by Unknown
The court found the competitor’s assertion insufficient evidence to show
compliance with the employment agreement. Because the list of 26 keywords
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was developed only by the competitor company and was not comprehensive,
the court was not confident that the forensic analysis had recovered all responsive files. In addition, the forensics experts should have provided a report of all responsive files, their locations, and whether they had been deleted. The court ordered a special master to oversee compliance with the agreement and ordered the competitor to pay all associated costs and attorneys’ fees.
Arista Records, Inc. v. Sakfield Holding Co. , 314 F. Supp 2d. 27. (D.D.C., 2004); general jurisdiction over defendant established by computer
forensic evidence.
The plaintiff record company brought suit against the defendant web-
site for allowing people to download the record company’s music. The defendant claimed that the District Court for the District of Columbia did not have jurisdiction over it. The court stated that there was enough evidence to show specific jurisdiction because the case was based on the declaration of a man who lived in the District of Columbia who said that he had downloaded music files from the defendant’s website.
During jurisdictional discovery, the plaintiff’s computer expert was able to uncover evidence that the defendant had deleted a log that listed all of the people who had downloaded music from its website. From the information
that he was able to recover, the expert determined that 241 of the people who had downloaded music from the defendant’s website were in fact from the
District of Columbia.
The court found these contacts with people in the District of Columbia
to be sufficient to establish the continuous and systematic contacts, which are necessary to establish general jurisdiction over the defendant.
Hollingsworth v. Time Warner, 812 N.E.2d 976 (Ohio App. 1. Dist. 2004); inadvertent disclosure of e-mail waives attorney–client privilege.
The plaintiff filed an employment discrimination suit seeking unem-
ployment benefits, because she felt that she was wrongfully discharged. The plaintiff had been granted intermittent leave from her position under the Family Medical Leave Act (FMLA) because of her chronic sinusitis. While
the plaintiff was on one of these leaves, her supervisor called her physician to ask about the plaintiff’s absences. The plaintiff immediately filed a complaint with the Department of Labor (DOL). A DOL investigator concluded that,
with the exception of the plaintiff’s supervisor contacting the plaintiff’s physician, the defendant appeared to be in full compliance with the FMLA with regard to the plaintiff’s employment.
Following her complaint, the plaintiff’s attorney sent a letter to the defendant expressing his concern over how the plaintiff was being treated after her FMLA-protected absences and her complaint to the DOL. Soon after this,
the defendant found an error that it was able to attribute to the plaintiff and discharged her for it.
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At trial, the court granted the defendant’s motion for summary judg-
ment and the plaintiff appealed. In her appeal, the plaintiff cited two errors on the part of the trial court:
1. The error in granting summary judgment; the plaintiff showed that
there was an issue of material fact as to whether she was discharged
based on discriminatory intent or for poor work performance.
2. The trial court’s granting of a motion for a protective order filed by the defendant. At a hearing before the Unemployment Compensation
Review Commission, the defendants had produced an e-mail from
the plaintiff’s supervisor to the defendant’s attorney. During discov-
ery, the plaintiff asked for production of all documents electronic and
otherwise concerning her discharge, her FMLA-protected absences,
and her DOL complaint.
After receiving only the e-mail that was produced at the unemployment
hearing, the plaintiff made a second request for the production of the documents she had requested. At this point, Time Warner sought a protective
order to get the e-mail message back and to stop the plaintiff from using the message or referring to it.
The trial court granted the defendant’s motion for a protective order. The appellate court reversed, reasoning that attorney–client communications are privileged, but where any of these communications are voluntarily divulged to a third party, they are no longer privileged, and the plaintiff should have access to all other documentation related to the same subject.
Invision Media Communications, Inc. v. Federal Ins. Co., 2004 WL 396037
(S.D.N.Y. 2004); sanctions imposed against party failing to reasonably produce e-mails upon discovery request.
In an action for breach of an insurance contract, the defendant moved
for sanctions against the plaintiff for discovery misconduct. The allegations of misconduct against the plaintiff included making false statements regarding the location and existence of its documents, failing to timely disclose requested documents, and destroying evidence relevant to the pending case.
Among the documents requested by the defendant were “all e-mail com-
munications sent or received by the plaintiffs during August 2001, September 2001, and October 2001.” In response to the request for e-mail communications, the plaintiff contended that the e-mails could not be produced because all e-mails were archived on servers for 2 weeks only. The court found this statement to be false, as demonstrated by the plaintiff’s eventual disclosure of the e-mail.
The court held that “a reasonable inquiry by the plaintiff’s counsel prior to responding to [defendant’s] document request… would have alerted counsel
that the plaintiff possessed e-mail that fell within the scope of [defendant’s]
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document request.” The court imposed sanctions against the plaintiff in the form of costs and attorney’s fees incurred by the defendant in pretrial discovery.
