N.D. Cal. Resolves Dispute Between Facebook and Plaintiff on 502(d) Order

Last week, in Klein v. Facebook, Inc., No. 20-cv-08570-LHK (VKD), 2021 U.S. Dist. LEXIS 105516 (N.D. Cal. June 3, 2021) Magistrate Judge Virginia DeMarchi issued an order resolving a dispute between the parties on a Rule 502(d) order, specifically with regards to whether or not a clawback order should only cover documents and data produced inadvertently, or cover all privileged material that is disclosed. The Court noted that Fed. R. Evid. 502(d) does not expressly restrict itself to inadvertent productions, and the commentary to Rule 502(d) states that, "[T]he court order may provide for return of documents without waiver irrespective of the care taken by the disclosing party[.]" Id. at *14. Magistrate DeMarchi concluded that, "The parties may have different views regarding what distinguishes an 'inadvertent' disclosure from an 'intentional' disclosure, but the principal purpose of the proposed order, as the Court understands it, is to provide a mechanism for protecting legitimate claims of privilege without requiring an exhaustive pre- or post-production review of documents disclosed in discovery, and a mechanism for challenging post-production claims of privilege in a way that does not unfairly prejudice a receiving party who may have relied on the purportedly privileged material without knowing or suspecting the producing party's privilege claim." Id. at *15.

In addition to making clear that the order governs all disputes on the production of protected documents, the Court found it necessary to add language to the 502(d) order that made it clear that it covered both documents and accompanying metadata.

The parties also disagreed over how documents and data subject to a clawback request should be treated. Facebook's position was that the materials should be destroyed by the opposing party pending resolution of any disagreement over a clawback request, and Klein argued that the materials could be sequestered and used for such resolution. The Court noted that both parties' proposals were contrary to Fed. R. Civ. P. 26(b), which prohibits the use of privileged documents in resolving a dispute, but does provide for sequestration as an alternative to the destruction of clawed back materials. Judge DeMarchi ordered that clawed back materials be returned or destroyed, but also ruled that notes or other work product concerning the content of the materials could be sequestered. The privileged materials are to be submitted to the Court for in camera review at the request of any party. A party responding to clawback requests made within a single 7 day period for more than 100 documents will receive 7 more days to dispute the requests.

The Court also addressed the possibility of deposition testimony concerning documents objected to as improperly produced privileged material at the deposition itself. The document in question will have to be redacted at the deposition, and any testimony about the challenged provisions taken after the dispute of a clawback request has been resolved. If they are not raised during the deposition, objections to testimony about privileged materials must take place within 10 days of the receipt of the rough draft of a transcript.

The Rarely Seen Quick Peek

While Federal Rule of Evidence 502 allows for quick peek agreements as an alternative to clawback agreements, parties rarely reach an agreement that allows a requesting party to review a complete data set to determine which documents it decides are responsive. This is what makes the decision of the United States Federal Court of Claims in Fairholme Funds, Inc. v. United States, No. 13-465, so interesting. Judge Margaret M. Sweeney granted the plaintiff's motion to compel 1500 documents pursuant to the FRE 502(d) quick peek procedure.

The defendants in this case argued that the purpose of the procedure is to lessen a producing party's burden to review ESI for privileged information. They cited to The Sedona Conference's Commentary on Protection of Privileged ESI, as support for the position that Rule 502 cannot be used to compel the production of privileged information and ring a bell that cannot be un-rung.

The court nevertheless decided that it should grant the plaintiffs' request to review the documents withheld on the basis of deliberative process and bank examination privilege, even if the defendant did not consent, and had already conducted a comprehensive review. In making its decision, the court cited the following factors:

1. defendant's piecemeal production

2. a trial court's board discretion to issue discovery orders

3. a quick peek review would avoid a motion by the plaintiffs to conduct an in camera review which would be burdensome to the court.

4. a Rule 502(d) protective order provides greater protections than a Rule 26(c) protective order.

5. only individuals subject to the protective order will have access to the documents.

Judge Sweeney concluded that, "the court's use of the quick peek procedure in the case at bar is not motivated by a need to (1) protect inadvertently disclosed materials, (2) address the high cost of discovery in cases involving large quantities of ESI, or (3) punish defendant. The court's sole purpose in utilizing the procedure is to bring jurisdictional discovery to an end so that the case may move forward. Given the court's wide discretion to manage discovery pursuant to RCFC 26, and given the mutually agreed-to protective order already entered in this case, the court's use of the quick peek procedure is eminently appropriate."

Amendment to Federal Rule of Evidence 902 is Effective Today

Happy E-Discovery Day!

Back on December 19, 2016, I noted that amendments to Federal Rule of Evidence 902 would become effective today. As announced by the Federal Judicial Center, FRE 902(13) and 902(14) now allow for electronic evidence to be self-authenticating. Previously FRE 902 allowed for these kinds of documentation to be self-authenticating - (testimony or other extrinsic evidence is not necessary for them to be regarded as authenticate):

1. Public documents under seal.

2. Certified copies of public records.

3. Newspapers and periodicals.

4. Trade inscriptions.

5. Notarized documents.

6. Business records with custodian’s declaration.

FRE 902(13) now provides for the self-authentication of records generated by an electronic process (a print-out of web page or output from a computer like a spreadsheet), and FRE 902(14) for self-authentication of data from electronic media that is digitally identified with hash values. - when certified by a qualified person.

A video posted by the FJC on amendments, notes that self-authentication must meet the procedural requirements of the hearsay exception under FRE 803 for records of a regularly conducted activity. So the record has to be made at or near the time by someone with knowledge, kept in the course of a regularly conducted business activity, and be made as a regular practice.

The certification of the qualified person has to be based on a federal law or Supreme Court rule. If a foreign record is concerned the certifying person must be subject to a criminal penalty in the country where the certification is given for falsifying the record.

The FJC online presentation notes that certification under 902(14) can be done by means other than comparing hash values that 'future technology' will provide.

Written notice of records offered under FRE 902(13) and 902(14) must be given before a trial or hearing, and the records and their accompanying certification should be offered up for inspection.

Today in a webinar hosted by Exterro, "Top 5 E-Discovery Process Improvements Legal Needs to Make (but haven’t made)", former United States Magistrate Judge Facciola discussed the amendment. He gave the example of a certification provided by an expert that a particular web page was accessed on a particular computer as providing for the authentication of the evidence without testimony before the court. Judge Facciola warned that such evidence would still have to be relevant in order to be admissible.

Mary Mack, the head of ACEDS, advised that attorneys should be sure that software used for data collection is generating hash values at the same time collection is performed. Judge Facciola said that he did not think that a person would need to be a certified forensic specialist in order to validate hash values for digital evidence. He thought that the rule would be interpreted reasonably and not require a particular type of expert recognition. He gave the example of how an IT director at Met Life might certify that hash values showed that data was copied from its network correctly. Judge Facciola would not be troubled by the fact that the director lacked a degree in forensic science or another official qualification.

William Hamilton of the University of Florida's School of Law's E-Discovery Project discussed how he teaches his students to use a collection log which shows the data collected, the location it was collected from, and the hash value for the data. The software used for collection generates a hash value for the data both in its original location and for where it is copied to in order to verify that there has been no alteration.