The Modern Archivist

Havana Bar Brawl? Nope, just sanctions!

By Elle Byram. Esq., CEDS

It’s not too often that you see a case in which both the plaintiff and the defendant receive sanctions for spoliation. This is exactly what happened in Patel v. Havana Bar, Restaurant and Catering, 2011 WL 6029983 (E.D. Pa. 2011). The case arose from injuries sustained by plaintiff when he fell from a second floor balcony at an engagement party in the defendant’s bar. Both parties, perhaps one more egregiously than the other, spoliated evidence.

Defendant, who routinely recorded video surveillance of the bar, and which was recorded on the night of the injury, failed to preserve the video. The surveillance system was programmed to record over the existing footage every three weeks. Defendant, claiming that he attempted to prevent the footage from the night of the accident being erased, was unsuccessful in such attempts.

The plaintiff’s part appears to be substantially more egregious. About a year after plaintiff was injured, plaintiff’s sister-in-law sent a Facebook email to the engagement party guests to request a statement of what they witnessed that evening. However, her email requested that the guests state that plaintiff was not intoxicated at the time of the fall and that he is “a hyper guy who acts all wild and crazy without being drunk… .” No statements from this request were ever produced to defendants. Two years after this email, plaintiff’s sister-in-law again requested statements, but because the direction of the case had changed, her request sought statements indicating that plaintiff was in fact drunk.

Note that reading the sister-in-law’s emails sent to the guests requesting their statements is painful. No attorney ever wants a written word requesting evidence to be tailored to the outcome you desire.

Defendant knew nothing about either of the emails requesting statements or the purported statements until one of the plaintiff’s witnesses was deposed and admitted to sending a statement to plaintiff. Despite this admission and defendant’s subsequent requests to plaintiff to produce the statements, no statements from the first email were produced and only 16 of the 20 from the second email were produced in a piece-meal fashion. The court found plaintiff spoliated evidence as well.

The result of both parties’ spoliation: an adverse inference sanction was granted for defendant’s spoliation of the video and for plaintiff’s spoliation of the statements from the earlier email request. Plaintiff was also sanctioned for defendant’s costs for the original requests for production as well as re-deposing witnesses.
And so the lessons to be learned? Make sure you halt routine destruction of evidence. This cannot be emphasized enough. Additionally, if you are advising your clients on a suit, don’t let them create evidence that could impact the case. It should go without stating that you should not let your witnesses fabricate evidence either, but it never hurts to remind some attorneys.

Being careless can cost you

By Elle Byram. Esq., CEDS

It never reflects positively on you when the judge starts off the opinion stating “This case highlights the dangers of carelessness and inattention in e-discovery.” Fortunately for the plaintiff in I-Med Pharma v. Biomatrix, 2011 WL 6140658 (D. N.J. 2011), it all worked in its favor. However, this case seems to emphasize the need for good records management.

In attempting to resolve plaintiff’s breach of contract and fraud dispute, the I-Med Pharma parties entered into a discovery stipulation for materials from plaintiff’s computer network, servers, and storage devices. Defendant hired an expert and ran a number of keyword searches that produced – in the unallocated space alone – 64,382,929 hits representing an estimated 95 million pages of data. Yikes. The court, to its credit, questioned the accuracy of the parties’ estimation. However, the court stated that it had no choice but to accept the parties at their word.

Of course such a vast number of documents that it would need to review for privilege produced a visceral response in plaintiff. It quickly sought relief from the stipulation that would allow it to withhold the data found in the unallocated space, which the court granted. Defendant, desiring to acquire the voluminous data, appealed asserting that the Magistrate Judge had abused his discretion in granting plaintiff relief from the stipulation.

To provide plaintiff relief, defendant claimed that there needed to be exceptional circumstances that would cause plaintiff to suffer manifest injustice if required to perform its obligations under the stipulation. In support of its claim, it used a personal injury suit in which one of the defendants stipulated to its liability in order to bifurcate the trial and have damages tried first. When things didn’t turn out so well for that defendant, it tried to back out of the stipulation.

