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Posted on May 15, 2013 by Gibbons P.C.

Six Gibbons Attorneys to Speak at Upcoming NJSBA 2013 Annual Meeting & Convention

The New Jersey State Bar Association 2013 Annual Meeting and Convention will be held May 15-17, 2013, at the Borgata Hotel Casino & Spa. Six Gibbons attorneys will be featured as speakers and moderators at this years convention. The Gibbons attorneys, Fruqan Mouzon, Mary Frances Palisano, Damian V. Santomauro, Judge Edwin H. Stern, Jennifer Marino Thibodaux, and Chief Justice James R. Zazzali, will be covering topics ranging from developments in E-Discovery to white collar crime and the Consumer Fraud Act.

Consumer Fraud Act: Remedies & Defenses for Purchases of Property and Home Renovation Contracts
- Damian V. Santomauro, Director in the Gibbons Business & Commercial Litigation Department
- Thursday, 8:30 - 9:45 am, The Water Club.

This panel will cover the rights and remedies available under the Consumer Fraud Act to consumers who have contracted for purchase of property or for home renovation contracts. Mr. Santomauro will discuss the elements of a CFA claim, specifically construction law cases, businesses as CFA plaintiffs, and individual liability of principals and officers for CFA claims.

White Collar Crime
- Judge Edwin H. Stern, Counsel to the Gibbons Business & Commercial Litigation Department, & Mary Frances Palisano, Counsel to the Gibbons Criminal Defense Department
- Thursday, 10:00 - 11:15 am, The Borgata

Judge Stern and Ms. Palisano will discuss various white collar crimes, including embezzlement and public contract fraud.

Recent Legal and Technological Developments in E-Discovery: What Every State and Federal Practitioner Should Know
- Jennifer Marino Thibodaux, Associate in the Gibbons Business & Commercial Litigation Department
- Thursday, 1:00 - 2:15 pm, The Borgata

Ms. Thibodaux’s panel will discuss important technological and legal developments in E-Discovery, such as predictive coding, recent court decisions related to the use of search terms, social media and information preservation.

Inside Trenton
- Fruqan Mouzon, Director in the Gibbons Business & Commercial Litigation Department
- Thursday, 3:00 - 4:15 pm, The Borgata

Mr. Mouzon will moderate this panel, which will cover the latest developments in Trenton. The panelists will offer insight into the legislative process and hot topics in the capitol such as gubernatorial and legislative races.

Justice at Stake
- Chief Justice James R. Zazzali, Counsel to the Gibbons Business & Commercial Litigation Department
- Friday, 9:45 - 11:00 am, The Borgata

Chief Justice Zazzali’s panel will discuss the threats facing the independence and integrity of the New Jersey Judiciary. The panelists will not only provide a statewide overview, but a national overview of this topic and the challenges that various states are facing.

For more information on the other panel discussions going on throughout the convention, please click here.

This blog post originally appeared on the Gibbons Business Litigation Alert on May 15, 2013.

Tags: Consumer Fraud Act, Electronic Discovery, General Litigation, Preservation, Search Terms, Social Media

Posted on April 22, 2013 by Jennifer Marino Thibodaux

Federal Judge in New Jersey Issues Adverse Inference Instruction Due to Plaintiff's Failure to Preserve Facebook Information in Personal Injury Action

Recently, a federal judge in New Jersey imposed sanctions for a personal injury plaintiff’s failure to preserve his Facebook account. The Court concluded that it was “beyond dispute that Plaintiff had a duty to preserve his Facebook account,” and granted the defendant’s motion for an adverse inference instruction.

The plaintiff allegedly suffered serious injuries at work, which purportedly left him permanently disabled, unable to work, and limited in his “physical and social activities.” The defendants sought the plaintiff’s Facebook information, alleging it related to damages, but the plaintiff declined to provide an authorization form for Facebook. During a settlement conference, the Magistrate Judge ordered the plaintiff to execute the appropriate form, and the plaintiff agreed to change his account password to allow defense counsel to access his Facebook page. Defense counsel then accessed his account and printed portions of the plaintiff’s Facebook page.

Days later, plaintiff’s counsel told defense counsel that the plaintiff had received a Facebook alert indicating that an unknown IP address in New Jersey accessed his account. Defense counsel confirmed that the plaintiff’s account was accessed, and the parties disagreed as to whether defense counsel was able to directly access the account. Defense counsel also advised that the defendants served a subpoena on Facebook, enclosing the authorization form executed by the plaintiff, to obtain the plaintiff’s account information.

Facebook objected to the subpoena, citing the Federal Stored Communications Act, and recommended that the plaintiff download his Facebook information and provide it to defense counsel. The parties disputed whether the plaintiff agreed to take these steps. Weeks later, defense counsel learned that the plaintiff deactivated his Facebook account, and then Facebook automatically deleted his account fourteen days later, so all account information was lost.

The defendant requested an adverse inference instruction or monetary sanctions. The Magistrate Judge applied the four factor test for sanctions as set forth by the Third Circuit in Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir. 1994). The Magistrate Judge found that the deletion of the Facebook account “clearly” satisfied the first, third, and fourth Schmid factors: the Facebook information was within the plaintiff’s control as the accountholder; the Facebook account was relevant because the plaintiff put his social and physical activities at issue in the litigation, i.e., the “posts, comments, status updates, and other information posted or made by the Plaintiff subsequent to the date of the alleged incident” would bear upon damages; and it was reasonably foreseeable that Facebook information would be sought because the defendant requested the social media information months before the plaintiff deactivated his account, and the parties previously discussed the Facebook information during a settlement conference with the Court. Consequently, the Magistrate Judge concluded that “it is beyond dispute that Plaintiff had a duty to preserve his Facebook account at the time it was deactivated and deleted.”

With respect to whether the plaintiff actually suppressed or withheld the Facebook information, the plaintiff argued that he was involved in a “contentious” divorce and his Facebook account had been “hacked into” many times before, so he acted reasonably when he deactivated his account after receiving the Facebook notification. The plaintiff also argued that he did not mean to permanently delete his account, only deactivate it, and that it was deleted automatically due to Facebook policy; he also alleged that he unsuccessfully attempted to restore the account. The Court reasoned that even if the plaintiff did not intend to delete his account, his intent was of no matter because the spoliated evidence was relevant, and “there is no dispute that Plaintiff intentionally deactivated the account.” The Court concluded that the plaintiff “failed to preserve relevant evidence” despite the alleged unauthorized access by defense counsel and the plaintiff’s unsuccessful restoration efforts. Because the defendants were prejudiced by the failure to obtain Facebook information that was relevant to damages and credibility, the adverse inference instruction was appropriate. The Court did not find, however, that an award of fees and costs was appropriate.

Attorneys, pay attention: if your client uses Facebook, it must be maintained like any other electronically-stored information or hard copy document -- particularly if its import is specifically sought in discovery or discussed with the Court. This is not the first time that a federal judge in New Jersey has awarded sanctions for failure to preserve social media, and it likely will not be the last.

Jennifer Marino Thibodaux is an Associate in the Gibbons Business & Commercial Litigation Department and a member of the Gibbons E-Discovery Task Force.

Tags: Adverse Inference, Allied Aviation Services, Facebook, Legal Decisions & Court Rules, Social Media, United Air Lines, Inc.

Posted on February 7, 2013 by Melissa DeHonney

Magistrate Judge Orders Production of Social Media Discovery But Fashions Novel Protocol Designed to Protect Privacy Concerns

Where the requesting party makes a threshold showing of relevance, courts now routinely grant discovery of social media notwithstanding so-called “privacy objections.” Indeed, as one court recently noted, there is “no principled reason to articulate different standards for the discoverability of communications through email, text message, or social media platforms.” But on November 7, 2012, in EEOC v. Original Honeybaked Ham Co., Magistrate Judge Michael E. Hegarty of the United States District Court for the District of Colorado ordered all class members to produce social media discovery to the defendant subject to what the EEOC ultimately called a “somewhat unusual procedure.”

Dispensing with the plaintiffs’ relevancy objection, the Court first found that the defendant was not engaging in “the proverbial fishing expedition,” since it had already demonstrated the relevancy of content from the Facebook wall of one plaintiff. Though relevancy was no obstacle, the Court took heed of the plaintiffs’ “privacy concerns” and established a “process designed to gather only discoverable information”:

First, the class members were required to produce to a court-appointed special master cell phones used during the relevant period, and information necessary to access social media websites, email accounts, blogs, or other platforms “used for communications or pictures” during the relevant period.
Second, the parties were ordered to create and provide answers to a questionnaire to identify sources of discoverable information, and to provide the special master with instructions defining the discovery parameters.
Third, the Court would conduct an in camera review, culling that which it found “legally relevant under the applicable rules.”
Fourth and finally, the EEOC could then conduct a privilege review of this data, ultimately producing only non-privileged, relevant materials to the defendant, together with the requisite privilege log, if any.

It is curious that the Honeybaked Ham Court took these precautions in response to the plaintiffs’ privacy concerns. As noted, many other courts, in contrast, have held that there can be no expectation of privacy in social media. In Zimmerman v. Weis Markets, for example, the Court noted that “[a]ll the authorities recognize that Facebook and MySpace do not guarantee complete privacy.” (You can read a detailed discussion of Zimmerman here.) The Zimmerman Court “flatly rejected” a proposal similar to the protocol that the Honeybaked Ham Court ordered since it would impose “an unfair burden” on the court and require it “to guess as to what is germane to defenses which may be raised at trial.” What’s more, the Honeybaked Ham Court itself specifically likened social media to “a file folder titled ‘Everything About Me,’” which was “voluntarily shared with others.” Under the circumstances, it is difficult to justify an expectation of privacy.

Addressing another hot topic — cost shifting — the Honeybaked Ham Court initially ordered the parties to split the costs of the forensic evaluation, notwithstanding its finding that “the potential cost of producing the discovery is commensurate with the dollar amount at issue.” The Court further indicated that it would “relieve the Plaintiff / Claimants of monetary responsibility” if “this effort produces little or no relevant information.” The Court later issued an amended order modifying the discovery protocol to allow an EEOC employee with forensic qualifications to undertake the tasks previously assigned to the special master, “at the cost of the EEOC (utilizing outside vendors as necessary).” Thus, it seems that the EEOC will bear the costs of this endeavor.

Notably, on November 21, 2012, the EEOC filed objections to the Magistrate Judge’s Order pursuant to Federal Rule of Civil Procedure 72. The defendant responded on December 10, 2012, but significant portions of that response are not publicly available. Thus, it remains to be seen whether the rulings discussed above are final. Any further significant developments will be reported here.

Melissa DeHonney is Counsel to the Gibbons Business & Commercial Litigation Department and a member of the Gibbons E-Discovery Task Force.

Tags: Attorney Client Privilege, Cell Phones, E-Discovery Special Master, Facebook, Legal Decisions & Court Rules, Social Media

Posted on January 18, 2013 by Elizabeth Ann Fitzwater

Netflix Case Illustrates Potential Social Media Pitfalls Facing Public Companies

As we reported in the Gibbons E-Discovery Law Alert in May 2012, “Reg FD” could present a potential pitfall for those that post material non-public information via social media platforms. In early December 2012, that “pitfall” became a reality for Netflix Inc. CEO Reed Hastings. In July 2012 Hastings published on his public Facebook page a 43-word post concerning viewership statistics, including that Netflix subscribers had watched one billion hours of video the previous month.

The post presents at least two questions. First, whether Hastings’s statement constitutes “material” information falling within the purview of Reg FD. As a reminder, Reg FD mandates that, when an issuer, or a person acting on behalf of the issuer, discloses material non-public information to certain enumerated persons (generally, securities market professionals and security holders who may trade on the basis of the information), it must make public disclosure of that information simultaneously (for intentional disclosures), or promptly (for non-intentional disclosures).

The second -- and far more novel -- issue is whether posting to over 200,000 people constitutes a “public” disclosure. The SEC staff does not seem to think so. On December 6, 2012, Hastings disclosed in an SEC filing that Netflix had received a “Wells notice” from the SEC staff, recommending that the agency bring an enforcement action against Netflix over the July post. Specifically, the SEC is concerned that Hastings’s post violated Reg FD in that a post on Facebook is not a disclosure to all investors at the same time. The Wells notice does not mean the SEC will actually prosecute Netflix. Moreover, such a prosecution would likely face serious challenges because a lynchpin is proving that a public posting on Facebook is not public dissemination. That said, a company like Netflix that has struggled to maintain relevancy in an increasingly digital age nonetheless felt the sting of a decreasing stock price in the wake of the announcement of the Wells notice.

While regulators and public companies find their footing in applying a 12 year old rule to new technologies, it is still a good idea to: (i) ensure that their message is being simultaneously delivered to a wider audience instead of to a fraction of subscribers to a particular social media platform; and (ii) have documented policies and procedures concerning the use of social media. Otherwise, a public company may find itself under unwanted public scrutiny with undesirable consequences regardless of culpability.

Elizabeth Ann Fitzwater is Counsel to the Gibbons Business & Commercial Litigation Department and a member of the Gibbons E-Discovery Task Force.

Tags: Compliance, Corporate Information & Records Management Policies, Facebook, LinkedIn, Policies, Social Media, Twitter

Posted on November 5, 2012 by Mitchell Boyarsky

Taking Over Former Employee's LinkedIn Account Not a Violation of Federal Law, According to Pennsylvania District Court

A Pennsylvania Federal District Court has decided that an employer did not violate the Federal Computer Fraud and Abuse Act (“CFAA”) or the Federal Lanham Act, when it took control of a departed employee’s LinkedIn account. The Court ruled that (1) the CFAA, which in part prohibits unauthorized access to a computer with the intent to defraud, did not come into play and (2) no trademark infringement in violation of the Lanham Act had occurred.

