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: Jessica K. Rauskolb

Citation: F.T.C. v. First Universal Lending, LLC, 2011 WL 673879 (S.D.Fla.)

Employee/Employer Implicated: Outside Counsel, Miscellaneous

e-Lesson Learned: If you scrub the data off your computers, you can’t blame the other side for destruction of evidence. Your adversary does not have to make sure that you have information to establish your defense.

Tweet This: No Bad Faith? No sanctions. Especially not where the accused party never had control of the later scrubbed PCs

Don’t blame others for your mistakes! If you are given permission by a court appointed receiver to scrub relevant data off your computers to eventually sell them, you can’t blame the other side for spoliation of relevant data that you need to establish your defense - especially not if the other side never had control over the computers with the relevant data! You will not be able to succeed, just ask the defendants in F.T.C. v. First Universal Lending, LLC. In F.T.C. v. First Universal Lending, the F.T.C. investigated the defendants for their mortgage modification practices by alleging that defendants had violated the Federal Trade Commission Act and that defendants had acted in violation of the Telemarketing Sales Rule. For the duration of the investigation, the court appointed a temporary receiver who took control of defendants’ business premises.

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: Fernando M. Pinguelo and Priya S. Amin

Tweet This: Scheindlin W/d's Opinion in Nat'l Day Laborer Org. Network v. US Immigr & Customs Enf Agency http://ellblog.com/?p=2432

The previously filed court opinion by Judge Scheindlin involving the case Nat'l Day Laborer Org. Network v. United States Immigration and Customs Enforcement Agency has been withdrawn. Significantly, the opinion stated that metadata that is maintained by an organization is assumed to be producible under the Freedom Of Information Act, unless the organization is able to prove that the data is not “readily reproducible.” The opinion also specified guidelines indicating the appropriate amount of metadata that should supplement any collection of digital record. This opinion has since been withdrawn and Judge Scheindlin expressly stated, in so doing, that “it is the intent of this Court that the decision shall have no precedential value in this lawsuit or in any other lawsuit” and reasoned that it “was not based on a full and developed record.” Click here for a copy of the order.

Authored By: Edward J. Piasecki

Citation: Gyrodata Inc. v. Gyro Technologies, Inc., 2010 U.S. Dist. LEXIS 120084 (D. Conn. Nov. 12, 2010)

Employee/Employer Implicated: Information Technology Staff

e-Lesson Learned: E-mail filter systems with a drop box remain effective devices of preservation, despite their potential to trigger return receipt messages that might suspiciously look like violations of a protective order.

Tweet This: Return receipt messages and suspicion, without more, is NOT evidence of a violation of a protective order.

It is common practice in litigation between industry competitors that litigants will seek protective orders from the court to ensure that in the exchange of discovery, neither party’s trade secrets are revealed or inadvertently made public. It is also common practice for companies to go to great lengths to ensure that they do not destroy any evidence that might be pertinent to the litigation. One method used in preservation is an email filter, whereby incoming and outgoing emails with certain words are copied into a drop box without the sender or receiver ever knowing. This is generally a very effective method. But what happens if a sender’s email has a return receipt on it? Is the jig up? Or even worse, what if the sender, although not a party to the litigation, is not supposed to receive correspondence regarding the litigation because there is a protective order in place?

Authored By: M.J.R.

Citation: Jannx Medical Systems, Inc. v. Methodist Hospitals, Inc., 2010 WL 4789275 (N.D. Ind., Nov. 17, 2010)

Employee/Employer Implicated: Outside Counsel, In-house Counsel, Senior Management, information technology manager

e-Lesson Learned: Discoverable data must be produced in a reasonably usable form in which it is ordinarily maintained and not in a format more difficult for the requesting party to use in litigation.

Tweet This: Indiana Court hands down a harsh punishment for shady electronic discovery practices!

Not only was Jannx scolded by the District Court on three separate issues, they are now responsible for significant legal fees, and lost a motion to protect their own data. It’s safe to say the Indiana District Court was not impressed with the Jannx legal team. Basically, this case involves a dispute over pre-trial discovery motions between the plaintiff, Jannx Medical Systems and defendants, Methodist Hospital, Crothall Healthcare, Inc., and Propoco Professional Services. The Court issued an opinion and order on Defendant’s motion to get Jannx to comply with electronic discovery and Jannx’s motion to withhold electronic data from discovery by reason of trade secrets, etc.

Authored By: Drew Manaray

Citation: In re Stern, 321 S.W. 3d 828 (2010); 2010 Tex. App. LEXIS 7382

Employee/Employer Implicated: PLaintiff

e-Lesson Learned: Discovery is generally construed very broadly by courts, but a line will be drawn when requests are overbroad or irrelevant. This is true with electronic production requests as well.

Tweet This: Just because you are attempting to compel production of electronically stored information does not entitle your requests to be overly broad!

­­­­­­­­­­­­­­­­­­In In re Stern, Virgie Arthur, mother of the late Anna Nicole Smith, alleged that Howard K. Stern, Smith’s former attorney, and others in the media (particularly television and internet gossip programs) had engaged in a conspiratorial effort to defame her and harm her efforts to maintain custody and visitation rights of Smith’s daughter. Arthur challenged Stern’s assertion that he was father to Smith’s newborn daughter, thereby causing Stern to engage in a conspiracy in which his sister, Bonnie, as well as additional parties (Nelda Turner, Lyndal Harrington and Theresa Stephens) found “dirt” on Arthur and then posted it on the internet. Further, Stern and his alleged conspirators had provided gossip website TMZ with a tape and transcript of an interview in which Smith accused Arthur of “being complicit in child abuse” committed against Smith when she was a child.

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.