Miscellaneous

Discretion Will Not Be In Your Favor If You Give the U.S. Department of Commerce Unverifiable Financial Records

On October 7, 1992, the United States Department of Commerce created an antidumping on extruded rubber thread in Malaysia.  The intent of antidumping orders is to discourage the “dumping” of foreign goods into the U.S. for substantially lower prices.  The Department of Commerce sought financial records from international companies involved in the importing and exporting of the antidumping order(s), in order to create accurate administrative reviews of the collected information.  From the Department. of Commerce’s results, the U.S. determines dumping margins for each “dumping” importer.  If there is a challenge to the Department of Commerce’s final results, the court that oversaw the case would sustain the Department of Commerce’s final results as long as they are supported by substantial evidence on the record.  “Substantial evidence” is defined as more than a “mere scintilla” supporting a conclusion. The main issue being challenged by Heveafil is that the Department of Commerce refused to base Heveafil’s dumping margin on their bill of materials, determining the bill of materials to have failed verification.  The court held that the Department of Commerce was within its discretion because Heveafil’s production of the bill of materials, downloaded on a computer disk in response to the government’s questionnaires and requests for information, was not generated “in the ordinary course of business,” which the government required as part of verification of documents.  Since, the bill of materials was originally maintained on database, that was later purged, the computer disk produced did not meet the government’s verification requirements.  Alternatively, Commerce attempted to verify the information through other sources and documents but Heveafil’s 1996 Budget Report was not given its entirety and the partial Budget Report and inventory records did not correlate. Given the unverified documents, the court reasoned that the Department of Commerce could reject the financial records in total, even though Heveafil challenged that it only failed verification for a portion of its information.  The government stated in its final results, which the court agreed with, that it does not make sense to only reject the part of Heveafil’s records that were unverifiable since the Department of Commerce was doing price-to-price comparisons.  Due to Department of Commerce’s rejection of Heveafil’s records in total, the government used adverse inferences in assigning Heveafil’s dumping margin.  Heveafil challenged the government’s determination that Heveafil did not cooperate during the review, which is necessary to show, along with not submitting verified data, in order to use adverse inferences.  However, the court sustained the government’s determination that Heveafil did not cooperate to the best of its abilities, due to the fact that Heveafil was given plenty of notice that the government required “source documents” for review and was aware of the process since Heaveafil had previously participated in reviews, yet deleted the relevant bills of material.  The Department of Commerce defines “source documents” as documents that are maintained in the normal course or business, which the computer disk duplication of the bills of materials was not. The court went on to sustain all but one determination by the Department of Commerce despite Heveafil’s, and fellow plaintiff, Filati’s, challenges.  The government chose to select the highest rate calculated in a prior administrative review in determining the dumping margin for each company.  The government’s selection of the highest dumping margin chosen for plaintiffs was sustained due to the discretion given to Commerce after having shown that adverse inferences were appropriate.

Facebook Fails: Can I Delete my Facebook while a Lawsuit is Pending?