Factual Background

In Eagle v. Moran et al. plaintiff Eagle was employed as the CEO of Edcomm, Inc., a company that provided training services. In accordance with company practice, Eagle set up a LinkedIn account and gave another employee the password to her account. Edcomm followed a policy of asserting “ownership” over the account when an employee departed the Company; it would extract data and incoming information from the LinkedIn account, but took steps to avoid stealing the former employee’s identity. After Eagle’s involuntary termination, Edcomm used her password to change Eagle’s LinkedIn profile to that of the incoming CEO, and it replaced the photographs and information to reflect that of the new employee. Plaintiff claimed that when searches were done for her, the name and photograph of her replacement was displayed, yet Eagle’s awards, recommendations and contacts remained unchanged. In her lawsuit, Plaintiff claimed violations of the CFAA, the Lanham Act and state common law arising from the loss of business opportunities, relationships, reputation and trust caused by the change to her LinkedIn profile.

Court’s Ruling

In order to prove a violation of the CFAA, a federal statute that prohibits unauthorized access and use of computers, a plaintiff must show actual damages. As the Court held, potential loss of future business -- particularly as plaintiff speculatively claimed -- is insufficient. Similarly, a loss to one’s reputation or relationship with clients does not arise to the level of a CFAA violation. The District Court dismissed Eagle’s CFAA claim, finding that Eagle’s simply claiming a loss of business opportunities by her lack of access to and control of her LinkedIn account for four months, failed as a matter of law to establish a CFAA violation. In addition, plaintiff was not claiming a monetary loss because her computer was inoperable or she expended money to repair damage to it (typical of a CFAA claim).

The Court also dismissed Eagle’s claim under the Lanham Act, the federal statute relating to trademark protection which prohibits unfair competition in goods and services through use of a word, term, name, symbol or device (or a combination of them) that is likely to confuse, mislead or deceive regarding the affiliation, sponsorship or approval of such goods, services or commercial activities. A viable claim under the Lanham Act requires a showing of a legally protectible mark, the plaintiff owns the mark and the defendant’s use of the mark to identify goods and services is likely to cause confusion. The Court considered the Third Circuit’s Lapp factors -- a non-exhaustive list of factors used to determine whether the mark is likely to cause confusion -- and concluded that the use of the LinkedIn account by the incoming CEO is unlikely to confuse a viewer. The Court did so reasoning that the account was changed to reflect the name, photograph and information of the incoming CEO. Also, Edcomm made no attempt to portray the new CEO as the former one or to claim the outgoing CEO was affiliated with or endorsed by Edcomm.

Finally, the Court maintained jurisdiction over the plaintiff’s state law claims, noting that the trial date was only 2 weeks away and that it would be unfair to dismiss those claims at such a late date.

Conclusion

The law with regard to social media -- especially professional social media -- is constantly evolving. Efforts by an employer to assert protections over company sponsored or directed social media activity is likely to face challenges by employees asserting privacy and property rights. Employers should consider these and other related social media activities when preparing social media policies and enforcement measures. For answers to questions regarding social media issues, please feel free to contact any of the attorneys in the Gibbons Employment & Labor Law Department.

Mitchell Boyarsky is a Director in the Gibbons Employment & Labor Law Department. This blog post originally appeared on the Gibbons Employment Law Alert on November 5, 2012.

Tags: Computer Fraud and Abuse Act, Lanham Act, Legal Decisions & Court Rules, Privacy, Social Media

Posted on August 28, 2012 by Jennifer Marino Thibodaux

Changing the "Games": The First Social Media Olympics

As followers of this blog know, we often bring you updates regarding the ever-changing world of social media – in particular, how it affects attorney ethics or judicial proceedings, or how it is used by financial services industry participants. Here, as the closing ceremonies for this year’s London Olympics have recently ended, we pause to reflect how the popularity of social media has “changed the game,” resulting in the world’s first “Social Media Olympics.”

The 2012 summer games mark the first time that journalists, competitors, and fans have used social media to “broadcast” the Olympics. Here are a few global highlights from this year’s “Social Media Olympics” -- some good and some bad:

Twitter shut down a journalist’s Twitter account after the journalist criticized NBC’s delayed coverage of the Olympics, stating that the journalist violated Twitter’s usage terms when he included a top NBC’s executive work e-mail address in his Tweet;
British diver Tom Daley re-Tweeted an offensive Tweet he received from a “fan” claiming that Daley let his father down with his performance; it is well-known that Daley’s father died of cancer last year;
Competitors from Switzerland and Korea were expelled from competition after using Twitter to post racial remarks aimed at other competitors;
American soccer star Hope Solo engaged in a Twitter attack against a former competitor who criticized the team’s performance;
Competitors, including such gold medalists as Michael Phelps and Gabby Douglas, used Twitter to thank their fans or comment on the games;
ABC’s popular morning news program, Good Morning America, reviewed some of the competitors’ Tweets each morning in order to keep its audience updated “in real time” about the competitors’ sentiments; and
We can’t forget the U.S. Olympic swim team’s viral YouTube video lip-synching to the pop song, “Call Me Maybe,” by Carly Rae Jepsen.

The use of social media at this year’s games only highlights what this blog has reiterated for several years: social media isn’t going anywhere, so stay tuned here before you get left behind!

Jennifer Marino Thibodaux is an Associate on the Gibbons E-Discovery Task Force.

Tags: Facebook, Social Media, Technology Developments & Issues, Twitter

Posted on August 7, 2012 by Elizabeth Ann Fitzwater

"Did I Just Get a Tweet From Goldman Sachs?!?": Increased Expansion and Scrutiny of Social Media in the Financial Services Industry

With the increased use of social media by financial services industry participants, more activity and scrutiny can be expected from financial regulators. This is not to mention the litigation from investors that could arise out of, for example, the misinterpreted or well-meaning post from an advisor that simply did not translate to “less than 140 characters.” It appears that there is a trend (amongst at least the larger financial institutions) that a united and pre-approved voice is best for now.

Social Media has become a critical business tool for financial advisors. A recent study of the use of social media in the financial services industry concluded that 7 in 10 financial advisors are already using social networks for business purposes as illustrated by the following excerpt:

With a business that is fueled primarily by networking, advisors are increasingly integrating social media as a core element of their marketing efforts. This comes as no surprise, given the adoption rates of their prospective clients: According to Forrester Research, two-thirds of U.S. Online adults with an investment account now have social network profiles.

Indeed, after concluding a year long trial involving 600 employees, financial giant Morgan Stanley recently announced that it plans to give its roughly 17,000 financial advisors at Morgan Stanley Smith Barney partial access to Twitter and LinkedIn over the next several months. Morgan Stanley’s big roll out has been widely criticized for its somewhat conservative approach which calls for its financial advisors to draw from a prewritten library of Twitter messages, e.g., “Morgan Stanley Advisors Take To Twitter To Do Nothing Very Interesting.” The company apparently decided to shelve an experiment that allowed a handful of investment advisors to compose their own Twitter messages. Its investment advisors also must submit all LinkedIn postings for approval.

This criticism may be easy to dish out for those whose Twitter feeds are not regulated by several state, federal and even international regulators. Financial services industry participants -- particularly large institutions such as Goldman Sachs (which sent its first “Tweet” at the end of May of this year) -- have to balance the spontaneity of social media with the competing concerns of the protection of its investing public and the potential costs associated with disregarding those concerns in a regulatory climate that has latched on to social media as a paramount concern to the investing public. It was recently reported by Reuters that FINRA, the Financial Industry Regulatory Authority, asked questions about social media in more than 1,000 brokerage examinations since mid-2010. Not having a social media policy in place -- even one prohibiting the use of social media - was the most common violation of industry regulations. See prior blog post here concerning prior industry guidance on these policies. According to Amy Sochard, FINRA’s director of advertising regulation, the second most common industry violation was failing to enforce those existing social media policies, whether through record keeping or the storage of electronic communications. In this regard, Reuters recently reported that at least one registered investment advisor (disclosing on the condition of anonymity) was issued an exam deficiency letter by a state securities regulator which cited deficiencies relating to the failure to create and outline proper procedures for social media use, its failure to train its employees in those procedures, and the failure to check up on the activities of its employees on LinkedIn and Facebook, even though the company had hired an outside company to save messages employees sent through the sites.

Pre-approved social media content also alleviates the need for dedication of additional compliance resources -- a cost-center that is typically stretched too thin. Similarly, outsourcing review and approval of the content of social media (as opposed to outsourcing a recordkeeping function), is likely not an option for a prudent entity or advisor, particularly with FINRA’s increased expression of interest concerning outsourcing and vendor selection in the industry as reported in Notice 11-14, which sought comment on proposed FINRA Rule 3190 concerning vendor selection and outsourcing. In any event, the ultimate responsibility for compliance with securities laws and rules rests with the firm.

For services that are supposedly free of charge, the increasing prevalence of social media in the financial services industry is coming at quite a cost to those ultimately responsible for its content. Many things -- such as the use of email, advertising and financial information, to name a few -- are simply different for those involved in the financial services industry because they face the added burden of a complex web of securities laws, external regulators and their rules, as well as internal compliance codes and legal regulations. Social media, the Johnny-come-lately, is proving to be no less complex of an issue -- far from it.

Elizabeth Ann Fitzwater is Counsel to the Gibbons Business & Commercial Litigation Department and a member of the Gibbons E-Discovery Task Force.

Tags: Compliance, Corporate Information & Records Management Policies, LinkedIn, Policies, Social Media, Twitter

Posted on August 3, 2012 by Jennifer Marino Thibodaux

Dancer's Facebook Messages With Opt-In Class Members are Protected Work Product

A group of exotic dancers in New York recently found themselves partially exposed -- well, their Facebook messages, that is. A federal judge in In re Penthouse Executive Club Compensation Litigation, 10-CV1145 (KMW) (S.D.N.Y May 10, 2012) decided that one of the plaintiff-dancer’s Facebook communications with non-party-dancers about joining the lawsuit were not protected from disclosure, but that Facebook communications between the plaintiff-dancer and opt-in plaintiffs were protected from disclosure. The Court’s application of the well-established work product doctrine and common interest rule to social media communications reminds lawyers to exercise caution when using social media for discovery purposes and to warn their clients to similarly proceed with caution.

In a putative class action lawsuit filed by former entertainers at the Penthouse Executive Club against the club and its owners and officers, alleging violations of the Fair Labor Standards Act and New York Labor Law, a discovery dispute arose regarding the production of communications between the plaintiffs and non-party entertainers on Facebook. Specifically, the defendants sought production of Facebook messages between named plaintiffs and opt-in plaintiffs, and those between named plaintiffs and potential class members. While the plaintiffs relied upon the work product doctrine and the common interest rule to withhold production of the Facebook messages, the defendants argued that the messages were not communications by or with counsel, so the work product doctrine and/or common interest rule were inapplicable.

After an in camera review of the Facebook messages between the plaintiff-dancer and non-parties, and those between the plaintiff-dancer and opt-in plaintiffs, the Honorable Kimba M. Wood, U.S.D.J., held that the Facebook messages were indeed “correspondence” that constituted “documents and tangible things” for consideration of protection under the work-product protection. The Judge explained that the Facebook messages between the plaintiff-dancer and opt-in plaintiffs were “descriptions of conversations with Plaintiffs’ counsel regarding litigation strategy,” which were “not correspondence prepared in the ordinary course of business or personal life, but rather were directly prompted by the litigation and prepared because of the action at bar,” so they were prepared in anticipation of litigation. Moreover, Judge Wood rejected the defendants’ assertion that the work-product doctrine was inapplicable to the communications because, she explained, the doctrine is broader than the attorney-client privilege and the Facebook messages were prepared by a party and sent to the opt-in plaintiffs “because of the litigation.” As such, Judge Wood held that the Facebook messages between the plaintiff-dancer and opt-in plaintiff-dancers were protected from production by the work product doctrine.

Next, the Judge considered whether the common interest doctrine also protected the production of any of the Facebook messages. She explained that the common interest doctrine protects joint defense efforts to keep communications between counsel for represented parties, or non-parties with a common interest in the outcome of the litigation, confidential. She elaborated that because the common interest doctrine is an extension of the attorney-client privilege, for it to apply a communication must meet the other elements of that privilege. The Facebook messages between the plaintiff-dancer and the non-party dancers -- both the opt-ins and the others -- simply did not meet those criteria. Judge Wood held, therefore, that the Facebook messages between the plaintiff-dancer and all non-party exotic dancers did not qualify for protection under the common interest doctrine because they were not attorney-client privileged.

Judge Wood’s ruling emphasizes what has been addressed numerous times in posts on this blog -- attorneys must remember that social media communications may be subject to discovery and to take care when using social media or directing their clients to use social media for discovery purposes.

Jennifer Marino Thibodaux is an Associate on the Gibbons E-Discovery Task Force.

Tags: Attorney Client Privilege, Attorney Work Product, Common Interest Dostrine, Legal Decisions & Court Rules, Social Media

Posted on June 20, 2012 by Gibbons P.C.

Attorneys' Use of Social Media to Research Jurors -- Another Ethical Land Mine

The New York City Bar Association's Formal Opinion 2012-2 examines whether ethical restrictions apply to attorneys who use search engines or social media websites for the purpose of researching jurors. While the Opinion does not oppose such research (provided no communication between an attorney and potential or sitting juror occurs), it broadly interprets “communication.” Although a “friend request” would obviously constitute a communication, the Opinion struggles with whether an inadvertent or unknowing notification or message to the juror, which was triggered by the attorney’s attempt to view a page or comments (such as what can occur when one views a person’s LinkedIn™ profile), should also be treated as a communication and thereby prohibited. Ultimately, the Opinion “takes no position” on that issue and instead, cautions attorneys to understand the technology at issue, refrain from engaging in deception to gather information, and promptly report any discoveries of juror misconduct that are gleaned from the research.

Attorneys researching jurors is not a novel concept. Nor is the prohibition of communications between jurors and attorneys as codified in New York’s Rule of Professional Conduct (“RPC”) 3.5(a)(4), which states in relevant part that “a lawyer shall not . . . (4) communicate or cause another to communicate with a member of the jury venire from which the jury will be selected for the trial of a case or, during the trial of a case, with any member of the juror unless authorized to do so by law or court order.” The application of these fundamentals and the distinction between private research and interactive communication, however, have been somewhat obscured by continuously evolving technology.

