eDiscovery Advantage Introduction Over the course of this summer, two states – Florida and Illinois – have amended existing rules to address electronically stored information (“ESI”) and/or social media. In addition, several bar associations – Maryland, Massachusetts, New York, and the District of Columbia – have issued opinions relating to eDiscovery. Significantly, the DC Bar has continued its effort to rein in the unauthorized practice of law by eDiscovery vendors – in this instance, review companies. In the privacy and cross-border arena, the Article 29 Working Party issued a draft opinion discussing the challenges associated with the use of the cloud, as well as a working paper on Binding Corporate Rules for thirdparty data processors. The Second Circuit recently held that the failure to issue a litigation hold is just one factor to consider in determining whether spoliation sanctions are appropriate. In doing so, the Second Circuit explicitly rejected Judge Scheindlin’s holding in Pension Committee that a party’s failure to institute a legal hold constitutes gross negligence per se. In addition, in one of the more high-profile cases, a magistrate judge imposed an adverse inference instruction against Samsung Electronics Co. due to its failure to suspend its automatic deletion of e-mails at a time when it admitted litigation was reasonably foreseeable. Judge Shira Scheindlin issued another opinion in National Day Laborer, which explored the dangers of allowing custodians to conduct their own searches using keywords. A number of recent decisions have addressed the ability of parties to obtain a defendant’s identity through information associated with his or her Internet Protocol (IP) address. In one instance, a court required a plaintiff to provide an unredacted copy of her Facebook and MySpace accounts to the defense in a personal injury action. As always, these developments are simply the latest in an ever-developing area of the law, and we hope that the following summaries continue to aid your understanding of this important and influential practice area.
July-August 2012 Volume 2, Number 3
Florida Amends Rule of Civil Procedure to Address ESI On July 5, 2012, the Florida Supreme Court approved certain amendments to the Florida Rules of Civil Procedure relating to the discovery of ESI. The new rules more closely track the Federal Rules of Civil Procedure, and encourage litigants to discuss and resolve ESI disputes early in litigation. Florida Rule 1.200, as amended, now requires parties to “confer and prepare a joint statement.” The joint statement should include an outline of a discovery plan. The outline should address the scope of preservation
Table of Contents Introduction............................................................................................... 1 Florida Amends Rule of Civil Procedure to Address ESI................................................................................................ 1 Illinois Amends Right to Privacy in Workplace Act to Protect Employee Use of Social Media........................................ 2 District of Columbia Bar Association Addresses eDiscovery Vendor Services ...................................... 2 Ethics Opinions....................................................................................... 3 Sanctions.................................................................................................... 5 Search, Retrieval, & Production ...................................................... 8 Da Silva Moore Update...................................................................... 10 Social Media ............................................................................................11 Stored Communications Act and Internet Service Providers ................................................................11 Global Privacy and Cross-Border Discovery Issues...............12 Upcoming Firm Speaking Engagements ....................................15 Featured Contributors ......................................................................15 Contact Us .............................................................................................15
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Winston & Strawn LLP and production format for ESI. Further, the outline should address whether: (i) to conduct discovery in phases; and (ii) to limit collection and review of ESI to specific custodians, time periods, or data sources. Florida Rule 1.201 encourages trial courts to consider certain eDiscovery issues during the pretrial conference, including the need for advance discussion on the admissibility of ESI. Florida Rule 1.201 further encourages trial courts to consider whether the parties can agree on the scope of preservation and format of production. Florida Rule 1.280(d)(1), as amended, now provides that a party is not required to produce materials that are not “reasonably accessible.” The burden is on the party to whom the request is made to demonstrate that the information or format requested is not reasonably accessible because of undue burden or cost. If the party makes such a showing, the burden then shifts to the requesting party to show good cause why the court should order the production of the inaccessible data. Rule 1.280(d)(1) also contemplates cost shifting of some or all of the expenses incurred by the responding party. Florida Rule 1.280(d)(2) provides that “the court must limit the frequency or extent of discovery … if it determines that (i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from another source or in another manner that is more convenient, less burdensome, or less expensive; or (ii) the burden or expense of the discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.”
Illinois Amends Right to Privacy in Workplace Act to Protect Employee Use of Social Media On August 1, 2012, Illinois became the second state to prevent employers from 2
requiring access to employees’ social networking accounts as a condition of employment. Specifically, Section 10 of the Illinois Right to Privacy in the Workplace Act was amended to bar employers from requiring that employees and prospective employees provide user names, passwords, or other accountrelated information associated with social networking Web sites (e.g., Facebook and Twitter) as a condition of employment. The amended law also prevents employers from circumventing this restriction by forcing employees or prospective employees to display portions of their social networking accounts even if the employees or prospective employees do not disclose their password information. But the amended law does allow employers to implement and maintain lawful workplace policies addressing the use of electronic equipment, the Internet, email, and social networking sites. The amended law also allows employers to monitor usage of the employer’s computer and electronic equipment. Employers can also continue to obtain information about employees and prospective employees that rests in the “public domain.” Similar legislation is gaining momentum in at least 10 other states. Given the growing intersection between work and personal communications, the impact of social media in the employment context likely will remain a hot spot for employment legislation and litigation. The text of the amended law is available here.
