Fears and Loathing (and Pain) in Seattle: a Case Lesson in How NOT to Preserve and Produce Email – Part One

April 13, 2014

Fear_Loathing_SeattleA recent case in Seattle provides a text-book example of how not to do e-discovery. It concludes with a sanctions order against the defendant, and the defendant’s law firm, Payne & Fears LLP. The law firm was fined $10,000, payable to the court, due to the conduct of two of its attorneys. The defendant, Corinthian Colleges, was fined another $25,000. Knickerbocker v Corinthian Colleges, Case No. C12-1142JLR, (WDWA, April 7, 2014).

How does a sanctions disaster like this come to pass? And in such a laid back city like Seattle? The court awarded sanctions because of a failure to preserve and a subsequent delay in producing evidence. Note that I did not say sanctions for a loss of evidence, only delay. The ESI at issue in the sanctions motions was the email of three of defendant’s former employees. They were the plaintiffs who were now suing Corinthian for alleged racial discrimination, harassment, and retaliation. Corinthian’s attorneys eventually found and produced the email from back-up tapes, but it was an ordeal to get there. The court got the distinct impression that the attorneys involved for the employer were not playing straight, that they were attempting to hide the ball.

Fear_Loathing_VegasDigging a little deeper into this 27-page Order, which is replete with facts, as all good sanctions orders are, we see a series of bad decisions. The decisions were all made by the attorneys for the defense. It would take me another 27-pages to review them all in detail, so I will just examine the segments that seem to me to have the most instructional value. (It is still going to be a two-part blog, even without these details!)

After you hear the story, and hopefully also read the opinion itself, you be the judge as to whether these bad decisions were just incompetence on the part of these attorneys, or actual bad faith. I will include a poll at the end of each segment where you can anonymously vote. The judge clearly thought it was bad faith by Pain & Fears’ attorneys. But, who knows for sure (aside from the attorneys themselves). It is often hard to tell the difference between dishonesty and incompetence, especially if all you know about the case is what you read in one court order.

Judge’s Quiz of Defense Counsel Uncovers a Complete Failure to Impose a Litigation Hold

trial_sceneThe first bad mistake made in this case was the defendant’s failure to issue a litigation hold. The specific facts surrounding this failure are interesting, so too are they way they came out. Maybe they tell a story of stupidity, or maybe intent to hide? Again, you be the judge. Personally, on this first error at least, I am inclined to think it was just a lack of knowledge and understanding. But I readily admit I could be wrong. Maybe they did not issue a hold because they wanted incriminating email to be destroyed. Naturally, that is what the plaintiffs’ alleged.

The facts of the no-holds bar (not a typo, think about it) were clarified during an evidentiary hearing on the plaintiff’s first motion for sanctions. Most of the clarification was attained by the judge’s questioning of the Payne & Fears attorneys themselves, and not the witnesses they had brought with them.

When a district court judge decides to quiz legal counsel about something he is curious about, you had better respond fully and truthfully. This is the same judge who is going to decide whether to sanction your client for misconduct. The compulsion to speak is especially strong in a situation like this where the other side is urging a sanction against your client for hiding the truth. Do you want to dig your hole even deeper to be buried in? No. The Payne & Fear attorney at the hearing, Jeffrey Brown, had no choice but to answer the judge as best he could.

Judge-RobartThe District Court Judge, James L. Robart, a wise and sage judge if there ever was one, cut to the chase and asked Jeffrey about the litigation holds. No doubt Jeffrey was nervous when he heard the question directed to him. He was looking up at Judge Robart in black robe several feet above him on his bench. I am pretty sure the Judge was not smiling like we see him in this photo. Jeffrey knew that the Judge would not like the answer he was about to give. He was right about that. Here is Judge Robart’s account of this exchange from the opinion:

At the hearing, Jeffrey Brown, counsel for Corinthian, admitted that, although Corinthian had issued litigation holds in previous litigations, Corinthian did not issue a litigation hold with respect to this case. (12/12/13 Trans. at 4-5.) Mr. Brown represented that, instead of issuing a company-wide notice, Corinthian had hand-selected certain employees and requested that they retrieve and retain relevant documents. (Id. at 5-7, 12, 18.)

Note the use of the word “represented” in Judge Robart’s account of Jeffrey’s response. It is a term of art, a kind of word you use when describing fraud. This is still early in the opinion, but experienced case law readers knows this is a set up word for things to come.

As we will see later when discussing other e-discovery blunders in this case, Mr. Brown quickly became a favorite target of Judge Robart’s questioning. His opinion is filled with quotes from poor Jeffrey. No doubt he acquired a major headache in that courtroom.

Oscar_Pistorius-Trial_headache

Here is Judge Robart’s summary of the defendant’s preservation mishaps (emphasis added and numerous citations to the record omitted):

Corinthian has issued litigation holds in previous actions. Nonetheless, for this case, Corinthian only requested that a subset of employees, whom it deemed to be “key” witnesses, search for and save relevant documents. Testimony by some of these “key” witnesses, however, casts doubt on Corinthian’s claim that these employees in fact performed any—let alone a thorough—search for relevant documents. Specifically, Ms. Austin and Ms. Paulino testified that they did not search for documents relevant to the litigation, and Ms. Givens and Ms. Phillips testified that they did not recall searching for documents.5 Such self-selection of a limited pool of discovery materials, combined with doubt as to what searches, if any, were performed of this pool of materials, gives the court no confidence in the quality of Corinthian’s discovery production. Yet, due to the lack of a litigation hold, it is not clear that the current additional discovery period, instituted 18 months after Plaintiffs filed suit, can remedy this deficiency.

So much for the corporation’s litigation hold procedures in this case. Turns out that the deposition testimony contradicted the representations made by Mr. Brown to Judge Robart as to his hand-selection of certain employees and request that they retrieve and retain relevant documents. These same witnesses testified that no one told them to search for anything, and they had not made a search. This suggests that the representations made to Judge Robart were not accurate. In fact, they seem down right misleading.

Not good. Not good at all. Perhaps now you understand the fines against the attorneys. But wait, there is more. An even bigger mistake was allowing all of plaintiff’s emails to be deleted from the corporation’s Exchange server after the case started. No doubt the judge was beginning to believe the plaintiffs’ allegations that the employer allowed the plaintiffs’ emails to be destroyed on purpose because they knew the content would harm the defense. But before we move on. What do you think? Did the employer not institute a litigation hold on purpose so that they could get away with destroying incriminating evidence, or is this just another case of lawyer incompetence?

More Drama Concerning the Defendant’s Destruction of Email

"You can’t handle the truth." -- Jack Nicholson in “A Few Good Men” (1989)The facts on this alleged destruction were cloudy and contradictory at the time of the first hearing. So, once again, what did Judge Robart do? That’s right, he turned to defense counsel and asked him if it was true, had his company deleted all of the plaintiffs’ email as plaintiffs’ allege. Here is Judge Robart’s later findings on this issue, which, once again, relies extensively on the responses of Mr. Brown to his impromptu questions:

First Corinthian’s counsel, Mr. Brown, conceded that Plaintiffs’ email boxes were in fact deleted pursuant to this practice. (“With respect to the plaintiffs’ email boxes, no, your Honor. Those emails exist on the backup tapes, but those email boxes were deleted per the policy that Mr. Banash explained to you.”) Mr. Brown also conceded that the deletion of Plaintiffs’ emails occurred after Corinthian received Plaintiffs’ EEOC notices:

If you put an order in that says delete the mailbox in 30 days, should somebody have spotted the EEOC charges and made the connection and gotten around and suspended that? That’s something I can’t argue. That is something that we have looked at. Yeah, we have to find a way to fix that system, your Honor. I cannot sit here and tell you that is the best way to do things.  

Mr. Brown also explained that no other document destruction program was in place at Corinthian. Although Plaintiffs pointed to a Corinthian document purporting to establish a six-month automatic email deletion policy, the policy was apparently never implemented. Plaintiffs claim that Mr. Ruiz represented that the reason Corinthian had produced so few emails was due to the alleged six-month deletion policy; Corinthian disputes that Mr. Ruiz ever made such a representation.  

Another big mistake was conceded by Mr. Brown. The plaintiff’s email was deleted after Corinthian received Plaintiffs’ EEOC notices. That means after a duty to preserve was triggered. He has just admitted a breach of duty. He has admitted spoliation. But he has a fall back argument, only that argument puts the credibility of other Payne & Fear attorneys at issue.

Mr. Brown was now arguing that the destruction of the email after notice was a harmless breach of duty, because, after all, there is a complete backup copy of all of the plaintiffs’ email. Did Mr. Brown forget that other attorneys in his firm had previously said they could not produce plaintiffs’ emails because the employer did not have them? They claimed that the emails were all destroyed in the normal course, and so the destruction was protected from sanctions by Rule 37(e). After the judge put Mr. Brown on the spot, and grilled him on his poor job of preservation, Mr. Brown responded by saying how easy it will be to just produce the emails off of the backup tapes. That reminds me of one of my favorite deposition questions: “Were you lying then, or are you lying now?

chief_judge_james_robartJudge James Robart, who has been a lawyer since he graduated from Georgetown in 1973, and a District Court Judge since his nomination by President Bush in 2004, knows a fair amount about IT. He was a member of the Ninth Circuit IT Committee from  2007 to 2009, and chief judge in 2008. I suspect Judge Robart knew a lot more about technology than any of the attorneys in this case, although they apparently did not know that.

Judge Robart analyzed the different things that he was being told by the attorneys for the defendant and reached this considered opinion:

Corinthian’s attempt to influence (if not misdirect) the court with such unsubstantiated information falls below acceptable standards of professional conduct.

In case you did not know it, that’s polite judge-speak for much stronger thoughts and condemnations, including my favorite deposition question.

Back to defense counsel’s fall back argument, that no harm was done because of the backup tapes, Judge Robart deals with this position in his sanction’s Order by again relying on counsel’s own words:

Specifically, Mr. Brown averred that:

First of all, there are backup tapes that have every single email that has been referred to on them. Every single day that Corinthian has operated in Bremerton there are backup tapes with those e-mails. Everything we are talking about in this motion has been preserved and is available.

The problem with this position, as the judge knew full well from study of the record, is that defendant never searched these tapes for the email. They never searched, even though another Pain & Fears lawyer had previously filed a certification with the court stating that:

Corinthian, at its own expense, conducted a full and complete search for all documents responsive to Plaintiffs’ Requests for Production Nos. 1, 2, 3, 4, 5, and 27 (subject to any and all objections and limitations previously agreed to by the parties) on all available electronic sources and/or servers . . . .

Judge Robart later found that this verification was, in the judge’s words: incorrect in that Corinthian’s backup tapes were not searched, despite the fact that Plaintiffs had not agreed that the backup tapes were not “available.” 

Obviously the lawyers were getting a little too cute with the use of the word available to try to justify their hiding the fact that they had these emails on electronic sources, namely backup tapes, but did not search them.

cant_handle_truthThis kind of squirmy behavior never goes over well with a judge, any judge, but especially not a U.S. District Court Judge like Judge Robart. He had long experience with complex litigation in Seattle, coupled with recent experience with IT. Believe me, a judge like that can handle the truth, the whole truth, and nothing but the truth. So that is what you had better give him, and you had better give it to him straight.

Here are Judge Robart’s words, where he once again quotes the words of Mr. Brown. Note how he begins each paragraph by invoking his name. (Again I am deleting the many citations to the record.)

Mr. Brown took the position that the Stipulated Order’s requirement for a “full and complete search” that “shall include documents on backup servers” did not extend to documents kept on backup tapes, because “[t]he tape is an entirely different ballgame from the servers.” (testimony by Mr. Banash confirming that Corinthian has both backup tapes and backup servers).) Plaintiffs’ counsel, on the other hand, claimed that they were not aware that Corinthian intended to draw a “distinction between backup servers and backup tapes,” and that they understood the Stipulated Order to refer “generally to backup media.” Similarly, with respect to the Verification of Compliance, which affirmed that Corinthian had searched “all available electronic sources and/or servers,” Plaintiffs maintained that they had not agreed that the backup tapes were not “available.”

