Predicitive Coding in Andrew Peck's Court

In what appears to be the first federal case to adopt the use of predictive coding, Magistrate Judge Andrew Peck of the U.S. District Court for the Southern District of New York in Monique Da Silva Moore, et al., v. Publicis Groupe and MSL Group, ordered the parties to adopt a protocol for e-discovery that includes the technology as implemented by Recommind's Axcelerate product.

Paul Neale, CEO of Doar Litigation Consulting and Gene Klimov, vice president of discovery consulting, advised the plaintiffs on developing a protocol for predictive coding that used quality controls by both parties to teach Axcelerate what is relevant and irrelevant through iterative sample sets. Peck agreed that "the [predictive coding] system is only as good as the training that it gets."

See LTN's technology editor Sean Doherty's analysis .

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Decisions, Decisions: EDD Cases in 2011

"Case law has rapidly evolved from the humble pronouncements of just a few technology-savvy federal judges," observes Littler Mendelson shareholder Cecil Lynn III, looking back at e-discovery opinions in 2011

Francisco v. Verizon South, Inc. and Race Tires America, Inc. v. Hoosier Racing Tire Corp. are among a rising number or opinions that address reimbursing the prevailing party's e-discovery costs. Thermal Design, Inc. v. Guardian Building Products, Inc. from the Eastern District of Wisconsin demonstrates judges stressing the need to move away from broad discovery demands towards targeted, more proportional requests.

The recently updated Pippins v. KPMG LLP raised the specter of disproportionate preservation demands and the worry that Southern District of New York Magistrate Judge James Cott's (and now District Court Judge Colleen McMahon's) decision might be misapplied. Other opinions addressed sanctions in the face of egregious misconduct, the production of metadata, and social media discovery.

For the full rundown, read Lynn's article, "The View From the Bench: Opinions on E-Discovery in 2011."

Pippins Demonstrates Need for Uniform Preservation Rules

In her Feb. 3, 2012 opinion in Pippins v. KPMG LLP, (S.D. N.Y. No. 11 Civ. 377), District Court Judge Colleen McMahon denied KPMG’s request for relief from its obligation to preserve more than 2,500 hard drives of its former Audit Associates in the overtime wage case, at a cost claimed by KPMG to be $1.5 million or more. The plaintiffs sought relief under the Fair Labor Standards Act and New York law.

KPMG’s failure to provide any information about or access to the drives doomed its argument that the value of the drives was disproportionate to the costs. Without any sense of what the value was of the information on the drives, the court could not undertake any balancing of burden vs. value. As stated by Judge McMahon, “KPMG is hoist on its own petard,” (Op. p. 20). In other words, traditional stonewalling tactics can backfire on a party trying to limit discovery by arguing proportionality; even the slightest cooperation would have put KPMG in a much better position.

If there was a silver lining for those who oppose burdensome preservation obligations, it was that the court stated that, “[P]roportionality is necessarily a factor in determining a party's preservation obligations” (Op. pp. 18-19), thereby siding against those who argue that proportionality governs production but not preservation.

KPMG Loses Appeal in Pippins

KPMG has lost its appeal in the controversial Pippins case. Judge McMahon said KPMG must preserve all possible plaintiffs' drives. Full story here.

Resolution Talks Fail in 'Pippins v. KPMG' Discovery Agreement

Update, 11:45pm: There won't be a resolution anytime soon. Read the article here.

----------

A possible resolution to the controversial discovery dispute in Pippins v. KPMG, in which KPMG's counsel hoped to communicate with Judge Colleen McMahon yesterday, has not been resolved after all.

The dispute, by now familiar to all in the legal technology tribe, is about how many computer hard drives to evaluate. Pippins' side won a Nov. 2011 ruling by magistrate Judge James Cott in favor of using all available drives, while KPMG appealed to use 100 sampled drives. The decision caused an uproar and KPMG appealed.

Steven Catlett, of Sidley Austin for KPMG, formally asked McMahon for communication by close-of-business yesterday. "The parties have... initiated a discussion as to whether... the parties can reach a resolution of the discovery issue," he wrote in a memo.

However, "There's been no action taken," Catlett told me today, from Chicago. "We're waiting to hear from her."

Pippins' counsel at Outten & Goulden did not respond to requests for comment.

The EDD Update and Law Technology News team will continue following this closely.

- Evan Koblentz

3rd Circuit Hears Oral Arguments in Race Tires

The Third Circuit Court of Appeals held oral argument on Monday in Race Tires America Inc., v. Hoosier  No. 11-2316 (3rd Cir. 2011) involving e-discovery cost taxation pursuant to 28 U.S.C. § 1920 and Federal Rule of Civil Procedure 54(d)(1). Philip Yannella’s recent LTN article addresses this hot topic and this specific case in Could E-Discovery Taxation Alter Discovery Paradigm?  

On Nov. 28, I reported on another appellate decision, In Re RICOH Company, LTD. Patent Litigation, No. 20-11-1199, (Fed. Cir. November 23, 2011), addressing EDD cost taxation in Federal Circuit Federal Circuit Takes on Database Cost Taxation.

The Third Circuit panel asked wide ranging and insightful questions involving the American Rule requiring each party to pay their own legal fees, cooperation, cost shifting and  cost reasonableness.  While we will have to wait until Third Circuit issues its opinion, you can listen to the argument and form your own opinion as to the direction the court will rule.

