eDiscoveryDaily

Defendant Not Sanctioned Despite Use of Evidence Wiping Software: eDiscovery Case Week

eDiscovery Case Week continues.  We’ll cover four cases this week (catching up on a couple from earlier this year) and we’ll cover our Wednesday webcast Key eDiscovery Case Law Review for First Half of 2017 (click here to sign up for that) as well.  Here’s the next case.  And, unlike the “Phelps vs. Shark” debacle, I promise nothing about this post was computer generated… :o)

In HCC Ins. Holdings, Inc. v. Flowers, No. 1:15-cv-3262-WSD (N.D. Ga., Jan. 30, 2017), Georgia District Judge William S. Duffey, Jr. denied the plaintiff’s motion for adverse inference sanctions despite evidence that the defendant had used evidence wiping software twice after being ordered to produce her personal computer, stating that the plaintiff “offers only bare speculation that any of its trade secrets or other data were actually transferred” to the defendant’s laptop.

Case Background

In this case, the defendant was accused of misappropriating trade secrets after she left her company and started a competitive company. The plaintiff claimed that when the defendant left the company, she took confidential files with her to benefit her new company and also claimed that, after receiving the lawsuit papers in this case, and after the Court ordered the defendant to produce her personal computer, she destroyed data on her personal laptop and also on a thumb drive that was plugged into her personal computer on September 20, 2015 (which was after she received a preservation notice and the complaint in the case).

The defendant’s husband, an experienced IT professional, claimed he inserted his personal thumb drive on September 20 to back-up data on the defendant’s personal laptop, but the thumb drive was corrupted and did not work, and that he therefore threw it away (the defendant’s own computer forensic expert claimed that it did work properly the second time, when it was plugged in for 38 seconds.

On September 19, 2015, and again three days later, the day after the Court ordered the defendant to produce her personal computer, the computer wiping program CCleaner was manually run on her personal laptop.  During that time, the program Defraggler (program that overwrites deleted files in unallocated space on a computer’s hard drive) was also run and so was a program called WinUndelete (which is used to recover deleted files).  The plaintiff claimed the defendant’s husband used WinUndelete to confirm that he had destroyed evidence, but he claimed he ran the program off of his work thumb drive to familiarize himself with it for future use for work purposes.  After running extensive searches over several weeks, a neutral examiner did not locate any of the plaintiff’s confidential information or trade secrets on any of the devices produced by the defendant.

Judge’s Ruling

In reviewing the results, Judge Duffey stated: “HCC’s Motion is based on a series of events it casts as suspicious, but HCC offers only bare speculation that any of its trade secrets or other data were actually transferred from HCC Life’s systems to Flowers’ personal laptop. A party seeking spoliation sanctions must prove that (1) the missing evidence existed at one time; (2) the defendant had a duty to preserve the evidence; and (3) the evidence was crucial to the plaintiff’s prima facie case… Here, after extensive discovery, including examinations by a neutral forensic examiner and the parties’ expert forensic examiners, depositions, and subpoenas of email and cloud-based storage companies, HCC does not provide any evidence to show that Flowers or her husband actually transferred any data from HCC Life to her personal devices or cloud storage media she controlled.”

As a result, Judge Duffey ruled as follows: “Though Flowers’ and her husband’s actions are troubling, and in breach of her duty to preserve, the Court finds spoliation sanctions are not warranted.”

So, what do you think?  Is this ruling troubling?  Or should the motioning party be required to show evidence of actual responsive ESI deleted?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Rules that Plaintiff’s Request for Data from Defendant is “Extraordinarily Burdensome”: eDiscovery Case Week

Why is a picture of a shark on this post?  Because it’s Shark Week on the Discovery Channel (not electronic discovery of course, but the generic kind of discovery).  To celebrate Shark Week in eDiscovery terms, we’ve decided to make this week eDiscovery Case Week on the eDiscovery Daily blog.  We’ll cover four cases in the next five days (catching up on a couple from earlier this year) and will cover our Wednesday webcast Key eDiscovery Case Law Review for First Half of 2017 (click here to sign up for that) as well.  Here’s the first case.

In Solo v. United Parcel Services Co., No. 14-12719 (E.D. Mich. Jan. 10, 2017), Michigan Magistrate Judge R. Steven Whalen agreed that the defendant showed that the level of data requested by the plaintiff “would be extraordinarily burdensome” and ordered the parties to discuss the defendant’s proposed methodology and “meet, confer, and agree on a mutually acceptable sampling methodology” if the plaintiff did not agree to the defendant’s approach.

