social media and e-discovery - lexisnexis...lexisnexis confidential 6 social media as an electronic...

2008 USLM Strategy Review -- November 17, 2010

Social Media and E-Discovery

November 2010

LexisNexis Confidential 1

THE IMPACT OF SOCIAL

MEDIA ON E-DISCOVERY1


1 Out of Every 14 People Has a Facebook Account

500 Million Users

200 Million Users

65 Million Users


Americans Spend Nearly a Quarter of Their Time on Social Websites and Blogs

6% in

2008

17% in 2009

22% in 2010


Challenges of Recovering Data from Social Media

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• Crispin v. Christian Audigier, Inc., 2010 U.S. Dist. LEXIS 52832 (C.D. Cal. May 26, 2010) – Defendant

subpoenaed Facebook and other social networking services, seeking all communications between Crispin and a

third party. The Court quashed the portions of the subpoenas that related to private messaging, finding that those

postings on social media sites “can constitute ['electronic communications services']” under the Stored

Communications Act.

• Romano v. Steelcase Inc., (September 24, 2010) - Court held that precluding defendant from accessing plaintiff's

private postings on Facebook and MySpace "not only would go against the liberal discovery policies of New York

favoring pretrial disclosure, but would condone Plaintiff's attempt to hide relevant information behind self-regulated

privacy settings."

– Facebook objected to having to produce the document directly under the SCA but the Court disagreed

• McMillan vs Hummingbird Speedway, Inc., No. 113-2010 CD (PA Ct of Common Please, Sept 9, 2010) - Court

held that plaintiff not only had to turn over all private and public portions of his social networking websites but also

needed to turn over his passwords. Court did not address Stored Communications Act.

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Social Media as an Electronic Discovery Tool

• Barnes v. CUS Nashville, LLC, 2010 U.S. Dist. LEXIS 52263, 2-3 (M.D. Tenn. May 27, 2010) –

Magistrate Judge created a Facebook account for the parties to use to submit photos to be

reviewed in camera. On June 3, 2010, Judge Joe Brown issued the following order:

– “In order to try to expedite further discovery regarding the photographs, their captions, and

comments, the Magistrate Judge is willing to create a Facebook account. If Julie Knudsen

and Michael Vann will accept the Magistrate Judge as a “friend” on Facebook for the sole

purpose of reviewing photographs and related comments in camera, he will promptly review

and disseminate any relevant information to the parties. The Magistrate Judge will then close

this Facebook account.”

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Authentication of Social Media is An Emerging Issue

Griffin v. State, 2010 Md App. LEXIS 87 (Md. Ct. Spec. App. May 27, 2010) - Maryland Court of Appeals‟ case of

first impression allowed authentication of a printout of a MySpace page to be authenticated for admission into

evidence through the testimony of the police office that printed out the page. On the print of the page was the phrase:

“FREE BOOZY!!!! JUST REMEMBER SNITCHES GET SNITCHES!! U KNOW WHO YOU ARE!!”

The officer testified that account was:

Maintained by the defendant‟s girlfriend;

Had a picture on it that appeared to be the defendant and his girlfriend;

Contained the defendant‟s nickname (Boozy);

The birth date for the account matched the defendant‟s girlfriend.

The Court of Appeals noted that "both prosecutors and criminal defense attorneys are increasingly looking for

potential evidence on the expanding array of Internet blogs, message boards, and chat rooms."

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Impact of Social Media on Government Investigations

• Department of Homeland Security revealed in October 2010 that United States immigration agents were being

trained on how to use social networking sites to detect visa and other immigration fraud.

• Department of Homeland Security also established a special program to collect and analyze social networking

data during President Obama's inauguration.

• State v. Gurney, 2010 Me. Super. LEXIS 96 (Me. Super. Ct. July 12, 2010). During murder trial court allowed

discovery of the defendant‟s social networking websites and blackberry which were in his possession at the time of

the murder and when he was arrested.