Image: Clipart.com

Interesting Spin on GPS Use

As we await the U.S. Supreme Court's decision in the GPS tracking case, the lower courts continue to struggle with this issue. A recent decision from a New York Appellate Court has an interesting spin on the use of GPS tracking devices. 

The case is In The Matter of Michael A. Cunningham v. New York State Department of Labor. In Cunningham, a 20-year state employee (with a history of misconduct) was being investigated for taking unauthorized absences from work and falsifying time records. Previous attempted to follow the employee after he left work through traditional surveillance had failed, so the investigators obtained help from the New York Office of the Inspector General (“OIG”). The OIG, among other activities, placed a GPS on the employee’s car.  Information obtained from the GPS device helped the OIG to conclude that the employee had submitted false information about hours worked and travel.

Federal Circuit Takes on Database Cost Taxation

Adding to the growing jurisprudence on e-discovery cost taxation, the Court of Appeals for the Federal Circuit issued an opinion finding the taxation of discovery database costs is permissible under 28 U.S.C. § 1920 and Federal Rule of Civil Procedure 54(d)(1). See In Re RICOH Company, LTD. Patent Litigation, No. 20-11-1199, (Fed. Cir. November 23, 2011).

This patent case arises from the Northern District of California and a decision by Chief Judge James Ware awarding certain discovery costs to the plaintiff. The parties in the matter agreed to produce documents in their native form in a database available to the parties.

The Federal Circuit, applying Ninth Circuit precedent, held that the costs of producing a document electronically can be recoverable under 28 USC § 1920(4) which provides for recovery of “exemplification” costs. It also found persuasive N.D. Cal local rule 54-3(d)(2) which permits taxing the “cost of reproducing disclosure or formal discovery documents when used for any purpose in the case.” 

GPS Device OK'd in State Worker's Car

John Caher reports today in the New York Law Journal that the New York State Inspector General's placement of a GPS tracking device on the private vehicle of a government employee suspected of falsifying attendance records did not violate the employee's rights. But, he notes, the appeals panel was "deeply divided." 

"The Appellate Division, Third Department, which was previously reversed when it upheld the warrantless use of a GPS device to track a criminal suspect, said the electronic surveillance was justified and reasonable in this civil matter because traditional methods, such as following the employee, had been thwarted.

But a two-judge dissent said the government went too far and tracked the employee's movements not only when he was supposed to be working, but when he was on a family vacation."

Read the full story here.

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Garbage In-Garbage Out

When the leading e-discovery jurists gather for a review of case law developments at the Georgetown Law Advanced eDiscovery Institute it is difficult to pick the most interesting element of the discussion.

However, the panel highlighted a case outside of the EDD mainstream that serves as a cautionary tale for ediscovery professionals. An appellate court bankruptcy decision, In re Taylor, No. 10-2154, (3rd Cir. August 24. 2011), is “an unfortunate example of the ways in which overreliance on computerized processes. . . can lead to attorney misconduct before a court.”

In Taylor, a magistrate judge imposed the bankruptcy equivalent of FRCP 11 sanctions on counsel who filed pleadings containing computer generated information fraught with errors and took no action when the debtors claimed that the data were inaccurate. The district court overturned the magistrate’s decision. The appellate court, in turn, reversed the district court holding that Rule 11 “requires more than a rubber-stamping of the results of an automated process.”

Further the appellate court held that when a lawyer systematically “ignores obvious indications” that the information may be incorrect, the attorney “cannot be said to have made reasonable inquiry” as required by Rule 11.

Taylor’s obvious lesson is that information output from computer systems is only as accurate as the underlying data. Ediscovery professionals rely on numerous “computerized processes” should remember “GIGO,” an acronym that stands for “garbage in-garbage out”. Careful counsel needs to “trust but verify” electronic data accuracy or potentially face misconduct sanctions.

Georgetown EDD Conference Case Law Update

The eighth annual Georgetown Law Advanced eDiscovery Institute opened Thursday morning with a fast-paced case law update presented by six of the most well-known jurists in the legal industry: John Facciola (U.S. District Court for the District of Columbia); Lee Rosenthal (U.S. District Court for the Southern District of Texas) (right); Andrew Peck (left), Shira Scheindlin, and James Francis (left below) — (all three from the U.S. District Court for the Southern District of New York) — and David Waxse (U.S. District Court for the District of Kansas) (below, with moderator Ron Hedges). Baltimore's Paul Grimm was scheduled to participate, but had a conflict and was unable to attend.

The almost-two hour session at the Ritz-Carlton in Arlington, Va., covered cases that illustrated a wide range of issues that were in consideration during 2011.

Francis started with the long-litigated Rambus cases. (Micron Tech, Inc. v. Rambus Inc., 645 F. 3d 1336 (Fed .Cir. 2011), and Hynix Semiconductor, Inc. v. Rambus Inc., 645 F. 3d 1336 (Fed. Cir. 2011), which addressed the issue of when the duty to preserve kicks in, and what is reasonable anticipation of litigation. Francis described the "shredding parties" that Rambus held that were revealed during the litigation. "In some respects, [Rambus] was an easy case," he observed, because it was so dramatic.

Read more here.