Case Background

In this class action suit, the plaintiffs alleged that the defendant consistently overcharged for delivery charges that had a declared value of $300 or more.  In an interrogatory, the plaintiffs requested the defendant to provide detailed information for packages with a declared value of $300 or more over the alleged overcharging period, which could extend as far back as 2008 from the end date of December 29, 2013.

In response, the defendant contended that providing the package-specific information requested would be excessively burdensome in terms of both time, manpower, and costs and indicated that the “package level detail” requested by Plaintiffs is only maintained in a “live” format (easily accessible electronically) for a limited time period and is then archived on backup tapes.  To bolster its claim that the request was burdensome, the defendant estimated that it would take at least six months just to restore the archived tapes as described above, at a cost of $120,000 in labor, requiring its employees to take on responsibilities outside of their regular duties and that cost estimate did not include the time and expense of analyzing the data once extracted in order to answer the interrogatory.

Instead, the defendant provided an estimate of the number of packages with declared value over $300 that were shipped during the period June 30, 2013 to December 29, 2013 – this time period was chosen because its contract terms state that a customer must give notice of a billing dispute within 180 days, or the issue is waived.

Judge’s Ruling

In evaluating the defendant’s response to the plaintiff’s request, Judge Whalen stated: “I am persuaded that UPS has carried its burden of showing that producing package-specific information going as far back as 2008 would be extraordinarily burdensome, particularly at this stage of the proceedings. Given the scope of UPS’s business operations and the exigencies of its proprietary billing system, there is a valid business reason for maintaining ‘live’ data for a limited period of time and storing older data on backup tapes.”  Judge Whalen also agreed with the defendant that if it prevailed on the 180 day limit issue, “the most likely period that will be found relevant will be the six-month time frame from June 30, 2013 to December 29, 2013.”

With that in mind, Judge Whalen stated: “The estimate that UPS produced for the six-month period encompassing the latter half of 2013 was based on a method that extrapolated “live” data from a more recent period. At the time this motion was filed, Plaintiffs were not privy to UPS’s methodology, given that it involved disclosure of proprietary information. However, now that a protective order has been entered [Doc. #74], UPS will disclose its methodology under the “attorneys’ eyes only” provision. It may be that Plaintiff is satisfied that UPS’s methodology is sufficient. If not, the parties will meet, confer, and agree on a mutually acceptable sampling methodology.”

So, what do you think?  Did the defendant provide enough basis to show the plaintiff’s request to be extraordinarily burdensome?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Need an “Assist” with Your eDiscovery Practices? Get an eDiscovery Assistant!: eDiscovery Best Practices

As someone who writes a blog daily for (part of) my living, I can attest that it can be a challenge to stay on top of eDiscovery trends and case law.  I try to do my best to provide some of that to the readers of this blog and, when it comes to case law, we provide posts on about 60 to 70 cases each year (we’re over 400 unique cases covered lifetime).  But, here’s a resource that provides access to even more case law, and several other great resources, as well.

eDiscovery Assistant™ is a site developed by ESI Attorneys that was built by attorneys and information law practitioners to provide several resources to help people get started — faster and with confidence — in eDiscovery.  Those resources include: case law, rules, checklists, forms, glossary of terms and (coming soon) a learning center with short, practical videos that explain concepts users can implement in their own eDiscovery operations.

When you open eDiscovery Assistant, you begin with a dashboard that shows you recent case law on the left hand side and a History of your activities on the right hand side to enable you to get back to something you looked at previously.  A list of Favorites that you’ve created is listed in the lower left side of the form and cite lists of case law searches is shown in the lower right side of the form.  Along the top of the form is a menu to enable you quickly navigate to search for case law, locate Federal, State and other rules, access a resource of checklists and forms for best eDiscovery practices, access your cite lists and access a glossary of eDiscovery-related terms.  Here’s an example of what the dashboard looks like:

According to the eDiscovery Assistant site, they have a database of over 5,000 eDiscovery decisions.  Each of those is categorized by the types of issues being addressed, so if you want to click on a type of issue to see how many case decisions and opinions there are about it, simply click on the issue to pull up all of those cases.  For example, clicking on the Technology Assisted Review (TAR) issue pulls up 39 results.  You can also perform date range searches and look for specific names (such as the name of a judge in whose courtroom you may find yourself) and other terms.  The application enables you to view the case decision and download it to PDF if desired.  As somebody who does a lot of research into key eDiscovery case law, it’s nice to have it all in one place.