District of Columbia Bar Association Addresses eDiscovery Vendor Services In June 2012, the Ethics Committee for the District of Columbia Bar Association issued Opinion No. 362, which addresses the ability of eDiscovery vendors to be partially or entirely owned by passive, nonlawyer investors. The June 2012 opinion builds on the January 12, 2012 opinion by the District of Columbia Court of Appeals Committee on the Unauthorized Practice return to top
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Winston & Strawn LLP of Law, which addressed eDiscovery vendors who offer “end-to-end” solutions. To read the full text of D.C. Bar Opinion 362, please click here. Opinion No. 362 is clear that eDiscovery vendors cannot practice law in the District of Columbia if they are partially owned by non-lawyers because any such practice would violate D.C. Rule 5.4(b). In addition, lawyers who “own, manage, work for or retain a discovery service vendor that engages in the practice of law in the District of Columbia and has passive non-lawyer investment may violate the prohibition in Rule 5.4(b) against assisting others in the unauthorized practice of law.” The opinion notes that “in order to hold an interest in a law firm, a nonlawyer must be ‘an individual performing professional services within the law firm or other organization.’” Put another way, “D.C. bar-admitted lawyers may not practice law within the District of Columbia or hold themselves out as able to do so for discovery service organizations where such organizations have passive non-lawyer investors.” But to the extent that the eDiscovery vendors follow the guidance of the January 12, 2012 opinion, the Ethics Committee notes that they are not “practicing law” within the meaning of Rule 5.4 and thus passive ownership is acceptable. In addition, lawyers contracting for discovery services on behalf of a client can similarly “run afoul of Rule 5.4(b) if the lawyer knows that the discovery services organization has passive non-lawyer ownership.” In such cases, the D.C. Bar Association counsels that a lawyer hiring the discovery services provider should “ensure that the services being provided for that lawyer will not extend to the practice of law outlined in Opinion 21-12.” (Click here for the text of Opinion 21-12).
Ethics Opinions Several state bar associations recently have issued opinions on the use of: (i) Internet-based storage solutions; (ii) social media as a means to conduct juror 3
research; and (iii) judicial use of social networking sites. Each of these opinions provides helpful guidance, and clients and practitioners are encouraged to review them in their entirety.
Massachusetts—Use of InternetBased Storage Solutions On May 17, 2012, the Massachusetts Bar Association issued Opinion 12-03, which addresses a lawyer’s ability to utilize Internet-based storage solutions (e.g., “Google Docs”) to store and synchronize work files containing confidential client information. The Massachusetts Bar Association stated that use of such solutions was acceptable, provided that: (i) the lawyer took “reasonable efforts to ensure that the provider’s data privacy policies, practices and procedures are compatible with the lawyer’s professional obligations”; (ii) the lawyer refrained from storing or transmitting particularly sensitive client information by means of the Internet without first obtaining the client’s express consent to do so; and (iii) the lawyer remained bound to “follow an express instruction from his client that the client’s confidential information not be stored or transmitted by means of the Internet.” The Massachusetts Bar Association defined “reasonable efforts” to include: (i) examining the provider’s terms of use and written policies; (ii) ensuring that such policies and terms prevent unauthorized access to data stored on the providers’ system; (iii) ensuring that the lawyer had “reasonable access to, and control over, the data stored on the provider’s system”; (iv) examining the provider’s existing practices to ensure that the data stored on the system will remain confidential and not be intentionally or inadvertently disclosed or lost; and (v) periodically revisiting and reexamining the provider’s policies, practices, and procedures to ensure that they “remain compatible” with the lawyer’s professional obligations. The Massachusetts Bar Association noted that while Google had adopted written terms of service and a privacy policy return to top
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Winston & Strawn LLP for users of Google Docs and provides that information stored on Google Docs is private and password-protected, Google and other Internet-based storage solutions are not “immune from attacks by unauthorized persons.” Accordingly, the ultimate question of whether “Google docs, or any other Internet based storage service provider, is compatible with the Lawyer’s ethical obligation to protect his client’s confidential information is one that the Lawyer must answer for himself based on the criteria set forth in the opinion.” The full text of the opinion can be found here.
Maryland – Judicial Use of Social Media On June 12, 2012, the Maryland Judicial Ethics Committee published an opinion providing guidance on judges’ use of social media. The Committee noted that “information posted by a judge on a social networking site can be quickly and widely disseminated, and possibly beyond its intended audience.” It also identified the concern “that being designated as a ‘friend’ of a judge on a social networking site might be perceived as indicating both that the person is in a position to influence the judge, and may have ex parte communications with the judge via that medium.” The opinion notes that “there is no rule prohibiting judges from having what is traditionally thought of as ‘friends’ be they attorneys or laypersons.” Accordingly, “the mere fact of a social connection does not create a conflict[.]” But the Ethics Committee cautioned that “social networking sites are fraught with peril for judges,” and emphasized that the focus is on how the judge participates through the social networking site, not simply whether he or she can participate. The full text of the opinion can be found here.