Photos: Monica Bay

More on Pippins Decision—Preservation Proportionality

Among the many issues raised by Magistrate Judge James Cott’s decision in Pippins et al v. KPMG, No. 1:11-cv-00377, (S.D.N.Y. Oct. 7, 2011) is the uncertainty in the law regarding preservation, particularly in applying  proportionality principles. 

KPMG had preserved more than 2,500 individual hard drives at a cost exceeding $1.5 million and sought a protective order to reduce the preservation scope or shift some of the preservation costs to the plaintiffs. Central to KPMG’s motion was a proportionality argument. In conflict with Rimkus Consulting Grp., Inc., v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. 2010) and Victor Stanley, Inc.v. Creative Pipe, Inc., 269 F.R.D. 497 ((D. Md. 2010), Cott declined to apply proportionality principles citing Orbit One Commc'ns, Inc. v. Numerex Corp., 271 F.R.D. 429 (S.D.N.Y.2010).  He  concluded that  "[u]ntil a more precise definition is created by rule," prudence favors retaining all relevant materials. (Citing Orbit One and Zubulake IV, 220 F.R.D. at 218). 

In response, KPMG filed a motion asking Federal District Court Judge Colleen McMahon to set aside or modify the magistrate judge’s order. The U.S. Chamber of Commerce has also filed an amicus brief urging McMahon ot set aside the magistrate’s order. Unless further extensions are granted, briefing will be completed by December 9, 2011. We will likely have to wait until next year to see whether McMahon will take a different view of preservation proportionality.

Pa. Court Upholds $510K Pretrial Costs

In a recent case in the U.S.D.C. Eastern District of Pennsylvania, Judge Legrome Davis upheld court costs of $510K for pre-trial discovery, mostly e-discovery. Attorney Peter Vaira, of Vaira & Riley, discusses the Aspartame Antitrust Litigation case in The Legal Intelligencer, here.  

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Supreme Court Arguments in U.S. v. Jones

The Supreme Court heard arguments on Nov. 8, in the GPS tracking case, United States v. Jones. My article is  here.

Magistrate Judge James Cott Ruling Generating Heat

Our former ALM colleague Alison Frankel reports on her "On the Case" blog (Thomson Reuters): "E-discovery ruling in KPMG case: Brace for 'profound' impact."

It's about an EDD order from Magistrate James Cott over how many hard drives must be examined in an uncertified wage-and-hour class action suit against KPMG.  The parties agreed that plaintiffs could use sampling software to limit the amount of data to be preserved, says Frankel, but couldn't agree on sampling criteria and number of drives to include in the sample. 

Amicus briefs are flying.  Here's the Chamber of Commerce brief, courtesy of Littler's Cecil Lynn III: Download Amicus Brief

Check it out Frankel's report  here. 

Evan Koblentz' 11/14 article here.

Leonard Deutchman 11/11 article  here 

Hat tip: Jeffrey Brandt

Update on SCOTUS GPS Arguments

Here are some of the news reports and resources regarding yesterday's SCOTUS arguments (See also, Joshua Engel post, below):

• Engel's article is here. 

• "Citing Orwell, Supreme Court Appears Wary of Police GPS Surveillance," by Marcia Coyle, The National Law Journal.

• Which Way Privacy?" by Dahlia Lithwick, Slate.

• Supreme Court documents here. Argument transcript

• SCOTUSblog post by Lyle Denniston. 

• The Volokh Conspiracy post by Orin Kerr.

• Cato@Liberty post by Jim Harper. 

• Electronic Frontier Foundation case history  here.

Image: Clipart

SCOTUS Arguments Today in U.S. v Jones

The United States Supreme Court is scheduled to hear arguments today in United States v. Jones, 

The court will consider whether the warrantless use of a GPS tracking device on a defendant's vehicle to monitor his movements on public streets violated the Fourth Amendment. The briefs, including 13 amicus briefs, are gathered on Scotusblog. For a little perspective, you can read my take from last year on how James Bond relates to this issue here.  

I will have more when the transcripts are released.

Patent Litigation Model E-discovery Order Update

In the LTN article The Elephant in the Patent Courtroom I reported on the model e-discovery order for patent litigation developed by the Federal Circuit Advisory Council's E-Discovery Committee. 

            Judges in three patent cases in the Eastern District of Texas have issued orders with provisions very similar to or incorporating the patent Litigation Model Ediscovery Order terms: Stambler v. Atmos Energy (Case No. 2:10-CV-594)((Judge Everingham), Effectively Illuminated Pathways v Aston Martin Lagonda, (Case No.:6:11cv34 (Judge Love) and Intravisual v Fujitsu (Case No. 2:10cv090) (Judge Folsom). Judge Love has also posted the E-discovery Model Order on his website alerting counsel appearing before him that it is a representative example of an order typically used by him in patent matters. 

            I have heard that the model order is also gaining some traction in Delaware and other patent-heavy jurisdictions.  I will continue to look for cases that adopt the model order. If any readers are aware of any cases that do implement the model order or its provisions, please let me know.

Recent Case Law re: ESI

Mark Berman, a partner at Ganfer & Shore, analyzes recent case law regarding electronically stored information, in this article from the New York Law Journal.