The Checklists and Forms page includes over 40 checklists and forms in a variety of areas ranging from identifying relevant sources of ESI to legal holds to meet & confer/Rule 26 conferences, with forms and letters including sample preservation letters, sample clawback agreement and chain of custody forms.  It’s a great resource for those who need some help in getting started in several key areas of the eDiscovery process.

I spoke to Kelly Twigger, CEO of ESI Attorneys and eDiscovery Assistant, about the goal for the platform and why she decided to build the platform in the first place:

“I built eDiscovery Assistant to be the practice tool I wanted for my practice. I wanted to find case law by issue FAST. I wanted to know what discovery decisions the judge assigned to my case has authored without sifting through everything she’s written. And I wanted the rules for all jurisdictions at my fingertips. That’s why we built a proprietary tagging structure to let you sort case law by issue, jurisdiction, judge, date and keyword. Hours of work is reduced to minutes. ROI is made with one search.”

Kelly also indicated that they are “working with eDiscovery professionals from around the country to create a community of users who want to stop reinventing the wheel and learn as technology and the law develop.”

From a pricing standpoint, Kelly indicated that pricing is available on a per seat, multiple seat or custom site basis.  You can sign up directly for per seat monthly and annual subscriptions on ediscoveryassistant.com. The annual subscription includes two free months.  For firms or organizations seeking more than five seats, you can contact them to set up multiple seats on one account.

eDiscovery Assistant also offers the ability for a firm or organization to have a separate branded site. Custom sites can also include a separate administrative backend to upload proprietary checklists and templates for sharing within the firm only.  Contact them at 720.414.6106 or at support@ediscoveryassistant.com to inquire about pricing for custom options.

I want to thank everybody at the Women in eDiscovery (WiE) Houston Chapter for inviting me to speak at the Legal Technology Showcase & Conference yesterday.  It was a terrific and very well attended conference!  I also want to thank my fellow panelists in the “State of the Industry” panel: Lana Schell from ONE Discovery (who moderated), Michele Lange of KrolLDiscovery, Lynn Frances Jae of iCONECT and Richard Dilgren of Fronteo.  We led off with the first panel of the day and discussed a variety of topics including Technology Assisted Review, the growth of cloud automation technology within eDiscovery, the impact of cybersecurity on eDiscovery and the impact of the 2015 Federal rules changes.  It was an enjoyable and informative discussion!

So, what do you think?  Do you have a go to resource for eDiscovery case law and best practices?  Besides eDiscovery Daily, of course!  :o)  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

What Can 4,000 Women Do? Help Educate an Industry: eDiscovery Trends

If you follow our blog regularly and have been following it over the past few weeks, you know that I’ve been promoting today’s Women in eDiscovery (WiE) event in Houston, the Legal Technology Showcase & Conference, being conducted today at South Texas College of Law (STCL) in downtown Houston.  But, I stopped promoting it a couple of days ago.  Why?

Here’s why.  WiE had a goal to attract 250 attendees for this event; instead, they have had over 300 attendees sign up and they actually had to close event registration a couple of days ago.  That’s phenomenal, especially considering that we’re in the middle of summer and a lot of family vacations are taking place.

If you’re in Houston and were hoping to attend last minute, sorry about that!  Hopefully, you’ll sign up sooner next time!  Regardless, here is some information about WiE for those women out there who might be interested in joining a dynamic group that is dedicated to opportunities for (of course) women in eDiscovery.

WiE provides educational opportunities regarding technology in the legal industry to its members, offering networking and leadership avenues, promoting personal and professional growth of women, and donating mentoring and charitable contributions to its communities. WiE incorporates a broad network of women volunteers who uplift and support each other and work together to recognize and honor each other’s achievements. WiE is comprised of professionals within the legal industry including attorneys, litigation support professionals, paralegals, legal IT staff, court reporters, consultants, recruiters and vendors.

WiE is ten years old!  Since its inception in 2007, WiE has grown globally to more than 4,000 members and more than 25 chapters.  For more information about co-founders, executive board members and regional directors, click here.

