Costs of Email

Posted by Gregg Mayer on Thursday, March 13th, 2008   

Here’s a great article from the BBC that poses one of the great philosophical questions of our time: is email ruining your life?

A recent study found one-third of office workers suffer from e-mail stress.
And it is expensive, too. One FTSE firm estimated that dealing with pointless e-mails cost it £39m a year.

I know next to nothing about currency exchange rates, but my quick Internet-assisted calculation reports that £39m would be about $77 million. Ouch. Not to mention the 52 hours a year we waste on junk email.  Read the rest of the article here. 

Ex-employee, Company Spar Over Unauthorized Access To ESI

Posted by Gregg Mayer on Thursday, March 13th, 2008   

In a decision this month, a federal judge is considering how to let an employer search an ex-employee’s personal computer in a lawsuit over whether that employee illegally accessed the company’s electronically stored information (“ESI”).

In Equity Analytics v. Lundin, Equity discovered that its former employee, Timothy Lundin, had accessed the company’s Salesforce.com account after he was fired.  Lundin explained he was given the password to the account by a member of Equity’s staff.

Equity wants to search Lundin’s computer, but the two sides cannot agree about how to do it.  Lundin wants Equity to use specified search terms and file types.  Equity wants broader access to the computer.

Interestingly, the judge hearing this case is the same judge who recently dealt with the search term issues of United States v. O’Keefe, discussed here on CIOLaw.org.  The judge has said expert testimony may be needed to determine search terms are sufficient when probing for ESI.

On March 5, 2008, the judge ordered Equity to have its computer forensics examiner submit an affidavit explaining why the limitations proposed by Lundin would render the search inadequate.

The expert shall also describe in detail how the search will be conducted. Armed with that information, supplemented if necessary by a hearing at which the expert will be cross examined, I can make the best possible judgment as to how to balance Equity’s need for information against Lundin’s privacy.

Equity will have until March 20 to submit its expert affidavit. Check back with CIOLaw.org to read the latest developments.

System-focused Approach Avoids Faux e-Discovery

Posted by Gregg Mayer on Wednesday, March 12th, 2008   

A recent article by attorneys James Shook and Andrew Cohen thoroughly discusses the problems of companies relying solely on employees to implement a legal hold when litigation is imminent.

Companies reviewing their electronic discovery options are frequently faced with a difficult choice on how to implement litigation holds and collect relevant electronic information. At first glance, the choice seems to be a “Catch-22”: should they: (a) quickly and inexpensively implement an employee self-service approach, and accept the inherent risks of such an approach; or (b) spend time and effort up-front to deploy tools that will systematically allow an investigator or legal team member to identify and collect the information?…[T] here is a significant amount of risk and difficulty hidden in the self-service approach, which can lead to “faux eDiscovery”– where a company incorrectly believes that it is meeting its electronic discovery obligations.

As discussed in the article, it is difficult for companies to rely on employees to preserve the relevant email and other electronically stored information (“ESI”) because an employee’s self interest – such as wanting to avoid revealing an embarrassing email – comes into play. Instead, companies should implement email archiving tools to allow for a system-focused, comprehensive, and cost-effective way to identify and retrieve email in the context of e-Discovery. Read the full article here.

Mr./Mrs. President, How Will You Archive?

Posted by Gregg Mayer on Wednesday, March 12th, 2008   

Here’s something you don’t hear a lot of clamoring about in the musty caucus hallways: which candidate will implement a comprehensive email policy?  Maybe we should hear more about it.

A recent article in The Seattle Times took on this very issue:

I know the three remaining candidates are busy addressing the really important questions. But sometime before the fall, they will need to tell us how they will develop a comprehensive e-mail archive and backup system that will allow easy search and retrieval of future public records.
As a bonus, they can tell us they believe in technology’s ability to make tasks easier and are comfortable in its use.

Read the rest of the article here.

Litigation Hold Impacts All Relevant Employees, Not Just CEO Or Executives

Posted by Gregg Mayer on Wednesday, March 12th, 2008   

A company’s failure to implement a legal hold for its employees’ email was likened by a Minnesota court to a game of “blind man’s bluff.” The court, of course, will win that game every time.