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New York City Bar Association – Social Media Juror Research In Formal Opinion 2012-2, the New York City Bar Association addressed the question of whether attorneys can use social media websites to research prospective or empaneled jurors. The opinion concludes that attorneys may use social media websites to conduct such research, provided, however, that the researching attorney does not communicate with the prospective or empaneled jurors in the process. Formal Opinion 2012-2 notes that the question “at the core of applying Rule 3.5 [of the New York Rules of Professional Conduct] to social media— what constitutes a communication—has not been specifically addressed[.]” Accordingly, the opinion cites to different definitions of communication and concludes that for purposes of Rule 3.5, “the focus is on the effect on the receiver, and that “[i]t is the ‘transmission of,’ ‘exchange of’ or ‘process of bringing information from one person to another’ that defines a communication.” With respect to social media, the opinion concludes that a “communication” can occur when a request or notification is transmitted via the social media site irrespective of whether the notification is accepted, ignored, or even if it consists of nothing more than an automated message of which the “sender” was unaware. For purposes of Rule 3.5, an “automated message from the social media service that a potential contact has viewed her profile” arguably constitutes a communication with a juror and should be avoided. Based on this admonition, the opinion holds that attorneys “may use search engines and social media services to research potential and sitting jurors without violating the Rules, as long as no communication with the juror occurs.” As in other contexts, the opinion notes that attorneys cannot use deception or misrepresentation concerning their identity in conducting social media research (e.g., claim to be an alumnus from
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Winston & Strawn LLP a particular school in order to gain access to a juror’s personal webpage). Nor may an attorney use a third party to conduct social media research that would violate Rule 3.5 if conducted by the attorney. The opinion also concludes that attorneys “should only view information that potential jurors intend to be—and make—public.” This includes information that a juror may not be aware is publicly available. But the opinion states that attorneys should not view such material when it is “clear that the juror intended the information to be private.” Furthermore, if an attorney learns of juror misconduct by means of this social media research, the opinion notes that the attorney “must promptly notify the court.” Any decision regarding the propriety of the juror’s conduct must be made using the attorney’s best judgment and good faith and without regard to whether the conduct benefits the attorney. The opinion also states that attorneys can communicate with jurors using social media after the jury has been discharged, unless: “(i) the communication is prohibited by law or court order; (ii) the juror has made known to the lawyer a desire not to communicate; (iii) the communication involves misrepresentation, coercion, duress or harassment; or (iv) the communication is an attempt to influence the juror’s actions in future jury service.” The full text of the opinion is available here.
Sanctions Significantly, in Chin v. Port Authority of New York & New Jersey, 2012WL 2760776 (2d Cir. July 10, 2012), the Second Circuit rejected the notion, expressed by Judge Scheindlin in Pension Committee, that the failure to institute a legal hold “constitutes gross negligence per se.” According to the Second Circuit, the “better approach is to consider [the failure to adopt good preservation practices] as one factor in the determination of whether discovery sanctions should issue.” 5
In the case below, the plaintiff in the Title VII action had requested that the district court issue an adverse inference instruction due to the defendants’ destruction of promotion folders used to make promotion decisions. There, the defendant had not issued a litigation hold, and as a result at least 32 promotion folders were destroyed. Nonetheless, the district court found that an adverse inference instruction was not appropriate because: (i) the plaintiff had provided “ample alternative evidence regarding the relative qualifications of the plaintiffs”; and (ii) the defendants’ destruction was merely negligent. In doing so, the Second Circuit held that the decision regarding the appropriateness of an adverse inference instruction is subject to a “case-by-case approach” based on the discretion of the district court. In Apple Inc. v. Samsung Electronics Co., Ltd., 2012 WL 3042943 (N.D. Cal. July 25, 2012), Magistrate Judge Paul S. Grewal imposed an adverse inference instruction on the defendant stemming from the defendant’s failure: (i) to suspend its automatic e-mail deletion policy; and (ii) to follow up with employees to determine whether they had been preserving relevant documents. In doing so, Magistrate Judge Grewal noted that the defendant already had been sanctioned for a similar failure in an earlier lawsuit. The defendant’s proprietary e-mail system, which was installed in 2001, stored sent and received e-mails on company-wide servers, rather than dividing the servers by business unit. The system automatically purged these e-mails every two weeks. Users were able to avoid the automatic deletion by clicking on a “Save All” button every two weeks. In addition, users could elect to receive e-mails in Microsoft Outlook, which archived the received e-mails on local hard drives, but did not preserve sent e-mails unless the user obtained special permission to do so. In establishing the date upon which defendants’ obligation to preserve attached, Magistrate Judge Grewal relied upon an August 23, 2010 litigation hold return to top
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Winston & Strawn LLP letter, in which defendant admitted that litigation with the plaintiff was reasonably foreseeable. Significantly, the court held that the August 23, 2010 litigation hold letter, and not the filing of the initial complaint nearly eight months later on April 15, 2011, triggered the defendant’s preservation obligations. Magistrate Judge Grewal noted that the defendant disseminated the August 23, 2010 litigation hold letter to only twenty-seven custodians and that “[n]o significant further action was taken over the next seven months.” In contrast, after the plaintiff filed its complaint, the defendant disseminated litigation hold notices to 2,841 custodians. Magistrate Judge Grewal assessed the following facts in determining to impose an adverse inference instruction: (i) the defendant produced only a “handful” of emails for fourteen key fact witnesses, (ii) most of the products at issue in the lawsuit were released prior to April 2011 – at a time when the relevant custodians’ e-mails were being automatically deleted; and (iii) defendant still had not suspended its automatic deletion of e-mails and had not followed up with employees to assess compliance with the preservation instruction. Although the court agreed with the defendant’s claim that its failure to suspend the automatic deletion of e-mails was not in “bad faith,” Judge Grewal held that all the court had to find was that the defendant “acted with a ‘conscious disregard’ of its obligations.” The court found that the defendant’s failures met this standard, and Magistrate Grewal “conclude[d] that defendant ‘consciously disregarded’ its obligation to preserve relevant evidence.” The remaining question was what level of adverse inference instruction to impose. After discussing the various options available (e.g., the use of deemed admissions, mandatory presumptions, and optional instructions) Magistrate Grewal decided to impose an adverse inference that instructed the jury to
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presume that plaintiff had met its burden of demonstrating that the defendant had spoliated evidence that was favorable to the plaintiff. But Magistrate Grewal left it to the jury to determine how important that finding was to the ultimate determination of whether the defendant had infringed upon the plaintiff’s products. In E.E.O.C. v. Fry’s Electronics, 2012 WL 2576283 (W.D. Wash. July 3, 2012), Judge Robert S. Lasnik modified his earlier decision that imposed an adverse inference instruction instead of striking the defendant’s affirmative defenses. Judge Lasnik initially found that these severe sanctions were appropriate because the defendant had “intentionally withheld” information and documents relating to an earlier investigation into an unrelated claim of sexual harassment, and appeared to have removed documents and information from “the files where one would expect to find them.” In reconsidering his earlier decision, Judge Lasnik noted that the defendant had “deliberately engaged in deceptive practices that undermine the integrity and orderly administration of these proceedings.” The court then analyzed whether dispositive sanctions were appropriate using the five-factors applied in the Ninth Circuit: (i) the public’s interest in the expeditious resolution of litigation; (ii) the Court’s need to manage its docket efficiently and effectively; (iii) the risk of prejudice to the party seeking sanctions; (iv) the public policy in favor of deciding cases on the merits; and (v) the availability of lesser sanctions. Jude Lasnik found that the first four factors militated in favor of dispositive sanctions. With respect to the fifth factor, Judge Lasnik analyzed whether less drastic sanctions would “allow plaintiffs to adequately prepare for trial and ameliorate the risk that defendant’s conduct will interfere with the rightful decision in the case.” The court imposed what it described as a “tiered and aggressive response.”
