E-Discovery Law Alert : New York & New Jersey Attorneys for Electronic Discovery and Corporate Information Management Law

The United States Courts’ Advisory Committee on Civil Rules (“the Committee”) has proposed various amendments to the Federal Rules of Civil Procedure that, if adopted, will profoundly affect the range and scope of sanctions a court may impose for failures to preserve electronically stored information (“ESI”). F.R.C.P. 37(e), which currently addresses sanctions in those instances, is one of several rules slated for amendment.

The current rule prohibits a court from imposing sanctions on a party that fails to provide ESI that was lost as a result of the “routine, good-faith operation of an electronic information system” absent exceptional circumstances. The federal courts have applied the rule differently with prevailing culpability standards currently ranging from negligence to willfulness or bad faith (this blog has commented on such disparate cases including New York, New Jersey, and Arizona.) The Committee seeks to address these discrepancies by adopting a single standard.

The proposed rule states that sanctions may be ordered in two limited instances -- when the failure to preserve: 1) “was willful or in bad faith and caused substantial prejudice in the litigation” or 2) “irreparably deprived a party of any meaningful opportunity to present a claim or defense.” Thus, the proposed rule rejects case law precedent in some jurisdictions that mere negligence constitutes a sufficient culpability to support sanctions. The proposed rule adds an adverse-inference charge to the jury to the list of sanctions already available -- like issue preclusion and outright dismissal -- under referenced F.R.C.P. 37(b)(2)(A).

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The International Organization for Standardization (“ISO”) is forming a new e-discovery committee tasked with the development of standards for e-discovery processes and procedures. The international standard “would provide guidance on measures, spanning from initial creation of [electronically stored information] through its final disposition which an organization can undertake to mitigate risk and expense should electronic discovery become an issue” according to a draft committee charter.

ISO is the world’s largest developer of voluntary international standards comprised of a network of standards bodies in more than 160 countries. Since its inception over 60 years ago, ISO has created more than 19,500 international standards for nearly every aspect of technology and businesses.

The proposed standard would cite ISO 9001, a part of the ISO 9000 family of standards that sets forth an internationally accepted consensus on good quality management practices. ISO 9001 defines minimum requirements for a company’s Quality Management System and is used by more than 1 million businesses in over 180 countries.

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An Arizona federal court has determined that default judgment, an adverse instruction and monetary damages are proper remedies for in-house counsel’s failure to take the proper steps to preserve potentially relevant evidence after receiving notice of potential litigation. In Day v. LSI Corporation, Docket No. CIV-11-186-TUC-CKJ, the United States District Court for the District of Arizona granted, in part, the plaintiff-employee’s motion for entry of a default judgment and imposed additional sanctions against the defendant-employer, concluding that the employer’s in-house attorney had a “culpable mind” and acted willfully in failing to carry out the company’s preservation obligations.

During his October 2010 exit interview, the employee complained about alleged discrimination. Three months later, in January 2011, the company received a letter from an attorney representing the employee setting forth various contractual and other claims. In-house counsel was aware of both the exit interview complaint and the attorney letter and, in January 2011, issued a written document retention notice. The notice was not sent to a critical witness with relevant knowledge of some of the claims, though the company maintained that the witness was not identified in the attorney letter and that it was not aware that the witness had potentially relevant knowledge until receiving the employee’s initial disclosures seven months later. By then, the witness was no longer with the company and his emails had been purged from the company’s server.

The Court’s decision contains a lengthy discussion of the parties’ spoliation-specific discovery dispute, which included the depositions of the in-house attorney and members of the company’s IT department. There are some important lessons to be learned from the missteps in this case:

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We previously reported on the First Appellate Department’s refusal to stay Judge Sciarrino’s order that Twitter turnover criminal defendant, Malcolm Harris’s tweets, which will allegedly contradict his defense in a criminal action. Facing the threat of a contempt order, Twitter produced to Judge Sciarrino the tweets in question on September 14. However, Harris previously brought an Article 78 proceeding against Judge Sciarrino (In the Matter of Harris v. Sciarrino, Index No. 103569/12) and filed a motion seeking a stay of Judge Sciarrino’s order that the tweets be produced to Judge Sciarrino for in camera review before production to the District Attorney. On September 27, 2012, Judge Huff denied Harris’s motion to stay enforcement of Judge Sciarrino’s order pending the resolution of the Article 78 proceeding. Although Harris argued pursuant to CPLR 7803 that Judge Sciarrino had acted outside of his jurisdiction, the District Attorney successfully countered that criminal defendants may not “interrupt their prosecutions to launch what is in essence a pre-conviction collateral attack using Article 78 as a vehicle.” Stay tuned for further updates….