Wondering if there’s a chapter in your town?  Click here to find out.  If not, you can contact WiE to see about starting a chapter in your town.

I’m excited to be participating in today’s WiE event and grateful to both WiE and STCL for including me in the program!

So, what do you think?  What resources do you use for networking and education?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Cloud Data is Within Defendant’s Possession, Custody and Control, Court Rules: eDiscovery Case Law

This case is a few months old, but is one of the cases we will cover in next week’s webcast Key eDiscovery Case Law Review for First Half of 2017 (click here to sign up)…

In Williams v. Angie’s List, No. 1:16-00878-WTL-MJD (S.D. Ind. April 10, 2017), Indiana Magistrate Judge Mark J. Dinsmore found that the plaintiffs “have met their burden of demonstrating” that the defendant has a legal right to obtain background data in Salesforce and that “Plaintiffs request for production properly seeks documents within Angie’s List’s ‘possession, custody, or control’ under Rule 34(a).”  He also denied the defendant’s request for cost shifting.

Case Background

In this case where 48 current and former employees of Defendant claimed they were entitled to “substantial compensation” for hours worked without pay, those plaintiff claimed that the defendant instructed them to underreport their overtime hours on their computerized time records.  Because the plaintiffs frequently worked from home, they sought production of “background data” automatically recorded while they were working in the defendant’s sales platform, Salesforce, in an effort to “close the gaps” allegedly left by the other records.

The defendant argued that the plaintiffs’ request for the Salesforce records falls outside of Rule 34(a)(1) because the records are outside of the defendant’s “possession, custody, or control” because Salesforce is a third-party provider of services and the defendant has no greater rights to the background data than any other person. The defendant also cited a $15,000 invoice it had received from Salesforce for the background data it had already provided to the plaintiffs.  The plaintiffs, in reply, argued that the defendant’s argument is belied by their conduct in producing a year’s worth of background data.  The defendant also argued if the Court grants the Motion, it should apportion some or all of the costs of production to the plaintiffs.

Judge’s Ruling

In making his ruling, Judge Dinsmore observed that “evidence before the Court demonstrates that Angie’s List and Salesforce have a longstanding contractual relationship and that the background data is recorded ‘for’ Angie’s List as part of the ordinary course of their business relationship. Even while end users such as Angie’s List ‘ordinarily’ do not access such data, the evidence clearly demonstrates that they are able to do so upon asking. In fact, the most compelling fact before the Court is that Angie’s List, despite dragging its feet and protesting vociferously, were actually able to retrieve and produce one year’s of the background data, collected for Angie’s List as part of its use of Salesforce’s sales platform, to Plaintiffs in discovery. The fact that Angie’s List has already produced one-third of the requested data, coupled with the evidence demonstrating the relationship between Angie’s List and Salesforce, compels the conclusion that Angie’s List has a ‘legal right to obtain’ the discovery sought.”

As a result, Judge Dinsmore concluded that “Plaintiffs request for production properly seeks documents within Angie’s List’s “possession, custody, or control” under Rule 34(a).”  After acknowledging the Court’s authority to “proportion the costs of e-discovery in cases of undue cost or burden”, Judge Dinsmore considered eight proportionality related factors to rule against cost shifting of some of the production costs to the plaintiffs.

So, what do you think?  Should the plaintiffs have been required to split the costs?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Law Firms and the Billable Hour – The Debate Continues: eDiscovery Trends

Over four years ago, I asked the question of whether it’s time to ditch the per hour model for document review.  Back then, I referenced an overbilling situation discussed in an article by a law firm that was recently in the news for a ransomware issue.  But, the debate continues – should law firms still use the billable hour?

In Above the Law (Should Law Firms Still Use The Billable Hour?), in a conversation hosted by Zach Abramowitz (via his ReplyAll conversation mechanism), Zach facilitates a discussion between several legal experts regarding the billable hour and alternative fee agreements (AFAs).  They include: Patrick Lamb, founder of the Valorem Law Group; Adam Steiner, software engineer turned practicing lawyer; Alma Asay, former Gibson Dunn litigator & founder of Allegory; Brad Blickstein, founder of Blickstein Group; Ken Grady, former GC, lean law evangelist at Seyfarth, and adjunct professor at Michigan State University College of Law; Catherine Krow, former partner at Orrick and founder of Digitory Legal; Mike Knowles, firm administrator at Emmanuel Sheppard & Condon; and Keith Lee, lawyer, blogger, and founder of Lawyer Slack.

