Authored By: Michael Tucker Jr.

Citation: ANZ Advanced Technologies, LLC v. Bush Hog, LLC, 2010 WL 3699917 (S.D. Ala. 2010)

Employee/Employer Implicated: Owner/Executive; Employee

e-Lesson Learned: It is important not to misrepresent the dates that documents were actually created because retyped “copies” are not actually copies. Once you go down this path, all your hard drives and storage devices can be physically analyzed and forensic images are just not good enough.

Tweet This: Forensic img of storage device insufficient when what you previously produced was a lie. Get Physical (Hard Drives)

On May 4, 2010, ANZ Advanced Technologies (plaintiff) was ordered to produce all hard drives and storage devices used by two of the company’s officers (Irfan Sheriff and Rakesh Vashee) for forensic analysis and ESI production. ANZ moved to modify the order seeking to substitute forensic images of the devices for the devices themselves. The court refused to allow the use of forensic images and mandated that ANZ turn over the physical storage devices   ANZ was forced to submit its devices for forensic analysis because of misrepresentations made about creation dates of various documents. The court found that ANZ’s conduct cast serious doubt on the authenticity of any document it produced from the hard drives of any computers or other storage devices in the possession of Mr. Sheriff or Mr. Vashee.

Authored By: Gina Barbieri

Citation: Rubin v. Alamo Rent-A-Car, 593 N.Y.S. 2d 284 (2nd Dept. 1993)

Employee/Employer Implicated: Owner/Executive, Employee, Patient

e-Lesson Learned: Nonmedical information, not related to the diagnosis or treatment of patients is not protected under the physician-patient privilege in N.Y. C.P.L.R. 4504(a)

Tweet This: How dare that judge order you to incriminate yourself and pay for it! You shouldn’t have to pay for it...

In most personal injury cases it is not unusual for documents to be granted a protective order based upon physician-patient privilege. However, the courts are reluctant to offer protection of materials, which are key to the defense of a lawsuit. This is particularly true when parties to litigation are attempting to claim privilege for documents that would not naturally fall under that protection. The court is weary of medical professionals who abuse this privilege for their own financial gain. Sindey Rubin and his Wife Lucille Munion, appealed an order from the Supreme Court of Nassau County which directed them to release their medical practice’s financial records to opposing counsel. Mr. Rubin alleged he was struck and seriously injured by a vehicle rented from the defendant, Alamo Rent-A-Car. After initiating a lawsuit to recover for his personal injury, Rubin amended his complaint to include his wife as a party to the suit and to include damages for loss of business income as a second cause of action.

Authored By: Michael Zoller

Citation: Columbia Pictures Industries v. Bunnell, 2007 WL 2080419 (C.D.Cal., 2007)

Employee/Employer Implicated: Owner/Operator

e-Lesson Learned: Even though data is not maintained permanently, but instead only stored in a web server’s RAM for a matter of hours, it is the operator of the server’s responsibility to preserve that information permanently for the purpose of discovery.

Tweet This: Torrent Website must 'RAM' up its production of electronically stored data

Everybody likes movies. Problem is not everybody likes paying $12+ to see one. As movie prices have gone up, viewers have turned to torrent websites as a way to download and watch movies for free from the comfort of their own homes. Of course not everyone, especially the movie studios, like these websites and the free content they deliver. As a result, movie studios have turned to the courts to try to stop these websites from violating their copyrights. To no one’s surprise electronic discovery is a big component of these cases.   In Columbia Pictures Industries v. Bunnell, the defendant operated a torrent website that allowed its viewers to download and watch movies without paying for them. Columbia pictures sued for violation of its copyrights in the various films. To prove its case Columbia had to show the website directly or vicariously infringed by assisting users in using copyrighted material without permission.   The site operates by allowing a user to click on a link or search for a film and the site will then find the movie online where it can be downloaded to the user’s computer. To complete its process, the site records the request information in its RAM (random access memory). This information is stored only for a short amount of time and then deleted. There is no permanent record of the data.   In order for Columbia to show copyright violation, it needed this search information so it made a discovery request. The defendant argued that due to the RAM’s temporary nature, there was no record to be turned over. The court found otherwise. The court held, “the data in issue which was formerly temporarily stored in the defendant’s RAM constituted “electronically stored information” within the control of the defendant.” As such it was the defendant’s responsibility to preserve the information and produce it for the plaintiff.   A warning for torrent site users, for the defendant to meet the court’s demands, it now has to permanently store all the information, including the IP addresses, on who uses their site and how they use it. While this information is not initially turned over to the movie studio, it now exists in permanent form and someday could be turned over. So if you are going to violate a studio’s copyright in a movie, just know they now have the ability to discover who you are.   Michael Zoller received his B.A. in Political Science from Johns Hopkins University. He is currently a third-year law student at Seton Hall University School of Law, he will be receiving is J.D. in May ’11. Want to read more articles like this? Sign up for our post notification newsletter, here.  

