Making Sense of Third-Party Discovery

It would be so nice if something made sense for a change!

- Alice, “Alice’s Adventures in Wonderland” by Lewis Carroll

What happens when, out of nowhere, the “other side” in a litigation matter wants electronic information during discovery not from you, but from a third-party who has worked directly with your company? Yikes! What about all that confidential information you provided them, never imagining that anyone else would have access to such electronic information? Alternatively, what if those third parties have purged their files and no longer have the requested information? Is there a duty to maintain electronic documentation which is out of your immediate control? 

The issue was addressed by United States Magistrate Judge Paul W. Grimm in his decision Goodman v. Praxair Servs., Inc., 2009 WL 1955805 (D. Md. July 7, 2009), where the Plaintiff asked that consultants to Praxair Services turn over their electronic documents in discovery.  The Plaintiff alleged that the Defendants violated their duty to preserve evidence when they failed to implement a litigation hold on the third party, resulting in a significant loss of data, including the contents of hard drives and emails relevant to the dispute at issue.

The Court found there was no duty to preserve third party evidence.  Although Fed. R. Civ. P. 34(a) does provide that documents are considered to be under a party's control when that party has “the right, authority, or practical ability to obtain the documents from a non-party to the action,”  the Court determined that Praxair did not have “the sufficient legal authority or the practical ability” to ensure the preservation of documents prepared by its third-party consultants or "any legal control" over those documents.  Accordingly, the Court held that Praxair had no duty to preserve any of the documents prepared by the third-party consultants.  Absent any duty to preserve evidence under a party’s control, there could be no finding that spoliation of evidence had occurred. 

This is a holding that makes perfectly good sense.  Alice would be delighted.

Gone But Not Forgotten

In "Men in Black," Will Smith carries a tool that is the Holy Grail of every litigant with something to hide: a "neuralizer" that erases aliens and Tommy Lee Jones' acting from the memories of those unlucky enough to witness either.  The real genius is that the subject doesn't know they've been "neuralized"--not only is the crime gone, but so is the cover-up.

There are a number of products on the marketplace that attempt to do the same for hard drives.  Some are surprisingly straightforward about their goal: destroying incriminating evidence.  For example, with a name that might provoke the most mild mannered judge, Evidence Eliminator boasts on its website that "If you do not use Evidence Eliminator, ' your PC is a ticking time bomb, waiting to go off!' . . . Only with Evidence Eliminator can you get the protection you deserve, only then can you use your PC to explore the Internet with confidence."  The company drives the point home with a page entitled "Reasons to Buy," which recounts statistics on prison violence.  The thinly veiled message is that the product can destroy incriminating evidence, and spare its purchaser jail time or civil liability.

However, unlike Will Smith's neuralizer, while the crime (or tort) may be erased from the hard drive, the cover-up is probably detectable to a competent forensic analyst.  In other words, the hard drive will typically contain an indication that it has been wiped.

This is a bad thing for those seeking to cover their tracks.  Attempts to destroy relevant evidence routinely lead to an adverse inference instruction if the following requirements are met: 1) the party was under an obligation to preserve the evidence; 2) the evidence was destroyed with a culpable state of mind (i.e. negligently or knowingly); and 3) the destroyed evidence was relevant.  In such a situation, the jury will typically be instructed that the party has destroyed information that would have been harmful to it.

It is easy to imagine situations in which such an instruction is far more devastating than the electronic information itself.  Thus, litigants should keep in mind the old adage that is as true today as it was in the paper era: the documents are what the documents are.  At least until a workable neuralizer is developed, attempting to hide incriminating documents creates more problems than it solves.

