More “Must Read” 2008 Cases – Part Three – Including My Favorite, the Wesley Snipes Tax Evasion “e-Document Dump” Case

This is the third and final installment of the”Must Read” 2008 Cases series that I began two weeks ago. The series reviews, in alphabetical order, thirty 2008 e-discovery cases. They are good reference cases that have some lessons to teach, but have not previously been featured in this blog. Part One covered ten cases A-J in just over 4,700 words. Part Two covered seven more cases in 4,150 words, but I only got through two letters in the alphabet, H-I. This last stage will cover the rest of the alphabet, covering 13 more cases in 5,100 words. My favorite is the Wesley Snipes tax evasion case, which not many people know has an interesting e-discovery component to it. U.S. v. Snipes, 2007 WL 5041892 (M.D. Fla. Dec. 24, 2007). Of course, the Ninth Circuit case about the swat team officer in California who constantly used a police pager to send sexy text messages at work is pretty good too. Quan v. Arch Wireless, _F.3d_, 2008 WL 2440559 (9th Cir., June 18, 2008).

Mikron Industries Inc. v. Hurd Windows & Doors, Inc., 2008 WL 1805727 (W.D. Wash. Apr. 21, 2008).
This is an interesting opinion by Seattle District Court Judge Robert S. Lasnik interpreting Rule 26(c) and 26(b)(2)(B). Defendants in this breach of contract case sought an order shifting the costs of producing ESI to Plaintiff, arguing that the requests were burdensome and cumulative. Judge Lasnik denied the motion on both procedural and substantive grounds.

He denied the motion on the procedural grounds because Defendants failed to comply with the good faith meet and confer obligations under Federal Rule of Civil Procedure 26(c). Still, Judge Lasnik went ahead and addressed the merits of the costs shifting motion, and denied it again. He held that Defendants had not met their burden of proof under Rule 26(b)(2)(B). Defendants merely provided a cost estimate and described the electronic records as “inaccessible.” Here is the language used by the court, which begins by criticizing Defendant’s lackadaisical collection efforts:

Although defendants directed their employees to search their hard drives for responsive information, defendants have not demonstrated any search efforts beyond that limited inquiry. Responsive information may be discovered during a more thorough search of defendants’ non-backup ESI, including employee hard drives and active e-mail servers. Cost-shifting would not be appropriate in the context of this kind of search, as this ESI is considered reasonably accessible within the meaning of Fed.R.Civ.P. 26(b) (2)(C).

With regard to ESI located on defendants’ backup tapes, those courts that considered shifting the costs of electronic discovery to the requesting party were presented with more detailed information than that provided by the defendants in this case.FN2 In alleging that continued discovery of their ESI would be unduly burdensome, defendants offer little evidence beyond a cost estimate and conclusory characterizations of their ESI as “inaccessible.” Defendants have not provided the Court with details regarding, for example: (1) the number of back-up tapes to be searched; (2) the different methods defendants use to store electronic information; (3) defendants’ electronic document retention policies prior to retaining an outside consultant; (4) the extent to which the electronic information stored on back-up tapes overlaps with electronic information stored in more accessible formats; or (5) the extent to which the defendants have searched ESI that remains accessible.

This case is thus useful to show the kind of evidence that some courts require to support a cost shifting motion under Rule 26(b)(2)(B). It also shows, once again, that just telling your employees to find and collect relevant computer files, with nothing more, is not adequate. The opinion concluded with an order directing both sides to meet and have bona fide good faith discussions on e-discovery issues before coming to him with any more motions.

Peskoff v. Faber, 2008 WL 2649506 (D.D.C. July 7, 2008).
This is a decision by one of my favorite e-discovery magistrates, Judge John M. Facciola (shown right). He found that the producing party, the Defendant, failed to comply with discovery requests because there were significant gaps in the production. The gaps were explained, in part, by the fact Defendant “failed to deactivate network maintenance tools that automatically delete electronically stored information.” Id. at *4. Other omissions were never explained, due in part to the fact that Defendant failed to appear at the evidentiary hearing (never a good idea). This suggested intentional, or at least negligent, omissions in collection or production of relevant ESI.