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Winston & Strawn LLP Specifically, the court: (i) struck certain of defendant’s affirmative defenses; (ii) ruled that documents and testimony related to other complaints or reports of sexual harassment were presumptively admissible; (iii) imposed $100,000 in sanctions; and (iv) stayed the action pending the appointment of a Special Master to review the defendant’s document retention, search, and disclosure activities throughout the course of the litigation. The court relied on the following in support of its harsh sanctions on the defendant: (i) the breadth of the defendant’s destruction of relevant ESI; (ii) the relevance of the information disclosed at such a late hour; and (iii) the court’s inability to determine the scope of defendant’s discovery violations. In Goldmark v. Mellina, 2012 WL 2200921 (N.J. Sup. Ct. App. Div. June 18, 2012), the New Jersey Superior Court, Appellate Division, affirmed on appeal the sanctioning of the defendants and their law firm for deliberately withholding two critical emails between the defendants and their former attorney that had been identified by the former attorney during a preservation deposition.
“[u]pon taking the position that relevant material is privileged or subject to protection, a litigant has the obligation of maintaining and eventually disclosing the material as directed by the court.”
The defendants initially listed the requested e-mails on their privilege log, but subsequently informed plaintiffs that the defendants no longer possessed the e-mails because: (i) the defendants’ new counsel had not kept a copy of the former attorney’s files; and (ii) the defendants had deleted their copies. A subsequent forensic search of the former attorney’s hard drive, however, located the relevant e-mails. Following a review of the e-mails by the trial court judge, the defendants produced the emails to the plaintiffs. The lower court directed the defendants to pay both the plaintiffs’ attorneys’ fees and the forensic specialist’s fee. The Appellate Division affirmed the lower court’s decision to impose sanctions on both the defendants and their current law firm. In doing so, the Appellate Division found that “[u]pon taking the position that relevant material is privileged or subject to protection, a litigant has the obligation 7
of maintaining and eventually disclosing the material as directed by the court.” The Court also noted that it “would make a mockery of our discovery rules, to allow a party or its counsel — after identifying privileged information — to destroy or carelessly lose or misplace the materials in question.” In Yelton v. PHI Inc., 2012 WL 2838421 (E.D. La. July 10, 2012), Judge Carl J. Barbier affirmed the magistrate judge’s order sanctioning defendants for spoliating relevant ESI. In doing so, the court rejected two defendants’ separate objections. Although Judge Barbier noted that the magistrate judge did not explicitly state that the first defendant’s conduct constituted bad faith, which was the standard necessary for imposing sanctions, he found that “it [was] impossible to read the opinion without concluding that this was exactly the result that the Magistrate reached.” The second defendant objected to the magistrate judge’s order because it failed to award the second defendant sanctions against the first defendant because the second defendant previously had settled with the plaintiff without the benefit of the spoliated evidence. But Judge Barbier upheld the magistrate judge’s determination that the second defendant’s “decision to settle the case for a larger amount was not causally related to [the first defendant’s] failure to timely supplement its discovery responses.” To the contrary, the court noted that at the time the second defendant settled, the first defendant had not fully responded to all of the plaintiff’s outstanding discovery requests. In Smith & Fuller, P.A. v. Cooper Tire & Rubber Co., 2012 WL 2345024 (5th Cir. June 21, 2012), the Fifth Circuit affirmed the district court’s decision to sanction the plaintiff’s counsel for violating the terms of a protective order and upheld the award of attorneys’ fees and costs. The plaintiff’s counsel inadvertently disseminated documents produced under the terms of the protective order to a number of personal injury attorneys attending a conference about obtaining return to top
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Winston & Strawn LLP discovery from the defendant. The breach of the protective order was only discovered when the defendant received documents from one of the personal injury attorneys in a separate lawsuit. The district court sanctioned plaintiff’s counsel under Federal Rule of Civil Procedure 37(b)(2), which “empowers the courts to impose sanctions for failures to obey discovery orders.” Although the district court did not find that plaintiff’s counsel willfully violated the protective order, it held that sanctions were necessary because defendant had made its production of confidential information in reliance on the protections in the protective order. And the court specifically noted that this was not the first time that plaintiff’s counsel had violated a protective order covering the defendant’s confidential documents and information.
there is “significant authority in support of the imposition of Rule 37(b) sanctions” for a party’s violation of a protective order.