So, should law firms still be using the billable hour in 2017?  Here are some of the observations by the experts (and my comments in response):

Knowles: “One reason I feel the billable hour is such an ugly term is the surprise/shock the client experiences when they receive a bill. Having worked for 3 different firms, I think, most firms serve their clients well. But we do a lousy job of explaining the process and managing their expectations.”

Agreed – this is one of the biggest problems with the billable hour.  Too many clients are getting “surprised” with the bill with no advanced expectation of what they should expect to pay for the services being provided.

Lee: “Litigation is often about creating variance. Relentlessly, exhaustively, exploring every Avenue and every possibility. Efficiency is not part of the menu because what matters is not being efficient, what matters is winning.

So we’re left with the billable hour.”

Well, that’s great, but winning at what cost?  Is there an unlimited budget to “winning”?

Blickstein: “While there are some matters that are not predictable enough for AFAs (though I suspect if you chunk it up enough they probably are), I honestly think the single biggest reason that we are still using hourly bills is philosophical. Both lawyers and clients perceive the work as a function of time.”

Agreed, if the clients still perceive it that way, what motivation is there to change?

Asay: “When clients and law firms are on the same page about both expectations and curve balls, then whether fees are based on AFAs or billable hours or a mix of both, the relationship is ultimately a win-win.”

That’s ultimately the key.  Staying on the same page with clients takes work and communication.  Curve balls happen – there are always things that come up that you don’t expect – but, if you’re continuing to communicate with the client as those happen, you have a much better chance of keeping the client happy regardless of the billing arrangement.

These are just a sampling of the comments from the experts, click here to view the entire conversation.

So, what do you think?  Should law firms still use the billable hour?  Please share any comments you might have or if you’d like to know more about a particular topic.

Also, if you’re going to be in Houston this Thursday (July 20), Women in eDiscovery (WiE) Houston Chapter, in partnership with South Texas College of Law, will be hosting the inaugural eDiscovery “Legal Technology Showcase & Conference” at South Texas College of Law in downtown Houston.  I will be participating as a panelist on the “State of the Industry” panel and my colleague, Karen, will be moderating the “Legal Operations and Litigation Support” panel.  Click here for more information about the conference, including how to register!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Court Limits Burden for Defendant to Search Loan Numbers, Splits Costs Between Parties: eDiscovery Case Law

In Phoenix Light SF Ltd. v. Deutsche Bank Nat’l Trust Co., No. 14cv10103 (JGK)(DF) (S.D.N.Y. June 5, 2017), New York Magistrate Judge Debra Freeman granted the plaintiffs’ motion to compel in part, ordering the defendant to search for 16,000 loan numbers proposed by the plaintiffs’ and ordered the parties to split the costs for performing the searches.

Case Background

In this case where the plaintiffs alleged that the defendant breached contractual and fiduciary obligations owed to the plaintiffs in connection with trusts for which the defendant served as trustee, the plaintiffs filed a motion to compel the defendant to run a search using approximately 245,000 individual loan numbers as discrete search terms or, at least run a sample search, using 16,000 selected loan numbers as search terms and produce documents responsive to the searched loan numbers.

To date, the defendant had only searched for only relevant trust names and the defendant’s own “trust identifiers”, explaining that its “routine” internal practice was to use these trust identifiers – not individual loan numbers – in communicating by email, both internally and externally, about loans within the trusts.  However, the plaintiffs provided the Court with four examples of email strings that were produced in discovery by the defendant, each of which included emails referencing individual loan numbers and not the trust names or identifiers on which the defendant had relied.

In arguing that the additional burden imposed by the search terms requested by the plaintiffs would be disproportionate to its likely yield, the defendant pointed to another case where a search of 72,000 individual loan numbers identified by the plaintiff returned 733,000 documents not previously produced, of which – based on its review of a sample of those documents – the defendant deemed 1.38 percent, at most, to be responsive to the plaintiffs discovery demands.

Judge’s Ruling

With regard to the defendant’s claim that its “routine” practice was to use trust identifiers for communication, Judge Freeman stated: “Plaintiffs have fairly demonstrated that, but for the happenstance that particular emails or attachments in each string included the trust name or identifier, the remainder of the relevant emails would not have been located by Defendant’s prior searches, and therefore would not have been produced. Further, Plaintiffs’ submitted evidence shows that Defendant’s assertion that it was not its practice to reference individual loan numbers in emails, without also referencing a trust name or identifier, is incorrect — or, at least, that Defendant’s employees did not utilize that practice consistently.”

