Failing to take prompt reasonable steps once notified of an inadvertent production results in privilege waiver – you’ve now entered the Twilight Zone

United States v. Sensient Colors, Inc., 2009 WL 2905474 (D.N.J. Sept. 9, 2009)

“You’re traveling through another dimension, a dimension not only of sight and sound, but of mind; a journey into a wondrous land whose boundaries are that of imagination – Next stop, the Twilight Zone.”

Any lawyer who inadvertently produces privileged information steps into a legal twilight zone. However, that legal twilight zone is not a “wondrous land,” but one filled with sleepless nights and many questions. How did it happen? When and how do I tell the client? How do I get the materials back? Will I lose the client, my job, my career? With ediscovery, the risk that privileged or confidential information will be inadvertently produced geometrically increases. While the use of clawback or nonwaiver agreements and FRE 502(b) lessen that risk, they do not eliminate it. Sensient Colors establishes that point.

Sensient Colors involved the electronic production of 45,000 documents totaling 135,000 pages or 450 boxes of records by the United States (“government”). Several months after that production was completed, the defendant initially returned a group of documents that were privileged. Over the ensuing months, the defendant continued to identify additional documents that the government had produced but were privileged. Ultimately, the defendant sought a ruling that the government had waived its right to assert privilege over the documents it had produced.

The court in Sensient Colors concluded the privileged documents were inadvertently produced by the government and that the requirements of FRE 502(b) were met as to the first group of documents the defendant returned. However, as to the subsequently identified privileged documents, the court ruled that the government waived its right to assert privilege under Rule 502(b) as to those documents because it had failed to promptly take reasonable steps to rectify its error after being notified of the initial inadvertent production.

The explanatory note to FRE 502 provides: “The Rule does not require the producing party to engage in a post-production review to determine whether any protected communication or information has been produced by mistake.” However, the court in Sensient Colors concluded that once a party has been put on notice that privileged information has been inadvertently produced, Rule 502(b)(3) requires the producing party take “prompt and reasonable steps to reassess its document production.” The court in Sensient Colors concluded the government failed to act reasonably and diligently to correct its error and waived its privilege and work-product protection as a result.

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State court ediscovery rules scorecard

Anyone old enough to remember when Jack Brickhouse and Lou Bodreau were WGN’s broadcasters for the lovable losers on the north side of Chicago, will have fond memories of the venerable public address announcer who graced the “friendly confines” known as Wrigley Field. At the beginning of each game Pat Pieper would begin with his signature announcement: “Attention, Attention, please! Have your pencils and scorecards ready and I will give you the correct lineups for today’s game.”

As of September 2009, there are 24 states which have enacted their own electronic discovery rules. Staying on top of this movement is important for attorneys with multi-jurisdictional practices and for general counsel whose companies operate in multiple states or ship their products through out the country, and as a result, are sued in various jurisdictions. Texas adopted its ediscovery rules (Tex. R. Civ. P. 196.4) before the federal rules were enacted and has not attempted to amend its rules to mirror the federal rules. Several of the states listed below (Idaho and Mississippi) follow the Texas approach. While other states have attempted to base at least some of their ediscovery rules on the corresponding federal provisions, in some instances there are obvious gaps and differences between the analogous state and federal rules, and in others, the variations are subtle, yet significant. So there is no substitute for reviewing the actual rules themselves.

Thus, with a tip of the hat to Tom Allman who originally began tracking those states that adopted their own set of ediscovery rules, and with a bow to Pat Pieper, get your pencils and scorecards ready for a list of those states that have enacted ediscovery rules which are linked below to their respective state rules:

• Alaska
• Arizona
• California
• Idaho
• Indiana
• Iowa
• Kansas
• Louisiana
• Maine
• Maryland
• Michigan
• Minnesota
• Mississippi
• Montana
• Nebraska
• New Hampshire
• New Jersey
• North Dakota
• Ohio
• Tennessee
• Texas
• Utah
• Virginia
• Wyoming

Pat Pieper served as the public address or field announcer at Wrigley Field for 59 years – he worked longer in that capacity than the ediscovery rules listed above likely will. Some fun facts about Pat on his Wikipedia page are that from 1916 to 1932, he used a megaphone to make his field announcements, and he never missed a game at Wrigley Field after 1924 until he retired in 1974. He likely should be listed in Ripley’s Believe It or Not for watching the most baseball games ever lost. Had he only gone to the South Side and worked for the White Sox, at least he could have watched some winning baseball including the 1959 Champs known as the Go Go Sox. Yes, I admit it, I am a White Sox fan, and I am waiting for the most interesting manager in baseball, Ozzie Guillen to pop back up on Twitter. Or was he also Twitterjacked?

Scorecard photo courtesy of Flickr user Caitlinator under this Creative Commons license.

