Court Orders Monetary Fine for Gross Negligence and Intentional Spoliation of ESI, Including Emails, Text-Messages, and Skype Messages : Electronic Discovery Law
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Passlogix, Inc. v. 2FA Tech., LLC, 2010 WL 1702216 (S.D.N.Y. Apr. 27, 2010)
Upon finding that defendants spoliated relevant information, including emails, Skype messages, and computer logs, the court declined to order an adverse inference, to preclude defendants from the presentation of arguments implicating the discarded documents, or to order defendants to pay plaintiff’s costs, but ordered monetary sanctions in the amount of $10,000, after balancing “2FA’s litigation conduct with its status as a small corporation.”
In this opinion, the court addressed plaintiff’s allegations that defendants, specifically defendant Gregory Salyards, committed fraud on the court by creating and sending an anonymous email “in an effort to expand discovery, cause Passlogix competitive harm, and garner a favorable settlement.” Defending against the accusation, Salyards proffered the affirmative defense of IP spoofing, “stating that a Passlogix employee may have ‘spoofed’ his IP address in an effort to impersonate him on the internet.” Passlogix also sought spoliation sanctions arguing that defendants failed to implement a legal hold and took part in intentional spoliation of data, including emails and text messages.
Although beyond the scope of this summary, the court’s lengthy discussion of the anonymous email(s) and Salyards’ defense of “IP spoofing” is fascinating and showcases how ever-advancing technology has created scenarios for consideration that, not long ago, seemed more the stuff of spy novels than of litigation in our federal courts.
Reviewing employees’ email | Lexology
Quirky Question # 144:
I’m confused. I thought we could review our employee’s email communications when sent out on our company’s equipment. Our electronic communications policy states clearly that we reserve the right to do so.
I also thought we could review even privileged communications between our soon-to-be ex-employee and his attorney, if these communications were sent on our email system. I’m now being advised that we cannot do so. Can you offer any guidance?
My Analysis:
Your question illustrates the ongoing legal evolution in areas where advancing technology intersects employment law or affects other facets of legal analyses – here, the attorney-client privilege. Like technology itself, the law is developing and changing quickly in areas affected by technological advancements.
With respect to the issue of whether a company may review email communications of its employees, including even email communications between your employee and his/her outside counsel, I have written on this subject twice before. Happily, I am pleased to report that the advice I gave two years ago has been validated and reinforced by a recent decision from the Supreme Court of New Jersey.
The “confusion” you may be experiencing regarding this issue likely reflects the fact that this continues to be an area of the law where courts are providing mixed messages to litigants and their lawyers alike. Unsurprisingly, not all judicial decisions have adopted a uniform approach to the question of whether email communications to counsel, when sent on a company’s communications systems or computers, are protected by the attorney-client privilege.
One case that has received considerable recent attention and commentary is Stengart v. Loving Care Agency, Inc., et al., decided by the Supreme Court of New Jersey on March 30, 2010. Stengart is a thoughtful opinion and highlights many of the issues that you should consider in evaluating your unique fact pattern.
via Lexology – Reviewing employees’ email.
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Will Data Protection Laws Ever Catch Up To New Technology? : Connecticut Business Litigation Blog
That was the question posed in an email newsletter I received today from the International Association of Privacy Professionals. I am a member of this group out of personal interest and to to stay on top of issues related to privacy laws and technology. One of the benefits of belonging to this group is that I get email newsletters with summaries of new laws, regulations, and lawsuits dealing with privacy issues from all over the world.
Today’s email posed the question in the title of this post and featured an article from the New York Times by Natasha Singer called ”Shoppers Have No Secrets.” The article details the technology of “behavioral tracking” by retail and advertising businesses and how the Federal Trade Commission (FTC) is playing catch up when it comes to regulating this technology.
Online behavioral tracking has been a hot button issue for both businesses and privacy rights groups for a few years. Natasha’s article lists several types of new tracking to include:
Cameras that can follow you from the minute you enter a store to the moment you hit the checkout counter, recording every T-shirt you touch, every mannequin you ogle, every time you blow your nose or stop to tie your shoelaces.
Web coupons embedded with bar codes that can identify, and alert retailers to, the search terms you used to find them.
Mobile marketers that can find you near a store clothing rack, and send ads to your cellphone based on your past preferences and behavior.