As a result of Defendant’s failures, Plaintiff asked the court for permission to conduct a forensic examination of Defendant’s hard drive, and for Defendant to pay for it. Judge Facciola recognized that a forensic exam requests inaccessible information and thus made a full analysis under Rule 26(b)(2)(B). It provides a text book example on how the rule should be applied, except for a dicta statement that only the production of inaccessible data is subject to cost-shifting, citing to OpenTV v. Liberate Techs., 219 F.R.D. 474, 476 (N.D.Cal.2003). Id. at *2. In my opinion, that is only true if you are doing a 26(b)(2)(B) analysis to begin with. Otherwise, there are many other factual situations and other legal authority for shifting costs for accessible ESI. It certainly would not be wise to only employ cost shifting protection to requests for production of inaccessible data. See Eg.: Garrie & Armstrong, Electronic Discovery and the Challenge Posed by the Sarbanes-Oxley Act, 2005 UCLA JL&Tech 2.

Judge Facciola held that the requesting party, here the Plaintiff, had proven good cause under the rule to require production, and no cost shifting was appropriate. The $33,000 forensic exam expense must be born by the producing party. This was fair and equitable under the rules because there was $2.5 million in claims at issue, and the potential benefits of the discovery out weighed the costs. Further, Defendant’s failure to suspend the delete functions is what rendered much of the ESI at issue inaccessible to begin with. For these reasons Judge Facciola chose not to deviate from the “traditional rule that a responding party bears the costs of production.” Id. at *4. As Judge Facciola put it: “This is a problem of Mr. Faber’s own making and, consequently, the expense and burden of the forensic examination can hardly be described as ‘undue.'”

Quon v. Arch Wireless, 529 F.3d 892, 2008 WL 2440559 (9th Cir., June 18, 2008).
This case involves a swat team police officer who sent many, many sexually explicit text messages to his wife during work hours. He used a police department pager intended for emergency communications. In spite of these facts, the Ninth Circuit held that a public employee has a reasonable expectation of privacy to text messages and emails, and found unlawful search and seizure by the employer. The police department had read the text messages on its pager in connection with an audit for text message over-charges, and this lead to disciplinary action against the swat team officer. The police department employer had relied upon its formal computer use policies and procedures, to which the officer had signed a written acceptance, to try to justify its actions. The policy clearly stated that there was no privacy for any electronic messages at work, including email and text messages. The Ninth Circuit indicated that it would have enforced these policies, but for the fact that the employee’s supervisor had implemented a different informal policy causing the swat team officer to have a reasonable expectation that his text messages would not be reviewed. The court held that the “operational reality” trumped the “formal written policies.” For this reason, the employer’s review of the employee’s text messages violated the employees privacy rights, and that of his wife.

The case is also important for its interpretation of the Stored Wire and Electronic Communications Act, 18 U.S.C. §§ 2701-2711 (1986). The Appeals Court held that a paging company was an “electronic communication service” governed by the act. Thus the company’s disclosure of the messages to the employer, who was the “subscriber” and not “an addressee or intended recipient of such communication,” violated the act.

Simon Property Group, Inc. v. Taubman Centers, Inc., 2008 WL 205250 (E.D. Mich. Jan. 24, 2008).
Magistrate Judge Mona K. Majzoub considered a motion to enforce a subpoena against a third party. The underlying action involved allegations of the Racketeer Influenced and Corrupt Organizations Act (RICO), various securities laws and other tort claims. The third-party argued that it should not be required to produce electronic documents responsive to the subpoena because it would be unduly burdensome and expensive. Their search of electronic files identified over 250,000 files. The requesting party offered to narrow the scope of the search by altering the time periods, search terms, and possibly dropping some computer servers from the search. The court enforced the subpoena as long as both parties agreed to narrow the scope in good faith because discovery of electronic records is contemplated under Federal Rule of Civil Procedure 45(d) and is common in business litigation.

Southern New England Telephone Co. v. Global NAPs, Inc., 2008 WL 2568567 (D. Conn. June 23, 2008).
You would be hard pressed to find a case with discovery violations more egregious than this one, which explains why the ultimate sanction of a default judgment was entered in the amount of $5,247,781, plus fees and costs of $645,760. Among the parade of horribles, Defendants failed to turn over their financial records in direct contravention of numerous discovery orders, lied to the court about not obtaining records from third parties, and willfully destroyed and withheld relevant documents. Additionally, Defendants erased computer data in bad faith by using disk wiping software called Window Washer and its “wash with bleach” option. This option overwrites files with random characters to make them unrecoverable. If that were not enough, Defendants then ran the Windows Disk Defragmenter program on the drive, making recovery even more impossible.

The court found Defendants had committed fraud upon the court and prejudiced Plaintiff to such a great extent that it would be unlikely that Plaintiff could ever prove its case. A default judgment under these circumstances was the only viable remedy. Here is how District Court Judge Janet C. Hall summed it up:

In conclusion, defendants’ behavior exemplifies the type of willful disregard for the process of discovery created by the Federal Rules of Civil Procedure that warrants the ultimate sanction of dismissal. Defendants “rolled the dice on the district court’s tolerance for deliberate obstruction,” and this court does not believe they should be allowed to “return to the table.” Bambu Sales, 58 F.3d at 853.

