Electronic Discovery and Digital Evidence in a Nutshell - Chapter IX Outline

Here's another installment of my outline of Electronic Discovery and Digital Evidence in a Nutshell, the second edition of the West Academic guide to electronic discovery law in the United States authored by Judge Shira Scheindlin (the judge in the Zubulake v. UBS Warburg) and members of the Sedona Conference. An outline of the previous chapter was posted on February 19, 2017.

CHAPTER IX. ETHICAL ISSUES IN E-DISCOVERY

A. 2012 AMENDMENTS TO THE ABA MODEL RULES OF PROFESSIONAL RESPONSIBILITY

a. Duty of Technological Competence i. ABA Model Rule 1.1. – lawyer shall provide competent representation to a client. 1. Comment 8 – to must keep abreast of all changes in law and its practice, including the benefits and risks associated with relevant technology. ii. 12 states have adopted the commentary language of Rule 1.1. iii. 2014 – Standing Committee on Professional Responsibility and Conduct of the State Bar of California – duty of competency in connection with e-discovery. iv. June 2015 – California Standing Committee – attorney may need to seek assistance on some cases. Lack of competence in e-discovery issues may lead to an ethical violation of duty of confidentiality.

b. Duty of Confidentiality i. Model Rule 1.6 - lawyer shall take reasonable steps to avoid the inadvertent disclosure of information relating to the representation of the client. ii. Comment 18 – No ethical violation if reasonable steps to prevent access or disclosure. Factors to determine if reasonable: 1. Sensitivity of information 2. Likelihood of disclosure in absence of safeguards. 3. Cost of additional safeguards. 4. Difficulty of implementing safeguards 5. Effect of the safeguard on the ability of the attorney to represent the client.

B. RESPECTING THE RIGHTS OF THIRD PARTIES – INADVERENT PRODUCTION a. Rule 4.4 – Respect for Rights of Third Persons – must promptly notify sender upon the receipt of inadvertently disclosed ESI. Includes metadata.

C. DUTY OF SUPERVISION a. Rule 5.3 – Responsibilities Regarding Nonlawyer Assistance – Comments 3 and 4 re: litigation support vendors. b. Comment 3 – Must give clear instructions to assure nonlawyer’s conduct is compatible with professional obligations. c. Comment 4 – Lawyer and client must have an agreement on how to monitor the vendor. D. DUTY OF CANDOR a. ABA Model Rule 3.3 – Candor Toward the Tribunal i. Shall not knowingly make a false statement ii. Must take remedial measures if client is engaged in criminal or fraudulent conduct. iii. Duties apply even if compliance requires disclosure of information protected by Rule 1.6.\

b. Waste Mgmt. of Washington v. Kattler (6th Cir. 2015) – attorney not held responsible for client misconduct if not aware of it, did not assist, or moved to correct deception ASAP.

c. In re Actos Prods. Liab. Litig. (W.D. La. 2014) – adverse inverse instruction to jury for violation of duty of candor resulted in award of $9B.

E. DUTY OF FAIRNESS

a. Introduction i. ABA Model Rule 3.4 – lawyer shall not (or counsel other to) unlawfully obstruct another party’s access to evidence or unlawfully alter, destroy, or conceal a document or other material having potential evidentiary value. ii. Rule 8.4 – professional misconduct to engage in conduct that is prejudicial to the administration of justice. iii. Rule 26(f) lawyer must understand client storage systems so he can participate in the conference. iv. Branhaven v. BeefTek (D. Md. 2013) – failure to identify and produce email in timely fashion and in an acceptable form while misleading defendants that it had identified documents is sanctionable.

b. Electronic Discovery Search Terms i. Apple v. Samsung (N.D. Cal. 2013) – search terms must be produced because they are facts about discovery and therefore not protected.

c. Litigation Hold Letters i. Majority of courts have found that they do not have to be produced.

d. Candor to the Court Regarding the Vulnerability of Electronic Discovery i. In re Intel (D. Del. 2008) – attorney disclosed client’s failure to comply with hold to the court and adversary. Court ordered Intel to produce information regarding the scope of and cause of destruction, whether it was deliberate, and if backup copies existed.