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LITIGATION HOLDS

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New Guidance for Litigation Holds – Make Sure Your Hold Notice is in Writing

and That You are Fully Transparent

• Pension Committee – “the failure to issue a written litigation hold constitutes gross negligence because that

failure is likely to result in the destruction of relevant information.” The overall message is that the best way to

avoid sanctions is through full transparency and disclosure, key even as to known deficiencies. This case also

raised key issue around back-up tapes and inaccessible data (discussed below). Pension Committee of the

University of Montreal Pension Plan v. Banc of America Securities, LLC, 2010 U.S. Dist. LEXIS 4546 (S.D.N.Y.

Jan 15, 2010).

• Crown Castle – plaintiff was grossly negligent in failing to issue a written litigation hold notice, monitor collection

of responsive documents or ensure that relevant documents were not destroyed warranted sanctions. Crown

Castle USA Inc. v Fred A. Nudd Corp. No. 05 Civ 6163T, 2010 U.S. Dist. LEXIS 32982 (W.D. N.Y. Mar 31, 2010).

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Self Identification is NOT a Best Practices for Litigation Holds

• Jones v. Bremen High School District - The Court held that the defendant was grossly negligent in relying on

employees to select and preserve responsive documents. The court stated that "[i]t is unreasonable to allow a

party's interested employees to make the decision about the relevance of such documents, especially when those

same employees have the ability to permanently delete unfavorable email from a party's system." In-house

counsel should not rely on self-identification as a best practice for litigation holds. Jones v. Bremen High School

District, 2010 U.S. Dist LEXIS 51312 (N.D. Ill. May 25, 2010)

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Courts are Becoming more Comfortable with Technology

• Genworth Financial v. Mcmullan - Court outlined the procedure for the outside computer forensic

specialist to follow. Genworth Financial Wealth Management Inc. vs. McMullan, 2010 U.S. Dist. LEXIS

53145 (D. Conn. June 1, 2010).

• U.S. v. Williams – Fourth Circuit Court of Appeals held that it “accepted that a computer search must, by

implication, authorize at least a cursory review of each file on the computer.” United States v. Williams, 2010

U.S. App. LEXIS 1347 (4th Cir Jan 21, 2010).

• Schreiber v. Schreiber – N.Y. Sup Ct. June 25, 2010 – Court provided detailed instructions on the protocol

for cloned hard drives. Court held that any request for investigation of a hard drive must contain a specific

protocol including:

– Discovery Referee

– Forensic Computer Expert

– File Analysis

– Scope of Discovery

– First Level Review

– Second Level Review

– How Discovery Disputes will be Resolved,

– Cost Sharing

– Discovery Deadline

– Retention Policy for Clone.

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Examples of Types of Data that are Subject to the Litigation Hold

Vagenos v. LDG Fin. Servs., LLC, 2009 U.S. Dist. LEXIS 121490 (E.D.N.Y. Dec. 31, 2009)

Passlogix, Inc. v. 2FA Tech., LLC, 2010 U.S. Dist. LEXIS 44182 (S.D.N.Y. Apr. 27, 2010)

Oce N. Am., Inc. v. Brazeau, 2010 U.S. Dist. LEXIS 25523 (N.D. Ill. Mar. 18, 2010)

Southeaster Mech. Serv., Inc. v. Brody 2009 U.S. Dist. LEXIS 69830 (M.D. Fla. July 24, 2009)

Arteria Prop. Pty Ltd. v. Universal Funding V.T.O., Inc., 2008 U.S. Dist. LEXIS 77199 (D.N.J. Oct. 1, 2008)

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Copy Machines

• April 2010 - Buffalo PD IT department didn‟t scrub all data off its copy machines

• April 2010 – Affinity Health Plan had to send out a breach notification to all its clients and employees.

– Medical records for nine individuals were found on the digital copier that we purchased in a wholesale

warehouse. The copier had once been in use at the Affinity headquarters in the Bronx.

– On that same copier, we also found hundreds of pages of non-medical documents, including driver's

licenses, social security cards, W-2 forms and even a handwritten love note.

• June 2010 - New Jersey state lawmakers have introduced legislation that would require all hard drives on copy

machines be wiped clean to protect the sensitive data retained on them.