The court easily distinguished this personal case noting that the stipulation dealt with the liability of the parties and not a discovery dispute. Even more importantly, the court found that the factors used in the personal injury dispute to determine if there would be manifest injustice went against upholding the I-Med Pharma stipulation. First, plaintiff’s privilege review of 65 million documents would be too time-consuming and too expensive to perform. Second, defendants had failed to demonstrate a likelihood that relevant non-duplicative information would be found in the unallocated space files. Third, although plaintiff should have been more cautious before stipulating to broad search terms, its failure to do so did not justify requiring the plaintiff to perform such a review.

It worked out favorably for plaintiff this time. But, the lesson to be learned: you can never be too careful in e-discovery. Not all courts will express sympathy for poor decision-making. Being cognizant of your data and managing it properly cannot be understated. In fact, tools exist today that would enable reviewers to identify the number of keyword hits instantaneously, and if coupled with proximity search capabilities, these would likely fine tune the number of hits by several orders of magnitude if not more. It is likely that many of the documents in plaintiff’s unallocated space could have been deleted before any preservation obligations had kicked in. Had they actually have been forced to adhere to the stipulation, plaintiff might have been kicking themselves for not properly managing their data to begin with.

Should more artists perform document review?

By Elle Byram. Esq., CEDS

I was excited to read a recent blog by Greg Bufithis that connected neuroscience, and yes, e-discovery. In an earlier career, I pursued neuropsychology. Long before the electronic discovery days I must admit. But I’ve never lost my fascination for the power of the brain. When I saw Greg’s blog I felt a little tinge of excitement.

In the blog, Greg references a discussion he had with a neuroscientist about e-discovery, algorithms and predictive coding. The neuroscientist explained that when humans change their minds, those changes are generally based on heuristics, those “ah-ha” moments where the brain connects-the-dots as we are being told a story. Heuristics generally happen in the right side of the brain. Most of us recognize this as the artistic side. The other side, or the left side, is the logic side, which is less frequently deployed by the human brain when we change our minds.

This of course begs the question, should artists, who are legal folks’ right-brained brethren, actually be doing document reviews? I would venture a guess that the answer most often will be no. And, I highly doubt too many artists would leap on the opportunity to sit hour-upon-hour, week-upon-week plastered in front of a computer merely to review some of the most tedious communications in existence. (Sigh. And what was wrong with me when I chose to sit behind the computer and week-upon-week review mind-numbingly dull documents. Alas.)

Notwithstanding, over the past few years, many e-discovery professionals have been searching for new technologies pushing predictive coding, which uses algorithms to assist with e-discovery review. For at least one obvious reason, it’s certainly received quite a splash: those mind-numbingly dull reviews produce frequent errors that have on occasion had serious consequences. This of course is not to say that technology doesn’t produce errors, especially with technology that is in its infancy. However, it seems that technology may be winning over the human reviewer, not just in accuracy, but in speed and cost. And, it appears that it’s winning by overcoming some of the weaknesses of the human brain in e-discovery reviews.

Greg’s blog goes on to mention that perhaps the key, which seems to be what some of the predictive coding technologies are attempting to crack, is to allow algorithms – i.e. logic – to change the way the human mind makes decisions. By providing a formulaic approach based on a small sampling of data, predictive coding can provide the reviewers with specific information about what is being reviewed. This will in turn allow the reviewer to make even more accurate logic-based decisions resulting on a more effective review.

eDiscovery is Too Expensive! But who is driving the bus?

By Linda G. Sharp, Esq., MBA

We have all heard time and time again that eDiscovery is too expensive. Those that have been in the industry for any time have come to realize that this is a huge problem for corporate America. But what are the driving forces?

1) Keeping data that has no legitimate business purpose (“Honey pick up the milk” emails).
2) Keeping data that has passed its useful business lifecycle.
Replicating data again and again for multiple matters, which includes collections, processing, review, and hosting.

In the paper days, one file on any given transaction constituted the “corporate record”. What happened? Why can’t we do that in the electronic world? As new technologies developed, it became easier and easier to replicate information. Consider those emails, with the attachments, that are sent to the entire department or members of the team. Not to mention the number of replies to all compound the problem. How do we get control of this problem?