The article is a very good summary of the issue and has links to advocacy groups on both sides of the debate. The article also highlights the differences between European and US based privacy laws. In general, the EU is far more advanced and stringent when it comes to personal data protection.
In the US, the FTC publishes guidelines and takes enforcement action under its authority to regulate unfair trade. There are also the states’ Attorney Generals and class action and individual lawsuits. Nevertheless, to answer the question I posed in this post, it is clearly a “NO” in the US. Data protection laws will not catch up to new technology. At least, not anytime soon.
via Will Data Protection Laws Ever Catch Up To New Technology? : Connecticut Business Litigation Blog.
Apple iPhone Apps for Lawyers | Virtual Data Rooms – Online Document Management & Collaboration | Firmex
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A few really interesting iPhone apps were recently released that could prove very useful to lawyers, each incorporating speech to text dictation into their platforms in various ways.
The first, and my personal favorite, is Siri. Siri is a free iPhone app designed to be your personal assistant. The app provides a wide range of information, from the local weather, nearby restaurants, movie listings and times, to details about local events. You can even check a flight’s status or book a taxi. Simply speak into your iPhone or use Siri’s intuitive interface to type in your requests.
In addition to providing the specific information, such as an address or the start time of a movie, Siri provides an assortment of ratings and reviews from a number of websites, thus making it easier for you to choose a restaurant or movie. And for attorneys who tweet–Siri just added a new feature that allows you to send a status update to Twitter by dictating it into your phone.
If you’re in the market for a basic speech to text dictation tool that works quite well, the free Dragon Dictation app is for you. Simply speak into the phone and your words are instantly transcribed. The text is fully editable with the additional functionality of “copying” to a clipboard, text message or into an email.
Finally, Vlingo is another voice command app worthy of note. Using the free version of Vlingo, you can tell the app to search Google maps, update your Facebook or Twitter statuses, search the Web, or initiate a phone call to one of your contacts.
Using the paid versions of Vlingo you can dictate an email or text message. However, Vlingo goes one step further than the Dragon Dictation app and allows you to dictate not only the content of the message, but also the name of the contact, and if it’s an email, the subject of the email. The SMS and email features cost $6.99 apiece or you can purchase both for $9.99.
All 3 of these apps are must-haves for busy attorneys. Each has the potential to transform your iPhone into an information gathering and transmitting voice command center. Imagine the possibilities!
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Toyota exec warned on defect: We need to come clean | Reuters
A senior Toyota Motor Corp (7203.T) executive in the United States warned in a January email that the automaker needed to “come clean” on a safety defect that caused accelerator pedals to become stuck open.
The January 16 email from Irv Miller, then Toyota’s top U.S. spokesman, was sent five days before the automaker launched a recall for about 2.3 million vehicle to fix the sticky accelerator pedals.
“We are not protecting our customers by keeping this quiet,” Miller said in his email. “The time to hide on this one is over. We need to come clean.”
A copy of the document was obtained by Reuters on Thursday. Its release comes as Toyota considers whether to appeal a proposed $16.4 million safety fine by U.S. safety regulators.
The email exchange between Miller and a Japanese colleague arguing against responding to media reports of mechanical failures highlights the gap in the level of urgency at the U.S. arm and headquarters — a problem that Toyota later acknowledged contributed to delays in its responses.
The email from Miller, who was about to retire a month later, was one of thousands of pages of internal correspondence collected by U.S. government officials investigating Toyota.
The U.S. Department of Transportation proposed the fine against Toyota — the largest allowed by law — and said that the automaker had knowingly delayed the recall for defective accelerator pedals.
Toyota has two weeks to decide whether to appeal that penalty for the first official finding that the world’s largest automaker violated U.S. safety regulations.
Toyota spokesman Mike Michels said on Thursday that the automaker had not determined its response yet.
The automaker said it would not comment on Miller’s email.
“We have publicly acknowledged on several occasions that the company did a poor job of communicating during the period preceding our recent recalls,” Toyota said in a statement.
via Toyota exec warned on defect: We need to come clean | Reuters.
Facebook Flub Leaks Private E-mail Addresses – PCWorld
Private e-mail addresses that many Facebook users wanted to keep hidden were revealed publicly last night on a multitude of Facebook profiles, Gawker reports. The glitch lasted about 30 minutes before Facebook sealed the gap.