Plaintiff’s counsel appealed the sanctions ruling, arguing that Rule 37(b)(2) does not allow a court to sanction a party for violating protective orders. The Fifth Circuit disagreed, and found that there is “significant authority in support of the imposition of Rule 37(b) sanctions” for a party’s violation of a protective order. In upholding the sanctions award, the Fifth Circuit found that the district court “provided specific and wellreasoned grounds to impose sanctions as it determined that any lesser penalty would not have been an adequate future deterrent.” In Tadayon v. Greyhound Lines, Inc., 2012 WL 2048257 (D.D.C. Jun. 6, 2012), Magistrate Judge John M. Facciola faced dueling sanctions motions relating to various discovery issues. The plaintiff sought sanctions due to the defendant’s failure to comply with its self-imposed production deadlines on a number of occasions. In denying the plaintiff’s sanctions motion, Magistrate Judge Facciola found that Federal Rule of Civil Procedure 37 did not provide any basis for imposing sanctions because the defendant had not failed to comply with a court order.
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The court also refused to award sanctions under its inherent authority because the plaintiff failed to demonstrate that the defendant had acted in “bad faith.” To the contrary, the defendant ultimately produced over 45,000 pages of the requested documents. Notably, Magistrate Judge Facciola ordered the plaintiffs to show cause why they should not be required to pay the defendant’s attorney’s fees and expenses in responding to the plaintiff’s sanctions motion, which the court found was “not substantially justified.” And frustrated by the parties’ repeated inability to resolve their discovery disputes, the court admonished the parties to “make genuine efforts to engage in the cooperative discovery regimen contemplated by the Sedona Conference Cooperation Proclamation.”
Search, Retrieval, & Production Courts continue to confront questions concerning whether a party’s efforts to locate, review, and produce ESI are reasonable under the Federal Rules. In Nat’l Day Laborer Organizing Network v. United States Immigration and Customs Enforcement Agency, 2012 WL 2878130 (S.D.N.Y. July 13, 2012), Judge Shira Scheindlin addressed the propriety of the searches conducted by a variety of government agencies in response to a Freedom of Information Act (FOIA) request. The plaintiffs argued that the agencies’ searches were inadequate because they excluded certain custodians, used vague instructions, and did not specify the search terms used. Judge Scheindlin noted that most custodians generally cannot be trusted to run effective searches “because designing legally sufficient searches in the discovery or FOIA context is not part of their daily responsibilities.” Similarly, Judge Scheindlin noted that simple keyword searches are often not enough as “[e]ven in the simplest case requiring a search of on-line e-mail, there is no guarantee
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Winston & Strawn LLP that using keywords will always prove sufficient.” In order to address these shortcomings, Judge Scheindlin noted that there is a “need for careful thought, quality control, testing, and cooperation with opposing counsel in designing search terms or ‘keywords’ to be used to produce e-mails or other electronically stored information.” She also stated that parties can and often should use “latent semantic indexing, statistical probability models, and machine learning tools to find responsive documents.” To the extent that courts are asked to evaluate the adequacy of the search terms that are used by a particular party, Judge Scheindlin found that such an evaluation is “highly context-specific,” and noted that even courts that have “carefully considered defendants’ search terms have generally not grappled with the research showing that, in many context, the use of keywords without testing and refinement (or more sophisticated techniques) will in fact not be reasonably be calculated to uncover all responsive material.”
there is a “need for careful thought, quality control, testing, and cooperation with opposing counsel in designing search terms or ‘keywords’ to be used to produce e-mails or other electronically stored information.”