Imagine if there was only one instance of any given document. For litigation matters, you could place a hold on the data without going through the traditional process of collecting, processing and hosting it for review. What if you could put a legal hold on the data in your environment so that it isn’t deleted? What if you no longer had to export your data for review but could have counsel link into your environment and review the documents, in place, that satisfy the request? What if you could eliminate collection, processing and hosting charges while at the same time reduce review costs? What if, once you learned that the data no longer has a legal or business purpose, you could click a button and it would just go away?

There is technology today that can solve this, but companies have to make the move. Many companies have built enormous IT infrastructures as well as implemented eDiscovery processes and workflow that compound the problem. We have to stop looking at the way we do business just because “this is the way we have always done it.” But who is driving the bus when it comes to looking at corporate data from a holistic approach? Legal is focusing on legal, records on records, and compliance on compliance. And IT? They wait for their “internal customer” to tell them what they need and then find a targeted solution to fix that specific problem.

A Rambus in the SEC?

In the world of e-discovery and spoliation, the Securities and Exchange Commission in some respects committed a Rambus-level spoliation violation.  We all know what happened in the Rambus cases – Rambus’s “shred days” were, to say it nicely, not looked upon favorably.  The company’s “shred days” policy resulted in severe sanctions effectively terminating some of the disputes it brought.  But, the SEC is not Rambus or a private company, and we are not in court.  Moreover, if the SEC did receive sanctions (or if it receives fines as a result of any justice department action), the costs of such sanctions would be paid for by the taxpayers.  That would only mean more costs for taxpayers adding to what has been a costly few years taxpayers.  Regardless, the repercussions of their destruction policies have also been paid for by taxpayers.

The story goes like this:  In early 2010, an SEC whistle-blower, Darcy Flynn, raised questions about the document retention policies of the SEC.  According to a New York Times article, the SEC had a policy in which it routinely destroyed documents for “matters under investigation” that had been closed.  These “matters under investigation” were in essence preliminary investigations that did not result in full investigations.  Apparently, the SEC policy was an internally posted policy that dated to at least the early 1990s and allowed documents for such closed matters to be destroyed.  At first glance, that doesn’t sound so bad.

But, according to some, these closed “matters under investigation” involved many investigations of individuals who were involved in or were subsequently charged with SEC violations relating to the 2008 Wall Street collapse as well as economic crises from earlier times.  No one knows whether some of those destroyed documents may have contained evidence that could have aided subsequent investigations.  Destruction may have also wiped out evidence that showed SEC investigators providing favors to private-sector former colleagues or future employers.  If the SEC were a company, it would have faced serious spoliation charges.

The good news is that the SEC has amended its policy, hopefully in compliance with a deal it worked out with the National Archives and Records Administration requiring it to retain documents for 25 years.  Perhaps this new policy is more akin to one of the purposes of the SEC – to ensure Wall Street retains its records and to fine those who fail to do so.  They may be well-advised to look into better records management solutions that allow for appropriate retention, storage and disposition of documents.

The Perils of Social Media

One thing I’ve noticed about human behavior is that for some of us, to put it euphemistically, we don’t ever quite learn.  Many know by now that postings on Facebook or other social media sites are not considered private.  Courts have concluded that there is no right to privacy in social media.  Okay, fewer of us may be aware of that part.  But I would think most who have been on the Internet know by now that once it’s on the Internet, it’s not going away easily, if at all.  Call it a new form of fossilization.  That embarrassing photo could travel all over the globe.  And if it’s embarrassing enough, a select few have experienced the thrill of “going viral.”  Once it’s out there, it will be discovered by someone, which can have dire consequences.

Unfortunately a few learn the hard way.  One such person is Isaiah Lester.  Lester won a $10.6 million verdict in a wrongful death suit he brought after the tragic death of his 25-year old wife.  Poor Lester, however, may see that verdict reversed.  Two years after his wife’s death, he posted a photo of himself on Facebook in which he was wearing a t-shirt that says “I [love] hot moms.”  To top it off, literally, he adorned himself with a garter belt on his head accompanied by a beer in his hand.  I’ll refrain from making any comments about his appearance.  But, his posting puts his wife’s tragic death in a whole new perspective.

Upon discovering the photograph, defense counsel requested similar pictures and screen shots from Lester’s Facebook account.  This of course caused a chain reaction:  Lester’s counsel (regrettably) advised the paralegal to have Lester delete some of his Facebook pictures.  This was communicated via email.  Note that up to trial the firm denied having made such a request.  Very faux pas.  Especially when there is a record of it.  The paralegal returned with a report that Lester had deleted his entire Facebook account.  Can we say spoliation?