Paul A. Saso is a Director in the Gibbons Business & Commercial Litigation Department and a member of the Gibbons E-Discovery Task Force.

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That didn’t take long. A panel of the Appellate Division, First Department in People of the State of New York v. Harris, Index No. 080152/2011 has denied Twitter’s motion for a stay of enforcement of the Trial Court’s order requiring the production of Mr. Harris’s tweets. On Tuesday September 11, the Trial Court warned Twitter during a hearing on the District Attorney’s motion to hold Twitter in contempt that Twitter must produce the information in question by Friday September 14 or face a finding of contempt. Manhattan Criminal Court Judge Sciarrino further warned that he would review Twitter’s most recent quarterly financial statements in determining the appropriate financial penalty if Twitter does not obey the order. Denial of the stay and the Trial Court’s expected insistence on compliance puts Twitter in a difficult position as production of the tweets will effectively moot their appeal of Judge Sciarrino’s order. Twitter’s next move should be interesting. We will continue to keep you apprised.

Paul A. Saso is Director in the Gibbons Business & Litigation Department and a member of the Gibbons E-Discovery Task Force.

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We previously reported on the New York District Attorney’s attempts to obtain tweets by a criminal defendant in People of the State of New York v. Harris, Index No. 080152/2011 and the corresponding challenges asserted by the individual user/defendant and Twitter itself (here and here). Defendant is accused of disorderly conduct for allegedly having blocked traffic during an Occupy Wall Street protest. The District Attorney has sought defendant’s simultaneous tweets that allegedly will undermine his defense that he was forced onto the street by police officers. The trial court first denied defendant’s motion to quash the subpoena served on the social networking site Twitter and then denied Twitter’s own motion to quash.

Twitter has filed an appeal of the trial court’s decision with the Appellate Division, First Department, arguing that Twitter users have standing to quash subpoenas pursuant to Twitter’s terms of service and because defendant’s constitutional rights are implicated by a government-issued subpoena to a third party. The District Attorney has brought an order to show cause as to why Twitter should not be held in contempt for failure to produce the tweets. In response, Twitter has sought a stay of enforcement from the First Department of the trial court’s order pending the appeal. The District Attorney opposes the motion to stay enforcement, citing Harris’s impending trial date. Stay tuned….

Paul A. Saso is a Director on the Gibbons E-Discovery Task Force.

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We previously reported on the New York District Attorney’s attempts to obtain tweets by a criminal defendant in People of the State of New York v. Harris, Index No. 080152/2011 on May 23, 2012 and the corresponding challenges asserted by the individual user/defendant and Twitter itself on June 7, 2012. The Court first denied defendant’s motion to quash the subpoena served on the social networking site Twitter, ruling that the defendant, charged with disorderly conduct after allegedly marching onto the Brooklyn Bridge during an Occupy Wall Street protest, had no reasonable expectation of privacy in communications of this type and lacked standing to seek the protections of the Stored Communications Act. Seeing its user fail in his efforts to quash the subpoena, Twitter took the matter into its own hands, moving for the same relief as defendant and ultimately obtaining the same result. The more recent decision, which addressed Twitter’s challenges, raised considerable buzz in legal and social media circles as a case of first impression because it concerned (1) a criminal rather than a civil matter and (2) a motion by a social media site rather than an individual user.

Based upon Twitter’s challenges, which were enumerated in the June 7, 2012 post, the Court found as follows:

• First, the Court disagreed with Twitter’s claim that, if its users lacked standing to challenge subpoenas (as the Court ruled in the prior decision), Twitter would be unfairly burdened by the choice to “either provide user communications and account information in response to all subpoenas or vindicate its users’ rights by moving to quash these subpoenas itself.” The Court held that the subpoena for defendant’s user information did not constitute an undue burden because it would not take significant effort for Twitter to search for and provide the data at issue. In reaching its decision, the Court added that the burden Twitter alleged “is placed on every third-party respondent to a subpoena and cannot be used to create standing” where none exists.
• Second, the Court held that the subpoena did not violate the Fourth Amendment, which requires either (1) a physical intrusion onto defendant’s personal property or (2) a violation of a defendant’s reasonable expectation of privacy. The Court stated that “in this case there was no physical intrusion” and indicated that, just like “screaming out a window” to the street below, Tweeters are afforded no reasonable expectation of privacy because of the author or speaker’s “intention [to] broadcast to the world.” The Court explained that “today, the street is an online, information superhighway, and the witnesses can be third party providers like Twitter, Facebook, Instagram, Pinterest, or the next hot social media application.”
• Third, the Court noted that pursuant to the Stored Communications Act (18 U.S.C. § 2703(d)) (“SCA”)  “[a] court order for disclosure under subsection (b) or (c) . . . may issue only if the government entity offers specific and articulable facts showing that there are reasonable grounds to believe that the contents of a wire or electronic communication, or the records or other information sought, are relevant and material to an ongoing criminal investigation.” (Emphasis added). In this case, the People anticipated that defendant will raise “a defense allegedly contradicted by his publicly posted tweets around the time of the incident.” Consequently, the Court concluded that the information sought by the subpoena was clearly both relevant and material to the ongoing criminal investigation and thus did not violate the SCA.
• Lastly, in the Court’s opinion, the scope of the District Attorney’s subpoena was sufficiently circumscribed and in accord with New York State law.