Because the Opinion interprets RPC 3.5’s absence of a mens rea or specific intent requirement as forbidding all communications with jurors - even if the attorney’s goal is to gather information - it concedes that technological challenges in this context lie in the constantly changing “functionality, policies and features of social media services.” By way of example, the extent to which an attorney can view information depends on the website at issue and whether the user has designated specific privacy settings. Likewise, some services alert a user when someone has viewed the user’s profile while others only do so if that someone has initiated “an interaction.” Therefore, the Opinion urges attorneys to educate themselves about the properties of the website or service at issue to avoid any inadvertent communication.

The critical tension between the RPCs and the ability to use Internet tools to research jurors is highlighted by the following excerpt from the Opinion:

A request or notification transmitted through a social media service may constitute a communication even if it is technically generated by the service rather than the attorney, is not accepted, is ignored, or consists of nothing more than the automated message of which the “sender” was unaware. In each case, at a minimum, the researcher imparted to the person being researched the knowledge that he or she is being investigated.

As with prior ethics opinions from various jurisdictions, this Opinion demonstrates how the Internet has simultaneously provided attorneys with easy access to all types of information and created an ethical minefield. In fact, the propriety of attorneys misrepresenting their identity through online communications to obtain otherwise unavailable information, the prohibition against using a third party such as a paralegal to engage in any such deceit or misrepresentation, and the restrictions on attorneys regarding “friending” witnesses and parties have been examined by the same author in previous blog posts made on October 8, 2009 and August 25, 2011.

Unlike the opinions referenced in those prior posts, however, Formal Opinion 2012-02 does not make a definitive finding or recommendation. Rather, it demonstrates that when attorneys use social media websites to research jurors, they have “arguably ‘communicated’ with the juror” if a juror receives an automated message. (Emphasis added). Similarly, it states that attempts to research a juror “might constitute a prohibited communication even if inadvertent or unintended.” Consequently, until a clear pronouncement is made in any jurisdiction, attorneys should routinely sharpen their social media researching skills and their familiarity with the technology, privacy settings and policies of a website if they intend to use that medium to research jurors.

Tags: Ethical Concerns, Facebook, Jurors, Legal Decisions & Court Rules, Social Media

Posted on June 1, 2012 by Kristin D. Sostowski

NLRB's Third Social Media Report Includes Model Social Media Policy

On May 30, 2012, the National Labor Relations Board's Acting General Counsel issued a third report on social media cases. This report follows the Board’s August 2011 and January 2012 reports on the subject, which we previously discussed. The guidance contained in the three social media reports is applicable to most private sector employers, unionized or not.

The third report discusses seven social media cases handled by the Board’s General Counsel in recent months, all of them focused on employer policies that restrict employee social media postings or communications. In six of the seven cases, the General Counsel’s office found that some provisions of the employers’ social media policies were unlawfully broad, interfering with the rights of employees under Section 7 of the National Labor Relations Act (NLRA) to engage in “protected concerted activities.”

Significantly, the General Counsel’s office concluded that the entire social media policy in the seventh case was lawful under the NLRA. The third report includes the full text of the lawful policy, providing the most helpful guidance for employers to date regarding what social media policy provisions will pass muster with the Board. In its discussion of the lawful policy, the report stressed that the policy avoided ambiguity regarding its coverage by providing sufficient examples of “plainly egregious conduct” so that employees would not reasonably construe the policy to bar Section 7 activities, such as discussion of wages and working conditions with co-workers.

In light of the NLRB’s most recent social media report and the continuous evolution of social media technology, employers should review their social media policies with employment counsel to ensure that their policy language complies with current law. In particular, employer social media policies should incorporate examples of prohibited conduct to avoid possible confusion about the policy’s coverage and emphasize the legitimate reasons for the policy (for example, preventing the improper disclosure of proprietary information via social media or the use of social media to engage in conduct that violates anti-discrimination and harassment policies).

To discuss your company’s social media policy or other policy needs, please contact any attorney in the Gibbons Employment & Labor Law Department.

Kristin D. Sostowski is a Director on the Gibbons E-Discovery Task Force. This blog originally appeared on the Gibbons Employment Law Alert on May 31, 2012.

Tags: Legal Decisions & Court Rules, NLRA, National Labor Relations Board, Section 7, Social Media, Terms and Conditions

Posted on May 21, 2012 by Elizabeth Ann Fitzwater

Social Media in the Securities Industry: Complying with Reg FD

Delivering non-public material information through Internet-based social media, especially social networking sites such as Facebook, LindedIn, and Twitter, means that this information will first reach only a fraction of the investing public -- those who “follow” the company using those platforms. As illustrated by the hypothetical below, this may create a potential “Reg FD” issue for a public company. As we addressed in a previous blog, the SEC has recently issued guidance to investment advisers concerning their use of social media. Click here for prior blog. We have also addressed in a previous blog that FINRA, too, has issued Regulatory Notices which make it clear that member firms are expected to have policies and procedures in place that cover the use of social media by the firm and its associated persons. Click here for prior blog. While direct guidance to public companies on the use of social media to report a company’s material financial matters has yet to issue, this post offers suggestions for avoiding pitfalls in this regard.

The Scene: The CEO of Awesome Widgit Inc. just received his company’s yet to be released first quarter earnings report showing unprecedented profits from this winter’s hot new gadget, the Widgitslicer. In his excitement, he grabs his mobile device and tweets to all Widget Inc.’s followers: “First quarter profits are out! Earnings up 5%!!!”

The Issue: Every officer, director, senior employee and investor of a public company should know that the disclosure and timing of a public company’s material financial details are highly regulated by, among other entities, the SEC, state securities agencies, and self-regulatory organizations (like FINRA and national exchanges). In less than ideal circumstances, inadequate disclosures can trigger investigations and enforcement actions not only by the foregoing regulators, but also lead to prosecution by the U.S. Department of Justice and/or state attorneys general, as well as private investor lawsuits. A large portion of a corporate securities lawyer’s time is devoted to ensuring that a company’s disclosures not only come with the appropriate disclaimers, but also that such disclosures do not run afoul of the SEC’s Regulation Fair Disclosure (commonly referred to as “Reg FD”). Essentially, Reg FD mandates that when an issuer, or a person acting on behalf of the issuer, discloses material nonpublic information to certain enumerated persons (generally, securities market professionals and security holders who may trade on the basis of the information), it must make public disclosure of that information simultaneously (for intentional disclosures), or promptly (for non-intentional disclosures). The SEC’s stated purpose of Reg FD is to “address the selective disclosure of information by publicly traded companies” and “aims to promote the full and fair disclosure.”

A Potential Solution: A public company can take advantage of social media platforms simply by ensuring that their message is being simultaneously delivered to a wider audience instead of to a fraction of subscribers to a particular social media platform. Companies can have their lawyers (in-house or outside counsel) and investor relations staff coordinate to file a Form 8-K with the SEC and, for example, “tweet” a headline concerning the information in the 8-K to its Twitter followers. Services such as “StockTwit” or a similar platform will also allow businesses to attach lengthy postscripts to their tweets and other online messages with the language necessary to comply with the various disclosure rules mandated by the SEC.

In light of the foregoing, initially, it is a good idea for public companies to have documented policies and procedures concerning the use of social media, which include compliance and legal review and a designated corporate “voice” to deliver the messages (such as its investor relations department). Indeed, as the SEC clearly signaled to investment advisers and FINRA to its members, the adoption of policies and procedures governing the use of social media sites is a prudent exercise -- this advice translates equally to public companies.

Elizabeth Ann Fitzwater is Counsel to the Gibbons Business & Commercial Litigation Department and is a member of the Gibbons E-Discovery Task Force.

Tags: Compliance, Corporate Information & Records Management Policies, Policies, Social Media

Posted on March 22, 2012 by Jennifer Marino Thibodaux

Ex-Juror Who "Friended" Defendant Faces Jail for Bragging on Facebook About Dismissal From Jury Duty

By now, attorneys should know to advise their clients to watch out for Friend requests from jurors during a trial. The latest debacle concerning jurors use of social media involves a juror “friending” a party and then bragging about his resulting dismissal from the panel. For that juror, his Facebook antics landed him a three-day jail sentence. Click here and here for additional coverage regarding this incident.

Back in December, a Florida man serving jury duty sent a Friend request to the defendant. The defendant told her attorney about the request, and Circuit Judge Nancy Donnellan dismissed the juror and admonished him for his actions. But, the story doesn’t end there.

After his dismissal, the ex-juror took to his Facebook page again. This time, he posted a comment: “Score . . . I got dismissed!! [A]pparently they frown upon sending a friend request to the defendant . . . haha.” Unfortunately for the ex-juror, court officials became aware of the post, leading Judge Donnellan to call the ex-juror back into Court to face criminal contempt charges. At the end of a two-hour hearing, Judge Donnellan commented, “I cannot think of a more insidious threat to the erosion of democracy than citizens who do not care.” She sentenced the ex-juror to three days in jail, and he was led from the courtroom in handcuffs.

This is just another example of social media impacting judicial proceedings. (For recent blog posts on this issue, click here.) As the attorney for the plaintiff in this case commented, “it was a very big deal” to his client “who had $48,000 in medical bills on the line,” and if the female defendant had, for example, responded to the Friend request and went on a date with the juror, perhaps the juror would have found in her favor.

In light of these missteps, attorneys must be keen to clients’ Facebook page and activity and should consider monitoring the Facebook pages of the defendant and any jurors -- especially any juror who has been dismissed for the improper use of social media.

Jennifer Marino Thibodaux is an Associate on the Gibbons E-Discovery Task Force.

Tags: Jurors, Legal Decisions & Court Rules, Social Media

Posted on February 24, 2012 by Gibbons P.C.

Still No Cure for the Malady of Jurors' Social Media Use During Trials and Deliberations

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.

Challenges with and Consequences of Detection

Of the 28 judges who indicated how they learned of a juror’s improper use of social media, the most common sources of that discovery were fellow jurors, attorneys or information learned in post-trial motions or interviews. Judges also learned of the malfeasance through court personnel or a party. Most notable is the fact that in only two instances did judges report personally observing jurors utilizing electronic devices in the courtroom. Upon learning of such improprieties, those judges have removed the juror, cautioned the juror about removal, declared a mistrial, held the juror in contempt, fined the juror, questioned the juror and/or held a hearing to determine the scope and nature of information shared.

Strategies for Preventing Jurors’ Use of Social Media Solutions

Fortunately, the majority of the judges who responded to the questionnaire have taken measures to prevent jurors from using social media during trial and/or deliberations, though surprisingly, 30 judges (6%) admitted not specifically addressing the issue with jurors. To prevent use of this media, judges have employed model jury instructions; reminded jurors during voir dire and through various points in the trial of the prohibition and the rationale behind it; confiscated phones and electronic devices during deliberation and/or at the start of each day of trial; articulated potential consequences of disobeying instructions; and/or required jurors to sign a certifications or statements promising not to use social media while serving on a jury or that they adhered to the instructions.

How do we know what, if any of those procedures are effective? The answer is we don’t. As conceded by almost half the jurists who responded to questions about preventive measures and whether they were effective, they simply do not know whether the steps taken were successful. In the meantime, while recognizing there is no panacea, judges, attorneys and fellow jurors must police the use of social media by jurors during trials and deliberations.

Tags: Blogs, Chat Rooms, Facebook, Internet, Litigation Preparedness & Strategies, Social Media

Posted on February 21, 2012 by Gibbons P.C.

Lester v. Allied Part 2: "Clean Up" of Compromising Social Media Evidence Can Result in Severe Sanctions

Though some practitioners might be in denial, the follow-up sanctions orders in Lester v. Allied Concrete Co. et al. dated May 27, 2011 and September 23, 2011 should leave no room for doubt that preservation of social media is as important as any other electronic data or discovery. Similarly, the penalty for intentionally destroying such evidence may reach beyond the purse strings.

As reported late last year in a blog posting regarding Lester Part I, defense counsel moved for sanctions against plaintiff Isaiah Lester and his attorney, Matthew B. Murray, for spoliation of Facebook evidence. Ultimately, although defense counsel’s request for a new trial was denied after the jury had reached a $10.6 million verdict related to the tragic death of Lester’s wife in an automobile accident, Lester and Murray were ordered to pay defense counsel respectively, $180,000 and $542,000. But the sanctions did not end there; Murray’s misconduct was referred to the Virginia State Bar and allegations of Lester’s perjury were referred to the local prosecutor.

During discovery, defendants sought production of the contents of Lester’s account because they believed it would help their case on the issue of damages. Defendants were inspired to pursue this evidence after discovering a photo on Facebook depicting “Lester clutching a beer can, wearing a T-shirt emblazoned with ‘I [heart] hot moms.’” Specifically, they served discovery requests that sought information relating to Lester’s Facebook account including screen-prints and attached the compromising picture.

After reviewing Lester’s Facebook page in conjunction with the discovery requests, Murray’s paralegal (at Murray’s direction) advised Lester via e-mail to “clean up” the Facebook page because “we do NOT want blow ups of other pics at trial so please, please clean up your facebook and myspace.” She also advised there were “other pics that should be deleted.” Thereafter, Murray concocted a scheme to deactivate Lester’s Facebook account and to advise defense counsel that on the date the answer to the discovery was signed that Lester had no Facebook page.

Shortly thereafter, Lester deleted 16 photos (which were ultimately available at trial) to ensure he complied with Murray’s initial “clean up” request, although Murray denied knowledge of deletion of these photos in discovery responses. Thereafter, Murray and Lester attempted -- unsuccessfully -- to cover up these communications and related acts. (Defendants’ internet technology expert was ultimately able to confirm deletion of the photos).

The amount and scope of sanctions in Lester make clear that social media evidence is as important as other electronic discovery, and that the penalties for its spoliation can be as severe as those for destroying other evidence. While the egregious malfeasance of Lester and Murray (and Murray’s paralegal, who was under his supervision) did not result in an overturned verdict (though it was reduced by around $4 million for other reasons), both counsel and client paid a high price for their cavalier treatment and destruction of Facebook evidence.

Tags: Case Summaries, Facebook, Legal Decisions & Court Rules, Sanctions, Service Providers, Social Media

Posted on February 3, 2012 by Gibbons P.C.

Ooops, They Did it Again -- Jurors Continue to Improperly Use the Internet, and Courts Struggle with Solutions

All over the country, courts are struggling with how best to prevent juror communications and/or research on the Internet, including on social media such as Facebook. What's the solution? Thus far, there is no clear answer, as evidenced by a recent New Jersey case in which a juror dodged sanctions for contempt after researching a child sex-crime case involving a former pastor on the Internet -- even after being instructed to refrain from such Internet research.