In Re: Lernout & Hauspie Sec. Litigation, 222 F.R.D. 29 (Mass. 2004); party who voluntarily discloses e-mail message cannot claim attorney–client privilege when refusing to turn over other e-mails regarding the same subject.
Investors who held equity in the software firm Lernout & Hauspie
brought a class action suit for securities fraud against the software firm as well as its accounting firm, KPMG. One of the issues in dispute was whether e-mails sent from an audit partner at KPMG to his legal counsel were protected by attorney–client privilege. The accounting firm had received anonymous calls from a sales rep that worked for Lernout & Hauspie, but the sales rep did not identify the firm he worked for to the audit partner. The sales rep asked a partner in the audit department about certain sales procedures that the software firm had been engaging in and whether they were illegal. The partner at the accounting firm told him that the procedures were indeed illegal. The sales rep gave the partner clues as to who his employer was.
In response to the conversations that the partner had with the cli-
ent company’s sales rep, the partner contacted the accounting firm’s legal counsel via e-mail to seek advice. There were 15 e-mails that discussed
the situation. In discovery, one of the e-mails was accidentally released by KPMG to the class plaintiffs. The class plaintiffs requested the rest of the e-mails during discovery, but KPMG claimed that they were protected by
attorney–client privilege.
The court ruled that the accidental disclosure of the first e-mail acted as a waiver of the attorney–client privilege with respect to that e-mail and all others relating to the
same subject.
In Re: Lowe’s Companies, 134 S.W.3d 876 (Tex. App. 2004); order compelling production of database during deposition overbroad.
In a personal injury case, the defendant appealed a court order compel-
ling the production of a database, which was used to compile information
on accidents and injuries that occurred in the defendant’s stores. The order instructed that, during an upcoming deposition, the defendant needed to
bring either (a) the database and application necessary to search, sort, and print data from it, or (b) computer access to the database that would enable searching, sorting, and printing data as requested by the plaintiff’s counsel.
The defendant challenged the order on the ground that it was overbroad
and that complete access to the database would provide plaintiff with privileged and irrelevant information. The defendant also alleged that the manner in which it gathered information concerning accidents in its stores was a trade secret.
The appellate court sided with the defendant, stating that discovery
should be limited to matters that are relevant to the case and that “requests for
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information that are not reasonably tailored as to time, place, or subject matter amount to impermissible ‘fishing expeditions.’” Ruling that the discovery order was overbroad, the appellate court issued a writ of mandamus vacating the portion of the order that required production of the defendant’s database.
Merck Eprova AG v. Gnosis SPA, 2010 U.S. Dist. LEXIS 38867 (S.D.N.Y.
April 20, 2010); court grants plaintiff’s motion for sanctions due to discovery deficiencies.
On the plaintiff’s motion for sanctions due to discovery deficiencies, the Southern District of New York imposed a $25,000 fine on a litigant whose
failure to properly install a litigation hold and conduct appropriate searches for relevant e-mail represented a diligence that fell “well below the minimum standard that a reasonably prudent person would use.”
What began as a false labeling allegation under the Lanham Act became a discovery dispute when defendant Gnosis’ initial production amounted to only 107 pages. Believing relevant documents and e-mail had been withheld, the plaintiff identified several deficiencies and requested further discovery from the defendant. After 2 months and several additional requests, the
defendant had produced an additional 6200 pages but had not disclosed the allegedly missing documents.
During an evidentiary hearing, the defendant admitted that the defen-
dant had not installed a written litigation hold and had not stopped the automatic deletion of all e-mails that were more than 15 days old. The company had performed only a cursory document search and argued that it had failed to produce the requested documents because of its poor understanding of the search tool provided in its e-mail client.
Relying on the analysis in Pension Committee of University of Montreal Pension Plan v. Banc of America Securities, the court found that the defendant’s failure to issue a written litigation hold amounted to gross negligence.
The court noted that the defendant’s first search for relevant e-mail had been insufficient and could have easily been improved to produce the wealth of documents that were later discovered. Additionally, the defendant’s decision to withhold documents it believed to be insufficiently important displayed an unacceptable disrespect for the judicial process.
The court granted the plaintiff’s motion for sanctions by awarding costs
and imposing a $25,000 fine on the defendant to prevent future discovery
misconduct and to install a modicum of respect for the judicial process.
In Re: Merrill Lynch & Co., Inc. Research Reports Sec. Litigation, 2004
WL 305601 (S.D.N.Y 2004); party moves to lift discovery stay to protect deleted data.