In 3M Innovative Properties Co. v. Tomar Electronics, Inc., a patent infringement lawsuit, problems arose during discovery – the initial phase of litigation where parties exchange evidence. Here is how the court summarized the issues:

3M makes three basic assertions: (1) Tomar gave false discovery responses; (2) Tomar failed to retain, collect, and produce court-ordered documents [including email]; and (3) Tomar engaged in deposition misconduct.

The court concluded Tomar’s president lied during his deposition. The president also interrupted other employees’ depositions. Moreover, the president failed to have his company implement a legal hold on email once the company was under a duty to preserve evidence for the litigation. The court wrote:

Discovery requests served on a company solicits information known to the company, not solely information known by the president, CEO, or other person directed to respond to the discovery requests. Accordingly, a reasonable investigation by a company would include an inquiry of a company’s employees for relevant information. A company need not question all employees, but must question those that would reasonably have relevant information.
…
Testimony indicates that [the president] never contacted any company employees to inquire about responsive information or documents. Tomar has presented no evidence or argument to this court that it has conducted a reasonable investigation for responsive information or documents, other than to assert that [the president] was in possession of all relevant documents and therefore an inquiry of other employees for relevant information was not necessary. Evidence indicates, however, that this position is not reasonable nor supported by evidence before this court.

In a last ditch effort to avoid a spoliation sanction, Tomar told the court it retrieved some 6,000 email messages from Tomar employees. The email messages had not been destroyed, as Tomar had earlier said.

By that time, however, it was too late. The court rejected Tomar’s effort to produce the email at that late stage, noting : “this discovery has all the earmarks of a game of blind man’s bluff.”

The court said an adverse instruction should be given against Tomar at trial, which will make it difficult for Tomar to win.

Several other sanctions were also imposed by the court, including not allowing the Tomar president to appear at any future depositions.

As Tomar learned the hard way, litigation holds impact an entire company.  Any employee with relevant evidence pertaining to the litigation will be under a duty to preserve that evidence, email and all.

Even Non-Parties To Lawsuits May Have To Retrieve And Disclose ESI

Posted by Gregg Mayer on Tuesday, March 11th, 2008   

Companies do not have to be sued in order to be burdened with retrieving and disclosing electronically stored information (“ESI”) for litigation.

Under the Federal Rules of Civil Procedure, Rule 45 provides ESI may be subject to subpoenas from the court. In general, a subpoena is a legal document that commands that a person or information – such as ESI – be made available for litigation.

Parties to litigation may subpoena information from a variety of relevant sources, including from companies that are not actually named in the lawsuit.

This issue arose last fall in the Louisiana case of Auto Club Insurance Company v. Ahner.

In the case, the Ahners, who were involved in a lawsuit involving damage to their home following Hurricane Katrina, issued a subpoena for ESI to Rimkus Consulting Group, Inc.

Rimkus had investigated damage to the Ahners’ home for Auto Club prior to the lawsuit.

Rimkus argued that it only wanted to produce the information as hard copies, not ESI. Next, Rimkus argued that the ESI was not reasonably accessible. The Ahners wanted the information in electronic format.

First, the court rejected Rimkus’ request to produce only hard copies of the information:

The mere fact that information which as a matter of ordinary course of one’s business is electronically stored has been produced in functional equivalent, such as through hard copy, does not in and of itself excuse a party from producing the requested information in electronic form.
…
Moreoever, the paper copies that Rimkus has deliberately retained in its files are highly unlikely to contain all of the respective material that was generated during its investigation…This type of information may well include, for example, working papers, e-mails requesting clarification, rough drafts and similar materials that are neither incorporated in final reports nor, perhaps, deemed worth of retention in hard copy.

Second, the court rejected Rimkus’ argument that the ESI was not “reasonably accessible.” Rimkus had failed to offer any evidence that retrieving the ESI would cause undue burden or costs. A mere statement by the lawyer was not enough.

The court is cognizant that Rimkus is a non-party with no direct stake in this litigation and that non-parties in particular are entitled to protection from undue burden and expense. However [the Federal Rules of Civil Procedure] impose a burden of proof upon Rimkus to show that the requested electronically stored information is unduly burdensome to produce. Rimkus has offered no evidence of any kind sufficient to satisfy this burden.