With respect to the searches at issue in the case, Judge Scheindlin required the parties to “work cooperatively to design and execute a small number of new, targeted searches.” In addition, for custodians for whom the government agencies had not disclosed the search terms, Judge Scheindlin required the parties to conduct new, fully-documented searches in order to evaluate the efficacy of the search terms. In Vietnam Veterans of America v. Central Intelligence Agency, 2012 WL 2375490 (N.D. Cal. Jun. 22, 2012), Magistrate Judge Jacqueline Scott Corley was asked to determine whether forty-year old magnetic tapes were reasonably accessible under Federal Rule of Civil Procedure 26(b)(2)(B). The defendants disclosed that they possessed 24 magnetic tapes that might contain relevant information, but noted that the tapes were forty years old. An initial attempt was made to recover data 9
from six of the twenty-four tapes by the Defense Logistics Agency, which was ultimately able to recover data from two of the six tapes. When the plaintiffs sought to compel the defendants to review the remaining 18 tapes, the defendants objected on the ground that the tapes were not reasonably accessible. The defendants also sought to shift the burden of retrieving any information from the remaining magnetic tapes to the plaintiffs. Magistrate Judge Corley noted that under Rule 26(b)(2)(B), a party does not need to “provide discovery of electronically stored information from sources the party identifies as not reasonably accessible because of undue burden or cost.” She noted that the defendants had “expended considerable resources to attempt to access information on the six magnetic tapes,” and stated that because “it is unknown whether any further information can be obtained from the tapes, the Court finds that the data on the tapes is not reasonably accessible[.]” But Magistrate Judge Corley allowed the plaintiffs the opportunity to “independently engage in further efforts to retrieve data” from the four tapes that the defendants claimed were unreadable. For the other 18 tapes in the defendants’ possession, the plaintiffs identified eight tapes that they believed were most critical and agreed to cover the cost of the restoration and review. Magistrate Judge Corley noted that “[s]hould the vendor successfully obtain data from the tapes that Plaintiff claims is relevant to their claims … the Court will entertain a motion for cost shifting at that time.” In Margolis v. The Dial Corp., 2012 WL 2588704 (S.D. Cal. July 3, 2012), Magistrate Judge William V. Gallo denied the plaintiff’s motion for a preservation order requiring the defendant to preserve its voicemails, instant messages, and disaster recovery backup tapes. With respect to the voicemails and instant messages, Magistrate Gallo noted that the defendant had issued a litigation hold to employees who might have potentially relevant documents, and that the hold expressly return to top
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Winston & Strawn LLP covered voicemails and instant messages. Further the defendant had represented that it would continue to take “reasonable steps” to preserve its voicemails and instant messages (absent any agreement to the contrary). In determining that the requested preservation order was not necessary for the defendant’s back-up tapes, Magistrate Gallo held that backup tapes used for disaster recovery generally are “not reasonably accessible without undue burden and cost.” The court noted that this general rule should not apply when a party can “identify where particular employee documents are stored on backup tapes.” In that event, “the tapes storing the documents of ‘key players’ … should be preserved if the information contained on those tapes is not otherwise available” (citing Judge Scheindlin’s decision in Zubulake v. UBS Warburg LLC). But Magistrate Gallo held that this exception did not apply in Margolis because the defendant’s backup data was stored on thousands of massive drives, and the court found that preserving such backup tapes was “not a matter of simply pulling out physical backup tapes … [because] the data [was] stored across multiple tapes in an encrypted format.” Magistrate Gallo found that forcing the defendant to preserve its backup tapes would be duplicative of its other preservation efforts and effectively would require the defendant to “build an entirely new infrastructure.” Further, in denying the plaintiff’s motion for a preservation order, .the court found that the defendant took “reasonable steps” to preserve relevant ESI by: (i) directing that a third-party website provider preserve the website’s content; and (ii) sending follow-up preservation requests identifying specific items to preserve. In Adair v. EQT Production Co., 2012 WL 2526982 (W.D. Va. Jun. 29, 2012), Judge James P. Jones affirmed the magistrate judge’s denial of the defendant’s motion for a protective order shifting the cost of ESI discovery to the plaintiff. The 10
defendant’s expert estimated that a traditional review of 68.86 GB of ESI would cost approximately $759,000 at the prevailing market rate for contract attorneys. The defendant’s expert further estimated that using document analytics, a process the court described as “a method of categorizing and organizing document review,” the review would cost approximately $421,767. The magistrate judge found that costshifting was unnecessary because the defendant could: (i) use search terms to limit production to those e-mails “likely relevant to the subject matter” of the case; (ii) limit the relevant time period; (iii) remove any e-mails “to and from a list of identified inside and outside legal counsel”; and (iv) produce the remaining documents without prior individual document review. In reviewing the magistrate judge’s ruling, Judge Jones noted that “the proliferation of ESI and its production have dramatically increased the burdens, financial and otherwise, associated with discovery,” and that the magistrate judge had “sought to find an efficient, reasonable, and fair solution” to the ESI discovery issues presented in the case. With respect to the magistrate judge’s reliance on the parties’ use of search terms to ferret out both irrelevant and privileged documents, Judge Jones held that such an approach “would not be appropriate without the existence” of a protective order and a clawback provision under Federal Rule of Evidence 502.” Rather, the court found that a protective order limiting the ability to use produced documents outside of the instant case, in conjunction with a Rule 502(d) clawback provision preventing inadvertent production of privilege documents from waiving any applicable privileges, adequately protected the defendant.
Da Silva Moore Update In the continuing saga of Da Silva Moore v. Publicis Group SA, 11-Civ-1279 (ALC) (AJP), the defendants recently opposed
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Winston & Strawn LLP the plaintiff’s objections to Magistrate Judge Peck’s refusal to recuse himself. The defendants claim that Judge Peck’s position on predictive coding and his contacts with individuals in the eDiscovery industry were well-known and appropriate. In essence, the defendants argue that the plaintiff agreed that the use of predictive coding was appropriate (although not necessarily with the actual protocol imposed). The issue is now before Judge Andrew L. Carter, who is expected to issue a ruling in the near future.
Social Media Courts continue to try to balance personal privacy rights in social media against the discovery of relevant documents in civil litigation. For example, in Thompson v. Autoliv ASP, Inc., 2012 WL 2342928 (D. Nev. Jun. 20, 2012), Magistrate Judge Cam Ferenbach was asked to compel the production of complete and unredacted copies of the plaintiff’s Facebook and other social networking accounts. The defendants argued that the plaintiff’s “post-accident social activities, mental state, relationship history, living arrangements, and rehabilitative process” were relevant to the claims and defenses in the plaintiff’s personal injury action. Although the plaintiff already had produced a redacted version of her Facebook site and several photographs, the defendants advised the court that they had obtained unredacted copies of wall posts and photographs from the plaintiff’s public Facebook profile before the plaintiff had changed her privacy settings. The defendants argued that the plaintiff’s unredacted Facebook and other social networking postings contradicted the plaintiff’s claims. Magistrate Judge Fehrenbach held that “evidence relating to Plaintiff’s physical capabilities and social activities [was] relevant to Plaintiff’s claims in this action,” and ruled that such materials were generally discoverable. But the court recognized that “litigation does not permit a complete and open public display of Plaintiff’s life.” Accordingly 11
Magistrate Judge Fehrenbach balanced the defendant’s need for these materials against the plaintiff’s personal interests. Specifically, the court required the plaintiff to upload all information from her Facebook and MySpace accounts onto an electronic storage device for submission to the defendants. The court prohibited the defendants from sharing this information with anyone other than counsel’s support staff, and required the defendant to identify to plaintiff’s counsel the previously-withheld materials that the defendants believe is discoverable. Magistrate Judge Fehrenbach then would decide any disputes over discoverability. Finally, the court required the defendants to return the storage device without making any copies once all discovery disputes had been resolved.