As for the additional burden argument by the defendant, Judge Freeman observed that, in the other case, “the plaintiff apparently did not concur with Defendant that the responsiveness rate for the search performed was as low as Defendant represented” and that “this Court has no way to gauge the potential importance of the non-duplicative documents that were located through that search.”  As a result, Judge Freeman stated: “Plaintiffs should be given the opportunity to review at least the additional documents that a sample loan-number search would uncover and that Defendant would produce as responsive to document requests, and then to return to this Court if, in their view, the volume and/or significance of any newly produced documents warrants a further, more extensive search.”

Judge Freeman therefore ordered the defendant to perform a search for the 16,000 loan numbers, and to “produce to Plaintiff all responsive, non-privileged documents discovered through that search, unless already produced in discovery in identical form.”  Judge Freeman also noted that “counsel should confer in good faith” regarding the use of qualifiers to avoid “false hits”, and found it “reasonable” for the plaintiffs to share half of vendor costs to perform the searches, in the approximate amount of $11,000.

So, what do you think?  Does this level of burden dictate splitting of costs?  Or does it depend on the case?  Please share any comments you might have or if you’d like to know more about a particular topic.

Also, if you’re going to be in Houston on July 20, Women in eDiscovery (WiE) Houston Chapter, in partnership with South Texas College of Law, will be hosting the inaugural eDiscovery “Legal Technology Showcase & Conference” at South Texas College of Law in downtown Houston.  I will be participating as a panelist on the “State of the Industry” panel and my colleague, Karen, will be moderating the “Legal Operations and Litigation Support” panel.  Click here for more information about the conference, including how to register!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

DOJ Asks SCOTUS to Take on Microsoft Case and Verizon Suffers its own Data Breach: eDiscovery Trends

A rare two-topic day, but both are notable…

Remember the Microsoft Ireland Warrant case, where the Second Circuit reversed earlier rulings and denied the government’s efforts to compel Microsoft to provide emails in that case?  It may not be over yet.

According to The Recorder (Government Asks SCOTUS to Overturn Microsoft Decision on Overseas Data, written by Ben Hancock), the Department of Justice last month asked the U.S. Supreme Court to overturn that landmark appeals court decision handed down last summer in favor of Microsoft Corp. that put their company data stored overseas mostly out of reach of U.S. law enforcement.  The case stems from a warrant issued in December 2013 by a U.S. magistrate judge in the Southern District of New York directing Microsoft to turn over a criminal suspect’s email data. Microsoft determined that the data was stored at its center in Dublin, and subsequently moved to quash the warrant. The district judge denied that request, but Microsoft prevailed in an appeal to the circuit court.

Here’s a link to the Petition for a Writ of Certiorari filed by the DOJ.

If the government’s petition is taken up by the high court, its decision could introduce some measure of clarity (and hopefully consistency) in the multiple legal battles playing out around the country over whether prosecutors can enforce warrants for private data stored abroad in the cloud.  For example, while Microsoft has prevailed so far in this case, Google has had two rulings go against it earlier this year in similar cases.

“It seems backward to keep arguing in court when there is positive momentum in Congress toward better law for everyone,” Brad Smith, Microsoft’s chief legal officer, said in a blog post responding to the DOJ petition. “The DOJ’s position would put businesses in impossible conflict-of-law situations and hurt the security, jobs, and personal rights of Americans.”

It will be interesting to see if SCOTUS takes the case, or we see legislation that clarifies expectations regarding data stored overseas.  Thanks to ACEDS for the tip on this story.

In other news…

As reported by ZDNet, As many as 14 million records of subscribers who called Verizon’s customer services in the past six months were found on an unprotected Amazon S3 storage server controlled by an employee of Nice Systems, an Israel-based company.  The data was downloadable by anyone with the easy-to-guess web address.

Chris Vickery, director of cyber risk research at security firm UpGuard, who found the data, privately told Verizon of the exposure shortly after it was discovered in late-June.  It took over a week before the data was eventually secured.  The customer records were contained in log files that were generated when Verizon customers in the last six months called customer service.

