e-Lessons Learned

E-discovery is a constantly developing topic in the legal world, and the word, “world,” should be taken literally.  Across the globe, different nations and their legal system are formulating new rules to tackle new discovery issues that can arise almost as quickly as new technology and means of communication can develop.  The only problem with this, however, is that different nations are addressing their e-discovery issues with different solutions.  This problem usually rears its ugly head when one of the parties in a lawsuit is a multinational company.  What is a British company supposed to do when it’s sued in an American because of a foul-up by its French Subsidiary?  Do they supply all of the e-discovery materials required by American courts?  What if e-discovery that the American court requires no longer exists because it never needed to be stored in the first place by   French or British?

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Bridgewater, NJ (April 23, 2010) – Fernando Pinguelo, a Member of Norris McLaughlin & Marcus, P.A., appeared as a guest on Fox News Channel’s live web show, The Strategy Room, hosted by Kimberly Guilfolye.  Pinguelo was interviewed about today’s headlines featuring internet abuse, including the Security and Exchange Commission Office of Inspector General’s 5-year investigation that revealed SEC employees and contractors visiting porn sites and viewing sexually explicit pictures using government computers. Ms. Guilfoyle’s guests today also included Richard “Bo” Dietl and Dr. Kathryn Smerling. 

The Strategy Room airs weekdays from 9 a.m. to 5 p.m. ET for a discussion of the day’s top stories, plus a variety of hour-long shows on topics like business, health, technology, and entertainment.

“Casual use of the internet in the workplace is on the rise.  With up-to-the-minute Facebook statuses and Twitter ‘tweets,’ the use of company time for personal internet use has become common place.  This has become so common that it is obvious employees don’t realize their actions can be tracked and saved.  This new breaking story testifies to the fact that many workers don’t realize the implications of their actions online,” said Pinguelo.

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Dead men tell no tales, but their bodies provide enough evidence to paint a graphic picture.  The same is true of deleted files on a computer.  Missing files can carry the inference that the evidence was only destroyed because it would have been damaging to the party responsible.

In Paris Business Products, Inc. v. Genisis Technologies, LLC (“Paris”), Genisis Technologies, LLC, (“Genisis”) was subject to a discovery order requiring it to preserve all relevant data on company-owned computer hard drives.  Despite this order, Genisis’ executive officers allegedly were responsible for: (1) deleting the company hard drives by reformatting them; and (2) physically removing and destroying some hard drives. Continue reading »

The New Jersey Supreme Court has a long history of affording New Jersey citizens broader privacy protection rights than those offered by the federal government.  For example, the New Jersey Supreme Court has held that citizens have a reasonable expectation of privacy in their bank account records, in their garbage, and in the personal information linked to their IP addresses. Thus, when the question of whether an employee who uses a company computer to access e-mail communications between her and her attorney maintains the confidentiality of those communications, it was no surprise that the Court held that the act of an employee who accesses her attorney-client communications via a company laptop does not destroy the privilege.

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Suppose you’ve got a business.  Not just any business, however, but a state-of-the-art business.  Not necessarily a business that sells state-of-the-art products or services, but a business that you run in a state-of-the-art manner.  Instead of carrying briefcases full of notes, you’ve got compact flash cards full of data.  You don’t even remember the cost of a first-class stamp because all of your correspondence is done by email.  You don’t have boxes and drawers full of hard files around the office because you’ve got everything stored and backed-up on hard drives and servers.  You don’t have a calendar on your desk because you’ve got your daily schedule synched to the Smartphone that never leaves your side.  You use every possible gadget to make sure that you are doing everything in the most technologically advanced and efficient way possible.

Now, think to yourself: What happens one day when your company winds up on the wrong end of a lawsuit?  Perhaps even a completely bogus, frivolous lawsuit.  Even if you know that you’ll end up victorious in the end, you might find yourself bogged down in an eDiscovery quagmire once you have to turn over all of your “documents” during discovery.   Continue reading »

Suddenly find yourself at the wrong end of a trade secrets litigation?  Heed this advice: When the court says “preserve,” that means documents, files, data, and BlackBerry^® smartphones.  Thus, be sure to instruct your clients not to wipe the memory from their BlackBerrys or other handheld devices before turning them in; or else, your client may be subject to sanctions.

The defendants in a trade secrets theft case learned this lesson the hard way when the District Court in Florida slapped them with sanctions after they turned in freshly “wiped” BlackBerrys.  The court interpreted the freshly sanitized BlackBerrys as evidence of bad faith that justified sanctions.  But you might be thinking: “A BlackBerry wiped clean? Who cares!  All the e-mails the other side could possibly want are readily available on the server.”  This type of thinking could get you in trouble.  Let’s see why.

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Tech-savvy business owner Dmitri Nikitin received a judicial tongue-lashing  and an adverse inference instruction  after he destroyed emails potentially relevant to a pending lawsuit brought by a Korean corporation. Not buying Nikitin’s “hackers” defense, the Court said that Plaintiff Optowave was entitled to an adverse jury instruction at trial against Nikitin’s company Precision Technology Group. “This sanction,” the Judge wrote, “will serve to cure the unacceptable actions of Nikitin, while allowing the case to be decided on the merits.”

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The old adage: “measure twice, cut once” applies to carpentry and very well should apply to the legal profession.  Both a carpenter and an attorney will save time and money by adhering to this maxim.

Take for example Preferred Care Partners Holding v. Humana.  In that case, Humana produced an additional 10,000 documents two months after the completion of discovery, and suffered sanctions because of it.  Humana discovered the existence of these newly produced documents during a deposition of an employee who found residual copies of documents that he believed had been deleted from his computer.  As a consequence, Humana conducted a subsequent search which led to the discovery of a vast number of residual files on other computers.  Because of the need to sort through all of the documents to determine which ones were responsive and privileged, the files were not produced until well after discovery concluded, and only a short time before trial.

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So what is all the fuss about Stengart v. Loving Care Agency, Inc. et al.?  Why are eDiscovelebrities and employment lawyers alike watching the case so closely?  Why should YOU be watching? Privacy! (And eDiscovery, of course)

“It” (Stengart, the fuss, the Supreme Court of New Jersey, this post, all this blog attention) all boils down to whether this employee had a reasonable expectation of privacy in emails between the employee and her lawyer sent and received (during work hours) using the employer’s computer and IT systems.

According to the trial court, Stengart did not have a reasonable expectation of privacy and the emails were properly retrieved and used by the employer and its lawyers in defense of the lawsuit.  According to the appeals court, not only did she (have a reasonable expectation of privacy), but also the appeals court took issue with the way the company lawyers handled the situation and queried whether the lawyers acted inappropriately when they retrieved and used these emails – and whether they should be sanctioned and/or thrown off the case.  Ouch!

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Increasingly, our society devotes a lot of time and energy to the use of smartphones. Whether it is a BlackBerry or an iPhone, it is the craze, and many now feel that they need to access their emails from the palm of their hands. And the corporate world is no different. Executives spend as much time focusing on the best ways to read emails, send and receive instant messages, and access the Web as the rest of us.

However, executives (and the corporations they work for) who use company intranets, also need to worry about the possibility of unintentional data distribution — meaning they should concern themselves with the fact that confidential information may be disseminated unintentionally or unexpectedly to the public. Continue reading »