A Doll's House of Cards: Wanton Laptop Destruction Leads to Sanctions

What happens when Nineteenth Century dolls meet Twenty-First Century litigation? Sometimes - sanctions! Kvitka v. The Puffin Co, LLC, 2009 U.S. Dist. LEXIS 11214 (M.D. Pa. Feb. 13, 2009) reminds us that the failure to preserve relevant ESI can mean disaster in any litigation. Although few of us would fail to recognize the red flags posed by Ms. Kvitka's behavior in this case, it bears repeating that even the inadvertent failure to preserve ESI can fatally compromise an otherwise-valid claim or defense, even in a doll-sized case.

Nancy Kvitka had advertised her antique bisque-headed dolls in the magazine Antique Doll Collectors, published by Puffin Company, LLC, since the magazine's first issue in 1998.  In August 2005, the magazine notified Ms. Kvitka that it would no longer publish her advertisements because of a large number of complaints about her business practices, including her disparagement of other advertisers and misleading advertisements.


Upset, Ms. Kvitka sent a letter back, intimating that forged or altered emails had led to the dispute. When Ms. Kvitka threatened litigation, Defendants notified Ms. Kvitka that Puffin had a file containing several emails written by Ms. Kvitka disparaging its other clients. Defendants' counsel also sent a letter to counsel for Ms. Kvitka reminding them that Ms. Kvitka's computer - and, in particular, the hard drive and the email messages contained there - needed to be preserved as potential evidence in the threatened litigation. "As you know," the letter warned, "emails can be deleted, but they cannot be erased."


Ms. Kvitka filed suit in Pennsylvania state court in January of 2006. She later claimed that, shortly after filing the state court litigation, she began having problems with the laptop she presumably used to send the offending emails. The laptop was "doing wonky things, ridiculous things," she said, and "it was difficult to receive emails, it was difficult to send emails..."  Nonetheless, after she ordered a new laptop, she successfully received email confirmation of that order on the old laptop, and forwarded that email confirmation to her computer technician on that old laptop. Hmmm.


Once her computer technician set up the new laptop, Ms. Kvitka THREW THE OLD LAPTOP IN THE TRASH.   (I guess she couldn't pull a Torvald and burn it?)  Mere days later, the court inquired about the status of the original emails Ms. Kvitka supposedly sent from the old laptop. Ms. Kvitka failed to inform the court of the destruction of the old laptop, and instead abruptly terminated the state court litigation and refiled her claims in federal court.


Ms. Kvitka successfully concealed the fate of her old laptop until January 2008, when Defendants moved for an order of inspection of her new laptop. She then claimed that, although she had not deliberately transferred any data between laptops, "some" emails had mysteriously made their way from the old laptop to the new laptop, while others had just as mysteriously disappeared forever.


Although such magical things may happen in dolly-land, they don't happen in the real world of ESI, and the court wasn't buying it either. Finding that Ms. Kvitka had acted in bad faith and "with the greatest degree of fault" in destroying her old laptop, the court imposed sanctions for the intentional spoliation of evidence, including dismissal of Ms. Kvitka's claims and an adverse inference instruction on Defendants' cross-claims.


Naturally - and much like your dear blogger - the court couldn't resist quoting Ibsen. Noting with dismay Ms. Kvitka's many implausible attempts to conceal her malfeasance, the court counseled her that "[m]any a man can save himself, if he admits he's done wrong and takes his punishment." (I was hoping for "it would be the greatest miracle of all if you avoided sanctions here, lady.")

Digital Medical Records: The Cure for What Ails?

The debates concerning President Obama’s plan to computerize medical records within 5 years have tended to focus on a few key issues. Those in favor of the plan suggest that it will create jobs, improve treatment, reduce errors, and reduce costs. Those opposed argue that it will be too costly and burdensome to implement and that it will be compromise the security of patients’ private information.  But what about the effect on e-discovery?

As Craig Ball notes on Law Technology News’ EDD Update blog, "medical records are evidence." They are often sought and produced by parties to all kinds of lawsuits, including cases involving malpractice, personal injury, insurance disputes, employment law issues and disability claims. Because medical records are evidence, digital medical records will be subject to the rules and procedures regarding electronic discovery.