The defendant in personal injury litigation commonly requests discovery concerning a plaintiff’s Facebook account.  The reason such requests are made is that pictures on Facebook may reveal the “injured” plaintiff dancing on top of a bar table, skiing, traveling, etc.  These damaging photos may prove that the plaintiff’s injury is not as severe as he or she claims and could result in dismissal of the case.  Therefore, it is not uncommon for a plaintiff to delete his or her Facebook account in order to conceal any damaging pictures.  The deletion of a Facebook account, however, may result in sanctions such as an adverse inference jury instruction.[1] In Gato v. United Airlines, Inc., the plaintiff was injured while working for the defendant.  During the litigation, the plaintiff permanently deleted his Facebook account.  The defendant motioned for an adverse inference jury instruction claiming that the deletion of the Facebook account destroyed relevant evidence, thereby prejudicing the defendant. In granting the sanction, the district of New Jersey adopted a very low standard as to what a litigant must show in order to obtain an adverse inference jury instruction.  The court held that “so long as evidence is relevant, the offending party’s culpability is largely irrelevant, as it cannot be denied that the opposing party has been prejudiced.”  This seemingly simple sentence has enormous implications for litigants in the district of New Jersey for two reasons. First, it means that as long as the destroyed evidence was relevant, a litigant need not prove that the adversary intentionally (or even negligently) destroyed evidence.  The lack of state of mind requirement eliminates what is often the most difficult element to prove when seeking spoliation sanctions.  Without the need to prove a litigant’s culpability in destroying the evidence, the court seems to impose a form of strict liability upon the destroying party.  The only requirement imposed by the court is that the party seeking sanctions prove that the destroyed evidence was relevant.  This is a significant deviation from the traditional method employed by courts which requires proof that a party was at least negligent in destroying the evidence. Second, the court indicates that as long as the evidence is relevant, it will presume that the destruction of the evidence was prejudicial to the opposing party.  This eliminates the need for the party seeking sanctions to prove that it was prejudiced by the missing evidence.  Instead, the party only needs to prove that the evidence was relevant. Notably, the court explained that the defendants in Gato were “prejudiced because they have lost access to evidence that is potentially relevant to Plaintiff’s damages and credibility.”  In other words, the defendant in Gato did not have to even prove that the destroyed evidence was undoubtedly relevant—the defendant only had to prove that the evidence was potentially relevant. In sum, the District of New Jersey imposed an adverse inference jury instruction simply because the destroyed evidence was potentially relevant to the litigation.  The court did not require the defendant to show that it was prejudiced by the destruction, nor did the court require any showing as to the Plaintiff’s state of mind in destroying the evidence.  Moving forward, litigants must be extra careful in their efforts to preserve evidence relevant to litigation. E-DiscoParty, a Seton Hall University School of Law graduate (Class of 2014), served on the executive board of the Seton Hall Law Review and is a member of the Interscholastic Moot Court Board.  Currently, E-DiscoParty clerks for a Justice on the Supreme Court of New Jersey.  [1] An adverse inference jury instruction is a powerful sanction where the court advises the jury to presume that any destroyed or missing evidence contained detrimental information about the party that destroyed or lost the evidence.

Court Rules In Favor for Precision in Regards to Limited Search Terms Used for Screening Privileged Documents

Whoever thinks that the legal world does not involve math is proven wrong through the Special Master’s analysis in Dornoch Holdings Int’l, LLC v. Conagra Foods, Lamb Weston, Inc. The heart of the opinion involves a percentage breakdown of search terms and their correlation of precision in regard to privileged documents. In Dornoch, the defendants objected to the privilege log of documents for three reasons: 1) the documents on the privilege log, except for communications between the plaintiffs and their outside litigation counsel dated after March 22, 2010, have not been established by the plaintiffs to be privileged; 2) The privilege log was created using overly broad search terms and has not been substantively reviewed, thus, the log contains numerous non-privileged documents; and 3) Non-correspondence documents listed on the privilege log are not privileged. In response to this objection, the court allowed the Special Master to make a recommendation on these objections, specifically allowing the Special Master to review “a statistically significant number of randomly selected documents to confirm the accuracy of the screening method.” The privilege documents log was assembled using search terms created and limited by plaintiff’s counsels and an eDiscovery technology consulting firm. And so, the Special Master did as the Court requested and took a sampling from the log to determine the effectiveness of the screen’s search terms. The consulting firm determined that “1,740 documents would need to be human reviewed” to determine whether the log was effectively precise. The Special Master decided to review 1,813 documents just to ensure it was an effective review. After explaining that Idaho law regarding attorney-client privilege and work product doctrine apply, the Special Master reviewed the documents and determined that 1,249 were not privileged documents and 564 were privileged. The Special Master also went into much detail about the effectiveness of the specific search terms that were used. Specifically, the Special Master determined that 73 percent of the search terms were highly correlated to actual privileged documents. Additionally, the Special Master determined that “those terms which identified a correlation with actual privilege of 59 percent or greater, showed a strong correlation with privilege.” Once the Special Master completed this analysis, the Special Master recommended that the documents that fall below that 59 percent correlation should be released and not kept private. Then, the plaintiffs could also decide to conduct another review of the remaining privileged documents to figure out if more should be released. Finally, the Special Master noted that it does not matter whether documents are listed as “correspondence” or “non-correspondence” for them to be determined to be privilege or not. These documents should be reviewed just as the others. Overall, the Special Master recommended that the court sustain the first objection, and overrule the third objection. As to the second objection, the court recommended the following: “(1) Concur with the selection of a 59% or greater correlation of search term precision for a document to remain withheld as privileged; (2) Allow Defendants the opportunity to further challenge the assertion of privilege above that 59% threshold, if they so choose, by requesting that the Special Master conduct a further targeted review for privilege and release any non-privileged documents discovered. The Defendants will be responsible for cost of this further analysis, if requested; (3) Release the documents associated with the less precise terms that fall beneath the 59% correlation threshold and remove them from the privilege log; (4) Prior to that release, allow Plaintiffs the opportunity to conduct a privilege review of all or a portion of the population to be released and create a supplemental privilege log. The Plaintiffs will be responsible for cost of this further analysis, if Plaintiffs chose to conduct it.”