New Trend: Big Cost Awards for Winners

“Winning isn’t everything, it’s the only thing” —  Examining the new trend towards big e-discovery cost awards for winners

It is now sweeter than ever to be a victor in federal court. That’s because of the hot new trend to award winners their e-discovery costs under 28 U.S.C. §1920(4) and Rule 54(d)(1) FRCP. Courts are now beginning to consider the services of an e-discovery vendor as “the 21st century equivalent of making copies.” CBT Flint Partners, LLC v. Return Path, Inc., 676 F.Supp.2d 1376, 1381 (N.D. Ga. 2009).

The top three cases to look at first in this area area:

•  In re Aspartame Antitrust Litigation, No. 2:06-CV-1732, 2011 (E.D. Penn. Oct. 5, 2011) ($500,000 e-discovery costs award to defendants);

U.S. v. Jones to Supreme Court

It may be impossible to overstate the potential importance of the upcoming Supreme Court case looking at the warrantless use of GPS tracking devices by law enforcement. The case is United States v. Jones, and there is a nice collection of documents on scotusblog.

I have written some articles about this issue, as well as posting on this blog and the Stockycat blog.  For those looking for a more detailed summary of my views, you can read this law review article I wrote last fall.

(Yes, sometimes hyped cases before the Supreme Court fizzle or get decided on more narrow grounds.  So please take that into account when you continue reading.)

The significance of this case rests, in my opinion, on the fact that this is the first time the Supreme Court has been forced to address whether the aggregation of data can pose significant and unique privacy concerns. In other words, is there a difference between limited observations of people in public, and 24 hour comprehensive surveillance?  This is one of the first opportunities for the court to examine how to apply mid-20^th century legal principles to 21^st century technology.

Federal Circuit Affirms $500K Sanction for Litigation Misconduct

Spoliation sanctions, to no one's surprise, continue to be a hot topic in our community, as the case law develops.

On July 29, defendants in a patent infringement suit were awarded  $500,000 in attorneys fees, in part, because the patent licensing entity destroyed inventor records. See the entire article about Eon-Net LP v. Flagstar Bancorp, at today's Law Technology News website, here.

Editor's note: Please welcome Mark Michels to EDD Update. He is the former litigation manager and discovery counsel at Cisco Systems. E-mail: mnpm2190@gmail.com.

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Blistering Pace of EDD Decisions at Mid-Year

Gibson, Dunn & Crutcher has released its 2011 Mid-Year E-Discovery Update, which surveys 187 cases from the first half of this year and analyzes the e-discovery trends. Highlights from the report include:

• The number of electronic data discovery decisions continues to increase at a blistering pace. The 187 decisions the survey identified in the first half of 2011 represents an 82% increase over the 103 decisions identified at mid-year 2010.
• Litigants sought sanctions nearly twice as many times in the first half of 2011 as they did in the same period last year (68 at mid-year 2011 versus 31 at mid-year 2010), and sanctions awards have nearly doubled in absolute terms (38 at mid-year 2011 versus 21 at mid-year 2010).
• Despite the increase in sanctions sought, courts awarded sanctions at essentially the same rate as in 2010 (56% of the instances in which a party sought sanctions in the first half of 2011, versus 55% for the full year in 2010).
• It turns out that there is such a thing as "discovery karma," at least in the 10^th Circuit, and courts may not appreciate "ankle-biting" an opponent for alleged discovery glitches, especially when one's own house is not in order.
• While no reported case addressed the use of predictive coding or other advanced search technologies, there is no doubt that these tools have been noticed, as The New York Times and Forbes focused on their potential impact in featured articles.
• E-discovery law continued to develop rapidly, and while some areas of law are coming into focus, other areas — including basic issues such as whether a litigation hold notice must be written -- continue to be heavily debated.
• Calls for reform of the Federal Rules of Civil Procedure continued, and the Civil Rules Advisory Committee is considering various approaches to address concerns raised at the Duke Conference in 2010.

For more detailed analysis of the 2011 mid-year trends, see the full report on Gibson Dunn's website.

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Searching Student Cell Phones

The issue of when officials can search a student's cell phone is an emerging e-discovery issue. This is illustrated in the recent case   N.N. v. Tunkhannock Area School District, Civil Action No. 3:10-CV-1080, United States District Court, M.D. Pennsylvania.

In this case, a student at Tunkhannock Area High School violated a school policy requiring cell phones to be turned off and stored in lockers during the school day by placing a call from her cell phone while on school property. A teacher confiscated the phone. School officials then examined the contents of the cell phone and discovered what appeared to be inappropriate photographs stored in the phone's memory. 

The phone was turned over to the police. The court opinion states that, “Aside from one photograph taken by a female friend, the photographs were taken by [the student] alone, and were intended for the sole consumption of herself and her long-term boyfriend. The photographs were taken off school property, were saved to the cell phone, were never e-mailed or uploaded to the internet, and were not shared with other students.”

Document Review Under the Microscope

The J-M Manufacturing Co.e-discovery malpractice suit against McDermott Will & Emery, has caused the document review process to come under close scrutiny. This is healthy and long overdue. The review process is costly, complex, requires expert supervision, careful training, defensible protocols and quality control.

Traditionally, law firms used their first year associates to conduct document reviews. Now we are seeing those associates taking on more of a management function over the review process. Document review is part art and part science that requires unique skill sets. To that end, document review attorneys are becoming specialized and actually making a career of it. Maybe certification is not far behind.