If you don’t immediately catch the significance of the proposed change in terms of litigation expenses consider this: Assuming you knew what you were looking for, how long would it take you to read several boxes full of your doctor’s hand-written notes written on whatever form your doctor happened to be using at the time? Compare that to the amount of time it would take you to run a keyword search of a single field (e.g. “Prescriptions”) of several uniform digital forms. If you were billed for the time spent running the searches, for which would you rather pay?


In his post, Mr. Ball, a computer forensic expert and e-discovery consultant, correctly points out that currently, the fees associated with collecting, reviewing, cataloging and labeling hard-copy medical records can often represent a significant litigation expense. In part, the fees are high because the records are often incomplete, irregular and not readily-accessible. Mr. Ball sees the change to computerized records as an opportunity to fix these problems. He pleads with the Administration to adopt policies and procedures that require complete, uniform, readily-available records. 

Admittedly, electronic discovery is not cheap. And in the hypothetical suggested above, you would likely have to pay a vendor to process the digital forms or obtain software to run the proposed search. But, if computerized medical records are the wave of the future, as an associate who spends at least one day per week reviewing documents, I sincerely hope Mr. Ball gets what he’s asking for: a considered response to the e-discovery issues concerning digital medical records.

My Boss May Own My Facebook Page !?

Social networking websites have taken the world by storm.  On MySpace and Facebook, users lovingly chronicle the intimate details of their lives, post their current relationship status and feelings, provide spontaneous opinions, and upload off-the-cuff photographs.  Even the more professional networking site LinkedIn, is now trying to become more social by adding a blog application.  Unfortunately, users often post without considering the trail of evidential bread crumbs they leave in their wake.  Just last week, Virgin Atlantic Airways fired 13 members of a cabin crew after they allegedly posted inappropriate comments on Facebook.  And today, investigators visit these sites as a matter of course when looking into an individual for purposes of employment, college admission, background checks for criminal activity, and so on.

This growing use of social network information raises two important questions for the corporate world in this new age of electronic discovery:

1. Are social networking sites accessed using an employer's computer, fair game when it comes to electronic discovery and document production?

2. If social networking pages are produced as part of electronic discovery, would this information then be admissible in court?

First, employees will notice that their personal workplace computers sometimes "remember" their MySpace or Facebook password -- not to mention gmail, hotmail, yahoo, and other accounts -- when they sign on.  That's because the website browser takes note of and saves the password.  But here's the catch.  Because the password exists on the employer's hard drive, that password and therefore access to the social networking page, are literally within the possession, custody, and control of the employer.  With the right IT know-how, the employer can easily access the site.  The unanswered question is, is the social network page in the legal "possession, custody and control" of the employer?  What happens when the employee or employer gets sued, and the social networking page becomes responsive to document requests?

It may depend on whether the adverse party is the employer or a third entity.  In the case of the employer being sued, perhaps the employee is alleging discrimination in the workplace, and has a discussion on his Facebook page about how he made up the whole story.  Does the employer have the right to access the Facebook page on its own?  If not, does the employer have the right to demand images of the page in their document requests?  The employer's argument would be that by accessing the page at work, the employee waived any right to claim that the site is private and personal.  An even broader argument is that by posting personal information on a world-wide web, the employee has automatically given up any pretense of personal privacy at all, to the world at large.

A different implication arises if the employer is being sued by a third party for, say, legal malpractice.  The third party does not have direct access to the Facebook page or the password. Does the third party have the right to request the employee's Facebook website through document requests to the employer?  The employer, who has the password in its records, may be able to access the Facebook page.  The answer hinges on whether the Facebook page is in the possession, custody or control of the employer, thereby requiring the employer to produce it to the third party.