Each record included a customer’s name, a cell phone number, and their account PIN – which if obtained would grant anyone access to a subscriber’s account, according to a Verizon call center representative, who, according to ZDNet spoke on the condition of anonymity as they were not authorized to speak to the press.

A Verizon spokesperson told CNBC on Wednesday that, “[a]s a media outlet recently reported, an employee of one of our vendors put information into a cloud storage area and incorrectly set the storage to allow external access.  We have been able to confirm that the only access to the cloud storage area by a person other than Verizon or its vendor was a researcher who brought this issue to our attention. In other words, there has been no loss or theft of Verizon or Verizon customer information.”

Verizon said the subscribers affected was “overstated” and that the PINs that were available during the breach aren’t actually linked to customer accounts but rather were numbers used to authenticate customers at call centers.

Verizon, of course, produces its excellent Data Breach Investigations Report every year (we’ve covered it the last three years).  Will they have anything to say about their own data breach in next year’s report?  We’ll see.

So, what do you think?  Should data stored internationally, but accessed in the US, be subject to subpoena?  As always, please share any comments you might have or if you’d like to know more about a particular topic.

Also, if you’re going to be in Houston on July 20, Women in eDiscovery (WiE) Houston Chapter, in partnership with South Texas College of Law, will be hosting the inaugural eDiscovery “Legal Technology Showcase & Conference” at South Texas College of Law in downtown Houston.  I will be participating as a panelist on the “State of the Industry” panel and my colleague, Karen, will be moderating the “Legal Operations and Litigation Support” panel.  Click here for more information about the conference, including how to register!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

The ABA Journal “Blawg 100” is Different This Year: eDiscovery Trends

For the past several years, the ABA Journal has published a list of the 100 best legal blogs.  They are requesting input again this year, but, with a twist.  This year, they are expanding the scope of their annual year-end feature beyond legal blogs to also include the best of lawyers’ websites, podcasts and social media.  As a result, they’re renaming it the ABA Journal Web 100.

If you have a favorite law blog (or “blawg”, get it?), law firm website that really impresses you, law-related podcast that you think others should listen to, or someone you think all lawyers should be following on social media, now is the time to nominate it for recognition.

On their Web 100 Amici page, you can complete the form to identify yourself, your employer or law school, your city and email address, the format (blog, law firm website, podcast or social media feed), the title (of the blog, law firm, feed or podcast), the Home Page URL, an example URL or title (of a representative post, feature or episode) and a brief (up to 500 characters) description as to why you’re a fan.  You’re also asked whether you know the creator personally (and admonished to “be honest”) and whether ABA Journal can use your name and comment in their coverage.

On the nomination page, ABA Journal provides sections with more information about “blawg”, law firm website, podcast and social media amici to help guide those in their “Friend of the Web briefs”, which are due by no later than 11:59 p.m. CST on Sunday, July 30, 2017 to include your nomination.

Anyway, if you have enjoyed reading eDiscovery Daily over the past several years and found our blog to be informative, we would love to be recognized!  Feel free to click on the link here to nominate us!  We appreciate the consideration!

There are several other excellent eDiscovery related blogs and resources out there, so feel free to nominate them too.  Our hats are off to all of those who provide eDiscovery news and analysis to the industry.  Hopefully, there will be a greater representation of eDiscovery blogs and resources on the list than there has been in the past couple of years, where hardly any have made the list.  Again, if you would like to nominate any of the blogs (including, of course, eDiscovery Daily) or other resources, click here.  Deadline is July 30.

So, what do you think?  Do you have a favorite eDiscovery blog or source of information?  Share it with our readers!  And, please share any comments you might have or if you’d like to know more about a particular topic.

Also, if you’re going to be in Houston on July 20, Women in eDiscovery (WiE) Houston Chapter, in partnership with South Texas College of Law, will be hosting the inaugural eDiscovery “Legal Technology Showcase & Conference” at South Texas College of Law in downtown Houston.  I will be participating as a panelist on the “State of the Industry” panel and my colleague, Karen, will be moderating the “Legal Operations and Litigation Support” panel.  Click here for more information about the conference, including how to register!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Court Rules Decisively in Battle Between eDiscovery Providers Over Hired Sales Agents: eDiscovery Case Law

In a lawsuit filed by DTI against LDiscovery and four former sales agents of DTI who were hired by LDiscovery, claiming they misappropriated trade secrets, interfered with client relationships and breached their contracts, an opinion provided by New York District Judge Jed S. Rakoff last week detailed his rejection of all arguments by DTI that led to his denial of a motion for a preliminary injunction on June 16.