Mr. Brown emphasized multiple times that accessing the information on the backup tapes would solve the spoliation problem facing the court: (paras added for ease of reading)

MR. BROWN: And the answer is lying right under our noses. We brought it up in April. We can go get those tapes. If there is something supposedly in Michelle Paulino’s mailbox, we can look at it. . . . We can do that. A thousand dollars a day and it is here and we are done.

THE COURT: Is it your position, sir, that that is not an intentional deletion of information once you are on notice of litigation?

MR. BROWN: Your Honor, number one, that is my position, because the emails exist on the backup tapes. And we can get them.  . . .  I know those things are still there. I can tell you, it is about a thousand dollars per day of recovery time. It can be done. It is sitting there.

Mr. Brown represented to Judge Robart during the hearing that the cost of retrieval of plaintiffs’ email from backup tapes would not be as expensive as Judge Robart feared. I wonder how Mr. Brown knew that, or thought he knew that? I suspect he just got carried away in trying to defend his client. Anyway, here is more Q&A between Mr. Brown and Judge Robart on the topic. You be the judge.

THE COURT: You are sitting here telling me over and over and over again, we have the backup tapes, it solves the entire problem. I don’t know if we can go back to 2004, but that would be, what, 365 days a year times ten years at $1,000. . . . Corinthian is going to have a very large bill.

MR. BROWN: The one day is a snapshot, though. For example, if you asked how would the world be different if we had sent a litigation hold that stopped the deletion of one of the plaintiffs’ emails, all we need—you can look at the termination date and get the backup tape for that date, and now you have got their email box exactly how it existed as of the date of their termination. It would be perfect. It would be one day, $1,000. If you wanted that for ten employees, then you get to $10,000. You don’t have to do it as separate days, because it is cumulative.

THE COURT: I think what I want it for, sir, is every employee of Corinthian, because I have no confidence in your search. . . .

MR. BROWN: . . . With respect to every employee, if you are looking at every employee at the Bremerton campus where this occurred, we can do that, your Honor. It can be done. We are not going to have to pay individually for each employee. If the backup tape for one day—That is across the whole campus. We can capture everybody that way. . . .

Judge Robart decided to accept the representations of Mr. Brown that recovering data from the backup tapes “would be perfect. It would be one day, $1000.” For that reason Judge Robart deferred ruling on Plaintiffs’ first motion for sanctions. Instead, he issued an order compelling defendant to “retrieve from the backup tapes all employee email accounts as they existed on or near the date that the last Plaintiff’s employment was terminated” and to “search the retrieved information according to the terms articulated in the parties’ stipulated order.” Because the parties’ trial date of January 6, 2014, was looming in less than one month, the court set a deadline of December 20, 2013.

tape-backupAs it turned out, and, as I dare say, could not have been overly surprising to the IT sophisticated Judge Robart, the defendant’s backup tape recovery process proved, in Judge Robart’s words, considerably less straightforward than Mr. Brown represented at oral argument. I just love the mastery of understatement that most judges seem to have. Judge Robart’s footnote four spells out the details. The first vendor defendant hired was unable to retrieve any information from the backup tapes. Oops! The tapes were then returned to defendant, who somehow managed to recover and produce some emails itself. Defendant then hired a second vendor to complete recovery of the emails. After still more delay, this vendor was able to retrieve a subset of the remaining emails.  The tapes were once again returned to defendant, who eventually somehow supposedly recovered and produced the rest of the missing emails.  

Needless to say, the December 20, 2013, production deadline was not met. In fact, defendant was seven weeks late, and even then, only produced about 3,000 additional emails from the backup tapes. Still, that looked good compared to defendant’s prior ESI search efforts, where it had only produced 110 email strings and 1,270 pages of other documents. After the late production, the court reopened discovery and extended the trial date until November 3, 2014.

The next hearing the court has on e-discovery in this case is a second motion for sanctions filed by plaintiffs just before trial. It is not heard until March 21, 2014. It is another one of those last minute attempts to win a case on e-discovery failures instead of the merits.

Hunter_ThompsonBut before we go to the grand finale, which I warn you is not as grand as you might expect, here is your second chance to express your opinion. Do you think the defendant intentionally withheld production of the emails? Or do you think it was all just accident and confusion. Maybe the result of legal recreational use or something. This is Seattle after all.

So straighten up and vote.

To be continued in next week’s blog . . .



Lawyers as Legal-Fortune Tellers

March 30, 2014

crystal_ball_IBMMost lawyers predict the future as part of their every day work. The best lawyers are very good at it. Indeed, the top lawyers I have worked with have all been great prognosticators, at least when it comes to predicting litigation outcomes. That is why concepts of predictive coding come naturally to them. Since they already do probability analysis as part of their work, it is easy for them to accept the notion that new software can extend these forward-looking skills. They are not startled by the ability of predictive analytics to discover evidence.

Although these lawyers will not know how to operate predictive coding software, nor understand the many intricacies of computer assisted search, they will quickly understand the concepts of probability relevance predictions. This deep intuitive ability is found in all good transactional and litigation attorneys. Someday soon AI and data analytics, perhaps in the form as Watson as a lawyer, will significantly enhance all  lawyer’s abilities. It will not only help them to find relevant evidence, but also to predict case outcomes.

Transactional Lawyers and Future Projections

crystal-ball.ESCHER.Losey2A good contract lawyer is also a good prognosticator. They try to imagine all of the problems and opportunities that may arise from a new deal. The lawyer will help the parties foresee issues that he or she thinks are likely to arise in the future. That way the parties can address the issues in advance. The lawyers include provisions in the agreement to implement the parties intent. They predict events that may, or may not, ever come to pass. Even if it is a new type of deal, one that has never been done before, they try to predict the future of what is likely to happen. I recall doing this when I helped create some of the first Internet hosting agreements in the mid-nineties. (We started off making them like shopping center agreements and used real estate analogies.)

Contract lawyers become very good at predicting the many things that might go wrong and provide specific remedies for them. Many of the contractual provisions based on possible future events are fairly routine. For instance, what happens if a party does not make a payment? Others are creative and pertain to specific conduct in the agreement. Like what happens if any party loses any shared information? What disclosure obligations are triggered? What other curative actions? Who pays for it?

Most transactional lawyers focus on the worst case scenario. They write contract provisions that try to protect their clients from major damages if bad things happen. Many become very good at that. Litigators like myself come to appreciate that soothsaying gift. When a deal goes sour, and a litigator is then brought in to try to resolve a dispute, the first thing we do is read the contract. If we find a contract provision that is right on point, our job is much easier.

Litigation Lawyers and Future Projections

magic_8_ball_animatedIn litigation the prediction of probable outcomes is a constant factor in all case analysis. Every litigator has to dabble in this kind of future prediction. The most basic prediction, of course, is will you win the case? What are the probabilities of prevailing? What will have to happen in order to win the case? How much can you win or lose? What is the probable damage range? What is the current settlement value of the case? If we prevail on this motion, how will that impact settlement value? What would be the best time for mediation? How will the judge rule on various issues? How will the opposing counsel respond to this approach? How will this witness hold up under the pressure of deposition?

All litigation necessarily involves near constant probability analysis. The best litigators in the world become very good at this kind of future projection. They can very accurately predict what is likely to happen in a case. Not only that, they can provide pretty good probability ranges for each major future event. It becomes a part of their everyday practice.

Clients rely on this analysis and come to expect their lawyers to be able to accurately predict what will happen in court. Trust develops as they see their lawyer’s predictions come true. Eventually clients become true believers in their legal oracles. They even accept it when they are told from time to time that no reasonable prediction is possible, that anything might happen. They also come to accept that there are no certainties. They get used to probability ranges, and so do the soothsaying lawyers.

Good lawyers quickly understand the limits of all predictions. A successful lawyer will never say that anything will certainly happen, well almost never. Instead the lawyer almost always speaks in terms of probabilities. For instance, they rarely say we cannot lose this motion, only that loss is highly unlikely. That way they are almost never wrong.

Insightful or Wishful

Professor Jane Goodman-Delahunty, JD, PhD.

Professor Jane Goodman-Delahunty, JD, PhD, Australia.

An international team of law professors have looked into the legal-fortune telling aspects of lawyers and litigation. Goodman-Delahunty, Granhag, Hartwig, Loftus, Insightful or Wishful: Lawyers’ Ability to Predict Case Outcomes, (Psychology, Public Policy, and Law, 2010, Vol. 16, No. 2, 133–157). This is the introduction to their study:

In the course of regular legal practice, judgments and meta-judgments of future goals are an important aspect of a wide range of litigation-related decisions. (English & Sales, 2005). From the moment when a client first consults a lawyer until the matter is resolved, lawyers must establish goals in a case and estimate the likelihood that they can achieve these goals. The vast majority of lawyers recognize that prospective judgments are integral features of their professional expertise. For example, a survey of Dutch criminal lawyers acknowledged that 90% made predictions of this nature in some or all of their real-life cases (Malsch, 1990). The central question addressed in the present study was the degree of accuracy in lawyers’ forecasts of case outcomes. To explore this question, we contacted a broad national sample of U.S. lawyers who predicted their chances of achieving their goals in real-life cases and provided confidence ratings in their predictions.

Assoc. Professor Maria Hartwig, PhD,  Sweden, Psychology and Law

Assoc. Professor Maria Hartwig, PhD, Psychology & Law, Sweden

Prediction of success is of paramount importance in the system for several reasons. In the course of litigation, lawyers constantly make strategic decisions and/or advise their clients on the basis of these predictions. Attorneys make decisions about future courses of action, such as whether to take on a new client, the value of a case, whether to advise the client to enter into settlement negotiations, and whether to accept a settlement offer or proceed to trial. Thus, these professional judgments by lawyers are influential in shaping the cases and the mechanisms selected to resolve them. Clients’ choices and outcomes therefore depend on the abilities of their counsel to make reasonably accurate forecasts concerning case outcomes. For example, in civil cases, after depositions of key witnesses or at the close of discovery, the parties reassess the likelihood of success at trial in light of the impact of these events.

Professor Pär Anders Granhag, Ph.D. Psychology, Sweden

Professor Pär Anders Granhag, PhD, Psychology, Sweden

In summary, whether lawyers can accurately predict the outcome of a case has practical consequences in at least three areas: (a) the lawyer’s professional reputation and financial success; (b) the satisfaction of the client; and (c) the justice environment as a whole. Litigation is risky, time consuming, and expensive. The consequences of judgmental errors by lawyers can be costly for lawyers and their clients, as well as an unnecessary burden on an already overloaded justice system. Ultimately, a lawyer’s repute is based on successful calculations of case outcome. A lawyer who advises clients to pursue litigation without delivering a successful outcome will not have clients for long. Likewise, a client will be most satisfied with a lawyer who is accurate and realistic when detailing the potential outcomes of the case. At the end of the day, it is the accurate predictions of the lawyer that enable the justice system to function smoothly without the load of cases that were not appropriately vetted by the lawyers.

Elizabeth F. Loftus, Professor of Social Ecology, and Professor of Law, and Cognitive Science Ph.D., Stanford University

Elizabeth F. Loftus, Professor of Social Ecology, Law and Cognitive Science, PhD., California

The law professors found that a lawyer’s prognostication ability does not necessarily come from experience. This kind of legal-fortune telling appears to be a combination of special gift, knowledge, and learned skills. It certainly requires more than just age and experience.

The law professor survey showed two things: (1) that lawyers as a whole tend to be overconfident in their predictions of favorable outcomes, and, (2) that experienced lawyers do not on average do a better job of predicting outcomes than inexperienced lawyers. Insightful or Wishful (“Overall, lawyers were over-confident in their predictions, and calibration did not increase with years of legal experience”). The professors also found that women lawyers tend to be better at future projection than men, so too did specialists over generalists.