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ADVERSE INFERENCE

SANCTION CASES15


Courts are Sanctioning Outside Counsel When they Fail to Adequately

Supervise Their Client‟s Collection of ESI

• Bray & Gillespie (Bray III) – Court sanctioned in-house and outside attorneys jointly for failing to produce relevant

data. The court found that the outside attorney failed to oversee or properly investigate or produce key evidence.

Moreover, the Court dismissed the plaintiff‟s claims connected to the late produced documents holding that no

other sanctions would serve as a future deterrent. Bray & Gillespie Management, LLC v. Lexington Insurance Co.,

2010 U.S. Dist. LEXIS 400 (M.D. Fla. Jan 5, 2010).

• In Re A&M Florida Properties – although neither the client nor the outside counsel acted in bad faith, the court

still sanctioned both finding that the outside counsel had failed to properly supervise the client‟s collection and

preservation of ESI. The court stated that the outside counsel “simply did not understand the technical depths to

which electronic discovery can sometimes go.” GFI Acquisition, LLC v. Am. Federated Title Corp. (In re A&M Fla.

Props. II, LLC), 2010 Bankr. LEXIS 1217 (Bankr. S.D.N.Y. Apr. 7, 2010)

To Avoid Sanctions Outside Counsel Should Make Significant Efforts to Supervise its Client

• Qualcomm v. Broadcom – Finally an end to the saga of one of the most famous of outside counsel sanction

cases. In Qualcomm, the in-house and outside counsel were jointly sanctioned for failing to oversee the

corporation‟s document production. In this final holding, sanctions against outside counsel were set aside with a

holding form the court that the counsel had “made significant efforts to comply with their discovery obligations” but

were lied to by Qualcomm employees. Qualcomm, Inc. v. Broadcom Corp., No. 05-cv-1958 (S.D. Cal. April 2,

2010).


More Circuits are Requiring Bad Faith Before Granting Adverse Inference

Sanctions

1st , Circuit – Bad Faith Required

2nd Circuit – Split Between „Gross Negligence‟ or „Bad Faith‟

3rd, 4th and 9th Circuits – No Bad Faith Required. Severe Prejudice is Enough.

5th Circuit - Bad Faith & Prejudice Required

6th Circuit - No Bad Faith Required where there is a Duty to Preserve

7th, 8th, 10th, 11th and D.C. Circuits – Bad Faith Required

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Examples of Court Requiring Bad Faith For Adverse Inference Sanctions

1st Circuit

US v. Laurent – 1st circuit increased requirement for adverse inference to „bad faith‟. Court held that negligent

destruction does not support a finding of adverse inference – bad faith is required. 2010 U.S. App. LEXIS 12449 (1st

Cir. N.H. June 17, 2010)

2nd Circuit

Pension Committee – Zubulake Judge held that gross negligence will result in Adverse Inference Sanctions. Party

failed to preserve and collect ESI from key witnesses amounting to gross negligence. No intent needed. Pension

Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Secs, LLC, 2010 U.S. Dist. LEXIS 4546 (S.D.N.Y. Jan.

15, 2010)

Wilson v. Thorn Energy – court imposed an adverse inference sanction for gross negligence where the defendants

had lost all data relevant to a large transaction when a USB drive was erased. Wilson v. Thorn Energy, LLC, 2010

U.S. Dist. LEXIS 47032 (S.D.N.Y. Mar. 15, 2010)

Crown Castle USA, Inc. v. Fred A. Nudd Corp - The court refused to enter an adverse inference in spite of the fact

that the plaintiff was grossly negligent because the plaintiff had not acted in bad faith and the defendant had not be

prejudiced by the failure to preserve relevant electronic documents. Crown Castle USA, Inc. v. Fred A Nudd Corp.,

2010 U.S. Dist. LEXIS 32982 (W.D.N.Y. Mar 31, 2010). Crown Castle does not even site Pension.

5th Circuit

Rimkus v. Cammarata – even gross negligence is not enough to warrant adverse inference sanctions absent a

showing of wilfulness there must be prejudice as well. Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S.