An article in Bloomberg Law (Judge Rakoff Shoots Down eDiscovery Trade Secrets Case, written by Gabe Friedberg) provides more information, noting that DTI filed its lawsuit in April against the four salesman (who had originally worked for Epiq prior to DTI’s acquisition of Epiq) and LDiscovery, after they resigned from DTI in January.  As the opinion notes, “the Individual Defendants signed employment agreements with LDiscovery whereby they agreed to resign from DTI by no later than January 31, 2017…The agreements set forth that the Individual Defendants will then take a ‘Sabbatical Year,’ during which LDiscovery will “not request and the [Individual Defendants] will not provide, any work, information, or services purported to be restricted by the Epiq [Employment Agreements].””  According to the article, LDiscovery agreed to pay $5.1 million in total bonus payments to the four agents during the “sabbatical year” alone.

Among the contentions by DTI was that the Individual Defendants “have breached or are threatening to breach their nondisclosure covenants by improperly copying and retaining DTI’s proprietary information” by failing to return two thumb drives in their possession, but Judge Rakoff concluded “that this was inadvertent rather than the result of a conspiracy” when forensic analysis failed to show either was used in copying files from DTI.  Another part of that contention was that one of the individual defendants had obtained an invoice spreadsheet from DTI, but Judge Rakoff determined that “DTI voluntarily forwarded the spreadsheet” to him to verify the accuracy of his commission checks and that, while that defendant forwarded it on to the other individual defendants so they could verify theirs as well, Judge Rakoff determined that there was no evidence that they had distributed it to any third parties, including LDiscovery.

DTI also contended that the Individual Defendants breached their employee non-solicitation clauses by jointly searching for new employment and also by allegedly soliciting two other DTI employees, but Judge Rakoff stated that agreement was “unenforceable insofar as it purports to prohibit at-will employees, who have yet to accept an offer of new employment, from “inducing” or even “encouraging” their coworkers to leave their present employer.”  Judge Rakoff also stated this:

“To be sure, if DTI desires to prevent its employees from coordinating their resignations, it is free to hire them pursuant to term employment agreements. DTI, however, cannot use restrictive covenants to supply itself all the benefits of term agreements while simultaneously retaining the right to lay off its personnel whenever it so desires. This is not a proper purpose for such a restraint on free market competition.”

With regard to DTI’s claims that the Individual Defendants breached their client non-solicitation covenants, Judge Rakoff stated that the “Epiq Employment Agreements do not require the Individual Defendants to cease all contact with their clients following their departure from DTI” and referred to “a suggestion by defendant Kreger to grab lunch or for a particular client to call him” (with no testimony provided that the Individual Defendants had solicited those clients for business) as “innocuous”.

As a result, Judge Rakoff dismissed the claims against LDiscovery and granted the individual defendants’ motion to move the case to a private arbitration.

Having heard stories about what some companies will do to enforce non-compete agreements, including sending cease and desist letters for a variety of perceived breaches of those agreements, this is the first instance I can think of where eDiscovery providers disputed the scope and validity of those agreements in court.  Given the huge compensation numbers and the dispute between two heavyweights in the industry (both backed by private equity firms), I wouldn’t be surprised to see more of these types of disputes in the future.  While I cannot dispute the impact of a successful sales person in obtaining clients in the first place, I would have thought that a company’s software and/or services would be the primary factor in retaining those clients.  Silly me.

Bloomberg Law provides a link to the case docket where (if you’re a subscriber), you can click a link to view the opinion.  It’s an interesting and fascinating read.

So, what do you think?  How enforceable should non-compete agreements be?  As always, please share any comments you might have with us or let us know if you’d like to know more about a particular topic.

Also, if you’re going to be in Houston on July 20, Women in eDiscovery (WiE) Houston Chapter, in partnership with South Texas College of Law, will be hosting the inaugural eDiscovery “Legal Technology Showcase & Conference” at South Texas College of Law in downtown Houston.  I will be participating as a panelist on the “State of the Industry” panel and my colleague, Karen, will be moderating the “Legal Operations and Litigation Support” panel.  Click here for more information about the conference, including how to register!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.