It would seem that by now, with all the hype around social media, most of us would know better than to post less than appropriate pictures on Facebook.  Moreover, with all the precedent surrounding spoliation, it would seem that most attorneys, at least those in a litigation, would have some inkling that things on computers and especially on the Internet are difficult to spoliate without a trace.  But I guess there are always exceptions, which keeps the legal world and its technological remedies moving forward.

As for the fate of Lester and his $10.6 million judgment?  We won’t know the result until the end of September, but defense counsel has asked for the judgment to be reversed among other suggestions.  His attorney also resigned from the firm earlier this summer and retired from the practice of law.  Lessons to be relearned by most but not all:  don’t post things on Facebook that you don’t want discovered and don’t lie about trying to cover it up.  Enough said.

Will GPS data be on the e-discovery radar?

Is the next technology that companies will need to archive GPS data?  Maybe.  The Supreme Court recently accepted on certiorari the appeal of a case that challenges the use of GPS data for a criminal conviction.  The District of Columbia Court of Appeals reversed the conviction of Antoine Jones in US v. Maynard because the use of GPS data without a warrant violated his Fourth Amendment expectation of privacy.  The lower court convicted him of conspiracy to distribute and possession with intent to distribute cocaine.

The Court of Appeals held that the placing of a GPS device on defendant’s car to observe defendant’s movements over a prolonged period of time violated Jones’ expectations of privacy.  The Justices reasoned that a person would not normally expect the police, if they weren’t using such a device, to monitor his public actions 24 hours a day, seven days a week for prolonged periods.  That type of surveillance was just not practical or reasonable.  The fact that GPS was more practical and cost efficient was of no consequence because a person would never reasonably expect his actions to be monitored that closely.

Moreover, the use of the GPS device resulted in too much data revealing too detailed a picture of defendant’s life.  The continuous GPS data allowed the police to create a detailed picture of how he lived his life over the course of the surveillance.  In many ways, it’s akin to a reality television show based on GPS data rather than video.  This type of detail was an intrusion on his privacy.

This case, and cases like it, perhaps foreshadow what could happen in a civil context.  It’s certainly been proposed (whether it has actually happened I can’t say) that employers could use such devices to track their employees’ movements.  For example, employers concerned about employees who might be taking advantage of certain laws that increase costs incurred by employers (i.e. the FMLA).  Or, perhaps they want to track their sales associates’ whereabouts throughout the day.   This use in turn presents the question of what notice the employer is required to give its employees and when that notice needs to be given.  Is a statement in the employee handbook sufficient?  Perhaps there should be a requirement that notice be given shortly before use of a tracking device giving the employee a more detailed description of what to expect.  (Seems that it could defeat the purpose, however.)

And the use of the device by an employer raises questions regarding data preservation – either for general archiving or for electronic discovery.  If an employer is permitted to legitimately capture and use data obtained from a GPS device, in the vast world of e-discovery, the employer would then logically have to archive it.  This presents more questions surrounding the logistics of archiving this data in the ediscovery and records management worlds.  And this is just the beginning of the questions.  The world of e-discovery has seen a lot of changes over the past decade and has learned to adapt.  It may have to adapt to GPS as well.  I think it will be up to the task!

J-M v. McDermott: Round 1

Let the fight begin!  I, like so many others in the e-discovery universe, blogged a month or so ago after the malpractice case brought by J-M Manufacturing against McDermott became public.  It appears that round one of the fight commenced this week when McDermott filed its demurrer and J-M Manufacturing filed its first amended complaint, the first of likely several more to be filed.

McDermott’s demurrer without doubt asserts the litigation equivalent of fightin’ words.  Its an entertaining litany of defensive attacks on the faults in J-M’s original complaint.  On J-M’s side of the ring, added to its first amended complaint is an ethical claim against McDermott:  McDermott ostensibly held J-M’s files hostage until J-M paid its bill in violation of the California Rules of Professional Conduct – not something to take lightly.  At first glance, the evidence, cited in support of the claim, is pretty damning.  Regardless of the ploys and tactics in the fiasco, I can confidently state, that I am very happy that I am not embroiled in this mess.  I predict that it will get uglier.