e. Metadata i. Ethical Concerns for the Producing Attorney 1. Comment 19 – lawyer not required to use special security measures if method of communication involves a reasonable expectation of privacy. Greater measures may be required if sensitive information or privacy protected by law. 2. Oregon Formal Opinion 2011-187 – lawyer has duty to use reasonable care to not reveal confidential information through metadata. 3. ABA Formal Opinion 06-442 – Review and Use of Metadata – computers users should avoid creating metadata in the first place; scrub embedded information before sending. ii. Attorneys Duties with Respect to Discovery 1. Common law obligations an attorney to preserve relevant evidence. 2. D.C. Ethics Opinion 341 (2007) – impermissible to alter documents that constitute tangible evidence, removal of metadata may be prohibited. 3. Williams v. Sprint (D. Kan. 2005) – electronic documents must be produced with metadata intact, unless there is a timely objection. 4. Wyeth v. Impax (D. Del. 2006) – presumption against the production of metadata, unless a party can establish that it is relevant. iii. Ethical Concerns for the Receiving Attorney 1. Does mining metadata violate an attorney’s ethical obligations, or is it required? a. New York State Bar Committee on Professional Ethics Opinion 749 – unethical to mine metadata -may be protected by attorney client privilege or work product. b. ABA Opinion 06-442 – Model Rules do not prohibit an attorney from mining metadata. Rule 4.4(b) is silent on this issue. c. State bar associations are split. d. Hybrid decisions – i. Pennsylvania Bar – duties with respect to mining metadata must be evaluated on a case by case basis.

F. DUTY OF SUPERVISION

a. Obligations of Counsel i. In order to meet preservation obligations, counsel should: 1. Inform client of duty to preserve 2. Inform that duty encompasses all documents relevant to the dispute. 3. Documents include hard copies and ESI, as well as drafts. ii. Metro Opera v. Local 100 (S.D.N.Y. 2003) – court issued default judgment and awarded sanctions where counsel: 1. No instructions to client on discovery obligations 2. Knew client had no retention systems but never implemented a systematic procedure for retention. 3. Delegated production to a lay person who did not understand that a document included a draft or non-identical copy. 4. Didn’t confirm lay person implemented effective system to respond to discovery requests. 5. Made baseless representations that all documents had been produced.

b. Managing the Client Lawyer Relationship i. Qualcomm v. Broadcom (S.D. Cal. 2008) – if supervising attorneys unable to get Qualcomm to conduct competent and thorough search should have taken other action to ensure production, or withdrawn from case. Referred to state bar for possible disciplinary action. Later reversed because of lack of bad faith.

c. Supervising Lawyers and Subordinates i. In Qualcomm obligation to disclose documents contradicting trial arguments. Knowledge may be imputed from client to counsel, and from partner to associate whether or not it’s actually communicated.

G. SEDONA CONFERENCE COOPERATION PROCLAMATION

a. 2008 proclamation – dual obligation: i. Conduct discovery in a diligent and candid manner. ii. Be zealous advocates for their clients.

b. Cooperation does not conflict with advancement of client’s interests, but enhances them.

c. 1983 Model Rules switch from ‘zealous advocacy’ to ‘diligent representation’.

d. Mancia v. Mayflower (D. Md. 2008) – Sedona Cooperation Proclamation cited for the proposition that cooperation is a professional obligation. Parties ordered to meet and confer and draft budget proportional to the issues in the case.

H. ETHICAL ISSUES IN DISCOVERY FROM SOCIAL MEDIA SOURCES

a. 2014 New York State Bar Association Social Media Ethics Guidelines i. Viewing Public Portion of a Social Media Site 1. Some sites indicate who is visiting the site. ii. Contacting an Unrepresented Party to View a Restricted Social Media Site 1. Can’t create a false profile to do this. iii. Viewing a Represented Party’s Social Media Site 1. Must obtain an express authorization. iv. Lawyer’s Use of Agents to Contact a Represented Party 1. Can’t have agent do conduct that would violate an attorney’s ethical rules.

b. Lester v. Allied Concrete (Va. Cir. Ct. 2011) – plaintiff suing for the wrongful death of his wife removed photos, at attorney’s instruction, of himself posted to his Facebook page wearing a tee shirt that read, “ I [heart] Hot Moms” and partying with women. Court imposed adverse inference instruction, and fined client and counsel. Attorney suspended from bar for five years.

c. In re McCool (La. 2015) – attorney disbarred for online campaign to influence child custody litigations that encouraged people to contact judges.