Stored Communications Act and Internet Service Providers Working within the confines of the Stored Communications Act (“SCA”), law enforcement agencies continue to seek information from Internet Service Providers (“ISPs”) from which they can identify individual end users associated with Internet Protocol (“IP”) addresses. In The People of the State of New York v. Harris, 2012 WL 2533640 (N.Y. Crim. Ct. Jun. 30, 2012), Justice Matthew A. Sciarrino, Jr. denied in large part a motion to quash a third-party subpoena on Twitter Inc. (“Twitter”) seeking production of the defendant’s account information and tweets. The defendant initially moved to quash the subpoena, but the court found that he lacked standing because he had no proprietary interest in the user information on his Twitter account. After the court entered an order compelling the production of the tweet, Twitter moved to quash both the original subpoena and the subsequent order. In doing so, Twitter argued that: (i) the defendant had standing to quash the subpoena; (ii) requiring Twitter to move to quash such a subpoena “places an undue burden on Twitter” return to top
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Winston & Strawn LLP because it forces Twitter to choose between providing user communications and account information in response to all subpoenas or moving to quash the subpoenas itself. Judge Sciarrino rejected this rationale, noting that “that burden is placed on every third-party respondent to a subpoena … and cannot be used to create standing for a defendant where none exists.”
knowledge of the identity or location of persons who know of any discoverable information, e.g., the names and related information of other users, if any, of the IP address.” The fact that the plaintiff might not have sufficient information to connect the owner of the IP address to the alleged infringer did not preclude the enforcement of the subpoena.
Moreover, he held that there “can be no reasonable expectation of privacy in a tweet sent round the world,” and that the order compelling productions “[was] not unreasonably burdensome to Twitter, as it does not take much to search and provide data to the court.” Judge Sciarrino note, however, that the SCA requires that to “compel a provider of ECS [like Twitter] to disclose contents of communication in its possession that are in temporary ‘electronic storage’ for 180 days or less, the government must obtain a search warrant[.]”
Global Privacy and CrossBorder Discovery Issues
Accordingly, in keeping with the provisions of the SCA, the court required that Twitter produce all “non-content records such as subscriber information, logs maintained by the network and the September 15, 2011 and December 30, 2011 tweets” that were covered by the court’s prior order. But the court required the plaintiff to obtain a search warrant in order to obtain tweets that were made after December 31, 2011, and thus within the 180-day window specified in the SCA. In Discount Video Center Inc. v. Does 1-29, 2012 WL 2786425 (D. Mass. July 5, 2012), Chief Magistrate Judge Leo T. Sorokin denied a motion to quash a subpoena to certain ISPs seeking a subscriber’s personally-identifiable information. The defendant argued that there was insufficient information to tie the identified owner of the IP address to the alleged copyright infringer and that the plaintiff was engaging in a bad-faith fishing expedition. Magistrate Judge Sorokin held that the plaintiff was entitled to this discovery because it could “reasonably assert that [the defendant] will, at least, have 12
The increasing use of the cloud to store company data and to engage in collaborative efforts has continued to present challenges to data protection, privacy, and cross-border data transfers. The Article 29 Working Party issued a draft opinion on cloud computing and a working document on Binding Corporate Rules (BCRs) for third parties. In addition, the Eastern District of Texas issued an opinion finding that it did not need to prohibit a party’s use of overseas discovery vendors because the parties already had agreed to a protective order that would cover instances where the overseas vendor lost or disclosed the opposing party’s confidential material.