Square D Co. v. Scott Elec. Co., 2008 WL 2779067 (W.D. Pa. July 15, 2008).
Here is another case a defendant has managed to lose entirely by poor judgment in e-discovery. It is doubtful the merits of the case matter much any more here, since defendant and its counsel have lost all credibility with the court through their over-aggressive discovery tactics. They tried to evade discovery and then did not fulfill their responsibilities, nor follow the court’s order. The result is a costly forensic examination of all of their computers and sanctions that stop just short of a default judgment. Here are the words of District Court Judge Nora Barry Fischer, whose patience has obviously worn out.

In conclusion, while the Court has previously spoken of its frustration regarding the discovery process in this case, it is becoming clearer to this Court that Defendant Globe and its counsel bear much of the responsibility for the continual and unreasonable delays in effectuating the Court-ordered forensic inspection and for the other delays in the discovery process in this case. With that in mind, the Court wishes to impress upon Globe and its counsel that any further restrictions unilaterally imposed by it or its counsel on the forensic inspection (in any regard) as well as any other baseless barriers impeding the completion of discovery will be met with sanctions. The Court shall conduct a post-inspection status conference on August 19, 2008 at 10:00 a.m. and counsel shall appear in-person. The Court advises the parties that if additional discovery disputes arise, the Court may require them to utilize a special master, with costs to be borne by the parties.

Note here how Judge Fischer uses the threat of a special master and the expenses that will incur as a stick to try to cajole good behavior. This seems to be a tactic that more and more judges are using lately.

Sterle v. Elizabeth Arden, Inc., 2008 WL 961216 (D. Conn. Apr. 9, 2008).
This is yet another case where aggressive defense lawyers use old fashioned advocacy in e-discovery. As usual, they end up doing more harm than good. This is a wrongful employment termination case like Zubulake. Plaintiff requested the production of Department Stores Fragrance Group (DSFG) sales reports that tracked employee performance. Defendant claimed that seven key DSFG reports were no where to be found and so they could not produce them. Apparently the court did not believe Defendant’s convoluted excuses, and so ordered a forensic exam of Defendant’s computer system.

In summary, over the course of nine months, the Defense Attorneys’ position regarding the DSFG Reports went from: (1) not being able to produce the documents, to (2) claiming that the documents could not be found, to (3) offering to “recreate” the documents, to (4) claiming that producing the documents would be “overly burdensome,” to (5) hypothesizing that the Plaintiff fraudulently produced the June 2004 DSFG Report, to (6) after receiving Sachse’s incriminating email, producing four of the eleven missing DSFG Reports.

The court ordered a computer forensic expert agreeable to both sides to inspect Defendant’s hard drives to try to locate the seven missing DSFG reports. The parties agreed on an expert, but when he arrived at Elizabeth Arden, he was prohibited from taking any forensic images by Defendant’s attorneys, and denied access to certain parts of the computer system, including a network folder named DSFG, and the laptops of key employees likely to have the DSFG reports.

Defendant then filed a blustery motion for protective order, claiming that the expert had gone too far, and trying to prohibit further inspection of its computer systems. They even sought to have Plaintiff pay for Defendant’s attorney fees. Plaintiff responded with a motion for contempt based on Defendant’s violation of the court’s order, and a motion for sanctions and attorneys’ fees. The court granted Plaintiff’s motion for sanctions finding that defense counsel engaged in “obstructive tactics” evidencing bad faith and a disregard for the authority of the Court. Here are the words of District Court Judge Dominic J. Squatrito:

*10 Accordingly, although the Defense Attorneys may have provided some access to the Defendant’s servers and networks, the majority of the inspection was thwarted by the Defense Attorneys obstructive tactics. Such tactics are sanctionable because “[a] party that ignores or engages in delaying tactics, despite an explicit refusal to produce discovery, is still liable for sanctions pursuant to Rule 37.” Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 707-08 (1982) (finding that the trial court’s invocation of powers under Rule 37 was “clearly appropriate” based on “continued delay and an obvious disregard of its order” even though “petitioners repeatedly agreed to comply with the discovery orders”).

