e-Lessons Learned

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 »

In Einstein, plaintiffs claimed that a Brooklyn condominium unit that they purchased was defective in its design and construction, and that defendants, including a real estate broker and several of its agents, fraudulently concealed water leak defects and induced plaintiffs to purchase the apartment.  The plaintiffs obtained emails from co-defendants that were transmitted by the business defendant’s employees but never produced by the defendants during discovery.

The defendants failed to take reasonable measures to ensure that all business communications were preserved as per the legal hold notice instructions, which ultimately lead to spoliation of the documents and sanctions for acting grossly negligent.  Through various motions and testimony of one the defendant’s IT director, it became clear that defendants relied on backup tapes in order to retrieve documents which were at issue, the reliance on which was flawed from the start.   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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Trouble lurks when you rely on ‘a pure heart and an empty head’

Now, I know what you’re probably thinking.  “Revisit Zubulake!?  But that was so long ago!  Surely everything has changed!”  (Sarcasm)

To be fair, things were quite different back then – no iPhones, no clouds (in the IT world), no Google Any-Application-You-Can-Think-Ofs.  The technology landscape has certainly evolved since Zubulake became a household name.

But (at least) two things haven’t changed:  Judge Shira A. Scheindlin’s view of eDiscovery due diligence and parties’ (and their lawyers’) continued failure to meet these expectations.

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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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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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Ever since the Enron destruction of documents debacle, one would think that corporate executives would realize that destroying evidence probably isn’t the greatest idea.  Nonetheless, they seem to keep on shredding and pressing delete as if there were no tomorrow.

In Smith v. Slifer, one of the defendant entity’s executives, after being served with notice of the lawsuit,  allegedly took it upon himself to download and use a program called Anti Tracks in order to wipe clean his home personal computer of allegedly damaging evididence.  I emphasize the word “allegedly” because the Anti Tracks program was apparently pretty effective, rendering it impossible for plaintiff’s experts to garner any concrete evidence that relevant evidence was in fact destroyed (although they were easily able to establish that several documents were deleted). Continue reading »

Earlier we reported that a New Jersey state trial court found that a former employee waived the attorney-client privilege when she decided to use company time, equipment, and resources to communicate with her lawyer (see Stengart v. Loving Care). Recently, an appellate court reversed that ruling and framed the issue “whether workplace regulations converted an employee’s emails with her attorney” sent through the employee’s personal, password-protected, web-based email account, but via her employer’s computer “into the employer’s property.”

Plaintiff had argued that the company failed to demonstrate that it had ever adopted or distributed the policy in question, that she was unaware that the policy applied to her, and even if the policy did exist, the company had not previously enforced it. The company argued that it had disseminated the policy, and that the policy did apply to the plaintiff. The appellate court determined that issues of material fact existed as to whether the policy at issue was in place and disseminated at the time of plaintiff’s employment and as to whether the policy applied to plaintiff; and that these issues could not be resolved by the trial judge without a hearing on the matter.

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Defendant Maxxam was accused of willfully destroying evidence that the government claimed would have aided its case.  The government alleged that Maxxam, a lumber company, fraudulently prepared a report that overstated the minimum amount of trees it could safely cut down while remaining economically viable.  The government further alleged that VESTRA, a consultant retained by Maxxam’s law firm, willful destroyed key data used in this report.

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Given our recent treatment of Zubulake as the “ebook of Genesis” on the creation of ediscovery, it is important to note that sanctions for ediscovery mishaps existed even before the term was coined.

This case arose out of a class action lawsuit brought by Prudential policy holders alleging that Prudential engaged in a scheme to sell life insurance through deceptive practices. On September 15, 1995, the court entered its first Order requiring that all parties preserve all documents and other records containing information potentially relevant to the litigation. This opinion relates to the multiple instances of document destruction by Prudential employees and agents after the issuance of this Order.

In 1994, pursuant to a regulatory directive issued to most life insurance companies, Prudential undertook a sweep of its sales materials to remove any unauthorized materials. To accomplish this, the company issued a manual that outlined the procedures to be followed in order to identify and remove all unauthorized sales materials. The materials specifically called for the destruction of all materials no longer authorized by Prudential. Continue reading »