In the New Jersey case, not only did the juror research certain legal terms on Wikipedia, but he also distributed handouts to his fellow jurors several days into the deliberations -- despite several precautions in place. For example, during voir dire, the court advised that the jurors should not consider facts outside of trial testimony and exhibits and similarly should not read about the case in the media. The judge also read the model jury charge each day of the trial. It reiterated that deliberations could only be based on what was presented during trial and cautioned jurors not to read about or research the case "in print, on the Internet or on any blog."

After the trial judge declared a mistrial, Bergen County Assignment Judge Peter Doyne issued an order to show cause why the juror should not be held in contempt. Judge Doyne ultimately found that a contempt sanction was not warranted because the error appeared to be a "genuine, though perhaps reckless, mistake," adding that while the conduct was contemptuous, it was not willful beyond a reasonable doubt. Judge Doyne suggested, however, that NJ's Model Jury Charges be amended "to make unquestionably clear that the prohibition on juror research and outside materials is absolute."

These steps may be necessary, as this is not the first time that jurors have engaged in improper electronic communications or research in New Jersey. In previous matters, a juror was dismissed after attempting to “friend” a defendant on Facebook and a court reversed manslaughter convictions after a juror conducted Internet research.

Recently, in addition to proposing revisions to jury instructions, other jurisdictions have attempted to employ creative means of preventing jurors from outside communications or research and/or punishing them if they disobey. For example:

In the Southern District of New York, Shira Scheindlin, U.S.D.J., contemplated requiring jurors to sign a pledge, promising that they would not use the Internet to research the case or be subject to perjury;
In California, jurors could now be exposed to civil penalties and/or jail time if they willfully disobey jury instructions prohibiting them from engaging in electronic or wireless communications or conducting Internet research about the trial pursuant to Assembly Bill No. 141, which amends the Code of Civil Procedure and Penal Code;
In Michigan, a juror was removed from a jury, fined $250 and ordered to write an essay on the Sixth Amendment for posting a comment about the case on Facebook that she was “actually excited for jury duty tomorrow. It’s gonna be fun to tell the defendant they’re GUILTY. . . .”;
In England, a juror was sentenced to eight months in jail after friending a defendant in a drug trial;
In New Jersey, the Supreme Court recently proposed guidelines to limit the use of electronic devices in the courtroom, which do not directly address juror misconduct on the Internet, but might stem the tide of such misconduct.

Unfortunately, there is probably no cure-all solution to stop this growing problem. A recent report issued by the Federal Judicial Center last month, reinforces that challenge. At the end of the day, it is incumbent upon judges and attorneys to remain vigilant in educating jurors on what constitutes prohibited research and communications (in the traditional and cyberspace forms). Jurors should also be advised of the consequences of violating such directives.

Tags: Facebook, Internet, Jurors' Internet Use, Litigation Preparedness & Strategies, Social Media

Posted on January 23, 2012 by Elizabeth Ann Fitzwater

Recent Regulatory Guidance from the SEC on the Use of Social Media

Broker-dealers and investment advisors face a variety of legal and compliance ramifications resulting from the expanding use of social media for business purposes. It is now commonplace that an entity or individual in the securities industry will employ a combination of social media platforms including Facebook, Twitter, YouTube and LinkedIn to market and network with their investors and potential investors. For example, an investment advisory firm may establish its own Facebook page where industry-related information may be posted, an investment advisor may “tweet” investment and wealth management strategies, or a registered representative may present his experience, licensures or his own opinions on trending stocks on his LinkedIn page.

Both the SEC and FINRA have now clearly articulated that the use of social media and its contents by regulated financial entities or individuals is not exempt from pre-existing compliance and regulatory requirements, the latter of which we previously blogged on. Click here for prior blog post. This is so despite the challenges faced when these new “in the moment” marketing channels meet recordkeeping and retention requirements and compliance regulations designed to protect investors. These challenges include ensuring compliant content of communications on platforms that are designed for spontaneous interchange, a firm’s determination and monitoring of “personal” versus “business” use by its registered representatives and employees, and regulating third-party content and contributions to a regulated-entities’ social media platform.

Beginning in late 2010 through early 2011, the SEC conducted a sweep of registered investment advisors and investment adviser firms to gather information about their use of, and policies and procedures regarding, social media including their existing or prospective communications on social media and those related to ongoing monitoring or review of such communications. On January 4, 2012, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a national examination “Risk Alert” providing the Staff’s observations based on a review of investment advisors of varying sizes and strategies that use social media. The OCIE, while more informal than the previously-issued FINRA Notices, made clear that a firm’s use of social media must comply with the already-existing provisions of the federal securities laws including anti-fraud, compliance and recordkeeping provisions. The Risk Alert’s “key takeaway[ ]” was as follows:

Investment advisers that use or permit the use of social media by their representatives, solicitors and/or third parties should consider periodically evaluating the effectiveness of their compliance program as it relates to social media. Factors that might be considered include usage guidelines, content standards, sufficient monitoring, approval of content, training, etc. Particular attention should be paid to third party content (if permitted) and recordkeeping responsibilities.

The Alert came on the heels of the SEC’s January 4, 2012 charge of an Illinois-based investment advisor related to his alleged offer to sell more than $500 billion in fictitious securities through various social-media websites such as LinkedIn. The SEC simultaneously issued an “Investor Alert” aimed to help investors be better aware of fraudulent schemes that use social media, and an “Investor Bulletin” containing best practices for investors to protect their information and avoid fraud.

One well-publicized attempt to comply with applicable regulations has been offered by financial services firm Raymond James Financial Inc. On November 2, 2011, Raymond James and Actiance (the company providing the software for Raymond James’ program), announced the implementation of a self-proclaimed “social media solution for financial advisors.” The “Socialite” platform is described as “enabl[ing] the company’s financial advisors to utilize social media sites including LinkedIn, Facebook and Twitter. The firm is also offering advisors optional marketing support with access to a library of pre-approved content and analytics to measure engagement and their social graph.” The Socialite system apparently allows financial services firms to moderate, manage and archive social media traffic routed through the solution. This approach, while perhaps removing the spontaneity of social media and certainly providing some delay in communications, provides at least a partial solution to this growing industry issue.

Elizabeth Ann Fitzwater is Counsel to the Gibbons Business & Commercial Litigation Department and a member of the Gibbons E-Discovery Task Force.

Tags: Compliance, Corporate Information & Records Management Policies, Document Retention, Social Media

Posted on December 16, 2011 by Gibbons P.C.

Chief Judge Finds That Alteration of Facebook Page Can Lead to Spoliation Inference

In a trademark infringement case involving two restaurants, Katiroll Company, Inc. v. Kati Roll and Platters, Inc. et al., Plaintiff sought a spoliation inference, alleging various discovery abuses involving several types of evidence including social media. Specifically, Plaintiff requested sanctions for the individual Defendant’s failure to preserve his Facebook pages in two different ways. Recognizing that Facebook users change their pages frequently given the nature of the media at issue, Chief Judge Brown of the District of New Jersey crafted a creative remedy, which was based in large part on the level of prejudice to Plaintiff.

Regarding the first Facebook issue, Plaintiff sought PDF versions of Defendant's Facebook pages before they were taken down pursuant to Plaintiff’s take-down request. The Court declined to sanction Defendants for actions taken at Plaintiff’s request because it would be "unjust."

Plaintiff also sought a spoliation inference because the individual Defendant altered his profile picture on Facebook. The prior picture reflected the infringing trade dress of the restaurant at issue but was not preserved. The Court recited the four requirements for a spoliation inference, which the Chief Judge described as the mildest of sanctions: (1) whether the evidence was in the party’s control; (2) whether the evidence was actually suppressed or withheld; (3) whether the evidence was relevant vis-à-vis the claims or defenses at issue; and (4) whether it was reasonably foreseeable that the evidence at issue would subsequently be discoverable. The Court concluded that the most important consideration in determining what level of fault is required to support the second factor (an issue that is disputed within the District) is the degree of prejudice to the movant. Specifically, the Court concluded that a negligence standard may be appropriate if there was substantial prejudice whereas intentional conduct would be required if minimal prejudice resulted.

The Court had little difficulty finding that Plaintiff met the third requirement. It similarly found that the first requirement was met because "defendants have a discovery obligation to produce [websites]” and “only defendants knew whether the website would be changed." As for the second and fourth requirements, the Court found that, although the individual knew he had to preserve evidence, “it would not have been immediately clear that changing his profile would undermine discoverable evidence" given that a change of a profile picture "changes the picture associated with each and every post that user has made in the past.” Although the Court found that the spoliation was not intentional, the Court also determined that the loss of information was “somewhat prejudicial.” But instead of imposing an adverse inference instruction (as Plaintiff had requested), the Court directed Defendant to post the image of the allegedly infringing picture for a short period of time so that Plaintiff could then print relevant posts; thereafter, Defendant was permitted to re-post the non-infringing picture.

Katiroll demonstrates the Court’s understanding that the nature of Facebook invites changes to postings and pictures, and it teaches that the prejudice to the movant is a significant factor in determining the level of fault required before an adverse inference instruction will be imposed. Katiroll also demonstrates that courts will fashion novel remedies for spoliation in the social media context.

Tags: Adverse Inference, Case Summaries, Legal Decisions & Court Rules, Sanctions, Social Media, Spoliation

Posted on December 12, 2011 by Phillip J. Duffy

The Fifth Annual Gibbons E-Discovery Conference Closes With Helpful Guidance on Drafting Records Management Policies

An effective and up-to-date set of records management policies may help companies reduce the likelihood of sanctions and other adverse consequences by ensuring records are retained and preserved in accordance with legal requirements, according to Gibbons Director Phillip Duffy; TechLaw Solutions’ Northeast Regional Director Michael Landau; and Inventus LLC Senior Consultant Bryan Melchionda.

The challenges, Duffy notes, include identifying and managing data, determining how long to retain it, and how to implement policies and execute them.

“As a general rule, records should be retained long enough to satisfy the purpose of their creation, and the applicable legal requirements, including those imposed by applicable statutes or regulations” he says. “Of course, there is also a common-law duty to preserve records that are relevant to lawsuits, investigations, audits and other circumstances, which is why every records management policy must contain provisions for institution of a legal hold when necessary.”

“So while it’s not unreasonable to destroy records after a specified period in compliance with a company’s general policy, before destruction begins, one must be certain that a duty to preserve that may require suspension of that routine destruction has not arisen and is not likely to arise,” Duffy adds.

But the regulations may be more constrained for non-profits, thanks to the Sarbanes-Oxley Act of 2002, notes TechLaw's Landau.

“Certain SOX requirements impose criminal liability on exempt organizations that destroy records with the intent to obstruct a federal investigation,” he says. “Additionally, IRS’ revised Form 990—the annual information return filed by most publicly supported exempt organizations—indicates the agency’s intent to continue to scrutinize corporate governance policies of exempt organizations.”

The challenges aren’t limited to paper-based documents, notes Inventus' Melchionda.

“Despite the widespread use of electronic filings, the volume of paper records is increasing in about 56 percent of organizations, and it’s decreasing in only 22 percent,” he relates. “Concurrently, electronic records volume is increasing rapidly for 70 percent of companies and it’s not decreasing in any of them.”

Findings like those hint at the potential cost savings, and regulatory compliance that may be utilized by businesses, Melchionda points out.

“We worked with a Fortune 10 financial services company that requested a comprehensive physical records reconciliation project to comply with records retention rules and business process procedures,” Melchionda says. “The client was incurring a high annual carrying cost for records with inventory that was more than 10 years old.”

Completing the metadata record-keeping requirements associated with the non-compliant records meant the client was able to make “confident and defensible retention and destruction decisions” on the records “as well as provide cost savings opportunities,” he adds. “We developed a robust methodology and strategy that provided better planning and estimation of disposition, and created scalable, repeatable record classification methodology while aligning record classification with corporate taxonomy. We’ve had cases where improved record retention and destruction strategies have yielded annual savings of nearly $800,000, while easing the integration of legacy and present records through a manageable, scalable and process driven framework.”

Generally Accepted Recordkeeping Principles, or GARP, have been developed by ARMA International, a non-profit professional association that addresses issues concerning the efficient maintenance, retrieval and preservation of vital records and information, says Duffy.

“The eight GARP principles address accountability, transparency, integrity, protection, compliance, availability, retention and disposition,” he explains. “Being GARP-compliant involves identifying all laws and regulations, developing systematic processes to capture and manage records through their life-cycle, and establishing continuous audit and improvement processes.”

Adherence to GARP Principles can result in ethical decisions by organizations and individuals, he adds, noting that the success of such efforts means they must be embraced by board and C-level officers.

“In our experience, GARP compliance requires the establishment of a statement of purpose to ensure compliance, facilitate retrieval and reduce storage costs,” he says. “You also have to establish the scope of your efforts, including the identification of employees, business units and storage locations.”

Consider the reasonableness of your records management policies and practices, Duffy advises.

“Among other issues, examine their scope, purpose, application and compliance,” he explains. “Do they address preservation and production issues, and do they address the information life cycle, while providing for obligations and measures directed at protecting privacy of information that should be kept confidential, such as medical records or propriety company information?”

As Landau further explained, “over-restrictive IG policies and record retention plans will lead to underground archiving.” Policies need to focus on business continuity needs as well as regulatory compliance. They also need to allow employees to do their jobs effectively and efficiently. “Clearly defensibility and risk mitigation is critical and so is the ability and willingness to comply. It is a delicate balance that has to be managed,” says Landau.

"Overall, retention schedules should be prepared with care," Duffy adds.

“Bear in mind that consistent application of your records policy can demonstrate good faith legal compliance,” he cautioned. “So, when you group records into categories, use terms that all employees understand—and speak with your IT, regulatory/compliance and legal departments so they ‘make sense’ to the employees. If you do so, you're much more likely to facilitate understanding and implementation.”

The PowerPoint presentation that was used for this panel discussion can be found here.

Phillip J. Duffy is a Director on the Gibbons E-Discovery Task Force.