Can government agencies share copies of a defendants' cell phone?

The United States District Court for the District of South Dakota issued a decision last week granting a defendant's motion to suppress evidence obtained from the defendant's iPhone. In United States v. Hulscher, 4:16-cr-40070-01-KES (Feb. 17, 2017 D.S.D.), Judge Karen Schreier held that evidence obtained from "a complete, unsegregated copy" of the defendant's iPhone could not be introduced by the Government after the Bureau of Alcohol, Tobacco & Firearms obtained a copy from a local police department that had seized the phone pursuant to a valid search warrant in an investigation related to illegal drugs. The separate federal action concerned the theft and illegal possession of firearms by Mr. Hulscher. The court noted the U.S. Supreme Court's holding in Riley v. California, 134 S. Ct. 2473 (2014), that cell phone data is not the same as physical evidence. There cannot be a mass retention of unresponsive data from a smart phone. The local police department had created a separate copy limited to evidence related to the drug charges.

The court held that the ATF agent was not relying in good faith on the warrant obtained by the local police because he was aware of its parameters, and the plain view exception does not apply with respect to the unresponsive data copied from the iPhone, because there was no justification for the search in the first place. The court did not rule on whether the plain view doctrine applies to digital searches.

Electronic Discovery and Digital Evidence in a Nutshell - Chapter VIII Outline

Here's another installment of my outline of Electronic Discovery and Digital Evidence in a Nutshell, the second edition of the West Academic guide to electronic discovery law in the United States authored by Judge Shira Scheindlin (the judge in the Zubulake v. UBS Warburg) and members of the Sedona Conference. An outline of the previous chapter was posted on February 12, 2017.

CHAPTER VIII SPOLIATION AND SANCTIONS

A. Power of the Court to Sanction a. Rule 37 in General i. 37(a) – power to issue orders to compel ii. 37(b) – power to sanction a party for failure to comply with an order. 1. Certain matters taken as established. 2. Prevent claims or defenses 3. Striking pleadings in whole or in part. 4. Stay proceedings until order is obeyed 5. Dismissing action in whole or in part. 6. Default judgment 7. Contempt of court. iii. 37(b)(2)(c) party must pay reasonable expenses caused by failure. iv. Rule 26(g) sanction – attorney must certify that disclosures are complete and correct and discovery request not for any improper purpose, and not unreasonable or unduly burdensome or expensive.

b. Inherent Authority i. Court can impose sanctions for misconduct in discovery under its inherent power to manage its own affairs. Chambers v. NASCO (U.S. 1991)

B. Spoliation a. Definition and Elements i. Wrongful destruction of evidence.

b. Degree of Culpability i. Loss or alteration of ESI from mere negligence, gross negligence, recklessness, bad faith or intentional misconduct. ii. Residential Funding v. DeGeorge (2d Cir. 2002) – discovery sanctions, including adverse inference instruction may be imposed where party has breached discovery obligation not only through bad faith or negligence but also ordinary negligence. iii. Stevenson v. Union Pacific (8TH Cir. 2004) – There must be some indication of intent to destroy the evidence for the purpose of obstructing the truth in order to impose the sanction of an adverse inference instruction. iv. Circuit Court Culpability Line-up 1. 5th; 7th; 8th; 10th Circuits require bad faith. 2. 2nd; 3rd; D.C.; Fed. Circuits negligence is sufficient. 3. 4th; 6th Circuits ‘willfulness’ standard 4. 1st Circuit – question of spoliation left to the fact finder and no required finding of degree of culpability. v. Culpability is not a factor under FRCP as amended in December 2015.