Opinion on the Use of Cloud Computing As the ability to store data in the cloud has progressed and more companies and individuals have turned to the cloud, the problems inherent with such storage have become more visible. On July 1, 2012, the EU Article 29 Data Protection Working Party, the European Union’s independent advisory board on data protection and privacy, issued an opinion analyzing the many issues generated by the use of the cloud for data storage and transacting business. The text of Opinion 05/2012 is available here. Opinion 05/2012 examines the relationship among the cloud client (the data controller), the cloud provider (the data processor), and subcontractors employed by the cloud provider. In addition, it identifies two broad categories of risk associated with cloud computing services: return to top
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Winston & Strawn LLP (i) lack of control over the data; and (ii) insufficient information regarding the processing operation itself (or transparency). The Opinion notes that cloud clients may no longer be in exclusive control of data committed to the cloud. Accordingly, clients may not be able to “deploy the technical and organizational measures necessary to ensure the availability, integrity, confidentiality, transparency, isolation, intervenability and portability of the data.” Moreover, the Opinion also warns of a lack of transparency that can occur when the cloud provider engages in chain processing (i.e., having multiple data processors and subcontractors), as well as having personal data processed in different geographic locations within the European Economic Area (“EEA”). The Opinion concludes that “[b]usinesses and administrations wishing to use cloud computing should conduct, as a first step, a comprehensive and thorough risk analysis …. Special attention should also be paid to assessing the legal risks regarding data production, which concern mainly security obligations and international transfers.” The Opinion then provides guidelines for clients and providers to follow when agreeing to service contracts, including, among others: ■■ The cloud client should select a cloud provider that guarantees compliance with EU data protection legislation; ■■ The use of subcontractors should be disclosed in any contract between the cloud provider and cloud clients;
as well as provisions limiting access to the data; and ■■ Providing comfort to the cloud client that the cloud provider will cooperate with the cloud client’s right to monitor processing operations, facilitate the exercise of data subjects’ rights to access/correct/erase their data, and notify the cloud client of any data breaches. In terms of cross-border data transfers, Opinion 05/2012 notes that the “cloud client should verify if the cloud provider can guarantee lawfulness of cross-border data transfers and limit the transfers to countries chosen by the client, if possible.” In closing, Opinion 05/2012 acknowledges that the “complexities of cloud computing cannot be addressed completely via the safeguards and solutions outlined in this Opinion.” But the Article 29 Working Party suggested that Opinion 05/2012 provides a sound basis for securing the processing of personal data submitted to cloud providers.
Working Paper on Binding Corporate Rules On June 6, 2009, the Article 29 Working Party issued a working document on Binding Corporate Rules (“BCRs”) for Data Processors, which it called “BCRs for third party data”). The Working Party intended that the working paper would serve as a “toolbox, describing conditions to be met” to facilitate the use of the BCRs for thirdparty data.
■■ Contracts should contain language ensuring that the cloud provider and any subcontractors must fundamentally comply with the applicable data protection requirements;
The Working Document sets forth various categories of provisions that should be included in BCRs for such data, including, among other things: (i) their binding nature; (ii) effectiveness; (iii) the duty to cooperate; (iv) a description of the processing and data flows; (v) mechanisms for reporting and recording changes; and (vi) data protection safeguards.
■■ Contracts should contain sufficient guarantees in terms of technical security and organizational measures,
It also outlines the following duties on the part of any party subject to the BCRs: (i) the duty to process the personal data
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Winston & Strawn LLP only on behalf of the data controller; (ii) the duty to return all personal data upon termination of data processing services; (iii) the duty to update, correct, or delete personal data as needed; and (iv) the duty to keep personal data secure. The text of the Working Document is available here. In Eon Corp. IP Holdings, LLC v. Landis+Gyr Inc., 2012 WL 2132385 (E.D. Tex. 2012) Magistrate Judge John D. Love rejected the defendants’ request to prohibit the plaintiff from transferring protected information outside the United States to a discovery vendor. Magistrate Judge Love’s decision was based in large part on the fact that the parties already had entered into a protective order that governed the use of confidential and highly confidential material. Despite the existence of the protective order, the defendants claimed that a general prohibition was necessary due to the “extremely sensitive nature of the Protected Material, the heightened risk of an inadvertent or intentional discloser [sic] in a foreign jurisdiction beyond this Court’s reach[.]” The defendants’ position was informed by an unrelated situation where data subject to a protective order was lost after it was sent to an overseas vendor. Magistrate Judge Love noted that while he was “mindful of Defendants’ concerns regarding the disclosure of confidential or highly confidential information,” he was not persuaded that “one unfortunate incident that occurred in an unrelated case amounts to a ‘clearly defined and serious harm’ such that all transmission outside of the United States should be forbidden.” The court required, however, that prior to receiving any confidential materials, the persons located outside the United States should: (i) review the protective order; (ii) agree in writing to be bound by its terms; and (iii) submit in writing to the governing jurisdiction.
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Winston & Strawn LLP
Upcoming Firm Speaking Engagements September 19, 2012
John Rosenthal PLI Webcast Electronic Discovery Guidance 2011: In-house Counsel’s Guide to e-Discovery: Everything You Need to Know
Featured Contributors The Editors wish to thank Anna Lamut, Esq., Matt Poplawski, Esq., and Martin Geagan, Esq. for their invaluable contributions to the content of this issue.
Contact Us If you have questions about the items in this issue of eDiscovery Advantage, would like to learn more about these cases or other eDiscovery matters, or would like to be added to the mailing list, please contact one of the following: New York Christopher C. Costello, Esq. (Editor)
[email protected] Scott M. Cohen (Director of eDiscovery Services)
[email protected]
+1 (212) 294-3336 +1 (212) 294-3558
Washington, D.C. John J. Rosenthal, Esq. (Chair, eDiscovery Group)
[email protected] Pamela A. Rons, Esq. (Editor)
[email protected]
+1 (202) 282-5785 +1 (202) 282-5746
Winston & Strawn LLP’s eDiscovery & Information Management Practice Group (the “eDiscovery Group”) brings years of “real world” experience and offers our clients and case teams the full continuum of services along the electronic discovery reference model behind our own firewall. Our services include preservation, collection, early case assessment, processing, hosting, and review. The eDiscovery Group also offers a wide variety of consulting services, including eDiscovery risk assessments, eDiscovery response programs, vendor selection, training of legal and technical staffs, data mapping, legacy retirement and records retention programs. These materials have been prepared by Winston & Strawn LLP for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code. Receipt of this information does not create an attorney-client relationship. No reproduction or redistribution without written permission of Winston & Strawn LLP. © 2012 Winston & Strawn LLP
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