Experience should make lawyers better prognosticators, but it does not. Their ego gets in the way. The average lawyer does not get better at predicting case outcomes with experience because they get over-confident with experience. They remember the victories and rationalize the losses. They delude themselves into thinking that they can control things more than they can.

I have seen this happen in legal practice time and time again. Indeed, as a young lawyer I remember surprising senior attorneys I went up against. They were confident, but wrong. My son is now having the same experience. The best lawyers do not fall into the over confidence trap with age. They encourage their team to point out issues and problems, and to challenge them on strategy and analysis. The best lawyers I know tend to err on the side of caution. They are typically glass half empty types.They remember the times they have been wrong.

How Lawyers Predict The Future

SoothsayerAccurate prediction of future events by lawyers, or anyone for that matter, requires deep understanding of process, rules, and objective analysis. Deep intuitive insights into the people involved also helps. Experience assists too, but only in providing a deep understanding of process and rules, and knowledge of relevant facts in the past and present. Experience alone does not necessarily assist in analysis for the reasons discussed. Effective analysis has to be objective. It has to be uncoupled from personal perspectives and ego inflation.

The best lawyers understand all this, even if they may not be able to articulate it. That is how they are able to consistently and accurately calibrate case outcomes, including, when appropriate, probable losses. They do not take it personally. Accurate future vision requires not only knowledge, but also objectivity, humility, and freedom from ulterior motives. Since most lawyers lack these qualities, especially male lawyers, they end up simply engaging in wishful thinking.

The Insightful or Wishful study seems to have proven this point. (Note my use of the word seems, a typical weasel word that lawyers are trained to use. It is indicative of probability, as opposed to certainty, and protects me from ever being wrong. That way I can maintain my illusion of omnipotence.)

The best lawyers inspire confidence, but are not deluded by it. They are knowledgable and guided by hard reason, coupled with deep intuition into the person or persons whose decisions they are trying to predict. That is often the judge, sometimes a jury too, if the process gets that far (less than 1% of the cases go to trial). It is often opposing counsel or opposing parties, or even individual witnesses in the case.

All of these players have emotions. Unlike Watson, the human lawyers can directly pick up on these emotions. The top lawyers understand the non-verbal flows of energy, the irrational motivations. They can participate in them and influence them.

If lawyers with these skills can also maintain objective reason, then they can become the best in their field. They can become downright uncanny in their ability to both influence and forecast what is likely to happen in a law suit. Too bad so few lawyers are able to attain that kind of extremely high skill level. I think most are held back by an incapacity to temper their emotions with objective ratiocination. The few that can, rarely also have the emphatic, intuitive skills.

Watson as Lawyer Will be a Champion Fortune Teller

Is Watson coming to Legal Jeopardy?

Is Watson coming to Legal Jeopardy?

The combination of impartial reason and intuition can be very powerful, but, as the law professor study shows, impartial reason is a rarity reserved for the top of the profession. These are the attorneys who understand both reason and emotion. They know that the reasonable man is a myth. They understand the personality frailties of being human. Scientific Proof of Law’s Overreliance On Reason: The “Reasonable Man” is Dead, Long Live the Whole Man, Parts OneTwo and Three; and The Psychology of Law and Discovery.

I am speaking about the few lawyers who have human empathy, and are able to overcome their human tendencies towards overconfidence, and are able to look at things impartially, like a computer. Computers lack ego. They have no confidence, no personality, no empathy, no emotions, no intuitions. They are cold and empty, but they are perfect thinking machines. Thus they are the perfect tool to help lawyers become better prognosticators.

This is where Watson the lawyer comes in. Someday soon, say the next ten years, maybe sooner, most lawyers will have access to a Watson-type lawyer in their office. It will provide them with objective data analysis. It will provide clear rational insights into likely litigation outcomes. Then human lawyers can add their uniquely human intuitions, empathy, and emotional insights to this (again ever mindful of overconfidence).

The AI-enhanced analysis will significantly improve legal prognostications. It will level the playing field and up everyone’s game in the world of litigation. I expect it will also have the same quality improvement impact on contract and deal preparations. The use of data analytics to predict the outcome in patent cases is already enjoying remarkable success with a project called Lex Machina. The CEO of Lex Machina, Josh Becker, calls his data analytics company the moneyball of IP litigation. Tam Harbert, Supercharging Patent Lawyers With AI. Here is the Lex Machina description of services:

We mine litigation data, revealing insights never before available about judges, lawyers, parties, and patents, culled from millions of pages of IP litigation information.

Many corporations are already using the Lex Machina’s analytics to help them to select litigation counsel most likely to do well in particular kinds of patent cases, and with particular courts and judges. Law firms are mining the past case data for similar reasons.

Conclusion

Oracle_delphiHere is my prediction for the future of the legal profession. In just a few more years, perhaps longer, the linear, keyword-only evidence searchers will be gone. They will be replaced by multi-modal, predictive coding based evidence searchers. In just a decade, perhaps longer (note weasel word qualifier), all lawyers will be obsolete who are not using the assistance of artificial intelligence and data analytics for general litigation analysis.

Lawyers in the future who overcome their arrogance, their overconfidence, and accept the input and help of Watson-type robot lawyers, will surely succeed. Those who do not, will surely go the way of linear, keyword-only searchers in discovery today. These dinosaurs are already being replaced by AI-enhanced searchers and AI-enhanced reviewers. I could be overconfident, but that is what I am starting to see. It appears to me to be an inevitable trend pulled along by larger forces of technological change. If you think I am missing something, please leave a comment below.

This rapid forced evolution is a good thing for the legal profession. It is good because the quality of legal practice will significantly improve as the ability of lawyers to make more accurate predictions improves. For instance, the justice system will function much more smoothly when it does not have to bear the load of cases that have not been appropriately vetted by lawyers. Fewer frivolous and marginal cases will be filed that have no chance of success, except for in the deluded minds of second rate attorneys. (Yes, that is what I really think.) These poor prognosticators will be aided by robots to finally recognize a hopeless case. That is not to say that good lawyers will avoid taking any high risk cases. I think they should and I believe they will. But the cases will be appropriately vetted with realistic risk-reward analysis. The clients will not be seduced into them with false expectations.

8-ball_Sue_advice

With data analytics unnecessary motions and depositions will be reduced for the same reason. The parties will instead focus on the real issues, the areas where there is bona fide dispute and uncertainty. The Watson type legal robots will help the judges as well. With data analytics and AI, more and more lawyers and judges will be able to follow Rule 1 of the Federal Rules of Civil Procedure. Then just, speedy, and inexpensive litigation will be more than a remote ideal. The AI law robots will make lawyers and judges smart enough to run the judicial system properly.

Artificial intelligence and big data analytics will enable all lawyers to become excellent outcome predictors. It will allow all lawyers to move their everyday practice from art to science, much like predictive coding has already done for legal search.


Judge John Facciola Exposes Justice Department’s Unconstitutional Search and Seizure of Personal Email

March 23, 2014

Magistrate Judge John Facciola in Wash. D.C.The NY Times reported this week that a federal judge in Washington D.C. issued an unusually sharp rebuke of the Justice Department. Judge Rebukes Justice Dept. for Requesting Overly Broad Email Searches, Matt Apuzzo (NY Times, 3/19/14). That judge was none other than well-known e-discovery expert, U.S. Magistrate Judge John M. Facciola. He knows illegal e-discovery when he sees it. Apparently he has been seeing it for quite a long time from the Department of Justice. With his Memorandum Opinion and Order of March 7, 2014In the Matter of the Search of Information Associated with [redacted]@Mac.com that is Stored at Premises Controlled by Apple, Inc., Judge Facciola has taken a bold step to try to stop the government’s unconstitutional search and seizure of personal email.

Here is the NY Times introduction to Judge Facciola’s important judicial order:

A federal judge has admonished the Justice Department for repeatedly requesting overly broad searches of people’s email accounts, a practice that he called “repugnant” to the Constitution.

Judge Facciola’s Order blows the whistle on the Department of Justice’s now routine requests for illegal General Warrants. The warrants they demand, and we must assume routinely obtain from other judges, allow the government to rummage through the entire contents of anyones email, and to keep that email for as long as they want. This kind of Big Brother police state action by the United States government is outrageous, especially in cases that have nothing whatsoever to do with terrorism. It should not be tolerated. Judge Facciola understands this and we must presume that is why he has taken the very rare step of writing a public opinion on what are usually secret criminal proceedings.

big-brother-is-watching-you GEORGE ORWELL's Novel 1984

The Order entered by Judge Facciola in In the Matter of the Search of Information Associated with [redacted]@Mac.com that is Stored at Premises Controlled by Apple, Inc., Magistrate Case. No. 14-228 (JMF) (D.D.C., 3/7/14) is an important judicial action. We all have a Fourth Amendment right to be free from illegal search and seizure from the government. This order protects this right.

We should all remember the words of the Fourth Amendment to the United States Constitution:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Our papers now are our ESI, our email and other electronic documents. There is no difference. They must be secure wherever they are stored, in clouds of computers located on Apple’s premises, as in this case, or wherever. In the Matter of the Search of Information Associated with [redacted]@Mac.com that is Stored at Premises Controlled by Apple, Inc..

This right to secure papers has been steadily eroding since 9/11, all in the name of fighting terrorism. This expansion of search and seizure powers has gone too far. This is shown by the instant case which had nothing whatsoever to do with any alleged terrorist activities.

Judge Facciola’s order reveals a Department of Justice that is out of control. They now routinely treat everyone’s email as fair game for their taking. They no longer even include a pretext of national security. This kind of illegal e-discovery is totally unacceptable. In this case the search warrant request involved a government investigation into a possible kickback scheme. I would guess it involves a government contract for goods and services. 41 U.S. Code § 8702.

The Anti-Kickback statute is very broad and covers such things as making an outright bribe to get a contract or favors, to payment for physician referrals who later bills Medicare, to offering to pay for some government employee’s dinner. It often simply has to do with complaints that the government was overcharged for a goods or service. The statute is filled with grey areas. A whole lot of people could potentially be violating a statute like that, and innocently too (i.w. – without criminal intent). Should suspicion of a person’s violation of that statute open the door to read all of their email? To search for whatever kind of dirt they might be able to pin on them, not just so-called kickbacks? Maybe the government will find evidence of tax violations in the person’s email to their accountant? Maybe they will see a picture of them illegally spitting on the sidewalk?

The point is their search warrants are not just limited to email regarding the questioned kickback payments, as it should be (assuming they had good cause even for that). The search warrants allow the government to see and use all email, not just email related to the investigation. And it also allows them to keep it forever. Perhaps J. Edgar Hoover type blackmail schemes are in the offing? Who knows? All we know is the constitution is supposed to protect citizen from General Warrants.

This is a government and Justice Department drunk with power. They appear to think they are above the law, above our Constitution. They think and act like they can search and seize whatever they want, whenever they want, including our private email. This is exactly the kind of thing that the Fourth Amendment was designed to prevent.

Facciola-Court-SealSome key quotes from Judge Facciola’s opinion will show what he is dealing with here, and the dangers that we now all face from an out of control Justice Department:

This Court is increasingly concerned about the government’s applications for search warrants for electronic data. In essence, its applications ask for the entire universe of information tied to a particular account, even if it has established probable cause only for certain information.  …

This Court is concerned that the government will see no obstacle to simply keeping all of the data that it collects, regardless of its relevance to the specific investigation for which it is sought. …

Despite the Court raising its concerns and urging the government to adopt a different approach, the government continues to ask for all electronically stored information in e-mail accounts, irrespective of the relevance to the investigation.  …

[A]s the Supreme Court has also said, “[T]hose searches deemed necessary should be as limited as possible. Here, the specific evil is the ‘general warrant’ abhorred by the colonists, and the problem is not that of intrusion per se, but of a general, exploratory rummaging in a person’s belongings.” Id. To follow the dictates of the Fourth Amendment and to avoid issuing a general warrant, a court must be careful to ensure that probable cause exists to seize each item specified in the warrant application. …

By the Court’s count, it modified approximately twenty search and seizure warrants for electronic information during September and December 2013. It will no longer do so. Instead, any warrants that do not comport with the requirements of the Fourth Amendment will—like the present Application—be denied with an explanation of why they have been denied so that the government may have an opportunity to correct its defects. To be clear: the government must stop blindly relying on the language provided by the Department of Justice’s Searching and Seizing Computers and Obtaining Electronic Evidence in Criminal Investigations manual. By doing so, it is only submitting unconstitutional warrant applications.