c. Degree of Prejudice i. Proof of prejudice still required under FRCP. ii. Requesting party unable to obtain production of relevant information that would have helped its case because evidence was destroyed in violation of an obligation to preserve. iii. Circumstantial evidence is often required to establish relevance of altered or destroyed evidence. iv. Prejudice as a necessary element of spoliation 1. Greyhound v. Wade (8th Cir. 2007) – must be a finding of prejudice before imposing sanction for the destruction of evidence. 2. Under the new Rule 37( e), as discussed below, when a party acts “with the intent to deprive another part of the information’s use in litigation” the court need not make a finding of prejudice in deciding whether to impose the harsh 306sanctions of adverse inference or dismissal/ default. This may be because when information is intentionally destroyed, prejudice is presumed. v. Circumstantial Evidence of Prejudice 1. Complete destruction of evidence automatically justifies a finding of prejudice. 2. In Zubulake plaintiff was able to show relevance of missing emails because she kept printouts of 450 emails on relevant issues. vi. Standard of Proof Needed to Establish Prejudice 1. Microtech v. Rambus (D. Del. 2009) – clear and convincing evidence is required. Balance standard of proof to establish intent with standard of proof to establish prejudice. vii. Presumption of prejudice based on Intentional Misconduct 1. Where the prejudice is very great, assessment of spoliator’s culpability becomes less important.

d. Rule 37(e) – General i. Applies only to ESI. ii. If ESI that should have been preserved in anticipation or conduct of litigation is lost because party failed to take steps to preserve it, and it cannot be restored or replaced, court 1. Upon finding of prejudice may order measures no greater than necessary to cure the prejudice. 2. Only upon finding of intent to deprive a. Presume that lost information was unfavorable. b. Instruct jury that it should presume information was unfavorable. c. Dismiss the action or enter a default judgment. iii. ‘Should have been preserved in anticipation of litigation’ 1. Note states that Rule 37(e) does not apply when information is lost before duty to preserve arises. 2. Note recognizes that there may be requirements to preserve imposed by statutes; administrative regulations; court orders; or party’s own document retention protocols, but failure to meet these requirements does not prove preservation efforts were not reasonable. iv. Reasonable Steps to Preserve 1. Committee Note – a. perfection in preserving all relevant ESI is often impossible. b. Routine, good faith operation of an electronic information system is a factor to consider. c. Consider a party’s sophistication. d. Is information lost by events outside of a party’s control? e. Consider principle of proportionality. v. Restored or replaced through additional discovery 1. Committee Note – efforts to restore or replace must be proportional to the importance of the lost information to claims or defenses.

e. Rule 37(e)(1) i. No requirement of culpability, but prejudice is required. ii. Burden of proving prejudice is not placed on one party or another. iii. Measures 1. Measures no greater than to cure prejudice. 2. Speaks of ‘measures’ not sanctions. 3. Types a. Forbid putting on certain evidence. b. Exclude specific item of prejudice. c. Permit parties to present argument and evidence to the jury regarding the loss of information 4. Hogan v. Raymond (3d Cir. 2013) – monetary sanction does not require showing of bad faith. iv. ‘No Greater Than Necessary’ 1. Committee Note – ‘much is entrusted to the court’s discretion’.

f. Rule 37(e)(2) i. Requires finding that the spoliating party acted with prejudice to deprive another party of its use. ii. Court may, but is not required, to take one of three actions: 1. Presumption that lost information was unfavorable. 2. Provide jury with either permissive or mandatory adverse inference instruction. 3. Dismiss the action or enter a default judgment. iii. ‘Intent to Deprive Another Party of Information’s Use in Litigation’ 1. Rule is silent on the burden of proof. 2. Can’t use adverse inference instruction for negligent loss of information as in Residential Funding. 3. Committee Note – these measures should not be used when information was unimportant or lesser measures can be sufficient to redress the wrong. iv. Default Judgment or Dismissal 1. Rule 37( b)( 2), which authorizes a court to assess a sanction for violation of a discovery order, or pursuant to new Rule 37( e)( 2). v. Adverse Inference Jury Instruction 1. When party fails to produce relevant evidence within its control can issue adverse inference instruction. 2. Rule is silent with respect to proof on whether or not the information must be relevant. 3. A party seeking such a “spoliation” adverse inference must adduce sufficient evidence from which a reasonable juror could infer the unfavorable nature of the destroyed evidence. 4. In re Actos (W.D. La. 2014) – evidence of bad faith sent to the jury when unsure if defendant had demonstrated bad faith to support mandatory adverse inference instruction.