One of the most important decisions in e-discovery, is who to use for the legal process sourcing of the review. Best practices requires having a well thought out document review protocol that is supervised by an experienced professional and having the right review team.  

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Supreme Court to Decide GPS Case

The Supreme Court on Monday agreed to decide whether the warrantless use of a GPS tracking device on a defendant’s vehicle to monitor its movements on public streets violated the Fourth Amendment.  The case is United States v. Jones, Supreme Court Docket No. 10-1259. The D.C. Circuit had previously held that the use of a GPS tracking device without a warrant violated the Fourth Amendment.

In this case, the defendant was under investigation for suspected drug offenses. As part of the investigation, officers installed a GPS device on his vehicle and tracked his movements for four weeks.

Scheindlin Withdraws NDLON Opinion

Judge Shira Scheindlin has withdrawn her NDLON v ICE opinion, reports Ralph Losey on his eDiscovery Team blog here. It addresses FOIA, metadata and cooperation. 

Photo: Monica Bay

Supreme Court on Searches (Davis v. U.S.)

The Supreme Court today held that searches conducted in objectively reasonable reliance on binding appellate precedent are not subject to the exclusionary rule –- even when the court later overrules the precedent. The case is Davis v. United States.  You can read it here.

This case involved a major shift in the law about when police could search a vehicle after the arrest of the driver.  In New York v. Belton, 453 U. S. 454 (1981), the Court permitted the police to search the passenger compartment of a automobile incident to arrest of a recent occupants, regardless of whether the arrestee was within reaching distance of the vehicle at the time of the arrest. 

In 2009, in Arizona v. Gant, 556 U. S. ___ (2009), the Supreme Court overruled Belton.  The court adopted a new rule that permitted the police to search an automobile after the arrest of an occupant only if the arrestee was within reaching distance of the vehicle during the search.  (The Court also permitted the search of a vehicle if the police had reason to believe that the vehicle contained evidence of the crime of arrest.)

New Hampshire Court: Comcast Can Release IP Address

The New Hampshire Supreme Court recently held that internet users have no reasonable expectation of privacy in subscriber information held by internet service providers (ISPs). The case is State v. Mello.

This case was closely watched because, as this article explains, the N.H. Supreme Court has often been willing to interpret its state constitution to provide greater protections of individual rights than the federal constitution. The defendant in this case was charged distribution of child pornography.  He was caught in an undercover police operation when a detective posed online as a 14-year-old boy. The defendant exchanged e-mails and chatted with the detective, and sent to the detective pornographic images depicting male children. 

The detective, using the defendant's e-mail address, determined the defendant's IP address was assigned to Comcast, a New Jersey company. The detective then obtained a search warrant for the defendant’s subscriber information. Using this information, the detective obtained an additional search warrant for the defendant's home computer, and seized evidence that led to his indictment. 

Greene: Court Slaps Plaintiff's Counsel for ESI Sanctions

In Greene v. Netsmart Technologies Inc. (E.D. N.Y., Docket 08-CV-04971) District Judge Thomas Platt ordered plaintiff's counsel to pay half the sanctions imposed on plaintiff, in an order entered June 2, 2011. The sanctions were half of the attorneys fees and costs associated with the defendant's motion as well as half of the cost of the vendor that examined the plaintiff's hard drive and recording device.

Platt adopted the "Report and Recommendation" of U.S. Magistrate Judge A. Kathleen Tomlinson on defendant's motion. Tomlinson had recommended the sanctions using an ordinary negligence standard to determine the appropriateness of sanctions. As detailed in that report, plaintiff had deleted voice recordings, destroyed handwritten notes, and not produced documents until defendant learned of them during plaintiff's deposition or as a result of a third-party examination of plaintiff's computer.

Boxing In Music?

The music industry, through the RIAA (the Recording Industry Association of America) has been at the forefront of e-discovery issues.

The primary target for the RIAA has, historically, been peer-to-peer networks such as Napster and LimeWire. A few weeks ago, the RIAA obtained a $105 million settlement from LimeWire for alleged copyright infringement by users.

Now, the RIAA is going after electronic data stored in the cloud. News reports suggest that the RIAA has filed subpoena to get information from Box.net. The subpoenas apparently seek to determine is users are storing music on the service, and then allowing others to access and copy the music.

According to Rolling Stone, the information sought by the RIAA is limited to information about specific users who are suspected of copyright infringement. 

The actions of the RIAA could become more interesting — and perhaps push the EDD legal envelope — if/when the RIAA starts making broader requests for information from cloud storage providers.  As the popularity of these services grow, more people are using the services to store and share photos and documents. For example, my sister-in-law just set up a page for us to share photographs from a recent family vacation. The request to Box.net by the RIAA could be the start of a strategy to make broader requests from cloud providers for information stored by a large numbers of users in an effort to identify copyright infringements. 

Social Media: Pursuit of Truth Trumps Privacy

Non-public portions of Facebook are now fair game if relevant information may be present during discovery.  In Zimmerman v. Weis Markets, Inc. the plaintiff sued his former employer over a forklift accident.  He sued for lost wages, lost future earning capacity, pain and suffering, scarring and embarrassment over the scars left by the injury.  At his deposition, Zimmerman claimed he never wore shorts after the accident because of the scars. 