Justice Department Must Be Stopped

Eric_HolderThe attorneys at Justice should collectively hang their heads in shame for this ongoing abuse of power. With this new revelation I join with the call of law professor and civil libertarian Jonathan Turley, and many others, to fire Eric Holder. We demand that the government stop its illegal e-discovery of U.S. citizens, including, but certainly not limited to, illegal seizure of the records of journalists (such as the seizure of the phone records of twenty AP journalists revealed in 2013, or the surveillance and seizure of the email of Fox News reporter, James Rosen, which was personally approved by Holder himself). Judge Facciola’s Order needs to be both a wake-up call and a turning point.

Thankfully Judge Facciola has had the courage to speak truth to power. He has used his authority as a U.S. Magistrate Judge to point out and challenge the unconstitutional actions of our government. As he states in his Order:

What the government proposes is that this Court issue a general warrant that would allow a “general, exploratory rummaging in a person’s belongings”—in this case an individual’s e-mail account. Coolidge, 403 U.S. at 467. This Court declines to do so.

Judge Facciola has fulfilled his responsibility under the law as a U.S. Magistrate Judge to stop this. He has done his duty. Now it is time for other judges and lawyers to speak up and do theirs.

I for one appreciate Judge Facciola’s brave action to make a public exposé of the Department of Justice. All Americans should. Our forefathers have fought bravely since 1776 on many occasions to protect our constitutional rights. So should we.

Iwo_Jima_flag_raising

Judge Facciola Dares to Speak Publicly 

Opinions on the government’s application for a search warrant in a government investigation like this are usually kept secret. They are sealed and not revealed to the public. Judge Facciola did not just deny the search warrant, he denied it publicly. He took the extraordinary step to actually file his order in court without seal. The investigation was protected by many redactions. Judge Facciola decided to expose the abuse and illegal actions of the Justice Department to the public, to you and me. Here are his exact words in footnote two:

[T]his opinion is intended to be—and shall be—made public, as it discusses the investigation in a sufficiently vague manner such as to avoid compromising the ongoing criminal investigation.

His opinion was eventually picked up by the NY Times who wrote the mentioned news story. But the Times did not include the opinion, even in their online edition. In fact, the opinion took some digging for me to find. But find it I did, and not from Judge Facciola or his court, but from Politico.com.

I have seen things like this disappear from the Internet before. But widespread distribution of Judge Facciola’s Opinion, and full publication of its terms, will make that impossible, even for the all-powerful NSA. Click here to download a full copy of the Opinion and share this document, this court order, with as many people as possible. Read it carefully and discuss it with your friends. That is our constitutional right.

Justice Department is Both Sloppy and Abusive

When reading the order, which includes a copy of the government’s application for warrant, the first thing that any lawyer will be struck by is the incredibly sloppy work done by the Justice Department lawyers.  That is yet another reason to reform the Justice Department. Any paralegal in a private law firm could do a better job at drafting a motion than this.

As Judge Facciola points out, the application form is filled with writing errors and ambiguities. If Judge Facciola had granted the warrant requested, the recipient, here Apple, would have been left to guess what was really intended. In Judge Facciola’s words:

This Court should not be placed in the position of compelling Apple to divine what the government actually seeks. Until this Application is clarified, it will be denied.

Judge Facciola’s order should be read in full to appreciate both the breadth of the audacity of Justice Department lawyers, and the sloppiness of their work. For that reason, I reproduce below the full unedited contents of Order. (I did move footnotes to the end of the paragraph where they are cited for ease of reading.)

Conclusion

U.S. FlagThis is the United States of America, not a police state. We must all do everything we can to be sure it never becomes one. The Fourth Amendment was enacted for good cause. Before our Revolution in 1776 we used to live in a police state governed by King George III. The King’s police could break down your door and rummage through your house whenever they wanted. They could search and seize your papers as they pleased. They could take your mail. We can never allow our country to slip slide back into that kind of totalitarian government. Judge Facciola reveals that we are already well along that path.

Shamefully, the Department of Justice, who is supposed to be protecting us, is instead leading the charge. It is now up to other lawyers, judges, private citizens, and corporations, to stand up to this renegade department of the executive branch of our government. We especially need the help of the technology companies, the Internet providers, to stand up to the government’s unconstitutional actions. If, like Apple in this case, they are served with illegal General Warrants, they must not meekly comply. They must fight back to protect the rights and liberties of the users who entrust their private information to them. We are watching. Stop using companies who will not dare to stand up to tyranny, who will not protect our constitution.

To all my paranoid conspiracy theorist friends, although I disagree with you and think things are not yet as bad as you claim, if my blog website is now attacked, I may well have to reconsider. Same goes if I am suddenly audited by the IRS, or God knows what. Same goes if John Facciola loses his position or is otherwise harassed. I do not think my conspiracist friends are right, but I will be watching. So should you. The price of liberty is eternal vigilance.

Regardless of personal consequences, we should all follow the lead of Judge John Facciola. We must all speak out to protect our constitution, to protect our fundamental right as American citizens to be secure from unreasonable search and seizure. This time is was [redacted]@Mac.com who was hit. Next time it could be you.

_________

 _______________ 

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Magistrate Case. No. 14-228 (JMF)

IN THE MATTER OF THE SEARCH OF
INFORMATION ASSOCIATED WITH
[REDACTED]@MAC.COM
THAT IS STORED AT PREMISES
CONTROLLED BY APPLE, INC.

MEMORANDUM OPINION AND ORDER

Pending before the Court is an Application for a search and seizure warrant pursuant to Rule 41 of the Federal Rules of Criminal Procedure and 18 U.S.C. § 2703(a), (b) and (c) to disclose certain records and contents of electronic communications relating to an Apple e-mail address. 1  Despite this Court’s repeated prior warnings about the use of formulaic language and overbroad requests that—if granted—would violate the Fourth Amendment, this Court is once again asked by the government to issue a facially overbroad search and seizure warrant. For the reasons explained below, the government’s application for a search and seizure warrant will be denied.

(FN 1 All references to the United States Code are to the electronic versions that appear in Westlaw or Lexis.)

I. Background

As part of an investigation of a possible violation of 41 U.S.C. § 8702 (Solicitation and Receipt of Kickbacks) and 18 U.S.C. § 371 (Conspiracy) involving a defense contractor, the government has filed an application for a search warrant (the “Application”) targeting a specific Apple e-mail address. See Application at 3. 2 For purposes of this opinion, the details of the investigation—which remain under seal on the Court’s docket—are irrelevant. 3

(FN 2 Because the Clerk’s office does not index filings on ECF for a search warrant application until after an order has been issued granting or denying an application, this opinion cannot reference specific ECF filing numbers.)

(FN3 This opinion addresses an investigatory tool related to an ongoing investigation, and the underlying documents must remain sealed for the time being. However, this opinion is intended to be—and shall be—made public, as it discusses the investigation in a sufficiently vague manner such as to avoid compromising the ongoing criminal investigation.)

Following a standard format used by the Department of Justice, 4 the Application is divided into three main parts. The first part provides background and explains the basis for probable cause. The second part—labeled Attachment A—is titled “Place to Be Searched” and specifies the location of Apple, Inc.; it also explains that the “warrant applies to information associated with the e-mail account [redacted]@mac.com which date from [December], 2013, until the present.” Application at 14. Finally, the third part—labeled Attachment B—operates in a bifurcated manner: under the heading “Particular Things to be Seized,” the Application distinguishes between “Information to be Disclosed by Apple” and “Information to be seized by the government.” Application at 15-16. 5

(FN 4 In fact, the exact draft language is found in Searching and Seizing Computers and Obtaining Electronic Evidence in Criminal Investigations, Department of Justice Criminal Division Computer Crimes and Intellectual Property Section, 255-262 available at http://www.justice.gov/criminal/cybercrime/docs/ssmanual2009.pdf  (last visited Mar. 7, 2014).)

(FN 5 As a practical matter, when a Magistrate Judge is presented with a search warrant application, the Judge signs both the application presented by the government and a standard search warrant form propagated by the Administrative Office of the United States Courts. The search warrant form has a space where the “items to be seized” are listed. Instead of specifying the items there, the government or the clerk’s office typically writes in “See Attachment B.”) Thus, when the warrant is presented to the target—in this case Apple—that target receives both the form and Attachment B.

The government seeks the following:

ATTACHMENT B

Particular Things to be Seized

I.  Information to be disclosed by Apple

To the extent that the information described in Attachment A is within the possession, custody, or control of Apple, Apple is required to disclose the following information to the government for each account or identifier listed in Attachment A: All records or other information stored by an individual using each account, including address books, contact and buddy lists, pictures, and files;

a.         All records pertaining to communications between Apple and any person regarding the account, including contacts with support services and records of actions taken;

b.         All records or other information regarding the identification of the accounts, to include full name, physical address, telephone numbers and other identifiers, records of session times and durations, the date on which each account was created, the length of service, the types of service utilized, the Internet Protocol (IP) address used to register each account, log-in IP addresses associated with session times and dates, account status, alternative email addresses provided during registration, methods of connecting, log files, and means and [sic] of payment (including any credit or bank account number);

c.         All records or other information stored by an individual using each account, including address books, contact and buddy lists, pictures, and files; 6

(FN 6 This paragraph is a repeat of the request after the colon in the initial paragraph.)

d.         All records pertaining to communications between Apple and any person regarding the account, including contacts with support services and records of actions taken; and 7

(FN 7  This paragraph is also listed twice in the original Application.

e.         All records or other information pertaining to including [sic], without limitation, subscriber names, user names, screen names, or other identities, mailing addresses, residential addresses, business addresses, email addresses and other contact information, telephone numbers or other subscriber number [sic] or identity, billing records, credit card or bank account and information about the length of service and the types of service the subscriber or customer utilized, and any other identifying information, whether such records or other evidence are in electronic or other form.

II.  Information to be seized by the government

All information described above in Section I that constitutes contraband, evidence, fruits and instrumentalities of violations of 41 U.S.C. § 8702 (Solicitation and Receipt of Kickbacks) and 18 U.S.C. § 371 (Conspiracy), between [December], 2013, and the present, including the following:

a.         Records, emails, and other information referring or relating to a government investigation involving any or all of the following: [Specific names of individuals and corporations are redacted].

Application at 15-16.

II. Drafting Errors and The Scope of the Government’s Request

It is evident from the sealed affidavit that the government is really after e-mails from December to the present. Nothing in Attachment B, however, explicitly requests that Apple give the government any e-mails. Strictly read, it instead asks for extensive non-content records about the account as well as “address books, contact and buddy lists, pictures, and files.” Application at 15. However, under the subheading of “Information to be seized by the government,” Attachment B states that the government will “seize” relevant “[r]ecords, e-mails, and other information . . .” Id. at 16 (emphasis added). The Court believes that this confusion was caused by poor drafting. Compare Application at 15-16 (repeating sections beginning “All records or other information stored . . .” and “All records pertaining to communications between Apple . ..”) with Searching and Seizing Computers and Obtaining Electronic Evidence in Criminal Investigations at 261. After all, the affidavit discusses specific e-mail conversations as the reason for seeking the warrant; it would be illogical for the government to then not seek these e-mails.

