskell singing the Beaver’s praises to June Cleaver, only moments after giving him the business in private”?:

A. United States v. Univ. of Neb. at Kearney

B. Boston Scientific Corporation v. Lee

C. Mazzei v. Money Store

D. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

5.  In which case did the Court approve the plaintiff’s predictive coding plan, even though it was “switching horses in midstream”?:

A. United States v. Univ. of Neb. at Kearney

B. Boston Scientific Corporation v. Lee

C. Mazzei v. Money Store

D. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

6.  In which case did the Court approve use of predictive coding, disagreeing that it was “unproven technology”?:

A. Price Waicukauski & Riley v. Murray

B. Small v. University Medical Center of Southern Nevada

C. Melian Labs, Inc. v. Triology LLC

D. Dynamo Holdings v. Commissioner of Internal Revenue

7.  In which case did a client claim legal malpractice by its attorney firm for failing to review documents before production?:

A. Price Waicukauski & Riley v. Murray

B. Small v. University Medical Center of Southern Nevada

C. Melian Labs, Inc. v. Triology LLC

D. Dynamo Holdings v. Commissioner of Internal Revenue

8.  In which case was the plaintiff allowed to produce images instead of native files due to a joint stipulation between the parties?:

A. Price Waicukauski & Riley v. Murray

B. Small v. University Medical Center of Southern Nevada

C. Melian Labs, Inc. v. Triology LLC

D. Dynamo Holdings v. Commissioner of Internal Revenue

9.  In which case did the special master assigned to the case recommend default judgment against the defendant for failing to preserve data on several devices, including smartphones?:

A. Price Waicukauski & Riley v. Murray

B. Small v. University Medical Center of Southern Nevada

C. Melian Labs, Inc. v. Triology LLC

D. Dynamo Holdings v. Commissioner of Internal Revenue

10. In which case was privilege not waived on the defendant’s seized computer that was purchased by the plaintiff at auction?:

A. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

B. Boston Scientific Corporation v. Lee

C. Melian Labs, Inc. v. Triology LLC

D. None of the above*

*The answer is Kyko Global Inc. v. Prithvi Info. Solutions Ltd.

As always, please let us know if you have questions or comments, or if there are specific topics you’d like to see covered.

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.

October Case Law Pop Quiz! – eDiscovery Case Law

We enjoyed the eDiscovery case law pop quiz that we did back in August so much, that we decided it’s time for another one – this one is customized to the case law that we’ve covered since the beginning of August.  If you’re reading the blog each day, these questions should be easy!  If not, we’ve provided a link to the post with the answer.  We’re that nice.  Test your knowledge!  Tomorrow, we’ll post the answers for those who don’t know and didn’t look them up.

1.  In which case was a request for predictive coding NOT approved by the Court?:

A. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

B. Dynamo Holdings v. Commissioner of Internal Revenue

C. In re Bridgepoint Educ., Inc., Securities Litigation

D. Predictive Coding was approved in ALL of the above cases

2.  In which case did the Court state that searching for ESI should not be deemed a replacement for other discovery mechanisms?:

A. United States v. Univ. of Neb. at Kearney

B. Boston Scientific Corporation v. Lee

C. Mazzei v. Money Store

D. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

3.  In which case was a party sanctioned for failing to preserve data in a readable form?:

A. United States v. Univ. of Neb. at Kearney

B. Boston Scientific Corporation v. Lee

C. Mazzei v. Money Store

D. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

4.  In which case did the Court liken the plaintiff’s fall back willingness to compromise to “Eddie Haskell singing the Beaver’s praises to June Cleaver, only moments after giving him the business in private”?:

A. United States v. Univ. of Neb. at Kearney

B. Boston Scientific Corporation v. Lee

C. Mazzei v. Money Store

D. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

5.  In which case did the Court approve the plaintiff’s predictive coding plan, even though it was “switching horses in midstream”?:

A. United States v. Univ. of Neb. at Kearney

B. Boston Scientific Corporation v. Lee

C. Mazzei v. Money Store

D. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

6.  In which case did the Court approve use of predictive coding, disagreeing that it was “unproven technology”?:

A. Price Waicukauski & Riley v. Murray

B. Small v. University Medical Center of Southern Nevada

C. Melian Labs, Inc. v. Triology LLC

D. Dynamo Holdings v. Commissioner of Internal Revenue

7.  In which case did a client claim legal malpractice by its attorney firm for failing to review documents before production?:

A. Price Waicukauski & Riley v. Murray

B. Small v. University Medical Center of Southern Nevada

C. Melian Labs, Inc. v. Triology LLC

D. Dynamo Holdings v. Commissioner of Internal Revenue

8.  In which case was the plaintiff allowed to produce images instead of native files due to a joint stipulation between the parties?:

A. Price Waicukauski & Riley v. Murray

B. Small v. University Medical Center of Southern Nevada

C. Melian Labs, Inc. v. Triology LLC

D. Dynamo Holdings v. Commissioner of Internal Revenue

9.  In which case did the special master assigned to the case recommend default judgment against the defendant for failing to preserve data on several devices, including smartphones?:

A. Price Waicukauski & Riley v. Murray

B. Small v. University Medical Center of Southern Nevada

C. Melian Labs, Inc. v. Triology LLC

D. Dynamo Holdings v. Commissioner of Internal Revenue

10. In which case was privilege not waived on the defendant’s seized computer that was purchased by the plaintiff at auction?:

A. Bridgestone Americas Inc. v. Int’l Bus. Mach. Corp.

B. Boston Scientific Corporation v. Lee

C. Melian Labs, Inc. v. Triology LLC

D. None of the above

As always, please let us know if you have questions or comments, or if there are specific topics you’d like to see covered.

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.

Battle Continues between Attorneys and Client over Attorneys’ Failure to Review Documents – eDiscovery Case Law

In Price Waicukauski & Riley v. Murray, 1:10-cv-1065-WTL-TAB (S.D. Ind. Sept. 18, 2014), Indiana District Judge William T. Lawrence granted the plaintiff’s request for summary judgment for failure to pay attorney’s fees of over $125,000, and refused to issue summary judgment for either party related to a legal malpractice claim for the plaintiff’s admitted failure to review documents produced in the defendants’ case against another party because of a factual dispute regarding the plaintiff’s knowledge of the documents produced.

Case Background

This case was filed in August 2010 by the Plaintiff, Price Waicukauski & Riley, LLC, (“PWR”) against the Defendants, Dennis and Margaret Murray and DPM, Ltd. (“Murrays”), to recover $127,592.91 in attorneys’ fees owed to the plaintiff. The attorneys’ fees stem from the plaintiff’s representation of the defendants in a rather contentious lawsuit against Conseco that spanned more than six years, ultimately settling.  In November 2010, unhappy with the plaintiff’s representation, the defendants filed a counterclaim against the plaintiff alleging legal malpractice.

Legal Malpractice Claim of Breach of Duty of Loyalty

The defendants alleged several allegations of legal malpractice against the plaintiff, including conflict of interest, failure to properly plead federal subject matter jurisdiction and failure to take depositions and conduct discovery as they requested, among other allegations.  One allegation related to the defendants’ claim that the plaintiff breached the duty of loyalty to the defendants by failing (despite the defendant’s request to do so) to review documents before production in the case that revealed a Trust set up on behalf of the plaintiffs that wasn’t disclosed in interrogatory responses.  The plaintiff informed Mr. Murray that it reviewed the documents; however, it ultimately admitted that it did not.  As a result of the misleading interrogatory responses, Conseco filed a motion for sanctions which was granted, resulting in the defendants being ordered to pay over $85,000 in attorneys’ fees to their opponent’s lawyers.

The defendants claimed that the plaintiff knew about the Trust from the outset of its representation; however, the plaintiff (“falsely and underhandedly”, according to the defendants) represented to the magistrate judge assigned to the Underlying Litigation that it had no knowledge of the Trust until the defendants’ accountant produced the Murrays’ tax returns.

Judge’s Analysis and Ruling

The plaintiffs referenced Niswander v. Price Waicukauski & Riley, LLC, where the court held that “[w]hether . . . the Plaintiffs’ attorneys had a duty to review the documents personally before producing them in discovery . . . is simply not something within the knowledge of a layperson.”  However, Judge Lawrence noted, “[t]he Murrays have no expert testimony on either of these two related claims; however, they claim they fall into the above-mentioned exception for when no expert testimony is needed: ‘when the question is within the common knowledge of the community as a whole or when an attorney’s negligence is so grossly apparent that a layperson would have no difficulty in appraising it.’”  Judge Lawrence also agreed with the defendants differentiation of Niswander to this case in that they specifically directed the plaintiff to review the documents while the plaintiffs in Niswander did not.