Based on what was observed on the publicly available portions of Zimmerman’s Facebook and MySpace pages, Weis Markets believed there may be other relevant information as to Zimmerman’s damage claims on the non-public portions of his Facebook and MySpace pages. Zimmerman argued that his privacy interests outweighed the need to obtain discoverable material.

Relying on Romano v. Steelcase, Inc., 907 N.Y.S.2d 650 (Suffolk Co. 2010), the court ruled that since Zimmerman placed his physical condition in issue, Weis Markets was entitled to discovery. The Romano court citied Leduc v. Roman, 2009 CarswellOnt 843 (February 20, 2009):

Motor Fuel Discovery Skirts 1st Amendment Objection

Tenth U.S. Circuit Court of Appeals In Re: Motor Fuel Temperature Sales Practices Litigation held that court-ordered discovery does not violate First Amendment rights of motor fuel retailers where the defendant objecting to the discovery request failed to make a prima facie showing of the privilege's applicability.

In this case, plaintiffs seek damages and injunctive relief based on defendant retailers' maintenance of a volumetric pricing system for retail motor fuel that does not account for expansion of the fuel's volume due to temperature increases. The plaintiffs allege that when the temperature of motor fuel increases, its volume expands but its energy content remains the same.

Regardless of the outcome of this case, I have always heeded the advice of a Minnesota farmer: pump your gas early in the morning when the reservoir is cool and keep the jet stream of the pump slow and even.

Court of Appeal Fed Circuit Examines Rambus' Spoliation

In a series of district court cases from around the country, Rambus has been bludgeoned for its intentional destruction of evidence. The destruction resulted from implementation of a comprehensive records retention/destruction policy. Rambus was a relatively new company when it implemented the policy, which is when a new records retention policy should be rolled out. Unfortunately for Rambus, the policy was intertwined with its strategy to enforce technology patents. Every court that has analyzed the “real” reasons behind Rambus’ document retention/destruction policy, except one, has concluded that Rambus’ intent was nefarious.  The one court has now been overruled.

Rambus’ records retention policy roll out was examined in detail in two companion cases decided by the U.S. Court of Appeals for the Federal Circuit: Hynix Seminconductor Inc. et al. v. Rambus Inc., 2011 U.S. App. LEXIS 9728 (Fed. Cir. May 13, 2011) (affirming in part, reversing in part and remanding to the Northern District of California) and Micron Technology, Inc. et al. v. Rambus Inc., 2011 U.S. App. LEXIS 9730 (Fed. Cir. May 13, 2011) (affirming in part, reversing in part and remanding to the District of Delaware). The Federal Circuit has jurisdiction over matters involving patents, so it reviews cases from across the country.  Here it examined a case from the Northern District of California and one from the District of Delaware in two overlapping opinions.  We will post a link to the decisions soon.

Here are the short answers.

1.  The court vacated a Northern District of California decision holding that Rambus did not spoliate evidence as it implemented a comprehensive document retention policy in the late 90’s.  This also wiped out the court’s patent rulings on the merits of the dispute.  (As an aside the Northern District's holding has been used as a teaching tool in most litigation hold discussions to demonstrate how fact specific litigation hold decisions can be.  While the fact specific nature of the analysis remains the same, the case is off the teaching tool list).

The Tipster

The First Circuit Court of Appeals decided an interesting case last week on the value of passwords.  The case is United States v. D’Andrea.

In this case, a woman, whom the court refers to as (the "Tipster," called a child abuse hotline operated by the Massachusetts Department of Social Services. The Tipster, who wished to remain anonymous, stated that she had received a message on her mobile phone containing photographs of the defendants performing sexual acts on the Tipster’s eight-year-old daughter.  She provided to the agency a certain phone number and password used to access the photos.

M.J. Foschio departs from Scheindlin in Steuben Foods

Gibson Dunn's May 13 Alert reports that "another court within the Second Circuit has now declined to follow Pension Committee's per se gross negligence and inference of spoliation rule. In Steuben Foods, Inc. v. Country Gourmet Foods, LLC, 2011 WL 1549450 (WDNY Apr. 21, 2011), the plaintiff's corporate counsel implemented a litigation hold orally through conversations with the company's President, Vice President of Business Development and six other managers and officers. Id. at *1. Relying on Pension Committee, and pointing to a mere three missing emails, the defendant argued that relevant documents that were not produced should be presumed lost and sanctions imposed."

"In an opinion by Magistrate Judge Leslie Foschio, the court denied the defendant's request for sanctions because "in this case, the record fails to reveal any evidence that Plaintiff was responsible for the destruction or loss of any relevant evidence." 

"The court distinguished the facts of Pension Committee, where the plaintiffs had been under a fiduciary duty to conduct due diligence on their investments and therefore documents "surely must have existed," yet the "paucity" of documents produced led "inexorably to the conclusion that relevant records ha[d] been lost or destroyed."

Read more on Gibson Dunn's Alert: bit.ly/eddu514.

Image: clipart.com

Front Page News

In a recent article on police use of GPS tracking devices, I mentioned a case in Ohio where GPS was used to discover the suspects in a series of burglaries. One of the cases against the men remains on appeal.