While it is evident from closely reading the Application and its attachments what the government is really after, it is equally evident that the government is using language that has the potential to confuse the provider—in this case Apple—which must determine what information must be given to the government. See In the Matter of the Application of the United States of America for an Order Authorizing Disclosure of Historical Cell Site Information for Telephone Number [Redacted], 1:13-MC-199, 1:13-MC-1005, 1:13-MC-1006, 2013 WL 7856601, at *4 (D.D.C. Oct. 31, 2013) (Facciola, M.J.) (“Generic and inaccurate boilerplate language will only cause this Court to reject future § 2703(d) applications.”). This Court should not be placed in the position of compelling Apple to divine what the government actually seeks. Until this Application is clarified, it will be denied.

III. Analysis

A. The Court’s Previous Actions Regarding Overly Broad Search Warrant Applications

This Court is increasingly concerned about the government’s applications for search warrants for electronic data. In essence, its applications ask for the entire universe of information tied to a particular account, even if it has established probable cause only for certain information. To ameliorate this problem and bring the warrants in line with the Fourth Amendment, this Court has issued “Secondary Orders” to accompany search and seizure warrants for electronic records. These “Secondary Orders” explicitly require that contents and records of electronic communications that are not relevant to an investigation must be returned or destroyed and cannot be kept by the government. See, e.g., In the Matter of the Search of Information Associated with [Redacted] That is Stored at Premises Controlled by Yahoo! Inc., 13-MJ-728, [#4] (D.D.C. Sept. 25, 2013) (sealed) (Facciola, M.J.) (“All contents and records that the United States government determines are not within the scope of Attachment B (II)(A), (B), and (C) shall be either returned to Yahoo!, Inc., or, if copies, destroyed.”). Without such an order, this Court is concerned that the government will see no obstacle to simply keeping all of the data that it collects, regardless of its relevance to the specific investigation for which it is sought. See In the Matter of the Search of Information Associated with the Facebook Account Identified by the Username Aaron.Alexis That Is Stored at Premises Controlled by Facebook, Inc., 13-MJ-742, 2013 WL 7856600, at *7 (D.D.C. Nov. 26, 2013) (Facciola, M.J.) (hereinafter “Facebook Opinion”).

That, however, has not been the extent of the Court’s concerns. In the Court’s November 2013 Facebook Opinion involving the search of the Facebook account of Navy Yard shooter Aaron Alexis, the Court raised serious concerns about the government’s use of the two-step procedure under Rule 41 of the Federal Rules of Criminal Procedure. See Facebook Opinion, 2013 WL 7856600, at *6. (“Under that Rule, a warrant ‘may authorize the seizure of electronic storage media or the seizure or copying of electronically stored information. Unless otherwise specified, the warrant authorizes a later review of the media or other information consistent with the warrant.’”) (citing Fed. R. Crim. P. 41(e)(2)(B)). Under this approach, “the initial section of the warrants authorizing the electronic communications service provider to disclose all email communications (including all content of the communications), and all records and other information regarding the account is too broad and too general.” In re Applications for Search Warrants for Information Associated with Target Email Accounts/Skype Accounts, Nos. 13–MJ–8163, 13–MJ–8164, 13–MJ–8165, 13–MJ–8166, 13–MJ–8167, 2013 WL 4647554, at *1 (D.Kan. Aug. 27, 2013) (“In re App.”). Despite the Court raising its concerns and urging the government to adopt a different approach, the government continues to ask for all electronically stored information in e-mail accounts, irrespective of the relevance to the investigation.

To ameliorate these problems with respect to Alexis’s Facebook account, the Court modified the search warrant to ensure that no third-party communications were turned over to the government, see Facebook Opinion, 2013 WL 7856600, at *3, and to require that the government destroy “[a]ll records and content that the government determines are NOT within the scope of the investigation.” Id. at *7.

While those minimization procedures satisfied the Court in that particular case, it warned the government to “adopt stricter search parameters in future applications” or the Court would be “unwilling to issue any search and seizure warrants for electronic data that ignore the constitutional obligations to avoid ‘general’ electronic warrants.” Facebook Opinion, 2013 WL 7856600, at *8. The Court recommended several different approaches, including key word searches, using an independent special master to conduct searches, or segregating the people who are performing the search from those who are conducting the investigation. Id. As the present Application makes clear, the government has not taken the intervening months to address these concerns. Instead, it persists in its entitlement to the entire email account, without suggesting how the items that may be seized because there is probable cause to believe that they are evidence of a crime can be segregated from those that are not.

B. The Government Seeks an Unconstitutional General Warrant

This Court is also troubled that the government seeks a broad search and seizure warrant for e-mails and all other content related to this e-mail account. The Supreme Court has recognized two constitutional protections served by the warrant requirement of the Fourth Amendment. “First, the magistrate’s scrutiny is intended to eliminate altogether searches not based on probable cause. The premise here is that any intrusion in the way of search or seizure is an evil, so that no intrusion at all is justified without a careful prior determination of necessity.” Coolidge v. N.H., 403 U.S. 443, 467 (1971). Thus, it is this Court’s duty to reject any applications for search warrants where the standard of probable cause has not been met. Second, as the Supreme Court has also said, “[T]hose searches deemed necessary should be as limited as possible. Here, the specific evil is the ‘general warrant’ abhorred by the colonists, and the problem is not that of intrusion per se, but of a general, exploratory rummaging in a person’s belongings.” Id. To follow the dictates of the Fourth Amendment and to avoid issuing a general warrant, a court must be careful to ensure that probable cause exists to seize each item specified in the warrant application.

With respect to searches of electronic information, careful attention must be paid to the dictates of the particularity requirements of the Fourth Amendment, which limits the “authorization to search to the specific areas and things for which there is probable cause to search.” Md. v. Garrison, 480 U.S. 79, 84 (1987). As the Supreme Court has recognized, “the requirement ensures that the search will be carefully tailored to its justifications, and will not take on the character of the wide-ranging exploratory searches the Framers intended to prohibit.” Id. Any search of an electronic source has the potential to unearth tens or hundreds of thousands of individual documents, pictures, movies, or other constitutionally protected content. It is thus imperative that the government “describe the items to be seized with as much specificity as the government’s knowledge and circumstances allow.” United States v. Leary, 846 F.2d 592, 600 (10th Cir. 1988).

Here, the government has adequately described the “items to be seized” — but it has done so in the wrong part of the warrant and in a manner that will cause an unconstitutional seizure. By abusing the two-step procedure under Rule 41, the government is asking Apple to disclose the entirety of three months’ worth of e-mails and other e-mail account information. See Application at 14-15. Yet, on the very next page, it explains that it will only “seize” specific items related to its criminal investigation; it goes so far as to name specific individuals and companies that, if mentioned in an e-mail, would make that e-mail eligible to be seized. Id. at 15. Thus, the government has shown that it can “describe the items to be seized with [] much specificity”; it has simply chosen not to by pretending that it is not actually “seizing” the information when Apple discloses it. See Facebook Opinion [#5] at 9-10 (“By distinguishing between the two categories, the government is admitting that it does not have probable cause for all of the data that Facebook would disclose; otherwise, it would be able to ‘seize’ everything that is given to it.”).

As this Court has previously noted, any material that is turned over to the government is unquestionably “seized” within the meaning of the Fourth Amendment. See Brower v. Cnty. of Inyo, 489 U.S. 593, 596 (1989) (noting that a “seizure” occurs when an object is intentionally detained or taken). The two-step procedure of Rule 41 cannot be used in situations like the current matter to bypass this constitutional reality because the data is seized by the government as soon as it is turned over by Apple. Even if, as Professor Orin Kerr has stated, a search does not occur until “the data is exposed to possible human observation,” Orin Kerr, Searches and Seizures in a Digital World, 119 Harv. L. Rev. 531, 551 (2005), the seizure of a potentially massive amount of data without probable cause has still occurred—and the end result is that the government has in its possession information to which it has no right. See In re App., 2013 WL 4647554, at *9 (“The Court notes that while nothing in Section 2703 or Fed.R.Crim.P. 41 may specifically preclude the government from requesting the full content of electronic communications in a specific email account, the Fourth Amendment may do so and does here.”). What the government proposes is that this Court issue a general warrant that would allow a “general, exploratory rummaging in a person’s belongings”—in this case an individual’s e-mail account. Coolidge, 403 U.S. at 467. This Court declines to do so.

C. The Electronic Communications Service Provider Should Perform the Search

In the Facebook Opinion, this Court urged the government to adopt a procedure that would allow it to obtain the information it legitimately needs for criminal investigations while respecting the Fourth Amendment, such as:

1.   Asking the electronic communications service provider to provide specific limited information such as emails or faxes containing certain key words or emails sent to/from certain recipients;

2.   Appointing a special master with authority to hire an independent vendor to use computerized search techniques to review the information for relevance and privilege;

3.   If the segregation is to be done by government computer personnel, the government must agree in the warrant application that the computer personnel will not disclose to the investigators any information other than that which is the target of the warrant;

4.   Magistrate judges should insist that the government waive reliance upon the plain view doctrine in digital evidence cases; and

5.   The government’s search protocol must be designed to uncover only the information for which it has probable cause, and only that information may be examined by the case agents.

See Facebook Opinion, 2013 WL 7856600, at *8 (citing In the Matter of Applications for Search Warrants for Case Nos. 12-MJ-8119-DJW and Information Associated with 12-MJ-9191-DJW Target Email Address, Nos. 12-MJ-8119, 12-MJ-8191, 2012 WL 4383917, at *10 (items 1-2); United States v. Comprehensive Drug Testing, Inc., 621 F.3d 1162, 1180 (9th Cir. 2010) (Kozinski, J. concurring) (items 3-5)). See also In re Search Warrant, 71 A.3d 1158, 1186 (Vt. 2012) (upholding nine ex ante restrictions on a search warrant for electronic data but holding that the issuing officer could not prevent the government from relying on the plain view doctrine).

Despite being warned to “seriously consider how to minimize the amount of information that its search warrant applications seek to be disclosed” or “find this Court unwilling to issue any search and seizure warrants for electronic data that ignore the constitutional obligations to avoid ‘general’ electronic warrants,” Facebook Opinion, 2013 WL 7856600, at *8, the government continues to submit overly broad warrants and makes no effort to balance the law enforcement interest against the obvious expectation of privacy e-mail account holders have in their communications. See United States v. Warshak, 631 F.3d 266, 285-86 (6th Cir. 2010) (“Given the fundamental similarities between email and traditional forms of communication, it would defy common sense to afford emails lesser Fourth Amendment protection.”). In this case, balancing those interests might require that Apple perform the search for relevant e-mails. Indeed, despite any government protestation, a subpoena served on a third party, such as a bank, compels that entity to look within a record set for the particular documents sought. E-mail providers like Apple are technologically sophisticated actors; in fact, one of Apple’s main competitors, Google, has created an entire business model around searching the contents of e-mail in order to deliver targeted advertising, and it has done so for a decade. See, e.g., JonmHealey, Privacy Advocates Attack Gmail – Again – for Email Scanning, Los Angeles Times, Aug. 15, 2013, available at http://articles.latimes.com/2013/aug/15/news/la-ol-google-gmail- privacy-reasonable-expectation-20130814 (last visited Mar. 7, 2014) (“As Google notes, this practice has been a standard feature of Gmail since its inception in 2004.”). There is no reason to believe that Apple or any other entity served with a warrant is incapable of doing what entities responding to subpoenas have done under common law.

In its “seizure” section, the Application specifies that e-mails would only be “seized” if they relate to specific people and companies. See Application at 16. On a more fundamental level, the government surely knows how it intends to ultimately sort through the information disclosed by Apple. If a wide disclosure followed by a government search violates the Fourth Amendment, then the obvious answer is to have Apple perform the search using the criteria that the government would itself use in the same way that a bank, in the example used above, might find a particular type of document in its customer files.