Tags: Compliance, Corporate Information & Records Management Policies, Data Management, Document Retention, E-mail, ESI, Email Management, Employee Training, Information Management Counseling, Litigation Hold, Litigation Preparedness & Strategies, Litigation Readiness, Policies, Records Retention Policy, Social Media, Storage Counseling

Posted on November 16, 2011 by Robert D. Brown, Jr.

The Fifth Annual Gibbons E-Discovery Conference Kicks Off with an Interactive and Thought-Provoking Overview of the Past Year's Pivotal E-Discovery Case Decisions

The Fifth Annual Gibbons E-Discovery Conference kicked off with an interactive overview of the important judicial decisions from 2011 that shaped and redefined the e-discovery landscape. Before an audience of general and in-house counsel, representing companies throughout the tri-state area, the esteemed panel of speakers, including Michael R. Arkfeld, Paul E. Asfendis, and Mara E. Zazzali-Hogan, moderated by Scott J. Etish, tackled the issues faced by the courts over the past year. Through a series of hypotheticals, the panelists and attendees analyzed and discussed how to handle the tough e-discovery issues that arose and how the courts’ decisions again reshaped the e-discovery landscape as we know it. Litigation hold protocols and spoliation concerns, the use of social media in discovery with its attendant ethical concerns, and the use of social media and the Internet in the courtroom were the hot topics of the day. This interactive overview of the past year’s hot button, e-discovery issues was an instant success and clearly set the tone for the remainder of the conference.

Right out of the gate, the panelists and audience examined and debated Judge Scheindlin’s aggressive litigation hold protocol set forth in Pension Committee and the ramifications and aftermath it has since had on litigants. The attendees were treated to an in-depth, interactive discussion of two critical opinions from 2010-11 decided in the Southern and Western Districts of New York. These decisions made it clear that there are other approaches to the problems raised in Pension Committee other than the “gotcha game” that has since ensued. The panelists and attendees discussed the significance of the split in authority clearly seen in Pension Committee (S.D.N.Y), Orbit One (S.D.N.Y.) and Steuben Foods, Inc. (W.D.N.Y.). The implications of whether the more liberal and practical approach found in the Orbit One and Steuben Foods decisions were also discussed at length, during which time the attendees were asked to offer their insights on whether and how they would approach their existing litigation hold protocols as a result of these recent opinions. This examination served as a perfect segue into the analysis of other key issues raised by litigation hold protocols and the production of electronic evidence, including spoliation of evidence, sanctions, and waiver of privileges by inadvertent production of data.

In addition to the considerable discussion afforded to the recent changes in the litigation hold area, the panelists next offered a thought-provoking analysis of the important developments shaping the continued evolution of e-discovery disputes stemming from discovery requests for information maintained by a litigant or witness on social media host sites. As social media has become a modern replacement for face-to-face communications, its role in the litigation of cases has increased exponentially. The panel debated the primary question of whether counsel should be afforded access to the private sections of a litigant’s Facebook, MySpace or other social media account and how the courts and local bar associations answered this question over the past year. The discussion also focused on what measures counsel can and should employ to obtain access to this private information once litigation is threatened. As the panel emphatically stressed, the past year’s decisions and bar association opinions clearly demonstrate that “friending” a litigant or using deceptive practices to gain private access is extremely risky and could result in discipline. The issue of spoliation of evidence in this context, an issue recently addressed by the District of New Jersey in Katiroll Company, Inc. was also addressed by the panel.

Before wrapping up this important roadmap to the ever increasing e-discovery issues faced by litigants and their counsel, the panel discussed and examined the challenges faced by the court with the advancements in technology and the Internet. As we are all aware, gone are the days when it took considerable time to learn about an important event or to research an issue. With the advent of smart phone devices and websites like Wikipedia, information about virtually everything is at one’s fingertips. Although extremely useful and beneficial in every day life, such instant access to information has been detrimental, at times, to the efficient administration of the law. The final hypothetical of the segment brought this very point to light when the distinguished attendees were asked to analyze what a juror did wrong when he decided to perform some research on Wikipedia regarding a critical fact of the case and then printed it out for review by his fellow jurors.

It is clear that the creation and storage of electronic data and the utilization of social media is here to stay with new advancements everyday. With these advancements, however, come new disputes and more intervention by lawyers and the courts to develop and manage methods to best keep up. It is clear that the landscape of e-discovery protocol is still unsettled with changes in methodology and philosophy popping up at a rapid pace. As the overview panel discussion made it equally clear, Gibbons is at the forefront in this area of the law and continues to strive to stay ahead for the benefit of its clients and those who may need assistance in the future.

The PowerPoint presentation that was used for this panel discussion can be found here.

Robert D. Brown, Jr. is an Associate on the Gibbons E-Discovery Task Force.

Tags: Case Summaries, Compliance, Data Management, Data Preservation, Email Management, Ethical Concerns, Facebook, Hold Triggers, Inadvertent Disclosure, Inadvertent Production, Internet, Legal Decisions & Court Rules, Litigation Hold, Litigation Preparedness & Strategies, MySpace, Pension Committee, Sanctions, Social Media, Spoliation

Posted on October 11, 2011 by Kristin D. Sostowski

NLRB Report on Social Media Cases Provides Guidance for Employers on Social Media Policies

The National Labor Relations Board’s Acting General Counsel recently issued a report and press release summarizing the outcomes of recent NLRB cases involving employees’ use of social media and the legality of employers’ social media policies. Among the cases discussed in the report are several in which the Board found that provisions of employers’ social media policies violated Section 8(a)(1) of the National Labor Relations Act, which prohibits work rules that would “reasonably tend to chill employees in the exercise of their Section 7 rights” to engage in “concerted activities” for the purpose of “mutual aid or protection.”

Although the NLRB report does not pronounce any new or specific rules for employers to follow in drafting social media policies, it suggests that to avoid running afoul of Section 8(a)(1), social media policies should be narrowly tailored so as not to prohibit “concerted activity” via social media, such as online discussion among coworkers regarding terms and conditions of employment. Employers should be mindful that union and non-union employees alike are covered by the NLRA, and thus the Board’s recent rulings on social media policies are applicable to virtually all employers.

The report specifically discussed Board rulings that the following social media policy provisions were overly broad and violated Section 8(a)(1):

Policy prohibiting the use of social media to post pictures depicting the company in any way, such as pictures containing the company uniform or logo.
Policy prohibiting employees “making disparaging comments when discussing the company or the employee’s superiors, coworkers, and/or competitors.”
Policy barring employee use of social media to engage “in inappropriate discussions about the company, management, and/or coworkers.”
Policy that prohibited employees from using social media in a manner that would: (1) “ violate, compromise, or disregard the rights and reasonable expectations as to privacy or confidentiality of any person or entity,” (2) constitute “embarrassment, harassment or defamation of the [employer] or any … employee, officer, board member, representative, or staff member,” or (3) “lack truthfulness or that might damage the reputation or goodwill of the [employer], its staff, or employees.”
Policy barring employees from using social media to “talk about company business,” post “anything that they would not want their manager or supervisor to see or that would put their job in jeopardy,” disclose “inappropriate or sensitive information” about the employer, or post “pictures or comments involving the company or its employees that could be construed as inappropriate.”
Policies prohibiting employees from using the company’s name, address or other information in their personal online profiles, or from revealing information regarding coworkers, company clients, partners or customers without their consent.

In light of these NLRB rulings, employers should reexamine their social media policies (or consider adopting one), keeping in mind the following best practices.

A social media policy should be clear and understandable to the average employee. The NLRB’s rulings have in large part turned on the ambiguities of social media policies, and the possibility that employees may misunderstand the policies to bar protected activities.
A social media policy must not be overbroad. Policies should be narrowly drawn to address the employer’s legitimate policy objectives (for example, preventing the disclosure of the company’s proprietary information via social media or restricting the use of social media to engage in harassing conduct that would violate the company’s anti-discrimination and harassment policies).
To put employees on notice of a social media policy’s coverage, the policy should include examples of prohibited conduct and/or definitions of terms that could be misconstrued by employees as barring protected activity.
A social media policy should include limiting language advising employees that the policy does not apply to activities protected by Section 7 of the NLRA.

In light of the continuous evolution of social media technology and the law in this area, employers should review their social media policies with employment counsel periodically to ensure that the policy language complies with current law and is consistent with the state of technology. To discuss your company’s policy needs, please contact any attorney in the Gibbons Employment & Labor Law Department.

Kristin D. Sostowski is a Director in the Gibbons Employment & Labor Law Department and a member of the E-Discovery Task Force. This blog post originally appeared on the Gibbons Employment Law Alert.

Tags: NLRA, National Labor Relations Board, Section 7, Section 8(a)(1), Policies/Handbooks, Social Media, Terms and Conditions

Posted on October 4, 2011 by Thomas J. Cafferty

New Jersey Supreme Court Considering Guidelines Concerning Use of Electronic Devices in Courtroom

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.

B. COMMON AREAS OF THE COURTHOUSE
While in the common areas of a courthouse, any person may possess and use an Electronic Device for any purpose other than to take photographs and/or electronically record or broadcast. Utilization of Electronic Devices in the common areas for these latter purposes requires court permission. This restriction is designed to insure that the restrictions of the Guidelines on photographing, electronically recording, and/or broadcasting in the courtroom are not circumvented by engaging in those activities immediately outside the courtroom door.

C. INSIDE THE COURTROOM
For the first time since the inception of the original Guidelines, the use of Electronic Devices (other than still cameras and television cameras) is permitted in the courtroom. The Guidelines create a distinction between the use of Electronic Devices to broadcast or photograph within a courtroom and the use of such devices for all other purposes.

Utilization of an Electronic Device for purposes other than to photograph, electronically record and/or broadcast a proceeding requires the execution of an agreement (“Agreement”) to use Electronic Devices and the filing of that Agreement with the Court. Upon execution and filing of the Agreement, which is valid for one year, the person may use an Electronic Device inside a courtroom to silently take notes and/or transcribe and receive data communications in the form of text only. In addition to the execution and filing of an Agreement, however, the individual must specifically request permission from the court. The Guidelines also continue existing restrictions on photographing, recording and/or broadcasting certain images from within a courtroom, such as jurors.

D. GENERALLY
The Guidelines further provide a mechanism for attorneys desiring to utilize an Electronic Device in a courtroom for purposes other than to photograph, electronically record and/or broadcast, to do so by annually completing the Agreement and filing same with his or her New Jersey Lawyers’ Fund for Client Protection form.

Finally, in recognition that individual cases may require specific restrictions on the use of Electronic Devices, the Guidelines specifically provide that a Court retains discretion to impose such restrictions on the use of Electronic Devices necessary to implement the goals of the Guidelines, which include avoidance of interference in court proceedings and maintenance of appropriate courtroom decorum.

The Supreme Court has published for comment the proposed Guidelines which may be found on the Judiciary’s website. The comment period ends Friday, October 28, 2011. For related blog posts regarding the use of electronic devices in the courtroom, click here and here.

Thomas J. Cafferty is a Director in the Gibbons Business & Commercial Litigation Department. Nomi I. Lowy, Counsel to the Gibbons Business & Commercial Litigation Department, and Lauren James-Weir, an Associate in the Gibbons Business & Commercial Litigation Department, co-authored this post.

Tags: Blogs, Cell Phones, Internet, Laptops, Legal Decisions & Court Rules, Social Media

Posted on September 21, 2011 by Paul A. Saso

FINRA Issues Regulatory Notice 11-39: Social Media Websites and the Use of Personal Devices for Business Communications

In August 2011, FINRA, the self-regulatory agency of the securities industry, issued Regulatory Notice 11-39, offering additional guidance concerning the use of social media and supplementing its first notice on the subject—Regulatory Notice 10-06, issued in January 2010. Notice 11-39 focuses on issues relating to FINRA members’ use of social media, including record-keeping, supervision and responding to third-party posts and links. The Notice includes 14 “Q&As,” which provide instruction on the practical application of a firm’s and “associated person’s” (i.e., FINRA members) obligations under applicable laws and regulations when it comes to social media. With respect to record-keeping requirements, social media websites raise new complications because member firms do not themselves typically sponsor or host the content on those websites. The Notice, however, clarifies that record retention requirements continue to apply to content on social media sites and that the controlling question is whether the communications on those sites relate to the firm’s “business as such.” Any business communication made via Facebook, for example, must be “retained, retrievable and supervised.”

Firms are also required to supervise the content of associated persons’ social media websites, including conducting “appropriate training and education concerning [the firm’s] policies,” and must follow up on “‘red flags’ that may indicate that an associated person is not complying with firm policies.” The Notice states that many firms have chosen to require associated persons to certify on an annual (or more frequent) basis that they are complying with firm policies and perform spot checks on associated persons’ social media sites to monitor compliance. (An earlier post on Gibbons E-Discovery Law Alert addressing social media policies generally can be found here.)

Third-party posts and links on social media sites raise additional concerns for FINRA members. The Notice provides that associated persons may respond to a third-party’s business-related inquiry on a personal social media site, such as a question about a particular security, as long as the response does not violate the firm’s policies concerning such communications and the firm takes appropriate steps to retain that communication. According to the Notice, many firms require associated persons to provide only a non-substantive response on the social media site, directing the person with an inquiry to firm-approved communication channels, such as the firm’s email system.

In sum, Notice 11-39 does not alter the existing rules concerning communications between member firms and associated persons on the one hand, and their clients and the general public on the other, but serves to acknowledge the difficulties in applying the traditional rules in the social media context. The Notice recognizes that the general rules regarding firms’ supervision and retention of business-related communications are complicated where certain communications no longer take place in hard copy or even on firm-provided devices or websites, but seeks to instruct members that these rules apply nonetheless and provides guidance on how members can continue to comply.

Paul A. Saso is an Associate on the Gibbons E-Discovery Task Force.

Tags: Compliance, Corporate Information & Records Management Policies, FINRA, Facebook, LinkedIn, MySpace, Social Media, Twitter

Posted on August 8, 2011 by Gibbons P.C.