Dist. LEXIS 14573 (S.D. Tex. Feb 19. 2010)

7th Circuit

OCE North America – refusing to impose adverse inference sanction because defendant did not know he had the

option or ability to preserve instant messages until after litigation began and plaintiff had no evidence of harm. Oce N.

Am., Inc. v. Brazeau, 2010 U.S. Dist. LEXIS 25523 (N.D. Ill. Mar. 18, 2010)

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Examples of Circuits that Do Not Require Bad Faith for Adverse Inference

Sanctions

3rd Circuit

Diocese v. Summix – No bad faith is required where the injury is clear. Plaintiff received an adverse inference jury

instruction even though there was no bad faith. The Plaintiff overwrote backup tapes for eight months after the

complaint was filed. The court held that this action alone made it “more probable than not” that the defendants had

been prejudiced justifying adverse inference. Diocese of Harrisburg v. Summix Development Co., 2010 U.S. Dist.

LEXIS 49069 (M.D. Pa. May 18, 2010).

6th Circuit

Jain v. Memphis – No bad is required for an adverse inference sanction where the sanctioned party had a duty to preserve even

when it had no control over the data subject o preservation. Jain v. Memphis Shelby Country Airport Authority, 2010 U.S. Dist.

LEXIS 16842 (W.D. Tenn. Feb. 25, 2010).

9th Circuit

Kwon vs. Costco – imposed adverse inference sanctions because the party knew or should have known that the

destroyed data was relevant (a videotape). Kwon v. Costco Wholesale Corp, 2010 U.S. Dist. Lexis 13614 (D. Haw.

Feb 17, 2010)

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RECOVERY OF EMPLOYEE’S EMAIL

AND TEXTS

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Courts Disagree on Whether the Attorney-Client Privilege Trumps an

Employer‟s Written Electronic Communications and Usage Policy

• Stengart v. Loving Care Agency – key decision from New Jersey Supreme Court finding that emails between

and employee and her attorney sent from her personal email on the employer‟s laptop were subject to attorney-

client privilege in spite of the company‟s use policy. Court held that company policy did not convert employee‟s

emails with her attorney into company property. Stengart v. Loving Care Agency, Inc., 201 N.J. 300 (N.J. Mar 30,

2010).

– Employer’s computer-use policy provided that the company “may review, access and disclose all matters on

the company's media systems and services at any time” and that all information on the computer was the

company’s property.

• Convertino v. United States DOJ – Court upheld the attorney-client privilege of a federal prosecutor emails on

the DOJ‟s email system to his personal attorney. In Convertino v. United States DOJ, 2009 U.S. Dist. LEXIS

115050 (D.C. Dec. 10, 2009).

– The Justice Department’s e-mail policy permitted personal use of its e-mail system

• Alamar Ranch, LLC v. County of Boise – Idaho Court held that the attorney-client privilege had been waived by

an employee who sent emails to her attorney through the company‟s email address because both had notice that

the email was on the Company‟s computer and would be accessible and stored by the Company. Alamar Ranch,

LLC v. County of Boise, 2009 U.S. Dist. LEXIS 101866 (D. Idaho Nov 2, 2009).

– The Employer’s computer-use policy provided that all email was the employer’s property, the employer had

the right to monitor the email and that the employee should not assume email would be confidential.

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Employers Should Provide Clear Guidelines For How Employer Issued

Communication Devices May be Used and Supervised

• City of Ontario v. Quon, 130 S.Ct. 2619 (U.S., June 17, 2010) – Police Sargent claimed his

Fourth Amendment rights were violated when his supervisors read his personal text messages

that were sent on his city-issued pager while he was at work. Court held no violation had

occurred and that the search had been reasonable. Justices cautioned:

– "Prudence counsels caution before the facts in this case are used to establish far-reaching

premises that define the existence, and extent, of privacy expectations of employees using

employer-provided communication devices," the ruling states. "Rapid changes in the

dynamics of communication and information transmission are evident not just in the

technology itself but in what society accepts as proper behavior. At present, it is uncertain

how workplace norms, and the law's treatment of them, will evolve."

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APPENDIX


Victor Stanley Chart

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