This Court is aware that other district courts have held that the “Fourth Amendment does not require the government to delegate a prescreening function to the internet service provider or to ascertain which e-mails are relevant before copies are obtained from the internet service provider for subsequent searching.” United States v. Taylor, 764 F. Supp. 2d 230, 237 (D.Me. 2011); accord United States v. Bickle, 10–CR–00565, 2011 WL 3798225, at *20 (D.Nev. July 21, 2011); United States v. Bowen, 689 F.Supp.2d 675, 682 (S.D.N.Y. 2010). But, in light of the government’s repeated submission of overly broad warrants that violate the Fourth Amendment, this Court can see no reasonable alternative other than to require the provider of an electronic communications service to perform the searches. Under the government’s demand that it be given everything, the government leaves the Court with only two options: deny the warrants— thus depriving the government of needed information—or issue warrants that are repugnant to the Fourth Amendment. Neither is viable.

Thus, having an electronic communication service provider perform a search, using a methodology based on search terms such as date stamps, specific words, names of recipients, or other methodology suggested by the government and approved by the Court seems to be the only way to enforce the particularity requirement commanded by the Fourth Amendment.

D. The Government Must Return or Destroy Irrelevant Information

The Court is particularly troubled that the Application does not specify what will occur with e-mails and other information that is, even by the government’s standards, not relevant. Will that information be returned, destroyed, or kept indefinitely? The “Secondary Orders” that have been routinely issued by this Court—and a significant portion of the Facebook Opinion— have required the government to destroy all contents and records that are not within the scope of the investigation as outlined in the search warrant. See Facebook Opinion, 2013 WL 7856600, at *7. While such a clause in a search warrant application is certainly necessary for its issuance by this Court, the government should not believe that it is sufficient. In this case, its absence is grounds enough for the Court to deny the Application.

IV.  Conclusion and Order

By the Court’s count, it modified approximately twenty search and seizure warrants for electronic information during September and December 2013. It will no longer do so. Instead, any warrants that do not comport with the requirements of the Fourth Amendment will—like the present Application—be denied with an explanation of why they have been denied so that the government may have an opportunity to correct its defects. To be clear: the government must stop blindly relying on the language provided by the Department of Justice’s Searching and Seizing Computers and Obtaining Electronic Evidence in Criminal Investigations manual. By doing so, it is only submitting unconstitutional warrant applications.

It is hereby ORDERED that the government’s Application is DENIED without prejudice.

Facciola-Court-SealSO ORDERED.JOHN M. FACCIOLA
Date: 2014.03.07 12:21:39 -05’00′

UNITED STATES MAGISTRATE JUDGE


Best Practices in e-Discovery for Handling Unreviewed Client Data

March 16, 2014

Hacker_closeupBig data security, hackers, and data breaches are critical problems facing the world today, including the legal profession. That is why I have focused on development of best practices for law firms to handle large stores of client data in e-discovery. The best practice I have come up with is simple. Do not do it. Outsource.

Attorneys should only handle evidence. Law firms should not take possession of large, unprocessed, unreviewed stores of client data, the contents of which are typically unknown. They should not even touch it. They should stay out of the chain of custody. Instead, lawyers should rely on professional data hosting vendors that have special expertise and facilities designed for data security. In today’s world, rife as it is with hackers and data breaches, hosting is a too dangerous and complex a business for law firms. The best practice is to delegate to security professionals the hosting of large stores of unreviewed client data.

Although it is still a best practice for knowledgable lawyers to control the large stores of client data collected for preservation and review, they should limit actual possession of client data. Only after electronic evidence has been reviewed and identified as relevant, or probable-relevant, should a law firm take possession. Before that, all large stores of unidentified client data, such as a custodian’s email box, should only be handled by the client’s IT experts, and professional data hosting companies, typically e-discovery vendors. The raw data should go directly from the client to the vendor. Alternatively, the client should never let the data leave its own premises. It should host the data on site for review by outside counsel. Either way, the outside law firm should not touch it, and certainly should not host it on the law firm’s computer systems. Instead, lawyers should search and review the data by secure online connections.

This outsourcing arrangement is, in my opinion, the best practice for law firm handling of large stores of unreviewed client data. I know that many private law firms, especially their litigation support departments, will strongly disagree.

focusLaw firms should stick to providing legal services, a position I have stated several times before. Losey, R., Five Reasons to Outsource Litigation Support (LTN, Nov. 2, 2012); WRECK-IT RALPH: Things in e-discovery that I want to destroy!Going “All Out” for Predictive Coding and Vendor Cost Savings. Data hosting is a completely different line of work, and is very hazardous in today’s world of hacking and data breaches.

Best Practice: Full Control, But Limited Possession

Again, to be clear, law firms must have actual possession of evidence, including original client documents. Lawyers cannot do their job without that. But lawyers do not need possession of vast hordes of unidentified, irrelevant data. The best practice is for law firms to control such client data, but to do so without taking possession. Attorneys should limit possession to the evidence.

Only after the large stores of client’s raw data have been searched, and evidence identified, should the digital evidence be transferred to the law firm for hosting and use in the pending legal matter. In other words, lawyers and law firms only need the signal, they do not need the noise. The noise – the raw data not identified as evidence or possible evidence – should be returned to the client, or destroyed. Typically this return or destruction is delayed pending the final outcome of the matter, just in case a research of the raw data is required.

I know this is a very conservative view. My law firm may well be the only AmLaw 100 firm that now has this rule. This hands-off rule as to all large stores of ESI is a radical departure from the status quo. But even if no other large law firm in the world now does this, that does not mean such outsourcing is wrong. It just means we are the first.

tugboat_1930s

Remember the T.J. Hooper, the tugboat with valuable barge that sunk at sea because they were not equipped with radios to warn them of an approaching storm? The case involving this tragic loss of life and property is required reading in every law school torts class in the country. T. J. Hooper 60 F.2d 737 (2d Cir. 1932) (J. Hand).

Sometimes a whole profession can lag behind the times. There is no safety in numbers. The only safety is in following best practices that make sense in today’s environment.  Although law firm hosting of large data stores of client data once made sense, I no longer think it does. The high amount of data and security threats in today’s environment makes it too risky for me to continue to accept this as a best practice.

Current Practice of Most Law Firms

data-breachMost of the legal profession today, including most private attorneys and their law firms, collect large stores of ESI from their clients when litigation hits. This is especially true in significant cases. They do so for preservation purposes and in the hopes they may someday find relevant evidence. The law firms take delivery of the data from their clients. They hold the entire haystack, even though they only need the few needles they hope are hidden within. They insert themselves into the chain of custody. This needs to stop.

Corporate counsel often make the same mistake. The data may go from the client IT, to the client legal department, and then to the outside counsel. Three hands, at least, have by then already touched the data. Sometimes the metadata changes and sanctions motions follow.

It gets even worse from there, much worse. When the data arrives at the law firm, the firm typically keeps the data. The data is sent by the client on CDs, DVDs, thumb drives, or portable USB drives. Sometimes FTP transfer is used. It is received by the outside attorney, or their assistant, or paralegal, or law firm office manager, or tech support person. We are talking about receipt of giant haystacks of information, remember, not just a few hundred, or few thousand documents, but millions of documents, and other computer files. The exact contents of these large collections is unknown. Who knows, they might contain critical trade secrets of the company. They almost certainly contain some protected information. Perhaps a lot of protected information. Regardless, all of it must be treated as confidential and protected from disclosure, except by due process in the legal proceeding.

After the law firm receives the client’s confidential data one of three things typically happen:

1.  The law firm forwards the data to a professional data processing and hosting company and deletes all copies from its system, and, for example, does not keep a copy of the portable media on which the larges stores of ESI were received. This is not a perfect best practice because the law firm is in the chain of custody, but it is far better than the next two alternatives, which is what usually happens in most firms.

2.  The law firm again forwards the data to a professional data processing and hosting company, but does not delete all copies from its system, and, for example, keeps a copy of the portable media on which the larges stores of ESI were received. This is a very common practice. Many attorneys think this is a good practice because that way they have a backup copy, just in case. (The backup should be kept by the client IT as part of the collection and forwarding, not the law firm.) I used to do this kind of thing for years, until one day I realized how it was all piling up. I realized the risk from holding thousands of PST files and other raw unprocessed client data collections. I was literally holding billions of emails in little storage devices in my office or in subdirectories of one of my office computers. Trillions more were on our firm’s litigation support computers, which bring us to the third, worst case scenario, where the data is not forwarded to a vendor.

3.  In this third alternative, which is the most common practice in law firms today, and the most dangerous, the law firm keeps the data. All it does is transfer the data from the receiving attorney (or secretary) to another department in the law firm, typically called Litigation Support. The Litigation Support Department, or whatever name the law firm may choose to call it, than holds the billions of computer files, contents unknown, on law firms computers, and storage closets, hopefully locked. Copies are placed on law firm servers, so that some attorneys and paralegals in the firm can search them for evidence. Then they often multiply by backups and downloads. They stay in the firm’s IT systems until the case is over.

Rows of server cages

At that time, in theory at least, they are either returned to the client or destroyed. But in truth this often never happens and raw data tends to live on and on in law firm computers, back up tapes, personal hard drives, DVDs, etc. Some people call that dark data. Most large law firms have tons of client dark data like that. It is a huge hidden liability. Dark or not it is subject to subpoena. Law firm’s can be forced to search and produce from these stores of client data. I know of one firm forced to spend over a million dollars to review such data for privilege before production to the government. The client was insolvent and could not pay, but still the firm had to spend the money to protect the privileged communications.

Dangers of Data Intrusions of Law Firms

Data-Breach-climbThese practices are unwise and pose a serious risk to client data security, a risk that grows bigger each day. The amount of data in the world doubles every two years, so this problem is getting worse as the amount of data held for litigation grows at an exponential rate. The sophistication of data thieves is also growing. The firewall that law firms think protect their client’s data is child play to some hackers. The security is an illusion. It is only a matter of time before disaster strikes and a large store of client data is stolen. The damages from even an average sized data breach can be extensive, as the below chart shows.

Data_breach_cost

Client data is usually held by law firms on their servers so that their attorneys can search and review the data as part of e-discovery. As IT security experts know, servers are the ultimate target at the end of a lateral kill chain that advanced persistent threat (APT)-type attackers pursue. Moreover, servers are the coveted prize of bot herders seeking persistent access to high-capacity computing. Application control and comprehensive vulnerability management are essential to breaking the lateral kill chain of attackers. You do not follow all of this? Never seen a presentation titled Keeping Bot Herders Off Your Servers and Breaking the Lateral Kill Chain of Today’s Attackers? Of course not. I do not really understand this either. IT security has become a very specialized and complex field. That is one of my key points here.

Law firms are the soft underbelly of corporate data security. More and more bad hackers are realizing the vulnerability of law firms and beginning to exploit it. So many lawyers are technically naive. They do not yet see the danger of hacking, nor the severity and complexity of issues surrounding data security.

Sharon_NelsonSharon Nelson, President of the Virginia State Bar and well known expert in this area, has been warning about this threat to law firms for years. In 2012 her warnings were echoed by the FBI. FBI Again Warns Law Firms About the Threat From Hackers. Mary Galligan, the special agent in charge of cyber and special operations for the FBI’s New York Office, is reported by Law Technology News as saying: We have hundreds of law firms that we see increasingly being targeted by hackers. Bloomberg’s Business Week quoted Galligan as saying: As financial institutions in New York City and the world become stronger, a hacker can hit a law firm and it’s a much, much easier quarryChina-Based Hackers Target Law Firms to Get Secret Deal Data (Bloomberg 1/31/12).

If lawyers are in a big firm, their client’s data may already have been hacked and they were never told about it. According to Sharon Nelson’s report on a survey done in 2013, 70% of large firm lawyers do not know if their firm has ever been breached. The same survey reported that 15% of the law firms have experienced a security breach. That’s right. Fifteen percent of the law firms surveyed admitted to having discovered a computer security intrusion of some kind.

Sharon said that the survey confirmed what her company Sensei Enterprises already knew from decades of experience with lawyers and data security. She reports that most law firms never tell their attorneys when there has been a breach. Your law firm may already have been hacked multiple times. You just do not know about it. Sharon, never an attorney to mince words, went on to say in her excellent blog, Ride the Lightning:

We often hear “we have no proof that anything was done with client data” in spite of the fact that the intruders had full access to their network. Our encounters with these breaches indicate that if law firms can keep the breach quiet, they will.