How a "Stink Bomb" E-Mail and Its Proof That Facebook Pictures Were Deleted Might Have Blown Up a $10.6 Million Verdict

Parties in all types of cases often post pictures and messages on Facebook that might be detrimental to their cases. After his wife died tragically in an automobile accident, and he brought a wrongful death case, Isaiah Lester did just that when he posted a photo of himself wearing an “I [love] hot moms” t-shirt and garter belt on his head while he had a beer in hand. That was his first bad choice.

The defense attorneys, who represented the driver of the vehicle and his employer, saw the picture and requested similar pictures and screen shots from Lester’s Facebook account. The next day, Lester’s attorney, Matthew B. Murray (who is the Virginia Trial Lawyers Association’s immediate past-president), allegedly instructed his paralegal to advise Lester to delete some Facebook pictures. Lester, however, purportedly informed Murray that he had deleted his Facebook account. Clearly, these actions reflect additional unwise decisions. Defense attorneys are now challenging the $10.6 million verdict, which may be the state’s largest wrongful death case.

What was even more egregious according to defense counsel, however, was that Murray denied that Lester had a Facebook account on two specific dates on which he in fact did. They further contend that to add insult to injury, Murray denied up until the time of trial that he dictated any alteration of the Facebook account. Defense attorneys also contend that if the misrepresentations made to the court and opposing counsel were not sufficiently disconcerting, that Murray then deliberately withheld evidence, namely, a “stink bomb” e-mail reflecting that indeed, Murray had essentially directed his client to delete pictures from his Facebook page. Lester and Murray were also accused of other improprieties.

Ultimately, defense counsel proposed to the court there possible solutions: (1) dismiss Lester’s claim and enter a verdict in favor of the defendants; (2) throw out Lester’s claim, set aside the verdict and allow a new trial, which would limit Lester’s recovery of damages and prohibit Murray or his firm from representing Lester; or (3) reduce the verdict to $2.2 million or $1.1 million and preclude Lester’s attorney or the firm from collecting any contingent fees. A hearing regarding this issue will be held on September 23, 2011.

Murray has reportedly since retired from the practice of law and resigned from his firm on July 6, 2011. It is unclear if any ethical or disciplinary proceedings will follow. But suffice it to say that while attorneys should advise their clients not to post potentially damning photographs or messages to social media websites, they should be wary of the consequences of advising their clients to delete or alter such information -- particularly when it is the subject of a discovery request. (Click here for information on how to obtain Facebook discovery or preserve postings/pages through Facebook’s “Download Your Information” feature.) Indeed, that may be an obvious and prudent course of action for most attorneys. At least one attorney, however, failed to answer the clue phone on that issue.

Tags: Facebook, Legal Decisions & Court Rules, Sanctions, Social Media, Spoliation

Posted on June 27, 2011 by Suzanne Herrmann Brock

Pennsylvania Court Orders Plaintiff to Disclose Facebook and MySpace Passwords, User Names, and Log in Names to Defendant

A Pennsylvania trial court recently became one of a growing number of courts to rule that a plaintiff’s non-public Facebook and MySpace postings are discoverable. On May 19, 2011, in Zimmerman v. Weis Markets, Inc., No. CV-09-1535, 2011 WL 2065410 (Pa. Comm. Pl. May 19, 2011) the Court of Common Pleas of Pennsylvania granted the defendant’s motion to compel the plaintiff, a former employee of the defendant, to disclose his Facebook and MySpace passwords, user names and log in names. Notably, the Court reasoned that because the plaintiff voluntarily posted all of the pictures and information on his Facebook and MySpace sites, he had no reasonable expectation of privacy to the postings although the posts were on non-public pages.

Key to the Zimmerman Court’s decision was the fact that the defendant demonstrated that the public portions of the plaintiff’s Facebook and MySpace pages contained postings and pictures directly contrary to the plaintiff’s claim that a work related accident had caused his health to be seriously and permanently impaired. The Court held that: (1) because the plaintiff had put his physical condition at issue, the defendant was entitled to “discovery thereon” and (2) based on a review of the publicly accessible portions of the plaintiff’s Facebook and MySpace pages, there was a reasonable likelihood of additionally relevant information on the non-public portions of the social media sites. Specifically, despite the plaintiff’s deposition testimony that he never wore shorts due to his embarrassment of a scar on his leg from the accident, the public portions of his MySpace page contained pictures of the plaintiff in shorts with his scar visible, as well as recent pictures of the plaintiff with his motorcycle. In addition, the public portions of the plaintiff’s Facebook page stated his interests included “ridin” and “bike stunts.”

The Zimmerman Court was careful to warn that its decision should not be construed as authorizing “fishing expeditions” or a carte blanche entitlement to private Facebook and MySpace information in every personal injury case. The Court explained that in order to obtain access to a plaintiff’s private social media postings, a defendant must file a motion that makes a “threshold showing that the publicly accessible portions of any social networking site contain information that would suggest that further relevant postings are likely to be found by access to the non-public portions.” Thus, while courts are allowing the discovery of non-public social media postings with increased frequency, the Zimmerman decision provides an important reminder of the importance of early investigation of a plaintiff’s public social media presence.

Additional discussions on the discoverability of social media postings by members of the Gibbons E-Discovery Task Force can be found here, here and here.

Suzanne Herrmann Brock is an Associate in the Gibbons Employment Law Department. This blog originally appeared on the Gibbons Employment Law Alert.

Tags: Discovery, Electronic Communications, Legal Decisions & Court Rules, Preservation, Social Media

Posted on June 20, 2011 by Stephen J. Finley, Jr.

Notes From the E-gallery: Live texts, tweets and postings by courtroom observers present new challenges

Courts frequently grapple with questions raised by the use of social media in the legal process. From the admissibility of social media to limitations on its use by jurors, courts are continuing to develop new tools and best practices to ensure the outcome of a case is not impacted by social media sites.

While the issues raised by new social media technologies have primarily concerned those actually involved in a trial (i.e., the parties, their counsel, and members of the jury), that is beginning to change. Outside observers and news reporters are utilizing social media to report on trial happenings, sometimes in real-time. During a recent murder trial, a reporter for the London (Ontario, Canada) Free Press used Twitter to provide hundreds of updates as events unfolded. Similarly, in the media firestorm surrounding the Casey Anthony murder trial in Florida, at least one news outlet has assigned a reporter whose sole job is to blog from the gallery throughout the trial. This sort of real-time, play by play coverage of high profile legal proceedings poses new issues for courts, and may pose particular concerns in those jurisdictions where cameras are not permitted in the courtroom.

Policing the tweets, texts and blog posts of courtroom observers may test the limits of judicial power. By way of example, a courtroom observer is not subject to lengthy pre-trial screening and instruction like jurors, does not fall within ethics rules like attorneys, and is not subject to sanctions like a party to a lawsuit. Assuming that tweeting and texting from a courtroom is prohibited (it is not clear that even well written courtroom rules would preclude the occasional tweet, and, as noted, at least some courts are readily allowing members of the media to openly tweet and blog), a judge has limited powers to deal with the misbehaving courtroom observer. In all likelihood, the tweeting observer would be removed from the courtroom, but little else would be done. It is especially unlikely that any sort of contempt proceeding would be initiated. Perhaps most importantly, courts can do nothing to scrub Twitter, Facebook or other social media site of the content posted from the back of the courtroom. Courts would have to rely upon its instructions to the jury and trust that the jurors are not viewing media coverage or social media sites discussing their case.

For the moment, the legal system’s primary focus is on ensuring that parties, counsel and jurors are not utilizing social media to post about a trial and/or educate themselves about a case. Increasing use of social media, especially Twitter, as a means of reporting about a legal proceeding may lead to the development of rules regarding observer use of social media and, perhaps, efforts to monitor social media coverage of legal proceedings, although it appears that in today’s information overload environment, such regulation may be unwelcome and ultimately impossible.

Stephen J. Finley, Jr. is an Associate on the Gibbons E-Discovery Task Force.

Tags: Courtroom, ESI, Legal Decisions & Court Rules, Social Media, Twitter

Posted on June 16, 2011 by Gibbons P.C.

The Gibbons E-Discovery Task Force and the NJ Chapter of Women in E-Discovery present "The Internet and Social Media in the Courtroom"

Please join the Gibbons E-Discovery Task Force and the NJ Chapter of Women in E-Discovery in its presentation of "The Internet and Social Media in the Courtroom," hosted at Gibbons on Tuesday, June 21, 2011, from 6:30 to 7:30 pm. CLE credit is available for NJ and NY, and pending for PA. Jennifer A. Hradil will moderate a panel featuring Mara E. Zazzali-Hogan, Jennifer Marino Thibodaux, and Suzanne Herrmann Brock, regarding the use of social media in litigation and the courtroom.

We will discuss how attorneys can use social media and the internet as a resource to research potential jurors and as a discovery tool to obtain potential evidence.

For additional information or to register, contact Andrea Smith at (973) 596-4451 or rsvp@gibbonslaw.com.

Tags: Internet, Legal Decisions & Court Rules, Social Media, Technology Developments & Issues, Women in E-Discovery

Posted on May 11, 2011 by Patrick V. DiDomenico

How Useful is Facebook's "Download Your Information" Feature in E-Discovery?

In October 2010, Facebook announced a new Download Your Information (“DYI”) feature, billed as “an easy way to quickly download to your computer everything you've ever posted on Facebook and all your correspondences with friends: your messages, wall posts, photos, status updates and profile information.” The Facebook announcement included a short video detailing how to use the feature. Cnet TV has a more in-depth video. Craig Ball also wrote an article about this feature in the February 23, 2011 issue of Law Technology News.

Introduction

The DYI feature is potentially useful to attorneys in at least two ways: preservation of their client’s electronically stored information (“ESI”) and discovery of an adversary’s ESI. If your matter involves an issue that will likely require your client to produce evidence from his or her Facebook account, it may be advisable for your client to preserve the evidence by downloading his or her Facebook information. It is generally better to err on the side of preservation than to risk the possible penalties of not preserving evidence. Read more about the risks of failing to preserve ESI here. Similarly, if you think that your adversary’s Facebook account contains ESI that may be relevant to the prosecution or defense of a claim, then it may be wise to demand that the adversary preserve that information by using the DYI feature and produce the downloaded files. But, how effective is the DYI feature as a discovery tool? And, is there any way to be sure that the adversary is not hiding any information?

Testing the DYI Feature as an E-Discovery Tool

The DYI feature rolled out to more than 500 million Facebook users over the span of a number of months. When it finally hit my account, I decided to test it out to determine its usefulness as an e-discovery tool. Being a bit of a cynic, my main concern was whether the feature archives deleted content in the event that an unscrupulous adversary intentionally deletes relevant Facebook information. Will the DYI feature uncover the deleted content? I decided to investigate.

The Approach: 1. Download, 2. Delete, 3. Re-download, 4. Compare

Step 1: I initiated the download of my Facebook information. The procedure is easy: navigate to the “Account Settings” (a.k.a. “My Account”) page from the Account drop-down menu. Then, click the “learn more” link next to “Download Your Information.” Click the green Download button, and you will receive a message advising that you will receive an email when your archive is ready to be downloaded. Once Facebook has collected your data, click the link in the email to begin the download. You will receive a condensed (.zip) file containing your photos, wall posts, events, messages, friends list, and profile information.

Step 2: After downloading my data, I deleted from my Facebook profile the following: an email message, some wall posts, comments, photos, and even a friend (not a close friend).

Step 3: Four days later, I re-downloaded my Facebook information to compare the downloaded files with the current data in my profile. It should be noted that I actually re-downloaded my information every day for four days, but only the fourth day’s download file was different than the first day’s file. In other words, Facebook did not take a fresh snapshot of my account every day - it just re-downloaded the same file three days in a row. It is unclear how often Facebook actually takes a new snapshot of a profile.

Step 4: Compare the downloaded files. Except for one email message, all of the Facebook data that I deleted between the first and last DYI files were absent from the last download file. Bothered by the email anomaly, I repeated the process and found that on the second time around, the email message disappeared from the last download file.

Conclusion

According to my test, the Facebook DYI feature gathers a user’s information as it appears in their Facebook account at the time of the initiation of the procedure. The feature does not appear to “look back” and recover deleted information in the user’s account. Thus, if a Facebook user deletes account information prior to initiating the DYI procedure, that deleted information will not appear in the downloaded file. Furthermore, the downloaded file contains no indication that data was deleted.

Based on these findings, it is inadvisable for lawyers to rely solely on the Download Your Information feature for discovery of an adversary’s Facebook information. The feature gives no assurance that a litigant’s attempt to delete evidence will be revealed. Obtaining the data directly from Facebook, for example, via subpoena, may be a better approach. The question remains, of course, whether the data produced by Facebook will include user-deleted data. According to Facebook’s Privacy Policy, “deleted information may persist in backup copies for up to 90 days,” so there is a possibility that subpoenaed data will, in fact, include relevant information.

Patrick V. DiDomenico is the Chief Knowledge Officer at Gibbons and a member of the Gibbons E-Discovery Task Force.

Tags: Archive, Cnet, Computer Systems, Data Preservation, Data Recovery, Deleted Data Recovery, E-Data, ESI, Facebook, Internet, Law Technology News, Litigation Preparedness & Strategies, Production, Social Media, Technology Developments & Issues

Posted on April 4, 2011 by Stephen J. Finley, Jr.

Courts Rely Upon Jury Instructions to Discourage Juror Use of Social Media and Electronic Devices

The explosion of social media and the universal availability of electronic devices have presented a host of courtroom issues the judicial system must address, ranging from substantive legal questions like the admissibility of Facebook accounts and Twitter postings, to more ministerial issues such as the extent to which electronic devices may be utilized by counsel in the courtroom. While different courts have reached varied conclusions on these questions, courts have uniformly rejected any attempt by jurors to use technology to research a case or to post information about a case to social media sites, and increasingly use pre-trial and post-closing jury instructions.

The Judicial Conference of the United States has endorsed proposed model jury instructions aimed at advancing two goals:

Preventing jurors from independently researching a case, including through the internet or other electronic means; and
Preventing jurors from communicating about the case, including by electronic means such as e-mail or Facebook.

In addition to the model instructions drafted by the Federal Judicial Conference, several states, including New York and California, have adopted their own instructions to admonish the use of social media and electronic devices to research a case. Courts are beginning to employ these instructions.