What surprises me is that, although the complaint added a new allegation, it did not add any new defendants.  Perhaps there is no basis for a claim (i.e. no privity of contract and no other tortuous conduct that can be alleged for the other’s wrongs in this imbroglio) against Hudson, Stratify or Navigant for the botched job.  It’s hard to say at this point what the relationships were among the parties – named and unnamed – but as the drama unfolds I imagine some of these questions will be answered.

But what did actually happen?  That’s what the discovery process will hopefully clarify (this assumes that McDermott will not prevail on its demurrer) and which I know we are all impatiently waiting to learn.  The truth likely lies somewhere between J-M’s allegations and McDermott’s defenses.  Having been a contract attorney myself and having seen the document review and ediscovery process from a number of angles, there is no doubt in my mind that botched reviews and products are more frequent than comfort would desire.  This doesn’t exactly spell confidence for those on the vendor or law firm side of this equation.  But, on the other side of the equation, clients, as we saw in Broadcom v. Qualcomm, are frequently irresponsible with their data from the get-go, making the job of the vendor that much more difficult and uncertain.

This being said, all of this was likely needless stress and expense.  It has been espoused, not just by myself and my company, but others in the industry, that there is a fairly good solution to these nightmares:  manage your data better to begin with.  I can’t speak to how well J-M actually managed its data, but, in a nutshell, if a company has the proper procedures and technology in place to get control over its data before a dispute ever arises, then the need for multiple vendors and the problems with control over the data are greatly diminished.  Perhaps this case will help foster this realization in those that have yet to see it.

Wake-up call for firms and vendors: Malpractice alleged for e-discovery failures

It appears that the day has come for a client to sue its law firm for a botched contract attorney job.  What surprises me is that the vendor who supplied the contract attorneys is not named in the suit.  And, perhaps even more surprising, the contract attorneys themselves, listed as Does 1 through 10, have been sued, but no partners or associates of the law firm who supervised the contract attorneys are named.  An odd and seemingly incomplete list of defendants.

I wondered several years ago when this day would come.  Clients must deal with the consequences for poor delivery of services by both firms and vendors.  And this happens despite widespread knowledge that contract attorney reviews are at best not well done and at worst appalling.  Even the actual collection and processing of e-discovery, a mostly reactive approach that has typically used multiple solutions, has numerous problems creating costly consequences absorbed by clients even after clients pay exorbitant sums of money for services that were subpar.

 The suit was brought by J-M Manufacturing Co., Inc. against McDermott Will & Emery.  See complaint.  The claims allege that an electronic discovery production supervised by McDermott resulted in the erroneous production of an alleged 3,900 privileged documents that were part of 250,000 documents reviewed.  (That’s 1.5% of the review.)  The documents belonged to approximately 160 custodians of J-M’s ESI.   J-M sued McDermott for its failure to supervise and its “fraudulent, oppressive and malicious misconduct.”  See Amid Rising Fears of E-Discovery Malpractice, Huge Law Firm Faces Lawsuit Charging Misdeeds All Dread, Robert Hilson, June 9, 2011.  (Note that thus far I have seen no reported claims of ethical violations although it wouldn’t surprise me if complaints against McDermott for violating its supervisory obligations under Model Rule of Professional Conduct 5.1 are filed.)

“Fraudulent, oppressive and malicious” all seem pretty extreme to me.  Perhaps I believe in the good of humanity, but I would like to believe that McDermott didn’t fraudulently or maliciously produce 3,900 privileged documents.  No doubt something went horribly awry.  And I’m sure McDermott is, to say it gently, a little bit upset about the situation.  After all, they lost a client and now have a public malpractice suit filed against them which can’t be helping business.  But the alleged errors probably have less to do with any intent on McDermott’s part, or on the contract attorneys’ parts, to do something horribly wrong and have more to do with an e-discovery process that isn’t, and has been shown numerous times not to be working. 

This isn’t to say that McDermott, the contract attorneys or any associated vendors, did not do anything wrong.  Rather, it’s a wake-up call that a system that isn’t working is going to cause problems for its suppliers who have reaped monetary benefits for many years but have evaded the costly consequences.  You can’t have your cake and eat it too.  And now we need to re-evaluate what it is exactly we are doing with all this data. 