Blackberries ‘N SYNC’d with company servers did not prevent the imposition of sanctions for failing to preserve ESI on the Blackberries

Southeastern Mechanical Servs., Inc. v. Brody, 2009 WL 2883057 (M.D.Fla. Aug 31, 2009)

Blackberries, iPhones and similar devices used by a company’s employees contain electronically stored information (“ESI”), that must be preserved when a litigation hold is imposed. Many companies today have hundreds, if not thousands, of employees who use PDAs for company business, complicating the litigation hold process.

If you are a general counsel who believes the use of PDAs shouldn’t pose much of a litigation concern because they are synchronized to your company’s email servers so that any emails sent or received by your employees from those devices reside on your company’s servers, think again, and then read Brody. The fact that employee Blackberries were synced to the company’s email server did not preclude sanctions from being entered. Brody appears to be the first reported ediscovery decision where sanctions were imposed for failing to preserve data on individual Blackberries. Electronic information on individual PDAs must be preserved with no strings attached.

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The failure to timely issue a litigation hold did not itself create a question of material fact warranting the denial of summary judgment

Kotakis v. Wesco Distrib., Inc., 2009 WL 1850827 (W.D.Pa. June 26, 2009)

In Kotakis, plaintiff filed a Title VII claim asserting she was subjected to discrimination and retaliation because of her gender. The defendant moved for summary judgment, and plaintiff argued that a genuine issue of material fact was triggered because the defendant failed to take steps to preserve its electronically stored information (“ESI”) until nearly eleven (11) months after receiving notice of the litigation.

The district court quickly disposed of plaintiff’s argument. It observed that following Lujan v. National Wildlife Fed’n., 497 U.S. 871, 888 (1990), the party opposing summary judgment must proffer specific evidence found in the record which demonstrates the existence of a genuine factual dispute on a material issue which requires resolution by a jury. The district court in Kotakis held no question of material fact was presented by the plaintiff, and entered summary judgment in defendant’s favor.

In a footnote, the district court acknowledged plaintiff’s argument that the defendant failed to timely issue a litigation hold, but noted a recent decision, Phillips v. Potter, 2009 WL 1362049, *4-6 (W.D.Pa. May 14, 2009), which ruled that sanctions were inappropriate even though the defendant failed to timely issue a litigation hold when “there was no evidence that relevant documents were destroyed.” The district court in Kotakis found the logic of Potter persuasive, and applied its rationale in rejecting plaintiff’s summary judgment argument. Kotakis, 2009 WL 185027 at *4, n.2.

Thus, when a party opposing summary judgment fails to establish that potentially relevant ESI was lost due to a failure to timely institute a litigation hold, the mere fact that the moving party failed to timely take the necessary procedures to preserve ESI does not, in and of itself, provide a basis to deny the entry of summary judgment.

An “old school” approach to requests for forensic imaging of computers

In Re Weekley Homes, L.P., 2009 WL 2666774 (Tex. Aug. 28, 2009)
Covad Communications Co. v. Revonet, Inc., 258 F.R.D. 5 (D.D.C., 2009)

Given the seemingly ever-growing complexity of computer systems, an “old-school” approach may be helpful when addressing the issues presented by a request to have a forensic image made of your client’s computers. By “old school,” we are not referring to the 2003 movie by the same name about a start-up college fraternity starring Vince Vaughn, Will Ferrell and Luke Wilson, although renting that comedy might be good for your mental health after dealing with a request for forensic imaging. Urban Dictionary defines the term “old school” as anything that refers to a previous generation of a subject, idea or object, and that is how we propose the issues presented by a request for forensic imaging should be addressed.

How would a court respond to a request by opposing counsel to allow entry onto your client’s offices in order to rummage through the client’s file cabinets, simply because he did not believe your client produced all potentially relevant documents sought by his discovery requests? Most courts would deny such a request absent proof of deliberate withholding of information by the client or extenuating circumstances.

A request for forensic imaging of your client’s computers is essentially no different than a request to rummage through your client’s file cabinets made two decades ago. While today’s computers and servers can obviously do more than merely store ESI, they are the digital era’s filing cabinets of today. Further complicating the matter is that unlike two decades ago when confidential or proprietary information would be separately stored in a secure location by a client, today privileged or confidential information frequently resides side-by-side with Aunt Sophie’s apple pie recipe on a computer’s hard drive. So forget about sectors, clusters, slack space and how a computer’s hard drive may be partitioned for the moment, and consider going “old school” when your opponent makes such a request.

This post will address two recent decisions covering these issues. After analyzing applicable federal case law, the Texas Supreme Court in Weekley concluded that a trial court abused its discretion when it ordered four of the defendant’s employees to turn their computer hard drives over to forensic experts for imaging, copying and searching for deleted emails. In Covad Communications, Judge John Fasciola of the District of Columbia District Court granted a request to have forensic images made of several of the defendant’s databases and email servers. Judge Fasciola is regarded for his thought provoking ediscovery decisions. Both Weekly and Covad arguably take an old school approach to the forensic imaging issues presented, and provide insight into those factors that should be addressed whenever a request for forensic imaging is made, and the ways to limit the intrusiveness of such a search when it is allowed by the court.

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