The men were also charged in a neighboring county. They raised the GPS issue before the trial court there, as well. Earlier this week, the judge ruled that the police could use GPS devices without a warrant.  According to the new reports, the judge wrote that "a reasonable expectation of privacy" does not exist for those parking and traveling on public roads.” He explained: “The device was attached to a vehicle found on public property . . . [and] monitored their travel in public and at no time did the defendant attempt to shield the vehicle from the public.”

The most notable aspect of this case is that the decision was front page news in Columbus. The attention paid to this subject suggests that the public’s concern about the use of GPS tracking devices may be greater than the judiciary’s.

Image: Clipart.com

 

Court Denies Request to Track Adversary's ESI

You knew it was going to happen: Tracking electronically stored information, after disclosing it to the requesting party. In re Facebook PPC Adver. Litig., 2011 U.S. Dist. LEXIS 39830, at *9-10 (N.D. Cal. Apr. 6, 2011).

We have not seen the last of this issue. However, in denying the request it was a bit odd the court did not raise the attorney work product privilege issue.

After disclosing their ESI discovery, Facebook decided to track the opposing party's review of their discovery. This included when and who reviewed their documents, printing preclusion, setting expiration dates (if you did not review them fast enough, they were not available) and making documents non-searchable and non-annotatable.

Murder Conviction Reversed: MySpace Authentication Issue

The Maryland Court of Appeals has reversed and remanded for a new trial the defendant's murder conviction for failing to properly authenticate MySpace pages.

In a lengthy opinion, the court found the trial judge abused his discretion in attempting to authenticate the social networking site's web pages of defendant's girlfriend through the lead investigator's testimony only.

On the girlfriend's web page it stated, "FREE BOOZY!!!! JUST REMEMBER SNITCHES GET STITCHES!! U KNOW WHO YOU ARE!!" The defendant argued . . . (read more)

Image: clipart.com

10th Circuit: 3 Discovery Strikes & You're Out

A discovery-focused opinion worth a read was issued this week by a federal judge who is not named Scheindlin: Lee v. Max International, LLC, issued by the U.S. Court of Appeals for the 10th Circuit and authored by Judge Neil Gorsuch. The opinion affirms a trial court's dismissal of an action after repeated discovery violations — three, in fact — by the plaintiffs.

The errant behavior in question was a failure to produce the same documents at three separate junctures: first in response to document requests and subsequently in response to two separate court orders compelling production (where the latest order expressly warned that further problems could result in dismissal).

While the opinion focuses on discovery, rather than e-discovery per se, the language appears to apply with full force regardless of whether the "e" is involved. The opinion is full of colorful nuggets, such as the following:

• "Our justice system has a strong preference for resolving cases on their merits whenever possible, but no one, we hold, should count on more than three chances to make good a discovery obligation."

A Bit More on Cell Phones....

A little bit more on cell phones, searches incident to arrest, and passwords.

In this post, I tried to briefly answer the question that keeps recurring about police efforts to search cell phones when they arrest people:  "What if you need a passcode to enter your cellphone and refuse to provide it to the police to search the phone?"

A new law review article on this issue by Professor Adam Gershowitz of the University of Houston was brought to my attention. Gershowitz is one of the first to study the unique legal implications of smartphones.  Way back in 2008, he examined the search incident to arrest doctrine and cell iPhones and asked, “What happens . . . when the arrestee is carrying an iPhone in his pocket? May the police search the iPhone's call history, cell phone contacts, e-mails, pictures, movies, calendar entries and, perhaps most significantly, the browsing history from recent internet use?”  His answer was yes.  (My answer, two years later, was maybe no.)

Gershowitz’s new article is titled: “Password Protected? Can a Password Save Your Cell Phone From the Search Incident to Arrest Doctrine?  It will be published in the Iowa Law Review, and is available online here.

In this article, Gershowitz argues that an arrestee to disclose his password is a statement covered by the Fifth Amendment right to remain silent.  This is because knowledge of the password can demonstrate control and possession of the electronic device. 

That's Incriminating!

I recently wrote an article on  police searches of cell phones that was published on the LTN website. It focused on whether the police can search the contents of a cell phone when they arrest someone — even for a minor traffic offense.  

One of the commenters asked an excellent question:  "What if you need a passcode to enter your cellphone and refuse to provide it to the police to search the phone?"

The answer depends on whether the Fifth Amendment privilege against self-incrimination protects a person from being compelled to provide the passcode. The Fifth Amendment prevents the government from forcing a person to make any statements that can be incriminating.  

Restating: in order for the Fifth Amendment to apply, there must be a (1) statement that is (2) incriminating.

How (Not) to Lose Data & Alienate Judges

EDD Update author Farrah Pepper and colleague Jennifer Rearden offer an overview of the latest cases and trends, in "How (Not) to Lose Data and Alienate Judges," which appeared recently on our Law Technology News website. The pair, from Gibson Dunn & Crutcher, note that while there are not yet national standards, there have been significant rulings across the country.  Of course, U.S. District Court Judge Shira Scheindlin (right) is front and center in the discussion.