The Stored Communications Act Protects Public Posts to Social Media Sites

The case arose from an oral licensing agreement between artist Buckley Crispin, Plaintiff, and Christian Audigier and companies (famously associated with the clothing line Ed Hardy), Defendants. Plaintiff alleged that Defendant violated the terms of an oral license by failing to put Plaintiff’s logo on his artwork and by using his artwork on items that were outside the scope of the license. Defendants served subpoenas duces tecum on four third-party websites including Facebook, Myspace, Black Market Art Company, and Media Temple seeking Plaintiff’s communications, sales information and basic subscriber information. The magistrate judge, below, denied Plaintiff’s motion to quash the subpoenas.

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When deactivating your Facebook account becomes the intentional destruction of evidence

Deactivating your Facebook account and passively allowing it to be permanently deleted can be considered the intentional destruction of evidence. The Plaintiff in Gatto is now facing a potentially damaging adverse jury instruction if he takes his case to trial. In Gatto, a ground operations supervisor at JFK Airport was injured in his course of employment when one of the United Airline’s planes bumped into a set of fueler stairs, causing them to run into the plaintiff. In his suit, Plaintiff alleges that due to the crash he has suffered various serious injuries, is permanently disabled, hasn’t been able to work since July of 2008, and his physical and social activities have been limited. Defendants sought access to Plantiff’s Facebook account in relation to these claims.

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Is What You Post On Facebook Discoverable? The Answer Is… Maybe.

We often hear that we should be careful about what we post on the internet.  But no matter how many times we hear this good advice, it seems like we have all posted something on the internet that we later regret.  Unfortunately, the internet is not a forgiving place.  And these unwanted internet posts can haunt an individual and result in serious consequences.

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Discovery of Social Media: The Plaintiff Responds and Produces

Defendants in an automobile accident case sought discovery of Plaintiff’s facebook and myspace (i.e., social media) account information. Plaintiff was seeking damages based upon the physical limitations caused by the injuries sustained in the accident and for psychological damages caused by his newfound anxiety to travel and traffic as well as depression. Plaintiff conceded that the “public information,” or information available to all users/nonusers or friends/nonfriends should be discoverable pursuant to Federal Rule of Civil Procedure Rule 26 provided it was relevant. The Offenback Court conducted an in camera review of Plaintiff’s facebook page to determine the relevancy and discoverability of the material.[1]

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If at First You Don’t Succeed, Try, Try Again—Court Protects Identities of Internet Users But Allows Re-filing of Expedited Discovery Request

Many individuals believe that matters pertaining to the United States Presidential Election are paramount to all other considerations. This, however, is not always the case and even those who create problems for campaign committees from behind the guise of internet anonymity are entitled to equal rights under the judicial system. Ex parte applications for expedited discovery are no exception according to the recent ruling in Ron Paul 2012 Pres. Campaign Comm., Inc. v. John Does, 1–10 because courts have a set list of criteria to consider when assessing the existence of “good cause” for expedited discovery to identify internet users.

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Panetta Warns of “Cyber-Pearl Harbor” in Speech to Business Executives for National Security (BENS)

In a speech to the Business Executives for National Security (BENS) on Thursday, Defense Secretary Leon E. Panetta illustrated the increasing likelihood of a possible "cyber-Pearl Harbor," and identified China, Russia, Iran, and militant groups as having increased their aggressiveness and technological advances in the context of cyber warfare.

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A New Wave of ”Megan’s Law” Legislation: Internet Sex Offender Registries

New Jersey is among the thirty-one states to adopt a sex offender Internet registry web sites as part of “Megan’s Law” legislation. In 2000, New Jersey implemented new legislation regarding sex offenders. In A.A. v. State of N.J., convicted sex offenders challenged constitutionality of Article IV, Section 7, Paragraph 12 of the New Jersey Constitution, a state constitutional amendment which authorizes the creation of an Internet sex offender registry (“Registry”), and an amendment to “Megan’s Law” known as the Internet Registry Act, which seeks to implement the Registry and would allow unlimited public access to certain information. The Third Circuit, however, denied the registrants’ motions for preliminary injunctions and held that the state could implement such a registry.

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