e-Lessons Learned

This is the second video by Joscelyn from the eLessons Learned series on Stengart, dealing with the March 30 New Jersey Supreme Court decision favoring privacy over waiver of attorney-client privilege.

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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Blogger Joscelyn briefs us on the Stengart v. Loving Care case in this video eLesson.

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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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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Protecting your privacy starts with you!  When sending an email, keep in mind where you are sending it from – it may not be as private as you may think (or expect).  In Leor v. Aguiar, the court found that the CEO had no reasonable expectation of privacy in emails he transmitted through his employer’s server, thus,  he could not meet the burden necessary to establish attorney-client privilege in an email he sent to his attorney from work, resulting in the e-mail losing protection from disclosure.  Compare Stengart v. Loving Care Agency, Inc., New Jersey Superior Court, docket no. BER-L-858-08 (similar holding) with Stengart v. Loving Care Agency, Inc., 408 N.J. Super. 54 (App. Div. 2009) (reversing trial court and finding no waiver of privilege) (certification granted by the New Jersey Supreme Court and decision pending).

The court iterated that whether an employee had a reasonable expectation of privacy in his/her emails transmitted through an employer’s server should be determined on a “case-by-case basis.”

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The document reviewing attorney is charged with an unenviable task: Review thousands of documents to ensure that no privileged information is produced to opposing counsel.  Given the fact that document productions may consist of thousands or even millions of pages of documents, it is not surprising that privileged documents will slip by the watchful, often weary, eye of reviewing attorneys – it is inevitable.

Not to worry, the Federal Rules of Evidence are sympathetic to those tired eyes.  Inadvertently produced privileged documents do not automatically lose their privilege protection.  However, it is important to note that although FRE 502 allows some wiggle room for error, the attorney for the producing party must be careful.  Failing to take reasonable steps to prevent inadvertent disclosure, or failing to promptly identify privileged documents that had been produced mistakenly can result in the waiver of highly privileged documents, oftentimes a deathblow to an otherwise winnable case.

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While we appreciate our recent recognition in the ABA Journal Magazine, it’s time to get back to what we do best.  Following the “Vote” link, we have a new lesson for you to digest. [- FG]

–  Please vote for e-Lessons Learned –

This case just goes to show you the importance of effective counsel.  In the case, Rhino Advisors, Inc., a non-party, sought in camera review of 260 documents out of 67,000 documents that it had produced to the SEC in August 2003.  Rhino wanted to “claw back” these documents, claiming they were privileged and inadvertently produced.

The court analyzed Rhino’s claim using the four factors set forth in Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., and concluded that based Rhino had waived any privilege that it may have asserted.  Before discussing the court’s analysis, a brief rendition of the facts is required. 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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