Best practices for handling social media at trial requires certain diligence. Counsel should evaluate the risk of juror use of social media and electronic research as part of effective trial preparation. Counsel should identify what information is publicly available and evaluate whether to address it at trial, anticipating that a juror may ignore the court’s instruction to refrain from electronic sleuthing. Counsel should further insist that the jury be properly instructed on the use of electronic devices and social media prior to the start of trial, and again prior to deliberations. Counsel may also request that the court remind jurors of their obligations at appropriate intervals during trial and deliberations. To the extent permissible, counsel may also wish to monitor jurors’ social media accounts to ensure that the panel is complying with the court’s instructions.

Additional discussion on this topic can be found here.

Stephen J. Finley, Jr. is an Associate on the Gibbons E-Discovery Task Force.

Tags: Facebook, Jury Instructions, Legal Decisions & Court Rules, Litigation Preparedness & Strategies, Litigation Readiness, Social Media, Twitter

Posted on March 28, 2011 by Stephen J. Finley, Jr.

Show Me The Evidence - Use of Social Media Information at Trial

A defendant in an employment action discovers through Facebook that a plaintiff has lied about her discrimination claim. The information essentially undermines plaintiff’s entire claim. However, such information does not make it to a factfinder at trial unless the evidentiary foundations can be established -- proof of authorship and timeliness. These evidentiary foundations are not easy to establish in the ever-changing medium of social media. The anonymity offered by some social networking sites may be what makes them attractive to users, but it also makes establishing authorship of content difficult. Similarly, social media sites are constantly changing, as users can add, remove or edit content at any time. As a result, recreating a post or a profile from a particular moment in time can be difficult, if not impossible, depending on how a partciluar site functions.

In discovery, not only should litigants work to identify relevant social media, counsel should also seek to discover the facts that will be necessary to introduce social media evidence at trial. This includes information that may establish authorship, such as nicknames used by a party which may mirror an online profile, the identity of users who have viewed or commented on social media content and information relating to the inner-workings of a social media site. This information will aid in authenticating social media evidence and ensuring its admission into evidence.

At trial, the rules of evidence will determine whether electronic evidence, including social media, is admissible. In the federal courts, Federal Rule of Evidence 901 controls authentication of evidence. Rule 901 clearly places the burden of authentication on the proponent of the evidence. To satisfy Rule 901’s requirement that a document is what its proponent says it is, authorship and timeliness of social media content must be confirmed. Authorship may be established by testimony from the author or recipient, or other evidence which helps to confirm authorship, such as testimony that an individual’s commonly used nickname matches the name asociated with the online profile which authored the content. To confirm timeliness, data from a social media site may be available to confirm when information was posted and/or viewed. If data is not available from a site, witness testimony may be sufficient to confirm the time when social media content was published or viewed, although establishing timeliness may prove difficult.

As use of social media proliferates, courts will increasingly need to resolve challenges to the admissibility of social media. While the use of certain social media, like Facebook and MySpace, may already be familiar to courts, the ever-evolving nature of social media sites and applications make it difficult (if not impossible) to promulgate hard and fast evidentiary rules. Rather, the application of evidentiary rules to social media must remain flexible and fluid to ensure that relevant and critical information is available to the factfinder.

Stephen J. Finley, Jr. is an Associate on the Gibbons E-Discovery Task Force.

Tags: Admissibility, Authentication, Facebook, Litigation Preparedness & Strategies, MySpace, Social Media

Posted on February 14, 2011 by Suzanne Herrmann Brock

Court Finds Pictures Downloaded from MySpace Inadmissible

Obtaining data and images from social networking sites (“SNS”) such as Facebook, LinkedIn and MySpace has become commonplace in civil and criminal litigation. However, issues surrounding proper authentication of this information at trial remain unresolved. The New York Supreme Court’s recent opinion in People v. Karon Lenihan, 1714/2008 (Sup. Ct., Queens Cty. Nov. 12, 2010)highlights judicial skepticism surrounding the use of SNS evidence.

Karon Lenihan was convicted of second degree murder for shooting Patrick Hernandez. Before trial, Lenihan’s attorney requested, in limine, a ruling as to whether he could cross-examine two of the People’s witnesses about their alleged gang membership by using pictures Lenihan’s mother downloaded from MySpace four days after the shooting. Lenihan alleged the photographs showed the witnesses making hand signs and wearing clothing that signified an affiliation with the Crips gang, and that the witnesses’ gang affiliation was a possible motive for them to fabricate their story and frame Lenihan. The court denied Lenihan’s motion and affirmed its decision in a written opinion on Lenihan’s post trial motion to set aside the verdict. The judge set forth several grounds for barring the pictures downloaded from MySpace, including questions regarding authenticity. Specifically, the Court held as follows:

In light of the ability to ‘photo shop,’ edit photographs on the computer, defendant could not authenticate the photographs.

The court also noted that the Lenihan did not know who took the photographs or who posted them to MySpace.

Based on the court’s ruling in Lenihan, it would be difficult for a party to authenticate a photograph or image downloaded from a SNS without first obtaining a statement or affidavit from an individual with personal knowledge as to when the original photograph was taken and that the downloaded photograph is an accurate representation of the original. However, not all courts that have addressed this issue have imposed such an onerous burden to authenticate SNS and website images. For example, in Toytrackerz LLC v. Koehler, Case No. 08-2297 (GLR), 2009 WL 2591329 (D. Kan. Aug. 21, 2009) the court noted that an image printed from a website could be authenticated by testimony from the person who printed the image that the image “accurately reflects the content of the website and the image of the page on the computer at which the printout was made.” Likewise, in kSolo, Inc. v. Catona, Case Nos. 07-5213, 08-1801 (CAS) (AGRx), 2008 WL 4906115, n.5 (C.D. Cal Nov. 10, 2008), the court admitted screenshots from a website that were accompanied by a declaration from the individual who created the screenshots attesting that the “screenshots are an accurate representation of what he encountered upon visiting the website.” Thus, litigants who intend to use SNS images in support of their case should be mindful that case law regarding the authentication of SNS images is not settled and continues to evolve.

Further discussion of the admissibility of website images can be found here.

Suzanne Herrmann Brock is an Associate on the Gibbons E-Discovery Task Force.

Tags: Admissibility, Facebook, Internet, Legal Decisions & Court Rules, LinkedIn, MySpace, Social Media

Posted on January 31, 2011 by Robert D. Brown, Jr.

New York's Appellate Division Finds Facebook Accounts Off-Limits When Discovery Demands are Non-Specific

In McCann v. Harleysville Insurance Co. of New York, 910 N.Y.S.2d 614, 2010 N.Y. App. Div. LEXIS 8396 (N.Y. App. Div. Nov. 12, 2010), New York’s Appellate Division, Fourth Department affirmed the trial court’s refusal to compel Plaintiff to produce information regarding or provide access to her Facebook account. Plaintiff was injured in an auto accident with one of Harleysville’s insured. She filed a personal injury suit against the insured, which resulted in a settlement. Plaintiff thereafter commenced a new action directly against Harleysville for certain uninsured/underinsured auto insurance benefits.

During discovery, Harleysville sought disclosure of photographs from Plaintiff and an authorization for access to her Facebook account. Upon Plaintiff’s refusal, Harleysville moved to compel disclosure of Plaintiff’s Facebook account information. Harleysville argued that the information sought was relevant to whether McCann suffered a serious injury in the accident without specifying why. The trial court disagreed, finding that Harleysville’s request was “overly broad,” but noted that the denial was without prejudice “to service of new, proper discovery demands.” Harleysville then made a second request for access to Plaintiff’s Facebook account, which the Fourth Department noted specified the type of evidence Harleysville sought. Plaintiff again refused to disclose her Facebook account information and Harleysville again moved to compel. The trial court again denied the motion, finding that Harleysville failed to establish the relevancy of the evidence sought, and further granted Plaintiff’s cross-motion for a protective order.

On appeal by Harleysville, the Fourth Department, in a succinct opinion, held that the trial court properly denied Harleysville’s two motions to compel. The Court likened Harleysville’s motions to a request for permission to conduct a “fishing expedition” into Plaintiff’s Facebook account in hopes of finding relevant evidence. It disagreed, however, with the trial court’s entry of a protective order, determining that Harleysville should be allowed to seek disclosure of Plaintiff’s Facebook account in the future.

The McCann decision is consistent with Romano v. Steelcase Inc., 2010 N.Y. Slip Op. 20388, 2010 N.Y. Misc. LEXIS 4538 (N.Y. Sup. Ct. Sept. 21, 2010) and McMillen v. Hummingbird Speedway, Inc., Case No. 113-2010 CD, 2010 WL 4403285 (Pa. Ct. of Com. Pl. Sept. 9, 2010), which were previously discussed here and here. Implicit in all three decisions is that non-public communications and information found on social networking websites will not be protected from disclosure when it is properly demonstrated that the sought-after information is relevant to the litigation. As was previously discussed here, publicly accessible information on such sites has already been found to be discoverable. Unlike the boilerplate and catch-all discovery requests in personal injury actions, requests for access to a litigant’s Facebook or other social networking account must be specifically tailored and, if possible, tied to actual facts or information found on the public portions of a litigant’s account.

Robert D. Brown, Jr. is an Associate on the Gibbons E-Discovery Task Force.

Tags: Facebook, Legal Decisions & Court Rules, LinkedIn, MySpace, Production, Social Media, Twitter

Posted on November 29, 2010 by Robert D. Brown, Jr.

No Privilege for Information Posted on Social Network Sites -- Court Orders Production of Plaintiff's Social Network Account Usernames and Passwords

A Pennsylvania Court of Common Pleas has ordered the production of a plaintiff’s social network account passwords and usernames in the recent decision of McMillen v. Hummingbird Speedway, Inc., Case No. 113-2010 CD (Pa. Ct. of Common Pleas, Jefferson Cty. September 9, 2010) In this case, McMillen sued Hummingbird Speedway Inc. and others for injuries he allegedly suffered when he was rear-ended during a cool down lap after a stock car race in 2007 on Hummingbird’s premises. During discovery, Hummingbird requested that plaintiff disclose information regarding social network websites that plaintiff belonged to and asked that plaintiff turn over his log-in and passwords for his accounts. McMillen responded that he had accounts on Facebook and MySpace but objected to any request for his log-in and passwords on the basis that the requested information was privileged and would lead to the production of private communications. Ultimately, Hummingbird filed a motion to compel the production of the requested information as they wanted “to determine whether or not plaintiff has made any other comments which impeach and contradict his disability and damages claims.” The court found that such information is not protected by any evidentiary privileges under Pennsylvania law and thus, is discoverable. Read the entire decision here.

In deciding Hummingbird’s motion to compel, the court first analyzed whether the requested information was even discoverable under Pennsylvania’s discovery rules. The court concluded that, based on Pennsylvania’s broad discovery rules, as long as the information requested is relevant to the litigation, whether directly or peripherally, a party may obtain discovery regarding any unprivileged matter. The court further explained that “as a practical matter, that means that nearly any relevant materials are discoverable, because this Commonwealth recognizes only a limited number of privileges.” The court did not offer any discussion as to whether the information requested by Hummingbird Speedway was actually relevant to the litigation and simply moved on to the more pressing issue -- privilege.

The court handily dealt with McMillen’s argument that his social network account information and the communications made on these sites were of the nature that warranted protection of an evidentiary privilege. After reviewing the relevant policies on Facebook and MySpace, the court found that any expectation of privacy when engaged in communications on such sites was unrealistic. Finding that Pennsylvania did not recognize a privilege for social network communications, the court ordered production of plaintiff’s account information within 15 days to defendants’ counsel. The court further instructed that plaintiff was not to take steps to delete or alter the existing information on his social network accounts.

As recently seen in Romano v. Steelcase Inc., 2010 N.Y. Slip Op. 20388, 2010 N.Y. Misc. LEXIS 4538 (N.Y. Sup. Ct., Suffolk Cty. Sept. 21, 2010) and now in McMillen, a trend is evolving where communications made on social networking websites, indiscrete or otherwise, will not be protected under the shroud of privacy or privilege when it argued that such communications are relevant to a litigation. As the McMillen court reasoned, allowing access to social network sites primarily to gain assistance in proving the truth or falsity of any claim clearly outweighs the relational harm that may be realized by social network computer site users. McMillen is just another reminder that the ability to ascertain the truth is now extended to cyberspace, and communications made on social network sites, however made, can prove damaging to a litigation. Based upon the court’s ruling in McMillen, would-be litigants, at least in personal injury actions, should now heed the advice “think before you speak, or in this case, before you type” for fear of undermining the strength of the case or defense.

Additional discussions on this topic from members of the Gibbons Employment Law Department and the E-Discovery Task Force can be found here and here.

Robert D. Brown, Jr. is an Associate on the Gibbons E-Discovery Task Force.

Tags: Facebook, Legal Decisions & Court Rules, MySpace, Production, Social Media

Posted on November 23, 2010 by Gibbons P.C.

Employer Social Media Policies: The Dangers of Too Much Or Not Enough

Employers wanting to prohibit damaging communications from being made about them by employees through blogging and rapidly evolving social media such as Facebook, Twitter, and LinkedIn should be aware of a recent National Labor Relations Board (NLRB) Complaint against American Medical Response of Connecticut, Inc. asserting that two of the more common employer restrictions on employee blogging and social media communications constitute unfair labor practices and are, therefore, unlawful. In its News Release, the NLRB pointed to two of the provisions in the company’s blogging and internet posting policies as being unlawful under Section 7 of the National Labor Relations Act (NLRA):

“one that prohibited employees from making disparaging remarks when discussing the company or supervisors;”
“and another that prohibited employees from depicting the company in any way over the internet without company permission.”

This position, which emanates from the NLRB’s Office of the General Counsel, seems to differ from a December 2009 Advisory Memorandum from the NLRB General Counsel’s Division of Advice that found lawful the social media policy of Sears, Roebuck and Co. prohibiting, among other things, “[d]isparagement of company’s . . . products, services, executive leadership, employees, strategy, and business products.”