In denying Twitter’s motion to quash the subpoena, the Court ordered the social media site to produce “subscriber information, logs maintained by the network server, etc. and the September 15, 2011 to December 30, 2011 tweets covered by the court order,” and added that other tweets were accessible only through a search warrant. This victory for the District Attorney will aid in the prosecution of offenders who use social media services to comment on their alleged criminal acts. The decision, however, also reflects that as “the laws, rules and societal norms evolve and change with each new advance in technology, so too will the decisions of our courts.”

Paul A. Saso is a Director on the Gibbons E-Discovery Task Force.

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A few weeks ago, we reported on the recent decision of the People of the State of New York v. Harris, Index No. 080152/2011, (Crim. Ct. Apr. 20, 2012). There, the Court denied defendant Malcolm Harris’s motion to quash the District Attorney’s subpoena requiring the production of defendant’s user information, email addresses, as well as any Tweets posted for a four-month period from Twitter, Inc., all in connection with criminal charges pending against Mr. Harris due to his alleged involvement in an Occupy Wall Street protest. You can read our most recent blog post on this case from May 23. Twitter subsequently moved to quash the Court’s order on May 7, 2012, on the basis that the order imposes an undue burden upon it pursuant to Section 2703(d) of the Stored Communications Act (18 U.S.C. §§ 2701-2711) (the “SCA”), which provides that “[a] court issuing an order pursuant to this section, on a motion made promptly by the service provider, may quash or modify such order, if. . . compliance with such order otherwise would cause an undue burden on such provider.” Twitter argues that compliance with the Court’s order compelling the production of defendant’s Twitter user information imposes an undue burden for at least three reasons.

First, Twitter argues that the Court mistakenly concluded that defendant lacked a proprietary interest in the requested information in direct contradiction of Twitter’s Terms of Service, which state that users “retain [their] rights to any Content [they] submit, post or display on or through” Twitter’s services. Hence, it argues, Twitter’s users do not lack standing to challenge subpoenas of their electronically stored information. Similarly, Twitter argued that the Court’s decision contradicted Section 2704(b) of the SCA, which expressly provides that users on notice of a subpoena for their account records “may file a motion to quash such subpoena . . . in the appropriate . . . State court.”  If the Court’s order was to stand, Twitter argues that it would be put in an indefensible position of either producing “user communications and account information in response to all subpoenas or attempting to vindicate its users rights” by moving to quash these subpoenas independently despite often knowing little about the underlying facts to adequately support challenges to improper subpoenas.

Second, Twitter argues that the order compels it to violate “federal law” with respect to the portions of the SCA that have been held to infringe upon the protections of the Fourth Amendment. In particular, Twitter argues that the SCA violates the Fourth Amendment “to the extent it requires providers to disclose the contents of communications in response to anything less than a search warrant” (citing U.S. v. Warshak, 631 F.3d 266, 288 (6th Cir. 2010)) and that the Fourth Amendment’s warrant requirement “applies even when the government seeks information about allegedly public activities.” (citing U.S. v. Jones, 132 S. Ct. 945, 949 (2012)). Twitter further argues that the SCA provides that “[c]ontent less than 180 days old may only be disclosed pursuant to a search warrant,” but that a substantial portion of the information sought by the District Attorney’s subpoena is not yet 180 days old.