CIOs, in maintaining archiving for possible e-Discovery, should keep in mind that a company does not actually have to be named in a lawsuit in order to be forced to retrieve and disclose ESI. Non-parties to lawsuits are subpoenaed all the time. Once ESI is subpoenaed, it must be preserved and produced, unless a company is more successful than Rimkus in quashing the subpoena. Effective ESI management requires the ability to retrieve electronic information at any time.

Ignorance Is Not Bliss With e-Discovery

Posted by Gregg Mayer on Tuesday, March 11th, 2008   

In an insurance dispute in Colorado, the attorney for the plaintiff claimed he lacked the technical know-how to properly search a DVD for all of the email messages stored on it, resulting in his failure to disclose several email messages to the defendant. The court, explaining incompetence with a computer is no excuse, ordered the email messages disclosed.

The lawsuit, Garcia v. Berkshire Life Insurance Company of America, involves Tina Garcia’s claim against her disability insurer, who refused to pay her benefits from August 2003 to February 2007. As part of its defense, the insurer sought email messages that Garcia sent from her University of Denver email account.

The university burned all of the email messages onto a DVD and provided it to Garcia and her attorney. In turn, Garcia’s attorney disclosed 10 email strings to the insurer, and then claimed there were only 135 additional email messages that did not have to be disclosed.

As it turned out, there were more than 4,000 email messages on the DVD with more than 1,500 attachments. The insurer complained that Garcia and her attorney were hiding evidence.

In response, Garcia’s attorney said he simply was technologically incompetent and had inadequately searched the DVD for the email messages.

The judge was not convinced Garcia and her attorney did all they could, particularly after the insurer had put them on notice that there were significantly more email messages on the DVD than 135:

Plaintiff’s claim that she acted in good faith with respect to the contents of the DVD goes only so far. Perhaps plaintiff’s counsel can be heard to plead technical ignorance or mistake in his initial dealings with the DVD, but by September 21, 2007, upon the receipt of [opposing counsel’s] letter, he was on notice of the potential problem and was obligated to seek competent professional assistance to ascertain the truth about the contents of the DVD. He did not do so, and apparently still has not done so, in view of his expressed doubt, unsupported by any evidence, that the DVD contains substantial additional material.

Consequently, the court ordered in November 2007 that the email messages be disclosed, despite the added costs and burden to Garcia.

Parties must do all they can to fully disclose relevant evidence required under the Federal Rules of Civil Procedure, including being able to thoroughly search and disclose ESI for litigation

In this instance, the consequences were only the costs of going back to correctly reproduce all of the email. In more extreme cases, courts can enter sanctions for failing to disclose evidence, including precluding use of evidence at trial, or even more damaging sanctions, such as an adverse inference instruction for spoliation.

Throwing Computer In Dumpster Not Way To Handle e-Discovery

Posted by Gregg Mayer on Monday, March 10th, 2008   

A federal district court judge recently affirmed a $99,000 sanction and an adverse inference instruction against an individual and his company for purposely throwing a computer into a dumpster after becoming aware it was needed for litigation.

This odd case demonstrates the wrong way to handle a request for electronically stored information (“ESI”).

In APC Filtration, Inc. v. Becker, APC sued Becker for use of proprietary information and contacts that Becker gained while employed at APC. Becker had gone to work with SourceOne, a competitor of APC’s.

During the litigation, APC requested all communications between Becker and SourceOne, including email communications. Becker responded that he had communicated with SourceOne over email, but he no longer had those communications.

Pressed to explain, Becker at first said his personal computer crashed and any email messages were irretrievably lost. Later, Becker admitted he took the personal computer to a construction site some 20 miles from his home and threw the computer into a dumpster.

Unhappy with this turn of events, the magistrate judge in an October 12, 2007 opinion outlined the timeline of the litigation to explain Becker had proper notice that he should have preserved the computer:

APC’s complaint was filed on March 15, 2007…Becker admits to throwing the computer away sometime after March 21, 2007…In this case, Becker had notice [to preserve the computer] based on the nature of APC’s allegations that the computer could become part of the discovery process.
…
The Court specifically finds, in light of what Becker did (traveling 20 miles to dispose of the computer in a construction site Dumpster) and when he did it (within days of receiving notice of APC’s lawsuit), that Becker acted in bad faith in order to prevent APC from discovering potentially damaging evidence.