Second, even assuming that the Facebook page must be produced, it still may not be admissible in court.  Because websites are amorphous creatures, one must take a "snapshot" of the page in order to preserve a site as it existed at a particular moment.  This process raises numerous evidentiary issues under the admissibility rules for standard electronically stored information. This includes considerations of relevancy, hearsay, authenticity, the "best evidence" rule and undue prejudice. See Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 538 (D. Md. May 2007).

In sum, more people sign up for social networking websites every day.  It is only a matter of time before attorneys routinely request social networking pages during certain types of lawsuits.  The law is still uncertain as to when and whether such pages must be produced, and whether those pages are going to be admissible in court.  Employers should be mindful of these issues, and should impress upon their employees the dangers of posting inappropriate materials on their social networking pages.  Similarly, employees should be aware that what they post -- even if they explicitly limit access to their page to friends only -- may someday come back to haunt them.

Slaying the e-Discovery Dragon: Are Law Schools Up to the Task?

Ask any lawyer whether the typical law school course is "practical," and you'll likely receive a resounding "No!" - after they stop laughing, of course. But bloggers have stumbled onto a novel idea - why not teach law students practical skills for dealing with e-discovery issues before they are sent out into the legal community? In a recent article, William Hamilton, a commercial litigator at Holland & Knight and an adjunct professor at the University of Florida's Levin College of Law, pointed out that "e-discovery failures continue, apparently unabated" and "many of the dramatic e-discovery failures of the past two years have involved firms at or near the top of the profession." See The E-Discovery Crisis: An Immediate Challenge to Our Nation's Law Schools, November 5, 2008." Some experts believe that "attorney incompetence in e-discovery is so widespread that it presents a massive ethical crisis across the entire legal profession." Id.  So why not educate the next generation of lawyers about the best methods for dealing with e-discovery? These law students can bring a new level of e-discovery competence to law firms, government agencies, and clients. Id. It may be the best method by which the profession can slay the e-discovery dragon and avoid the pitfalls and sanctions of the "e-discovery crisis." 

In his article, published as a guest feature on the e-Discovery Team blog and the Paralegal Profs blog, Professor Hamilton does a thorough analysis of the impact law schools can have on the legal profession by teaching courses on e-discovery. Hamilton himself teaches a course on e-discovery at the University of Florida's Levin College of Law. He points out that most law schools are "blithely continuing to teach civil procedure as if nothing or little is happening 'out there.'" Id. All while the civil justice system "flounders under the weight of digital revolution." Id. Hamilton compares the inaction of law schools to "fastidiously arranging the deck chairs while the Titanic goes under." Id. He calls on law schools to educate young lawyers about the importance of e-discovery. After all, law schools are best equipped to address the e-discovery crisis, because they "operate in an educational environment absent crushing time and business restraints. Law students have the time to think, work, and struggle with e-discovery in a tolerant, incubating environment." Id. Practicing lawyers, on the other hand, are forced to attempt to learn best practices for dealing with e-discovery through CLE programs and seminars, all while trying to deal with the "crush of billable hours and the economics of the modern law firm." Id. Hamilton goes on to describe what a "practical" e-discovery course would look like.  He insists that "teaching e-discovery means working through each of the e-discovery phases outlined in the EDRM model with similar hands-on experimental approaches." Id. He also emphasizes that the students must not be lectured, they must "do." In his own course, Hamilton emphasizes practical experience, and the students conduct mock "interviews" using IT professionals from the University of Florida's Legal Technology Institute as their subjects. See Hamilton's article for a full walk-through of a course in his classroom. 

Professor Hamilton's point is a good one: the legal profession can begin to stop the bleeding from the e-discovery crisis by insisting that the new generation of lawyers be educated about e-discovery issues. Some law schools, like the Levin College of Law at the University of Florida, are already on board. But how likely are law schools across the country to answer Hamilton's call? After all, law schools have been historically slow to offer practical coursework for their students. But as sanctions from e-discovery violations build, law schools may be forced to pull their heads out of the sand and address the critical role they could play in educating the profession about e-discovery. Only time will tell if law schools will answer the call.