Perhaps from this companies, vendors and law firms will recognize that there is a better way to prepare electronic discovery.  (Wishful thinking??)  Vast amounts of data result in too many documents to be prepared reviewed.  Collecting, culling and processing aren’t sufficient to narrow the number of documents that are to be produced.  Predictive coding is helping, but it won’t ever replace document review and still requires some amount of upfront collection and culling.  Some in the industry are finally recognizing that ESI, just like paper records, has to be managed from the beginning – documents that aren’t needed must be destroyed, and documents that are needed must be kept and organized in a simple easy-to-search repository.  The downstream processes become easier to manage with more accurate and defensible results.  There is at least one system out there that can do this.

The abominable e-discovery sanction wearing an attorney cloak

It’s not too often (although it’s on the rise) that a court sanctions counsel for e-discovery violations.  It certainly presents a bit of an ethical conundrum when you get down to it:  how much control did counsel have over his or her client?  Did counsel properly advise his client?  Or, did the client fail to follow counsel’s advice or properly implement the appropriate measures for proper e-discovery production?  In a recent case, Greene v Netsmart Technologies, Inc., E.D. N.Y., Docket 08-CV-4791 (Feb. 28, 2011), the issue has again been addressed.  In Greene, the Magistrate Judge issued a Report and Recommendation (R&R) that, among other things, ordered sanctions be split 50/50 by both the plaintiff and his counsel.  The R&R was affirmed on appeal.

The distinguishing factor in Greene is that the Magistrate Judge didn’t specify what exactly counsel did or whether counsel was negligent or grossly negligent in managing e-discovery practices.  Nor does it appear from the R&R that counsel displayed a pattern of misconduct with regards to e-discovery.  In most other decisions where counsel was sanctioned the level of counsel’s misconduct was identified and counsel was generally only sanctioned where he or she had displayed a pattern of misconduct.  Sanctions for E-Discovery Violations: By The Numbers, Dan H. Willoughby Jr. et al., Duke L. J., 789-864 at 818 (2010). 

To the contrary, the Magistrate Judge noted that Plaintiff had conceded that he had control of the evidence and knew that he had a duty to preserve it.  Other than noting in the factual statement that plaintiff’s counsel had not timely responded to a request for documents on a couple of occasions, there was no other mention of what exactly counsel did wrong.  The Magistrate Judge stated that “[h]aving considered all of the facts, I find that Plaintiff and/or his counsel acted in a manner that meets the ‘ordinary negligence’ standard.” Id. at 16.  She also concluded that “there was clearly a breakdown in communication between Plaintiff and his counsel regarding document preservation and collection.”  Id.

Couldn’t you draw the conclusion that there was a ‘breakdown in communication’ in most e-discovery sanction cases?  After all, if a party isn’t producing what should be produced, somewhere counsel and the party have likely failed to communicate.  However, whether the breakdown in communication was the result of counsel or the party’s misdeeds are two separate matters.  In each instance, it would seem prudent to evaluate both counsel and plaintiff to determine who was negligent, or if both were negligent.  In Greene, there appears to have been no evaluation of counsel’s conduct.

Regardless, the decision presents several interesting considerations.  As we saw in Broadcom v. Qualcomm last decade, one of the paramount concerns is how counsel can defend themselves when the attorney-client privilege obligates counsel to an oath of silence.  Should there be modifications to the rules surrounding attorney-client privilege?  How should such disputes be handled?  Beyond the issue of privilege, who should be responsible for e-discovery practices, especially in the face of outsourcing?  Does there need to be a pattern of misconduct for counsel to be sanctioned?  What obligations do attorneys have to learn more about technology to properly advise their clients or seek outside assistance from someone with that expertise? And, if outside assistance is sought and it comes from a non-attorney, what obligations does that impose on the attorney? 

There are a slew of other questions, but you get the point.  Likely, we will see more guidance in this area as e-discovery continues to evolve and more attorneys are sanctioned.  Moreover, as the industry matures and as e-discovery attorneys and businesses recognize of the importance of information governance, will this assist in reducing sanctions – not just for counsel, but for parties as well?  If only I had a looking glass.