Consequently, the magistrate agreed to impose sanctions for spoliation.  First, the magistrate agreed to deem it “conclusively proven” that Becker communicated with SourceOne while Becker was still employed at APC, and that Becker tried to solicit business for SourceOne rather than APC while still employed at APC. Moreover, the magistrate imposed monetary sanctions of $99,462 to pay for APC’s attorney fees and expenses.

Since this opinion came from a magistrate judge, who generally handles preliminary aspects of litigation, including discovery, Becker and SourceOne appealed the monetary sanctions to the federal district court judge.

On Feb. 25, 2008, the federal district judge affirmed the magistrate’s sanctions.

CIOs, In-House Counsel Have Lessons To Learn From Qualcomm As Well

Posted by Gregg Mayer on Monday, March 10th, 2008   

Much of the blogosphere and legal discussions about the recent e-Discovery sanctions against Qualcomm focus on the amount of the sanction - $8.5 million – and the problems with six outside lawyers retained by the company.  Just last week, the district court lifted sanctions against those six outside lawyers to allow them the opportunity to fully defend themselves, although the sanctions against Qualcomm and its in-house team stand. 

In fact, the court in sanctioning Qualcomm made a specific point of noting that Qualcomm had an extensive in-house legal staff but the company simply “lacked the desire” to properly conduct e-Discovery.  The court listed the in-house failures:

Qualcomm employees were integral participants in hiding documents and making false statements to the court and jury. Qualcomm’s in-house lawyers were in the unique position of (a) having unlimited access to all Qualcomm employees, as well as the emails and documents maintained, possessed and used by them, (b) knowing or being able to determine all of the computers and databases that were searched and the search terms that were utilized, and (c) having the ability to review all of the pleadings filed on Qualcomm’s behalf which did (or should have) alerted them to the fact that either the document search was inadequate or they were knowingly not producing tens of thousands of relevant and requested documents.

As part of the sanctions, the Qualcomm in-house counsel have to participate in a court-ordered detailed analysis to identify all of the factors that contributed to the discovery problems, as well as evaluating proposals to ensure those problems do not happen again. The analysis program is known as CREDO (“Case Review and Enforcement of Discovery Obligations”).

As Qualcomm illustrates, in-house lawyers have a distinct responsibility to ensure companies comply with e-Discovery, even if outside counsel have been retained. The Qualcomm court explained that in-house lawyers are in the best position to understand a company’s organizational structure, know the extent of archived email and other ESI, and know the employees whose computers should be searched. In-house lawyers are simply better positioned to understand e-Discovery issues than any other lawyers involved in litigation.

Consequently, in-house lawyers should work with IT staff to understand how a company archives email and other ESI. CIOs should help spearhead this effort. Ignoring the e-Discovery implications of improper ESI disclosures is far more costly than investing in detailed e-Discovery management before a lawsuit ever happens.

Missouri Governor Wants $540,000 To Turn Over Email

Posted by Gregg Mayer on Friday, March 7th, 2008   

Taxpayers in the state of Missouri are learning first-hand how costly and time-consuming disputes involving email can be:

Last September, Blunt’s aides set off a furor when they acknowledged they were routinely destroying e-mails and did not consider them to be public records.

But state law says government e-mails can be public records and that some must be preserved for as long as three years. Blunt has since acknowledged that some e-mails are public records.

After Eckersley’s allegations surfaced, Nixon appointed the independent investigative team last November.

In a letter obtained this week by the Post-Dispatch, Holstein told the investigative team that it must pay $540,940 to obtain e-mail records from the governor’s office.

Holstein wrote that the team’s 45 open-records requests for specified e-mail communications in Blunt’s office will require 14,620 hours of staff time.

Moreover, the governor approved hiring outside attorneys – at a cost up to $370 per hour – to defend in him a lawsuit related to the email mess. Read the full story in The St. Louis Post-Dispatch here.

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