Judge Lawrence also stated that “[t]he same rings true with the Murrays’ allegation that PWR falsely denied knowledge of the Trust… Again, the Court believes that it is well within the knowledge of a layperson that attorneys should not lie and falsely implicate their own clients in order to shield themselves from liability. Thus, the Court agrees that no expert testimony is needed on this claim regarding the standard of care.”

However, Judge Lawrence decided that “neither party is entitled to summary judgment on this issue” because “there is a factual dispute that precludes granting summary judgment on this claim. PWR maintains that it did not lie; it steadfastly maintains that it had no knowledge of the Trust at the outset of the litigation. Thus, when asked by the magistrate judge when it found out about the Trust, it informed her truthfully. Therefore, whether or not PWR breached a duty that caused injury to the Murrays depends on whom the jury believes: Mr. Murray or PWR.”

Ultimately, Judge Lawrence granted the summary judgment on behalf of the plaintiffs for the attorney’s fees of $127,592.91 (which the defendant did not dispute, but argued that “[t]he successful pursuit of [their] claims would effectively eliminate PWR’s claim”) and denied the defendant’s summary judgment request, but refused a final judgment as outstanding claims remained against the plaintiff.  Judge Lawrence concluded his ruling by noting that “The only claims that remain to be tried are the proximate cause issue with regard to the federal subject matter jurisdiction claim and the allegation of malpractice committed by PWR as a result of its alleged failure to review certain documents that led to sanctions being imposed on Mr. Murray.”

So, what do you think?  Does the failure by the plaintiff to review the defendant’s production constitute legal malpractice?  Please share any comments you might have or if you’d like to know more about a particular topic.

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.

If You Have a Flashlight App on Your Phone, You Need to Read This – Mobile eDiscovery

Yesterday, we discussed a case where a company faced a recommended severe default judgment sanction, in part because of the company’s failure to preserve data on “bring your own device” (BYOD) personal smart phones used by employees for work purposes.  This is merely one challenge associated with BYOD policies in organizations.  Another is the greater potential for spyware to capture data through installed apps.  Here is one reported example.

If you have a smartphone or tablet, you probably like to install various apps for everything from tracking your fantasy football team to playing games to keeping up with friends on Facebook or Twitter.  You can even use your smartphone as a flashlight, I do.  Apparently, doing so may introduce spyware onto that smartphone, especially on Android phones and tablets, if you believe one company’s new report.

At the beginning of the month, SnoopWall issued a threat assessment report entitled Summarized Privacy and Risk Analysis of Top 10 Android Flashlight Apps, where they stated that they tested and installed the Top 10 Android Flashlight Apps on various smartphones and tablets and found that all of the applications that they tested appear to obtain access and information way beyond the needs of a Flashlight. According to SnoopWall, some appear specifically designed to collect and expose your personal information to cybercriminals or other nation states, taking permissions to do everything from modifying or deleting USB storage contents, modifying system settings, control vibration, disable your screen lock and capture GPS and network location.  At least one of them has been sued by the FTC for doing so.

If you believe the report and you’re using your smartphone for work purposes, that potentially puts company data at risk as well.  If you’re using one of those flashlight apps, SnoopWall’s strong recommendation is to uninstall it immediately.  They also note that you might need to reset your phone completely after the uninstall or even go to FACTORY RESET or a WIPE.

They also provide a list of what we think are best practices for increasing privacy and security on your device without spending any money, but they vary in practicality (#5 is to “either put masking tape over your webcam and microphone when not in use or pull the battery out of your smartphone when you are not using it” – not exactly practical).

As for the Apple iPhone and iPad or Microsoft WindowsPhone flashlight apps, SnoopWall states that the “flashlight app pre-installed on the Apple iPhone appears to be safe”, but notes that in both the iTunes store and on the Windows Phone app store, third party flashlight apps access various hardware ports including Webcam, Location Services and GPS.  So, there are stated risks on those platforms if you are using those apps.

Conveniently (hmmm), SnoopWall has developed their own free flashlight app, touted to install no ads, spyware or “bloatware”.  They also offer privacy apps that they state are designed to find apps that are spying on you, protect you when conducting financial transactions on your mobile device, etc.

Is it true?  Or is it just a very clever marketing campaign?  The myth debunking site Snopes states that these apps are pre-screened for malware, while acknowledging that one specific flashlight app was cited by the FTC for selling data to advertisers (that case was settled last December).

So, what do you think?  Do you have a third party flashlight app on your smartphone or tablet?  If so, how seriously do you take the report from SnoopWall?  Please share any comments you might have or if you’d like to know more about a particular topic.

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.