Although a union precipitated the recent Complaint and the individual who was terminated for her Facebook postings was a union member, the NLRB could easily make the same assertions against employers when there is no union involvement, because Section 7 of the NLRA protects employees’ rights to engage, not only in union-related activity, but also in “other concerted activities for the purpose of . . . mutual aid or protection.” Anecdotally, it seems that far too many non-unionized employers have either been unaware or apt to downplay the significance of this aspect of the NLRA.

Perhaps the resolution of this case will clarify at least some of the many uncertainties regarding the practical effects of Section 7 and other statutes and legal doctrines on employers’ abilities to restrict the social-media activities of employees. Definitive clarity, however, is not likely anytime soon for reasons such as:

the rapidly changing nature of electronic communications (who foresaw phenomena like Facebook and Twitter not so long ago?);
what allowance, if any, will be made for the quantitative and qualitative differences between electronic posts that are viewed and forwarded almost instantaneously by numerous strangers — possibly millions — worldwide and traditional small-group activities such as face-to-face conversations and picketing; and
the effects of political changes on institutions such as the NLRB, within which there appear to be differences of opinion as illustrated by the contrast between the December 2009 Advisory Memorandum and recent Complaint.

This is not to say that the best course is for an employer to view this shifting landscape as an excuse to do nothing to deter individuals it is paying wages (presumably in exchange for expected positive contributions) from biting in a very damaging way the hand that feeds. To the contrary, these developments underscore the dangers not only of drafting and enforcing policies without sufficient attention to Section 7, but also of inaction.

Tags: Electronic Communications, Facebook, Litigation Preparedness & Strategies, NLRA, Off Duty Conduct, Policies/Handbooks, Social Media

Posted on November 11, 2010 by Scott J. Etish

The 2010 E-Discovery Landscape: Panel Discussion on the Essential E-Discovery Decisions of 2010 at Gibbons Fourth Annual E-Discovery Conference

Gibbons’ Fourth Annual E-Discovery Conference kicked off with a panel discussion on the essential e-discovery decisions from 2010. The panel, comprised of renowned e-discovery authority Michael Arkfeld of Arkfeld & Associates, Scott J. Etish, Esq., an associate at Gibbons and member of the firm’s E-Discovery Task Force, and the Hon. John J. Hughes, United States Magistrate Judge for the District of New Jersey (Retired), addressed numerous recent decisions related to the following areas: (1) the need for outside and inside counsel to monitor compliance; (2) obtaining electronically stored information from foreign companies; (3) cooperation between adverse parties; (4) social media discovery; (5) searches and inadvertently disclosed privilege documents; and (6) legal holds and sanctions. The panel provided guidance as to best practices related to numerous areas, including navigating e-discovery challenges in the aftermath of the seminal Pension Committee, Rimkus and Victor Stanley II decisions. A brief summary of all of the cases the panel discussed is available here.

Scott J. Etish is an Associate on the Gibbons E-Discovery Task Force.

Tags: Case Summaries, Inadvertent Production, Legal Decisions & Court Rules, Sanctions, Social Media

Posted on November 3, 2010 by Gibbons P.C.

Employee Personal Use of Company-Owned Electronic Devices in the Wake of Stengart and Quon

In this technology age, employees increasingly make personal use of workplace electronic communications applications. The legal ramifications of such personal use – and how employers can create policies that balance the right to monitor the workplace with employees’ expectations of privacy – were examined in an informative panel discussion, “Electronic Communications Policies in the Wake of Stengart and Quon” during Gibbons P.C.’s Fourth Annual E-Discovery Conference on October 28, 2010.

Discussion regarding Stengart

The panel kicked off with a discussion of the New Jersey Supreme Court’s March 30, 2010, ruling in Stengart v. Loving Care, which presented novel questions about the extent to which an employee could expect privacy and confidentiality in personal e-mails with her attorney that she accessed on a computer belonging to her employer. The Court held that an employee did not waive the attorney-client privilege when using a company computer to communicate with her attorney via a personal password-protected e-mail account, and that attorneys for the employer who failed to turn over the attorney-client communications found on the computer were subject to sanctions.

A panel member explained that Stengart does not prevent employers from implementing and enforcing unambiguous electronic communications policies or from monitoring employee communications pursuant to such policies. Nor does it prevent employers from imaging and reviewing the contents of an employee’s computer in conjunction with a lawsuit. Employers, however should refrain from reading any communications between an employee and her attorney uncovered as part of such reviews. For further discussion of the Stengart case, see the article co-authored by Richard Zackin and Kristin Sostowski.

Discussion regarding Quon and Nelson

Next, the panel reviewed the United States Supreme Court’s opinion in City of Ontario v. Quon, rendered on June 17, 2010, which examined the Fourth Amendment privacy rights of government employees in their workplace communications. At issue in Quon was whether the Fourth Amendment's ban on “unreasonable searches” puts any limits on searches by public employers. The Court held that a police chief did not violate the constitutional rights of an officer when he read the transcripts of sexually explicit text messages sent from the officer’s work pager. A panel member noted that in so holding, the Court effectively “punted” the constitutional issue by assuming that the police chief's reading of the text messages was a search under the Fourth Amendment, but holding that the search was sufficiently narrow to pass constitutional muster.

The panel also noted that the case of NASA v. Nelson, which was argued before the United States Supreme Court on October 5, 2010, represents a new opportunity for the Court to make a broader statement regarding privacy rights. Nelson involves the constitutional right of employees of federal contractors to keep private personal information in conjunction with background checks.

Practical Pointers for Employers Offered

In light of the recent case law regarding employee privacy, the panel then provided practical points as to how employers can craft and execute a reasonable and enforceable electronic communications policy. The panel stressed that the best policies are clear to the intended audience and unequivocally state the employer’s position with respect to an employee’s expectation of privacy in their electronic communications. Training employees and requiring them to sign annual acknowledgements are important in this regard. Additional tips for employers on how to formulate a clear and understandable electronic systems policy are included in an April 2010 New Jersey Law Journal article authored by Kristin Sostowski.

The panel also discussed the importance of having proper monitoring mechanisms and protocols in place, such as reviewing employees’ emails, tracking the time spent by employees on personal websites, and blocking access to certain websites, password-protected email accounts and social networking sites like Facebook.

Finally, the panel addressed issues that companies – particularly national and multinational companies or those who store their data off-site – may have to confront regarding privacy protections found in the federal Stored Communications Act, which prohibits the unauthorized access of stored communications such as e-mail and Internet accounts. The panel also noted the existence of broader privacy protections afforded by the European Union Privacy Directive and other similar international protocols.

The panel fielded a wide range of questions regarding the content of electronic communications policies and the types of monitoring permitted. With regard to content, the panel noted that a policy permitting limited personal use but clearly spelling out an employer’s right to access workplace information, supported by proper monitoring, is usually the most realistic and enforceable approach.

Tags: Attorney-client Privilege, Confidentiality, Legal Decisions & Court Rules, Litigation Hold, Policies/Handbooks, Preservation, Privacy, Social Media

Posted on November 1, 2010 by Natalie H. Mantell

The Computer Fraud and Abuse Act Applied to Proprietary Database License Misuse

Congress enacted the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030 et seq., in 1984 to combat hackers and to address federal computer-related offenses. The CFAA prohibits individuals from “intentionally access[ing] a computer without authorization or exceed[ing] authorized access, and thereby obtain[ing] ... information from any protected computer.” See 18 U.S.C. § 1030(a)(2)(C). A “protected computer” includes a computer “exclusively for the use of a financial institution or the United States Government” or a computer that is “used in or affecting interstate or foreign commerce or communication.” See 18 U.S.C. § 1030(e)(2). The CFAA provides for criminal fines and penalties as well as a private civil right of action to remedy violations. See 18 U.S.C. § 1030(g). Civil remedies are limited to economic damages. Id.

Recently, proprietary database hosts have attempted to expand the CFAA’s scope to assert claims against third-parties who have accessed proprietary electronic databases by using the login credentials of an authorized or licensed user. Proprietary databases -- like Westlaw, Hoovers, Dun & Bradstreet and LexisNexis -- typically grant password-protected access to authorized users, usually under an individual or enterprise license agreement, so that only authorized users may access the hosted data. Such database hosts commonly provide restrictions on access to their proprietary electronic databases by licensees and typically inform licensed users that user names and passwords (“credentials”) are strictly personal and may not be shared with or disclosed to any third-party.

In State Analysis Inc. v. American Financial Servs. Assoc., 621 F. Supp. 2d 309 (E.D. Va. 2009), the court held that a CFAA claim was valid against a third-party user of licensee’s password, even though the licensee provided the third-party with the password. The court emphasized that, notwithstanding the means by which the third-party received the password, the third-party was still an unauthorized user of database. The court dismissed the CFAA claim against the authorized licensee because the simple allegation that the licensee had misused the credentials was not sufficient to state a claim under the CFAA. In contrast, in AtPac Inc. v. Aptitude Solutions Inc., No. 2:10-cv-00294-WBS-KJM, 2010 WL 1779901 (E.D. Cal. April 29, 2010), the court held that neither a state government licensee nor its new software vendor could be held liable under the CFAA for accessing a former software vendor’s proprietary database. The state government licensee provided its credentials to a new software vendor for purposes of downloading the state government’s data from the former software vendor. The court determined that the CFAA does not apply to the state government licensee because it was an authorized user and was not improperly accessing the data. The court further determined that the new software vendor likewise had no improper motive in accessing the database, and further had no prior knowledge or notice of the limitations to the former software vendor’s license agreement.

While most courts have not yet ruled on the limits or scope of the CFAA in similar cases, licensees should be cautioned to understand the terms of the license agreement governing access to the proprietary database, including whether it allows for enterprise use or requires a new password for each authorized user. Licensees should also be mindful that misuse or shared use of credentials could not only result in termination of the license, but significant civil liability.

Natalie H. Mantell is an Associate on the Gibbons E-Discovery Task Force.

Tags: Case Summaries, Computer Systems, Contract Attorneys, ESI, Hosting, Legal Decisions & Court Rules, Production, Social Media

Posted on October 25, 2010 by Robert D. Brown, Jr.

Accessing an Adversary's Public Social Networking Information -- N.Y. Professional Ethics Opinion 843

Facebook, Twitter, LinkedIn and MySpace are among the top social media websites that have culturally transformed electronic communications and social interactions. Inevitably, these platforms have also affected litigation practice and present myriad ethical dilemmas. One such dilemma is whether an attorney can access an adverse party’s social networking website to obtain information about the party, including impeachment material.

In Professional Ethics Opinion 843, issued on September 10, 2010, the New York State Bar Association's Committee on Professional Ethics concluded that an attorney representing a party in pending litigation may access the public pages of another party's social networking website to obtain publicly available information about that party. The Committee observed that some social networking websites and/or users do not require pre-approval or consent to access member profiles, and thus the profiles are accessible to all members. While the Committee found that such information on social networking websites is akin to publicly accessible online or print media, it also made clear that there are limitations to the attorney’s conduct on social networking sites:

An attorney cannot “friend” or otherwise make contact with the party. Such conduct would fall within the purview of Rule 4.2 of the New York Rules of Professional Conduct (“Rules”), which prohibits a lawyer from communicating with the represented party about the subject of the representation absent prior consent from the represented party’s lawyer.

An attorney cannot employ a third party to “friend” the party. Such conduct would fall within the purview of Rule 8.4(c), which prohibits a lawyer from engaging in conduct involving “dishonesty, fraud, deceit or mispresentation;” Rule 4.1, which prohibits lawyers from making false statements of fact or law to a third person; and Rule 5.3(b)(1), which holds an attorney responsible for the conduct of employed non-attorneys who violated the Rules.

In short, the rule is you may look, but do not “friend.”

Robert D. Brown, Jr. is an Associate on the Gibbons E-Discovery Task Force.

Tags: Attorney Work Product, Ethical Concerns, Facebook, Internet, LinkedIn, Litigation Preparedness & Strategies, MySpace, Social Media, Twitter

Posted on October 11, 2010 by Melissa DeHonney

"Private" Facebook and MySpace Postings are Discoverable

A New York trial court has ordered a personal injury plaintiff to produce her Facebook and MySpace postings, notwithstanding that plaintiff self-designated them as private. Justice Jeffrey Arlen Spinner, in Romano v. Steelcase Inc., 2010 N.Y. Slip Op. 20388, 2010 N.Y. Misc. LEXIS 4538 (N.Y. Sup. Ct., Suffolk Cty. Sept. 21, 2010), reasoned that New York’s "liberal discovery policies" favored allowing access to posts that might undermine plaintiff's claim for loss of enjoyment of life and further that, "as neither Facebook nor MySpace guarantee complete privacy, Plaintiff has no legitimate reasonable expectation of privacy." Read the decision here.

The Romano opinion suggests that, if a discovering party makes a threshold showing that content posted on social media websites is relevant, discovery may be had: "In light of the fact that the public portions of Plaintiff’s social networking sites contain material that is contrary to her claims and deposition testimony, there is a reasonable likelihood that the private portions of her sites may contain further evidence such as information with regard to her activities and enjoyment of life, all of which are material and relevant to the defense of this action." As with traditional modes of discovery, it appears that "fishing expeditions" will not be allowed.

Most of the cases the Romano court cited where access to social media was granted were likewise personal injury actions in which the individual plaintiffs were ordered to produce their online journals. Still, the opinion signals to businesses that they, too, might have to produce content posted on social media sites. With more and more businesses promoting themselves through this medium, the attendant preservation obligations should be considered. Posting potentially discoverable information with third-parties can complicate compliance.

For the same reason, businesses should be mindful of what their employees post on social networking sites. An employee’s postings may be deemed to reflect on the company and might even bear on matters relevant to a lawsuit in which the company is a party. All too often, what people say online is as candid as what they might say to a few close co-workers behind closed doors. Yet, online posts are available for the world to see. Even seemingly innocuous posts -- for example, "I was in way over my head today at work" -- can prove damaging in litigation. The most prudent approach would include both restricting employees' access to these sites at the office and implementing a social media policy addressing employees' online postings.

Additional discussions on this topic from members of the Gibbons Employment Law Department and the E-Discovery Task Force can be found here and here.

Melissa DeHonney is an Associate on the Gibbons E-Discovery Task Force.

Tags: Data Preservation, ESI, Employee Training, Facebook, Legal Decisions & Court Rules, MySpace, Social Media

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