An anonymous tipster altered Gawker of the breach in an expletive-riddled message: “6:46PM: I cannot [bleeping] believe it. Everybody's email has been turned on to the public for at least the past 30 min. I tried going into my account to remove my email b/c I have an issue with a crazed stalker. But I wasn't able to. God I [bleeping] hate FB!! When will they ever learn?!”
It might be that Facebook’s recently proposed changes to its privacy settings could be to blame for the hiccup. PC World writer Paul Suarez reported that “One of those changes [to Facebook's Privacy Policy and Statement of Rights and Responsibilities] would make it possible for Facebook to send your name, photo, friend list, and any public information about you and your friends to preapproved third-party Web sites.” A slight tweak to broadcasting profile information could have resulted in this embarrassing flub.
eZOOM – a focus on Microsoft Outlook PST files
Email has become the focal point of most electronic discovery and disclosure projects as it has become the primary method of communication in the business world. Additionally, it has been estimated that Microsoft’s Exchange Server has 70% of the commercial email market.
The OST and PST files created by Exchange Server – and the Microsoft Outlook desktop software typically used to access them – can present challenges with the analysis of email data. One PST file will often contain thousands of emails and attachments along with vital metadata such as sender, recipient, date/time sent and subject. Typically, industry practice has been to process PST files through an e-discovery processing tool and load the resulting files and metadata data on to a hosted review platform for analysis. This process can be cumbersome not only in cost, but in time as well.
- PST indexing, analysis & reporting
- PST content analysis
- Email traffic reporting
- Sender/recipient analysis
- PST to file (MHT, MSG, EML), spreadsheet and database (Access, SQL Server, mySQL) conversion
- PST email filtering
- Custodian network analysis, reporting and visualization
- Email categorization and grouping
- Full text, metadata and attachment extraction
- Onsite review and tagging
Further information on eZOOM℠ Data Analytics is available at
The New Exchange 2010 Dumpster
In my previous blog I exposed the naked truth about Exchange deleted items and how easy it is to destroy potential email records.
Microsoft must have listened because the new version Exchange 2010 includes substantial improvements to the “dumpster” and deleted item behavior and closed the potential “leak” for eDiscovery.
The new Exchange 2010 dumpster is a complete new design. Here is a link if you want the complete story.
http://msexchangeteam.com/archive/2009/09/25/452632.aspx
The new Exchange 2010 dumpster features that are key for legal discovery are:
- The new dumpster now includes all deleted items from the mailbox including email, calendars, contacts, and more. The old dumpster only included email.
- The new dumpster is indexed so it can be searched using the new multi-mailbox search tool in Exchange 2010. The old dumpster was not indexed and could not be searched.
- The new dumpster has been extended with new Purges and Versions folders. Users can no longer bypass the dumpster behavior with a manual purge.
The Purges folder keeps items that users purge from the dumpster and keeps them for the length of the dumpster retention period.
The Versions folders keeps a copy-on-write snapshot of email that users modify.
The new Exchange 2010 dumpster still operates with a retention period (14 day default) or custom. The new dumpster features are a welcome addition to Exchange.
By capturing all deleted items and by preventing users from purging email, it closes all of the major “leaks” for email discovery and compliance.
via The New Exchange 2010 Dumpster | Email Archiving & Storage Management Experts.
Communications with Attorney Using Company Computer and Email Account Not Protected by Attorney-Client Privilege : Electronic Discovery Law
Alamar Ranch, LLC v. City of Boise, 2009 WL 3669741 (D. Idaho Nov. 2, 2009)
In this case arising from a land use and permitting dispute, the court ruled that emails sent by a non-party to her attorney using her work computer and work-assigned email address were not protected by the attorney-client privilege. In so holding, the court relied in large part upon the existence of company policy which put the employee on notice that her emails were subject to monitoring and were not confidential. Emails sent by the attorney to the employee’s work account were likewise unprotected where the attorney was on notice of the employee’s use of company email and should have recognized the risk that such emails were unprotected. As for emails sent to the attorney by other clients and copied to the employee, the court reasoned that such emails retained their privileged status where the senders non-employees of the relevant company were not on notice of the potential exposure of their emails to outside scrutiny.
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