They will spend the money to investigate and remediate the breach, but they will fail to notify clients under state data breach laws and they won’t tell their own lawyers for fear the data breach will become public. Is that unethical? Probably. Unlawful? Probably. But until there is a national data breach law with teeth, that approach to data breaches is unlikely to change.

Someday a breach will go public. A big data breach and loss by just one law firm could quickly make the whole profession as conservative as me when it comes to big data and confidentiality. All it would take is public disclosure of one large data breach of one large law firm, especially if the ESI lost or stolen included protected information requiring widespread remedial action. Then everyone will outsource hosting to specialists.

What if a law firm happened to have credit card information and it was stolen from the law firm? Or worse yet, what if the client data was lost when a lawyer misplaced his brief case with a portable hard drive? This would a nightmare for any law firm, even if it did not get publicized. Why take that risk? That is my view. I am sounding the alarm now on big data security so that the profession can change voluntarily without the motivation of crisis.

Outsource To Trusted Professionals

Data_monitoringI have never seen a law firm with even close to the same kind of data security protocols that I have seen with the top e-discovery vendors. Law firms do not have 24/7 human in-person monitoring of all computer systems. They do not have dozens of video cameras recording all spaces where data is maintained. They do not have multiple layers of secured clean rooms, with iris scans and finger print scans, and other super high-tech security systems. You have seen this kind of thing in movies I’m sure, but not in your law firm.

Some vendors have systems like that. I know. I have seen them. As part of my due diligence for my firm’s selection of Kroll Ontrack, I visited their secure data rooms (well, some of them; others I was not allowed in). These were very cold, very clean, very secure rooms where the client data is stored. I am not even permitted to disclose the general location of these secure rooms. They are very paranoid about the whole thing. I like that. So do our clients. This kind of data security does not come cheap, but it is money well spent. The cheapest vendor is often a false bargain.

Data_SecurityHave you seen your vendor’s secure rooms? Does your law firm have anything like that? How many technical experts in data security does your firm employ? Again, I am not referring to legal experts, but to computer engineers who specialize in hacker defenses? The ones who know about the latest intrusion detection systems, viruses, bot herders, and breaking a lateral kill chain of attackers. Protecting client data is a serious business and should be treated seriously.

Any data hosting company that you choose should at least have independent certifications of security and other best practices based on audits. The ones I know about are the ISO/IEC 27000 series and the SSAE 16 SOC 2 certification. Is your law firm so certified? Your preferred vendor?

The key question here in choosing vendors is do you know where your client’s data is? In the clouds somewhere within your vendor’s control is not an acceptable answer, at least not for anyone who takes data security seriously. As a best practice you should know, and you should have multiple assurances, including third party certifications and input from security experts. In large matters, or when selecting a preferred vendor, you should also make a personal inspection, and you should verify adequate insurance coverage. You want to see cyber liability insurance. Remember, even the NSA screws up from time to time. Are you covered if this happens?

Client data security should be job number one for all e-discovery lawyers. I know it is for me, which is why I take this conservative hands-off position.

Most Law Firms Do a Poor Job of Protecting Client Data

Computer security conceptFrom what I have seen, very few law firms have highly secure client data hosting sites. Most do not even have reliable, detailed data accounting for checking in and out client data. The few that do, rarely enforce it. They rarely (never?) audit attorneys and inspect their offices and equipment to verify that they do not have copies of client data on their hard drives and DVDs, etc. In most law firms a person posing as a janitor could rummage through any office undisturbed, and probably even gain access to confidential computers. Have you ever seen all the sticky notes with passwords around the monitors of many (most?) attorneys.

Attorneys and law firms can and should be trusted to handle evidence, even when that may sometimes included hundreds of thousands of electronic and paper files. But they should not be over-burdened with the duty to also host large volumes of raw unprocessed data. Most are simply not up to the task. That is not their skill set. It is not part of the legal profession. It is not a legal service at all. Secure data hosting is a highly specialized computer engineering service, one that requires an enormous capital investment and constant diligence to do correctly. I do not think law firms have made that kind of investment, nor do I think they should. Again, it is beyond our core competence. We provide legal services, not data hosting.

Even data hosting by the best professionals is not without its risks. Just ask the NSA about the risks of rogue employees like Snowden. Are law firms equipped to mitigate these risks? Are they even adequately insured to deal with losses if client data is lost or stolen? I doubt it, and yet only a few more sophisticated clients even think to ask.

Is your law firm ready? Why even put yourself in that kind of risky position. Do you really make that much money in e-discovery charges to your clients? Is that profit worth the risk?

Ethical Considerations

This issue also has ethical implications. We are talking about protecting the confidentiality of client data. When it comes to issues like this I think the best practice is to take a very conservative view. The governing ethical rule for lawyers is Rule 1.6 of the ABA Model Rules of Professional Conduct. Subsection (c) of this rule applies here:

(c)  A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.

justice_guage_negligenceAgain we are faced with the difference between reasonable efforts and best practices. The ABA and most lawyers agree that Rule 1.6 allows a law firm to take possession of the raw, unreviewed client data, no matter what the size, so long as certain minimum “reasonable efforts” are made to safeguard the data. I do not disagree with this. I am certainly not attempting to create a new, higher standard for professional malpractice. It is not negligent for a law firm to possess large stores of unreviewed client data, although it could be, if rudimentary safeguards were not in place. My position is that it is no longer a best practice to do so. The best practice is now to outsource to reliable professionals who specialize in this sort of thing.

Conclusion

HackerLaw firms are in the business of providing legal services, not data hosting. They need to handle and use evidence, not raw data. Lawyers and law firms are not equipped to maintain and inventory terabytes of unknown client data. Some firms have petabytes of client data and seem to be very pleased with themselves about it. They brag about it. They seem oblivious of the risks. Or, at the very least, they are over confident. That’s something that bad hackers look for. Take a conservative view like I do and outsource this complex task. That is the best practice in e-discovery for handling large stores of unreviewed client data.

I sleep well at night knowing that if Anonymous or some other hacker group attacks my firm, and penetrates our high security, as they often do with even the best defenses of military security systems, that they will not get a treasure trove of client data.

Data_privacy_wordsThis does not mean law firms should be lax in handling their own data and communications. They must be hyper-vigilant in this too. Security and hacker defense is everyone’s concern. Law firms should focus on defense of their own information. Firms should not compound their problems by vastly increasing the size and value of their targets. Law firms are the soft underbelly of corporate data security because of the information of their corporate clients that most of them hold.

Although some hackers may be hired by litigants for purposes of illegal discovery of privileged communications and work product, most are not. They are after money and valuable trade secrets. The corporate stashes are the real target. If these potential treasure troves of data must leave a corporation’s possession, be sure they are in the hands of professional big data security experts. Do not set yourself up to be the next hacker victim.



IT-Lex Discovers a Previously Unknown Predictive Coding Case: “FHFA v. JP Morgan, et al”

March 2, 2014

brain_gearsThe researchers at IT-Lex have uncovered a previously unknown predictive coding case out of the SDNY, Federal Housing Finance Authority v. JP Morgan Chase & Co., Inc. et al. The et al here includes just about every other major bank in the world, each represented by one of the top 25 mega law firms in the country. The interesting orders approving predictive coding were entered in 2012, yet, until now, no one has ever talked about FHFA v JP Morgan. That is amazing considering the many players involved.

The two main orders in the case pertaining to predictive coding, are here (order dated July 24, 2012), and here (order dated July 31, 2012). I have highlighted the main passages in these long transcripts. These are Ore Tenus orders, but orders none the less. The Pacer file is huge, so IT-Lex may have missed others, but we doubt it. The two key memorandums underlying the orders are by the defendant, JP Morgan’s attorneys, Sullivan & Cromwell, dated July 20, 2012, and by the plaintiff, FHFA’s lawyers, Quinn Emanuel Urquhart & Sullivan, dated July 23, 2012.

The fact these are ore tenus rulings on predictive coding explains how they have remained under the radar for so long. The orders show the mastery, finesse, and wisdom of the presiding District Court Judge Denise Cote. She was hearing her first predictive coding issue and handled it beautifully. Unfortunately, under the transcript the trial lawyers arguing pro and con did not hold up as well. Still, they appear to have been supported by good e-discovery lawyer experts behind the scenes. It all seems to have all turned out relatively well in the end as a recent Order dated February 14, 2014 suggests. Predictive coding was approved and court ordered cooperation resulted in a predictive coding project that appears to have gone pretty well. 

Defense Wanted To Use Predictive Coding

JP_MorganThe case starts with the defense, primarily JP Morgan, wanting to use predictive coding and the plaintiff, FHFA, objecting. The FHFA wanted the defendant banks to review everything. Good old tried and true linear review. The plaintiff also had fall back objections on the way the defense proposed to conduct the predictive coding.

The letter memorandum by Sullivan & Cromwell for JP Morgan is only three pages in length, but has 63 pages of exhibits attached. The letter relies heavily on the then new Da Silva Moore opinion by Judge Peck. The exhibits include the now famous 2011 Grossman and Cormack law review article on TAR, a letter from plaintiff’s counsel objecting to predictive coding, and a proposed stipulation and order. Here are key segments of Sullivan and Cromwell’s arguments:

According to Plaintiff, it will not agree to JPMC’s use of any Predictive Coding unless JPMC agrees to manually review each and every one of the millions of documents that JPMC anticipates collecting. As Plaintiff stated: “FHF A’s position is straightforward. In reviewing the documents identified by the agreed-upon search terms, the JPM Defendants should not deem a document nonresponsive unless that document has been reviewed by an attorney.”

Plaintiffs stated position, and its focus on “non-responsive” documents, necessitates this request for prompt judicial guidance. Predictive Coding has been recognized widely as a useful, efficient and reliable tool precisely because it can help determine whether there is some subset of documents that need not be manually reviewed, without sacrificing the benefit, if any, gained from manual review. Predictive Coding can also aid in the prioritization of documents that are most likely to be responsive. As a leading judicial opinion as well as commentators have warned, the assumption that manual review of every document is superior to Predictive Coding is “a myth” because “statistics clearly show that computerized searches are at least as accurate, if not more so, than manual review.” Da Silva Moore v. Publicis Groupe, 2012 U.S. Dist. LEXIS 23350, at *28 (S.D.N.Y. Feb. 24, 2012) (Peck, Mag. J.) …

JPMC respectfully submits that this is an ideal case for Predictive Coding or “machine learning” to be deployed in aid of a massive, expedited document production. Plaintiffs claims in this case against JPMC concern more than 100 distinct securitizations, issued over a several year period by three institutions that were entirely separate until the end of that period, in 2008 (i.e., JPMorgan Chase, Bear Stearns & Co., and Washington Mutual). JPMC conservatively predicts that it will have to review over 2.5 million documents collected from over 100 individual custodians. Plaintiffhas called upon JPMC to add large numbers of custodians, expand date ranges, and otherwise augment this population, which could only expand the time and expense required? Computer assisted review has been approved for use on comparable volumes of material. See, e.g., DaSilva Moore, 2012 U.S. Dist. LEXIS 23350, at *40 (noting that the manual review of3 million emails is “simply too expensive.”).

Plaintiff’s Objections

FHFA

The plaintiff federal government agency, FHFA, filed its own three page response letter with 11 pages of exhibits. The response objects to use of predictive coding and the plaintiff’s proposed methodology. Here is the core of their argument:

First, JPMC’s proposal is the worst of both worlds, in that the set of documents to which predictive coding is to be applied is already narrowed through the use of search terms designed to collect relevant documents, and predictive coding would further narrow that set of documents without attorney review,1 thereby eliminating potentially responsive documents. …

Finally, because training a predictive coding program takes a considerable amount of time,2 the truncated timeframe for production of documents actually renders these Actions far from “ideal” for the use of predictive coding.