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In a recent case before the Criminal Court of the State of New York, the prosecution served a subpoena duces tecum on Twitter, Inc., seeking user information including the e-mail address and Tweets for a two-month period under the Twitter account, @destructuremal, which was believed to be that of the defendant Malcolm Harris. The People of the State of New York v. Harris, Index No. 080152/2011, (Crim. Ct. Apr. 20, 2012). Mr. Harris had been charged with disorderly conduct after allegedly marching on to the roadway of the Brooklyn Bridge during an Occupy Wall Street protest. The prosecution sought to refute Mr. Harris’s expected defense that the police led him into stepping on to the roadway of the Brooklyn Bridge, by examining his contradictory, contemporaneous Tweets.

Defendant moved to quash the subpoena in his own right or to intervene in the proceedings to quash the subpoena. In a case of first impression concerning whether a criminal defendant has standing to quash a subpoena issued to a third-party social networking website seeking to obtain the user’s information, the Court analogized these circumstances to cases involving subpoenas issued to banks and telephone companies, seeking a criminal defendant’s records. The Court found that, because a customer does not have a proprietary or possessory interest in his banking or telephone records, he similarly does not have such an interest in his Twitter account information, particularly where Twitter’s Terms of Service grant Twitter the right to transmit a user’s posts. Mr. Harris also sought to intervene because his interests were purportedly not adequately being represented by Twitter. The Court denied Mr. Harris’s application on this front as well because he would not be “bound by any of the principles of res judicata by any ruling in regards to the People’s subpoena.”

Finally, the Court also analyzed the State’s subpoena under the Stored Communications Act (18 U.S.C. §§ 2701-2711) (the “SCA”), which governs the privacy of stored Internet communications. The Court held that the subpoena both adhered to the procedural requirements for a subpoena under the SCA and that the State offered “specific and articulable facts showing that there are reasonable grounds to believe” that Mr. Harris’s Tweets “are relevant and material to an ongoing criminal investigation.” 18 U.S.C. § 2703[d].

Accordingly, the Court held that defendant’s motion to “#quash” the subpoena was “#denied” although the State consented to allowing in camera review of the documents.

Paul A. Saso is a Director on the Gibbons E-Discovery Task Force.

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Having recognized the challenges regarding jurors’ use of social media in the courtroom, the Committee on Court Administration and Case Management requested that the Federal Judicial Center (“FJC”) survey district court judges to identify effective mechanisms to curtail this growing problem. In response, the FJC queried 952 district judges and issued Jurors’ Use of Media During Trials and Deliberations, which demonstrates that despite the various strategies devised, it is virtually impossible to prevent jurors’ use of social media and is equally difficult to detect each and every impropriety. This issue is not novel; in fact, this blog has previously reported on instances where jurors’ use of social media had a significant impact on a proceeding as well as suggestions on how to avoid such pitfalls. Click here for those postings.

The General Response

Of the 508 judges who responded to the electronic questionnaire at issue, only 30 judges or 6% reported detecting jurors’ use of social media. This discovery occurred more often during trials rather than deliberations and in criminal trials than civil trials. The social media at issue in these instances were Facebook, Google, instant messaging (“IM”) services, Twitter, Internet chat rooms, Internet bulletin boards, and MySpace.

Nature of the Use

Among the jurists who identified how jurors used social media during trial and deliberations, the most common was through jurors’ “friending” or attempting to “friend” participants in the case (meaning witnesses, parties, attorneys or judges) as well as communicating or attempting to communicate directly with participants. In addition, the judges discovered that jurors used social media to reveal parts of the deliberative process; provide information about other jurors; conduct research; generally share information about the case by, for example, revealing the likely verdict; allow someone else to hear live testimony; and conduct personal business.

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The Bench Bar Media Committee of the New Jersey Supreme Court (“Committee”) has adopted, and forwarded to the Supreme Court, Guidelines for the Usage of Electronic Devices in New Jersey state courts. The proposed Guidelines comprehensively address the use of Electronic Devices in the courtroom, the common areas of a courthouse and the grounds of a courthouse. If adopted by the Supreme Court, the proposal will represent a major revision to the existing Guidelines.

The Guidelines broadly define the term “Electronic Device” as any portable device that has the capability to broadcast, record or take photographs. Acknowledging the rapid evolution in this area, the Guidelines provide that similar devices “whether now in existence or later developed” will fall within the purview of the Guidelines.

The Guidelines then define the permitted uses of Electronic Devices on the courthouse grounds, in common areas and in the courtroom.

A. COURTHOUSE GROUNDS
The Guidelines allow virtually unrestricted use of Electronic Devices, including the use of such devices for photography, recording or broadcasting, on the grounds outside the courthouse. The only caveats are security and insuring that the utilization of such devices does not interfere with ingress and egress to and from the courthouse.

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