Photo: Monica Bay

Victor Stanley II: A Swift Kick in the Bass

Regular readers well know the admiration I hold for Magistrate Judge Paul Grimm (D.MD) and his matchless contributions to the scholarship and advancement of electronic discovery.  Fanboy?  Mea culpa.  His Honor has done it again, today issuing a must-read analysis of the law of spoliation as it relates to e-discovery in a case familiar to all who follow EDD: Victor Stanley, Inc. v. Creative Pipe et al.

What will surely be known as Victor Stanley II devotes 35 of its 89 pages (exclusive of 'bonus' 12-page chart re: spoliation sanctions by circuit) to describing the sort of reprehensible data destruction and dissembling that's all-too-familiar to forensic examiners but which Judge Grimm labels, "the single most egregious example of spoliation that I have encountered in any case that I have handled or in any case described in the legion of spoliation cases I have read in nearly fourteen years on the bench." (p.34).

Litigants Fail to Heed Lessons of Victor Stanley

For counsel who missed Victory Stanley's warning to conduct quality control on keyword search terms, attorneys
H. Christopher Boehning and Daniel Toal point to a recent ruling that states loud and clear: Counsel who fail to conduct quality control risk involuntarily waiving privilege.

Story here.

People Make Mistakes

“People make mistakes.” This simple three word sentence is how Chief Justice John Roberts begins his opinion in Conkright v. Frommert, No. 08-810 (Apr. 21, 2010). He goes on to add: "Even administrators of ERISA plans." Then he explains how complicated those plans can be. As a former ERISA litigator, I know he's right, as I have read far too many ERISA plans myself. But let me tell you, as an attorney who left ERISA to focus solely on e-Discovery in 2006, it's nothing compared to ESI plans.

More judges need to learn the lesson of complexity and the impossibility of perfection in all situations, not just ERISA plans. The lesson is especially needed in the area of electronic discovery, where mistakes are inevitable in large projects. Everyone involved in e-discovery needs to learn that a mistake is not automatically negligence. In the language of the law, res ipsa loquitur does not apply. A missing ESI is not equivalent to a barrel falling on your head! It depends on the facts and circumstances. It depends on how bad a mistake it was.

Ontario v. Quon: SCOTUS Says Text Search Was Reasonable

As a long-time reader of EDD Update and first-time poster, I am delighted to use my inaugural post to bring you something hot off the presses - the Supreme Court opinion in City of Ontario v. Quon. 

The media commentary has already started on what it all means for privacy rights and the answer may be "not a whole lot," since the Supremes largely punted on the privacy issue and intentionally sought to keep the ruling narrow.

The majority opinion assumes arguendo that Sgt. Quon had a privacy right in text messages sent and received via his work-issued pager, but concludes that the search of the texts by his employer, the City, was nonetheless reasonable and the Fourth Amendment was not violated, reversing the 9th Circuit.

No rehash of the facts or extensive analysis in this post, designed solely to alert you to the decision (although there is certainly more to be said).

Without further ado, here is the lnk to the syllabus and opinion:
http://www.supremecourt.gov/opinions/09pdf/08-1332.pdf

Judge Scheindlin Enters Order Correcting Pension Opinion

Judge Scheindlin entered a second amendment to the Pension Committee opinion today, May 28, 2010. Please see my e-Discovery Team blog for the entire text of the Order.  "Likely constitutes negligence" is changed to "could." The "all employees" phrase is also modified to "those with any involvement." We can all breathe a little easier this weekend.

I heard this correction by Judge Scheindlin came about as a result of a question asked of her at a CLE event this week. Anyone care to share the details of that? Who gets the credit for bringing this glitch in wording to her attention?

Requiem for a Stillborn Rule

(Organ music subsides)  Thank you for coming.  We're gathered to remember FRCP Rule 37(e), our Safe Harbor.  Deformed by breech birth, Safe Harbor was unloved, ridiculed and scorned.  Sure, Safe Harbor never did anyone a lick of good, but what do you expect from a three year old?  Rest in peace, 37(e), we hardly knew ye.  Rule 26(f) will host the wake.

I confess I never liked Rule 37(e)--née 37(f)--but I never wished it the ignominous end it met in Wilson v. Thorn Energy, LLC, 2010 WL 1712236 (S.D.N.Y. Mar. 15, 2010).  It was always a struggle to get 37(e) to actually bail anyone out of an e-discovery flub up.  Advocates trotted out 37(e), and courts paid it lip service; but, its jurisprudence seemed confined to cases explaining why it didn't apply to the facts presented.  Rule 37(e) is to spoilation sanctions what duck-and-cover was to nuclear attack. 

Still, sooner-or-later, I imagined there would be an instance of innocent data loss--the crashed drive or rotated tape--that would let 37(e) step up and save the day.  Right?

Wrong.  If 37(e) can't save the bacon in Wilson v. Thorn Energy, it might as well be dead.

Lack of Familiarity w/ Retention Systems & Policies = Delay, Sanctions

In re A & M Fla. Props. II, LLC, 2010 WL 1418861 (Bankr. S.D.N.Y. Apr. 7, 2010)

Where plaintiff’s counsel “failed in his obligation to locate and produce all relevant documents in a timely manner” by failing to gain a sufficient understanding of plaintiff’s computer systems resulting in significantly delayed production of relevant documents, the court declined to impose terminating sanctions or an adverse inference but ordered monetary sanctions against plaintiff and counsel in an amount to be determined.

More: here at ediscoverylaw.com.