e-Lessons Learned

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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Pay close attention to the rules! Failure to understand the purpose of the rules, as well as failure to comply with motion timelines, could cost your client the opportunity to be relieved of undue discovery costs. This is what happened to the defendant in Cason-Merenda v. Detroit Medical Center.

In Cason-Merenda v. Detroit Medical Center, defendant filed a Motion for Protective Order in an attempt to require the plaintiff to pay 50% of its third-party vendor electronic discovery costs. The defendant relied on Fed.R.Civ.P. 26(b)(2)(B), which states that “[o]n motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost.” After the producing party shows that the information is not reasonably accessible, a court then has the ability to apportion costs between the two parties.

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Although most professionals and courts are still behind in the times when it comes to electronically stored information (ESI) and its discovery, the Southern District of New York recently sent a clear warning: Get with it! This district court cautions that counsel must cooperate with each other and get input from document custodians, to carefully develop and test keywords used to search email and other ESI.

In this March 2009 case stemming from a multi-million dollar construction dispute, the project owner agreed to produce all project-related emails and ESI from its non-party construction manager. The issue before the Court concerned the production of the construction manager’s emails from its server, and how to separate unrelated emails from project-related emails.

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Fool me once, shame on you. Fool me twice, more shame on you. Fool me three times and you are in some hot water! Regardless of whether you are (or represent) the plaintiff or the defendant, your discovery obligations are the same: Absent a valid, court-sanctioned objection, you must comply with your adversary’s discovery demands.

While electronically stored information (ESI) may be a rather esoteric concept for many of us (perhaps most), in the eyes of the law and the court, ESI is just as real as traditional paper documents; and one’s failure to search for and disclose ESI in a timely manner could lead to big problems for an attorney and the client. In one case, it may have cost one company $25 million.

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All content that you put on the internet, whether you think it is private or not, is out in the open and can be accessed by anyone. Think about some of things you may have on your MySpace or Facebook pages, or may have posted on your blog or might have tweeted. Do you want your boss or the police or the courts to see them? If not, you’d be wise to avoid posting anything that could expose you to the wrath of authorities.

In Clark v. State, police and prosecutors used statements on Ian Clark’s MySpace page to help convict him of first-degree murder. Granted, your dirty little secrets probably won’t end up as badly as Ian Clark’s, but why take any chances?

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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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eLLblog is happy to announce that we are the official blog for the upcoming Cardozo Arts & Entertainment Law Journal Symposium as they feature a discussion of the legal implications of Tiger Woods’ widely publicized recent behavior. As you may recall, it was electronically stored information (text messages) which ultimately led to Woods’ current troubles. This upcoming event is particularly relevant, given the press conference Woods held this morning.

From the official flyer:

Tiger Woods’ abrupt and unexpected freefall from golf heaven and his subsequent precipitous fall down the endorsement deal mountain both force the media and law spotlight on to the uncertain and turbulent future of endorsement deals, morals clauses, and reverse-morals clauses.

Join the Symposium speakers and guests who will critically evaluate this “Tiger Woods Effect” on the billion-dollar endorsement deal industry.

Among the Featured Panelists:

Fernando Pinguelo (moderator): Partner, Norris McLaughlin & Marcus and Co-Chair of its Entertainment Law Group

Michael McCann (keynote speaker): Legal Analyst, Sports Illustrated; Associate Professor of Law, Vermont Law School

Dorothy Crenshaw PR/Brand Strategist; CEO, Creative Director, Crenshaw Communications

Evelyn M. Tollinche Senior Counsel, Business & Legal Affairs Group, MTV Networks

To view the full invitation, click here. Though the event is free, you must register first by emailing [email protected] prior to March 1.

Photos from the event, after the break.

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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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