The plaintiff motioned the court pursuant to the Securities Exchange
Act of 1934 for an order lifting the automatic stay of discovery during the pendency of a motion to dismiss. The plaintiff’s essential claim was that
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discovery was necessary to preserve and restore e-mails that the defendant had deleted. The court said,
The Private Securities Litigation Reform Act mandates that all discovery…
shall be stayed during the pendency of a motion to dismiss. This provision is balanced by one imposing a contemporaneous duty on parties to preserve all relevant evidence as if they were the subject of a continuing request for production of documents.
However, the court referred to the fact that the “defendants avow that they are aware of their obligations and have taken and are continuing to take all necessary steps to preserve all potentially relevant electronic evidence.” The court concluded that an order lifting the mandatory stay of discovery was not warranted because there was no imminent risk, which established that deleted data would be overwritten and thus rendered irretrievable.
Northern Crossarm v. Chemical Specialties, Inc. , 2004 WL 635606 (W.D.
Wis. 2004); party must specify the format for production of e-documents.
During discovery proceedings, the plaintiff requested copies of the
defendant’s e-mails. The defendant produced copies of the e-mails that the plaintiff had requested, but did so in hard copy. When the plaintiff received the hard copies of the e-mails, which totaled 65,000 pages, the plaintiff then stated that it wanted the e-mails in electronic format. The defendant claimed that electronic reproduction would be too time consuming and expensive.
When the plaintiff originally requested the material under rule 34(a) of the F.R.D, it did not specify what format it wanted the documents in.
The court held that the defendant was compel ed only to provide the docu-
ments in the form that the defendant used them in during the normal course of business. A mimicking of this form, such as paper copies of electronic communications, would also be acceptable. But if the plaintiff had requested the documents in a specific format, then the defendants would have had to either comply with the request, compromise with the plaintiff, or seek shelter from the court.
In this case, since the plaintiff did not initially seek a specific format for the production of the documents, the court did not require the defendants to reproduce the information electronically.
People v. Dominguez, 2004 WL 1068809 (Cal. Ct. App. 2004); no distinction between computer files found on inactive or active memory.
In a criminal case, the defendant appealed his conviction involving the
possession of child pornography. Among the defendant’s arguments was
the contention that the evidence supporting his conviction was insufficient because it was discovered on the inactive memory of his computer and was
only retrieved by the use of special programs that the defendant did not possess.
The court found the fact that the files were on the inactive memory of the computer to be of no consequence. During trial, the jury was instructed that
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there are two types of possession: (1) actual (the person has possession of an object if he knowingly exercised direct physical control over that object) or (2) constructive (a person has possession if he knowingly exercised control over an object or has the right to control that object). The court reasoned that the evidence found on the inactive memory was “the result of searches conducted by appellant that resulted in child pornography being intentionally and knowingly downloaded to the active memory of his computer.”
The court held that the defendant “was in actual possession of those images at the time they first appeared on his machine” and that the evidence was sufficient to support his conviction on the child pornography–related charges.
Baptiste v. Cushman & Wakefield,
Inc. , 2004 WL 330235 (S.D.N.Y. 2004); attorney–client privilege of e-mail containing legal advice.
In an employment discrimination lawsuit, the court addressed the issue
of whether the contents of an e-mail were protected by attorney–client privilege. The plaintiff contended (1) that the e-mail was not protected by the attorney–client privilege because it was not labeled as being privileged and (2) that the e-mail was not privileged because it did not refer to legal advice.
The court said, “the attorney–client privilege affords confidentiality to communications among clients and their attorneys, for the purpose of seeking and rendering an opinion on law or legal services, or assistance in some legal proceeding, so long as the communications were intended to be, and were in fact, kept confidential.” The court held that the e-mail sent to an employee of the defendant was clearly conveying information and advice. The advice referred to what the defendant’s outside counsel anticipated would occur and how the defendant should conduct itself during pending legal matters. The court ordered that the original e-mail be returned to the defendant and that the plaintiff receive a redacted version not containing privileged information.
Comrie v. Ipsco, Inc. , 2009 WL 4403364 (N.D. Ill. 2009); defendant’s failure to support assertion waives attorney–client privilege.
On the plaintiff’s motion to compel production of ESI, the Northern
District ruled that the defendant’s failure to support its assertion that an e-mail was inadvertently produced waived the attorney–client privilege.
During the discovery phase of a suit under the Employee Retirement
Income Security Act (ERISA), the defendant produced more than 5500 documents, including a relevant e-mail sent from its general counsel to its outside counsel. The plaintiff’s counsel read the e-mail and questioned the general counsel about its meaning during a deposition. The defense claimed the
e-mail was protected by the attorney–client privilege and should be returned pursuant to the parties’ protective order. The plaintiff complied but filed a motion to compel, arguing that (1) the e-mail did not fall under the privilege; (2) even if the e-mail were privileged, the privilege had been waived; and (3) the e-mail fell within the fiduciary exception to the privilege.