Poppy_headThe first objection on keyword search screening is good, but the second, that training would take too long, shows that the FHFA needed better experts. The machine learning training time is usually far less than the document review time, especially in a case like this, and the overall times savings from using predictive coding are dramatic. So the second objection was a real dog.

Still, FHFA made one more objection to method that was well placed, namely that their had been virtually no disclosure as to how Sullivan and Cromwell intended to conduct the process. (My guess is, they had not really worked that all out yet. This was all new then, remember.)

[I]t has similarly failed to provide this Court with any details explaining (i) how it intends to use predictive coding, (ii) the methodology or computer program that will be used to determine responsiveness, or (iii) any safeguards that will ensure that responsive documents are not excluded by the computer model. Without such details, neither FHFA nor this Court can meaningfully assess JPMC’s proposal. See Da Silva Moore v. Publicis Groupe SA, 2012 U.S. Dist. LEXIS 23350, at *23 (S.D.N.Y. Feb. 24, 2012) (“[Defendant’s] transparency in its proposed ESI search protocol made it easier for the Court to approve the use of predictive coding.”).4 JPMC’s proposed order sets forth an amorphous proposal that lacks any details. In the absence of such information, this Court’s authorization of JPMC’s use of predictive coding would effectively give JPMC carte blanche to implement predictive coding as it sees fit.

Hearing of July 24, 2012

Judge_Denise_CoteJudge Denise Cote came into the hearing having read the briefs and Judge Peck’s then recent landmark ruling in Da Silva Moore. It was obvious from her initial comments that her mind was made up that predictive coding should be used. She understood that this mega-size case needed predictive coding to meet the time deadlines and not waste a fortune on e-document review. Here are Judge Cote’s words at pages 8-9 of the transcript:

It seems to me that predictive coding should be given careful consideration in a case like this, and I am absolutely happy to endorse the use of predictive coding and to require that it be used as part of the discovery tools available to the parties. But it seems to me that the reliability and utility of predictive coding depends upon the process that takes place in the initial phases in which there is a pool of materials identified to run tests against, and I think that some of the documents refer to this as the seed — S-E-E-D — set of documents, and then there are various rounds of further testing to make sure that the code becomes smart with respect to the issues in this case and is sufficiently focused on what needs to be defined as a responsive document. And for this entire process to work, I think it needs transparency and cooperation of counsel.

I think ultimately the use of predictive coding is a benefit to both the plaintiff and the defendants in this case. I think there’s every reason to believe that, if it’s done correctly, it may be more reliable — not just as reliable but more reliable than manual review, and certainly more cost effective — cost effective for the plaintiff and the defendants.

To plaintiff’s counsel credit she quickly shifted her arguments from whether to how. Defense counsel also falls all over herself about how cooperative she has been and will continue to be, all the while implying that the other side is a closet non-cooperator.

As it turns out, very little actual conservation had occurred between the two lead counsel before the hearing, as both had preferred snarly emails and paper letters. At the hearing Judge Cote ordered the attorneys to talk first, and then rather than shoot off more letters, and to call her if they could not agree.

I strongly suggest you read the whole transcript of the first order to see the effect a strong judge can have on trial lawyers. Page 24 is especially instructive as to just how active a bench can be. At the second hearing of July 24, 2012, I suggest you read the transcript at pages 110-111 to get an idea as to just how difficult those attorneys meetings proved to be.

As a person obsessed with predictive coding I find the transcripts of the two hearings to be kind of funny in a perverse sort of way. The best way for me to share my insights is by using the format of a lawyer joke.

Two Lawyers Walked Into A Bar

star_trek_barOne e-discovery lawyer walks into a Bar and nothing much happens. Two e-discovery lawyers walks into a Bar and an interesting discussion ensues about predictive coding. One trial lawyer walks into a Bar the volume of the whole place increases. Two trial lawyers walk into a Bar and an argument starts.

The 37 lawyers who filed appearances in the FHFA case walk into a Bar and all hell breaks loose. There are arguments everywhere. Memos are written, motions are filed, and the big bank clients are billed a million or more just talking about predictive coding.

Then United States District Court Judge Denise Cote walks into the Bar. All the trial lawyers immediately shut up, stand up, and start acting real agreeable, nice, and polite. Judge Cote says she has read all of the letters and they should all talk less, and listen more to the two e-discovery specialists still sitting in the bar bemused. Everything becomes a cooperative love-fest thereafter, at least, as far as predictive coding and Judge Conte are concerned. The trial lawyers move on to fight and bill about other issues more within their kin.

Substantive Disputes in FHFA v. JP Morgan

disclosureThe biggest substantive issues in the first hearing of July 24, 2012 had to do with disclosure and keyword filtering before machine training. Judge Cote was prepared on the disclosure issue from having read the Da Silva Moore protocol, and so were the lawyers. The judge easily pressured defense counsel to disclose both relevant and irrelevant training documents to plaintiff’s counsel, with the exception of privileged documents.

As to the second issue of keyword filtering, the defense lawyers had been told by the experts behind the scenes that JP Morgan should be allowed to keyword filter the custodians ESI before running predictive coding. Judge Peck had not addressed that issue in Da Silva Moore, since the defense had not asked for that, so Judge Cote was not prepared to rule on that then new and esoteric issue. The trial lawyers were not able to articulate much on the issue either.

Judge Cote asked trial counsel if they had previously discussed this issue, not just traded memos, and they admitted no. So she ordered them to talk about it. It is amazing how much easier it is to cooperate and reach agreement when you actually speak, and have experts with you guiding the process. So Judge Cote ordered them to discuss the issue, and, as it turns out from the second order of July 31, 2012, they reached agreement. There would be no keyword filtering.

Although we do not know all of the issues discussed by attorneys, we do know they managed to reach agreement, and we know from the first hearing what a few of the issues were. They were outlined by plaintiff’s counsel who complained that they had no idea as to how defense counsel was going to handle the following issues at page 19 of the first hearing transcript:

What is the methodology for creating the seed set? How will that seed set be pulled together? What will be the number of documents in the seed set? Who will conduct the review of the seed set documents? Will it be senior attorneys or will it be junior attorneys? Whether the relevant determination is a binary determination, a yes or no for relevance, or if there’s a relevance score or scale in terms of 1 to 100. And the number of rounds, as your Honor noted, in terms of determining whether the system is well trained and stable.

So it seems likely all these issues and more were later discussed and accommodations reached.  At the second hearing of July 31, 2012, we get a pretty good idea as to how difficult the attorneys meetings must have been. At pages 110-111 of the second hearing transcript we see how counsel for JP Morgan depicted these meetings and the quality of input received from plaintiff’s counsel and experts:

We meet every day with the plaintiff to have a status report, get input, and do the best we can to integrate that input. It isn’t always easy, not just to carry out those functions but to work with the plaintiff.

The suggestions we have had so far have been unworkable and by and large would have swamped the project from the outset and each day that a new suggestion gets made. But we do our best to explain that and keep moving forward.

Defense counsel then goes into what most lawyers would call “suck-up” mode to the judge and says:

We very much appreciate that your Honor has offered to make herself available, and we would not be surprised if we need to come to you with a dispute that hasn’t been resolved by moving forward or that seems sufficiently serious to put the project at risk. But that has not happened yet and we hope it will not.

After that plaintiff’s counsel complains the defense counsel has not agreed to allow depositions transcripts and witness statements to be used as training documents. That’s right. The plaintiff wanted to include congressional testimony, depositions and other witness statements that they found favorable to their position as part of the training documents to find relevant information store of custodian information.

Judge Cote was not about to be tricked into making a ruling on the spot, but instead wisely told them to go back and talk some more and get real expert input on the advisability of this approach. She is a very quick study as the following exchange at page 114 of the transcript with defense counsel after hearing the argument of plaintiff’s counsel illustrates:

THE COURT: Good. We will put those over for another day. I’m learning about predictive coding as we go. But a layperson’s expectation, which may be very wrong, would be that you should train your algorithm from the kinds of relevant documents that you might actually uncover in a search. Maybe that’s wrong and you will all educate me at some other time. I expect, Ms. Shane, if a deposition was just shot out of this e-discovery search, you would produce it. Am I right?

MS. SHANE: Absolutely, your Honor. But your instinct that what they are trying to train the system with are the kinds of documents that would be found within the custodian files as opposed to a batch of alien documents that will only confuse the computer is exactly right.

It is indeed a very interesting issue, but we cannot see a report in the case on Pacer that shows how the issue was resolved. I suspect the transcripts were all excluded, unless they were within a custodian’s account.

2014 Valentines Day Hearing

kiss_me_im_a_custodian_keychainThe only other order we found in the case mentioning predictive coding is here (dated February 14, 2014). Most of the Valentine’s Day transcript pertains to trial lawyers arguing about perjury, and complaining that some key documents were missed in the predictive coding production by JP Morgan. But the fault appears due to the failure to include a particular custodian in the search, an easy mistake to have happen. That has nothing to do with the success of the predictive coding or not.

Judge Cote handled that well, stating that no review is “perfect” and she was not about to have a redo at this late date. Her explanation at pages 5-6 of the February 14, 2014 transcript provides a good wrap up for FHFA v. JP Morgan:

Parties in litigation are required to be diligent and to act in good faith in producing documents in discovery. The production of documents in litigation such as this is a herculean undertaking, requiring an army of personnel and the production of an extraordinary volume of documents. Clients pay counsel vast sums of money in the course of this undertaking, both to produce documents and to review documents received from others. Despite the commitment of these resources, no one could or should expect perfection from this process. All that can be legitimately expected is a good faith, diligent commitment to produce all responsive documents uncovered when following the protocols to which the parties have agreed, or which a court has ordered.

Indeed, at the earliest stages of this discovery process, JP Morgan Chase was permitted, over the objection of FHFA, to produce its documents through the use of predictive coding. The literature that the Court reviewed at that time indicated that predictive coding had a better track record in the production of responsive documents than human review, but that both processes fell well short of identifying for production all of the documents the parties in litigation might wish to see.

Conclusion

transparencyThere are many unpublished decisions out there approving and discussing predictive coding. I know of several more. Many of them, especially the ones that first came out and pretty much blindly followed our work in Da Silva Moore, call for complete transparency, including disclosure of irrelevant documents used in training. That is what happened in FHFA v. JP Morgan and the world did not come to an end. Indeed, the process seemed to go pretty well, even with a plaintiff’s counsel who, in the words of Sullivan and Cromwell, made suggestions everyday that were unworkable and by and large would have swamped the project … but we do our best to explain that and keep moving forward. Pages 110-111 of the second hearing transcript. So it seems cooperation can happen, even when one side is clueless, and even if full disclosure has been ordered.

Since the days of 2011 and 2012, when our Da Silva Moore protocol was developed, we have had much more experience with predictive coding. We have more information on how the training actually functions with a variety of chaotic email datasets, including the new Oracle ESI collection, and even more testing with the Enron dataset.

Based on what we know now, I do not think it is necessary to make disclosure of all irrelevant documents used in training. The only documents that have a significant impact on machine learning are the borderline, grey area documents. These are the ones who relevancy is close, and often a matter of opinion, of how you view the case. Only these grey area irrelevant documents need to be disclosed to protect the integrity of the process.

grey_area_disclosure

The science and other data behind that has to do with Jaccard Index classification inconsistencies, as well as the importance of mid-range ranked documents to most predictive coding algorithmic analysis. See Eg: Less Is More: When it comes to predictive coding training, the “fewer reviewers the better” – Part Three at the subheadings Disclosure of Irrelevant Training Documents and Conclusions Regarding Inconsistent Reviews. When you limit disclosure to grey area training documents, and relevant documents, the process can become even more efficient without any compromise in quality or integrity. This of course assumes honest evaluations of grey area documents and forthright communications between counsel. But then so does all discovery in our system of justice. So this is really nothing new, nor out of the ordinary.

All discovery depends on the integrity and trustworthiness of the attorneys for the parties. Fortunately, almost all attorneys honorably fulfill these duties, except perhaps for the duty of technology competence. That is the greatest ethical challenge of the day for all litigators.


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