Authored By: Drew Manary

Citation: United States v. Steven Warshak, Harriet Warshak, TCI Media, Inc., 2010 WL 5071766 (C.A.6 (Ohio)).

Employee/Employer Implicated: Defendants (Steven and Harriet Warshak, TCI Media)

e-Lesson Learned: Good faith reliance on the Stored Communications Act may allow the government to obtain certain eCommunications without a warrant.

Tweet This: Ma Warshak, Smilin’ Bob and the Great Enzyte Fraud

Anyone who watched television during the early to middle part of the last decade would have seen an ad for Enzyte. The product purported to make male genitalia larger and used a figure referred to as “Smilin’ Bob” as its representative. The company also said the product was scientifically proven to work and would produce a size increase of up to twenty-five percent. Much to the dismay of Enzyte's Porsche-revving customers, that was all a fiction. However, it was a very successful fiction, producing hundreds of millions of dollars for the product’s creator, Steven Warshak, his mother and Enzyte employee Harriet Warshak, and his representative company. Much of the success of the product was not due to repeat business, but a system called “auto-ship” where anyone ordering the product online was automatically enrolled in (and generally uninformed of) a program which would continue shipping (and charging for) the product. Additionally, Warshak hid or omitted any disclaimers about this practice on the corporate website and further required anyone dissatisfied with the product to sign an affidavit that the product had not worked. The rationale behind this was that people would be too embarrassed to have such a document notarized. Naturally, such practices caused consumers to become aroused with anger, and file complaints with the Better Business Bureau.

Authored By: Gina Barbieri

Citation: Whited v. Motorists Mut. Ins. Co., 2010 WL 3862717 (E.D. Mich. Sept. 28, 2010)

Employee/Employer Implicated: Owners and Corporate Officers

e-Lesson Learned: In cases where extreme tampering with Electronically Stored Information (ESI) is evident, the offending parties’ claims will face dismissal with prejudice.

Tweet This: Destroying Evidence is Self-Destruction (or at least Claim Destruction)

Electronically Stored Information (ESI) is comprised of all of the data held on a computer hard drive. If relevant, it is standard in litigation for the court to order a forensic evaluation of the ESI on a party’s computer during the discovery process. This is particularly true when there is a question as to the authenticity of documents being produced by a party. In this case, an accident left Mr. Whited unable to care for himself. His sister and niece formed Luv-N-Care, LLC, listing Mr. Whited and themselves as the corporate officers of the closely held corporation. The corporation functioned with the sole purpose of providing constant care to Mr. Whited. The payroll for Luv-N-Care was funded by Mr. Whited’s insurance, Motorists Mutual Insurance Company, who was responsible for his care under Michigan’s “no fault” insurance. The legal process was initiated because of a dispute as to the amount of insurance benefits Luv-N-Care was entitled to for their services.

Authored By: Gina Barbieri

Citation: Oxxford Information Technology, Ltd. v. Novantas LLC, 2010 N.Y. App. Div. LEXIS 8496 (N.Y. App. Div. 1st Dep't Nov. 16, 2010).

Employee/Employer Implicated: Owner/Executive, information technology manager, C-level executive, owner, counsel (in-house & outside counsel)

e-Lesson Learned: The best way to protect trade secrets and other discoverable information is through a bargained for confidentiality agreement, which will likely be upheld in its original form

Tweet This: “If you bargain in favor of your privacy, you won’t fall victim to a bait-and-switch”

When confidential business information comes into play, it is imperative that parties diligently bargain to protect their interests. Once an agreement is reached the parties will be expected to uphold their side of the bargain based on the other side’s reliance.

Authored By: Michael Tucker Jr.

Citation: Orbit One Communs. V. Numerex Corp., 2010 U.S. Dist. LEXIS 123633 (S.D.N.Y. 2010)

Employee/Employer Implicated: Information Technology Administrator; Outside Counsel; Owner/Executive

e-Lesson Learned: Mere inadequacy of preservation efforts does not warrant sanctions unless it can be shown that discovery-relevant evidence has been lost. Despite that, it is better to adequately prepare for and execute a proper litigation hold than rely on dumb luck and coincidence to avoid sanctions.

Tweet This: Plaintiff not sanctioned for ESI preservation failures when comprehensive failures did not actually result in lost evidence.

In 2006, Numerex, a satellite communications company, began attempts to acquire Orbit One, which was owned by David Rosen, Scott Rosenzweig and Gary Naden. These negotiations resulted in an asset purchase agreement signed in July 2007, under whose terms Rosen, Rosenzweig, and Naden would continue on with Numerex, with Rosen becoming president of the new division. Around the same time Naden’s former company, Axxon initiated suit against Orbit One and Orbit’s attorneys ordered a litigation hold to ensure preservation of information relating to that controversy.

Authored By: Mallory Griffin

Citation: Dzung Chu v. Oracle Corp. (In re Oracle Corp. Secs. Litig.), 627 F.3d 376, 386 (9th Cir. Cal. 2010)

Employee/Employer Implicated: Upper Management

e-Lesson Learned: Failure to preserve electronic documents could lead a Judge to grant your adversary an adverse inference on what those missing documents may or may not have said.

Tweet This: “Do you want a jury making inferences about what your emails may or may not have said?”

“STOP PUTTING WORDS IN MY MOUTH” is something you might expect to be screamed during a typical fight on the Jersey Shore. However, if you are not careful complying with electronic discovery requests – you’re going to have a “Situation” in the form of a big fat SANCTION that leaves you saying, “but that’s not what my emails said.” What can no longer be seen, found, or read can’t hurt you – right? WRONG. Failing to preserve documents can easily come back to bite you in the ass. Be careful with the documents you have, but don’t be quick to cast aside those you claim are missing or destroyed.

Authored By: Eric Abes

Citation: Gallagher v. Crystal Bay Casino, LLC et al., 2010 U.S. Dist. LEXIS 124421 (D. Nev. Nov. 8, 2010)

Employee/Employer Implicated: Owners; Executives; Counsel

e-Lesson Learned: Failure to preserve evidence can be fatal, financially and judicially.

Tweet This: Whether a company keeps everything, or waits until a trigger to begin preservation, they should consult a lawyer to develop the proper plan for their company.

When I was a kid, every year at Hanukah, my mom had a one in one out policy for toys. If I got a new Transformer, I had to donate an old toy to Goodwill. It taught me two important lessons: always think of those less fortunate and try to keep the clutter in your home to a minimum. My fiancé cannot bear to part with anything. About five years ago she lost weight and went from a size 14 to a size 8. Today, half of her closet is filled with clothes that are 6 sizes too big for her. Which one would you rather have for a client?

Authored By: Danielle Y. Alvarez

Citation: Gates v. Wheeler, A09-2355, 2010 Minn. App. Unpub. LEXIS 1136 (Minn. Ct. App. Div. Nov. 23, 2010)

Employee/Employer Implicated: Co-owner

e-Lesson Learned: Secret email surveillance offends the orderly system of discovery. Don’t do it!

Tweet This: There should be no secret about your company’s email surveillance policy.

As the Appellate Court in Minnesota aptly noted, the rules of civil procedure exist for a reason―they provide us with an orderly system of discovery. Do not attempt to circumvent these rules. Secret email surveillance is never a good idea. This point was made very clear in Gates v. Wheeler. Richard Gates and Matthew Wheeler were co-owners of RSR, which was a limited liability company in Minnesota. Over time, the men’s relationship soured and this led to deadlock in their management of the company. Clearly, the time arrived for their professional relationship to end.