A new inspection was ordered and Defendant was ordered to pay all costs and fees. As a practical matter, the credibility of the Defendant and its attorneys is now shot. Their discovery gamesmanship has backfired terribly. At this point, I would guess their odds of prevailing to be about as good as UBS Warburg in Zubulake, i.e. – slim to none. Here is Judge Squatrito’s stern warning:

In addition to the costs and attorneys’ fees already awarded by the Court, the Plaintiff Attorney requests that the Court enter a default judgment. This request is denied, but not without warning to the Defense Attorneys. In the event that the Defense Attorneys do not comply in full with the directives contained in this decision, they may be found to be in defiance of these orders and to be disinterested in the resolution of this case on the merits. In such an instance this Court may strike the Defendant’s answer and enter a default judgment against it.

Treppel v. Biovail Corp., 2008 WL 866594 (S.D.N.Y., April 2, 2008).
This is another case where an over-aggressive refusal to cooperate unnecessarily drives up the cost of e-discovery. Defense counsel makes what appears to be a fairly forthright proposal to find relevant ESI and respond to pending e-discovery requests. He suggests that the parties reach an agreement as to which employees’ files should be searched and what search terms to use. Defense counsel proposed the following search terms and invited discussion: (i) Treppel, (ii) Jerry, (iii) Bank of America, (iv) Banc of America, (v) BAS, and (vi) BofA. (Personally, I do not think “Jerry” is a great search term, since it is a fairly common name, but that is beside the point.)

You would expect Plaintiff’s counsel at this point to respond by suggesting a few additional keywords, or making comments like I did as to the efficacy of the proposed search terms. You would expect cooperation and communication to begin to resolve the common problem of retrieval of responsive ESI from a large, complex computer system. But no, not in this case where there is a much higher level of virulence between the parties than usuall, and, it appears, their attorneys too. No, what happens here is Plaintiff’s counsel responds by stating that “it is defendants’ obligation to simply search its [sic] records and respond to those demands. Plaintiff has no obligation to assist defendants in the process by providing search terms or any other guidance.” Id. at *3. Then, after some discussions but no communication, Plaintiff responded with several discovery motions.

Magistrate Judge James C. Francis, IV, responded by denying Plaintiff’s request for a preservation order as premature, and ordered Defendants to “promptly conduct a diligent search, explain the search protocol they use, and produce the responsive documents so located.” Id. Defendants then proceeded with the search protocol and terms it originally proposed. Defendants searched the computers of 14 witnesses and multiple shared drives areas. For reasons not explained, Defendants also voluntary searched the backup tapes of two servers.

After the search, Plaintiff now wanted to get in on the act, and demanded that 30 new search terms be added, along with numerous additional ESI custodians, plus a search of several more backup tapes. No explanation as to why Plaintiff did not make any of these requests before, when the search terms negotiations were first proposed, and before Defendants carried out the court ordered search. Of course, I have my theories, that this is just old fashioned adversarial churning, tit for tat attempts at entrapment, not a bona fide search for truth. But that’s just a theory. Anyway, Defendants naturally refused to run yet another search with these new terms, stating the obvious, that it was too late and the request was too broad. The plaintiff then filed a motion to compel the search it wanted, and for sanctions based on Defendants inadequate preservation of evidence. These motions are the subject of this opinion.

I know how I would have ruled on Plaintiff’s motions, especially the motion to compel. If nothing else, to send a clear message about intolerance of e-discovery gamesmanship. But this Magistrate saw things slightly differently, and granted one part of the motion to compel. He ordered the restoration and search of two additional backup tapes, even though Plaintiff had apparently not specifically sought discovery from these tapes before the search and first order. At least the Magistrate did not require the use of the 30 new search terms Plaintiff wanted, nor the new custodians. Still, in my opinion, the search should not have been broadened in any way. Plaintiff had a chance to communicate and cooperate, and instead, Plaintiff’s counsel said, in effect, “not my job.” (Actual words: “Plaintiff has no obligation to assist defendants in the process by providing search terms or any other guidance.”) I am sorry, but as long a judges keep doing this, and rewarding one party’s refusal to cooperate, even if only in part, the bench only serves to encourage the kind of behavior they profess to oppose.

As to Plaintiff’s motion for sanctions, the Plaintiff sought an adverse inference instruction, and pointed to multiple oversights in preservation. The Magistrate correctly noted that Defendant’s preservation efforts were inadequate. At first, all Defendants did was provide verbal instructions to two key witnesses to start preserving evidence. There was no follow up, and apparently nothing at all was done during the first seven months of the case. The Court quite correctly relied upon Judge Scheindlin in Zubulake to find a dereliction of duty in this inaction. See Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 432 (S.D.N.Y.2004) (“Zubulake V” ) (“[I]t is not sufficient to notify all employees of a litigation hold and expect that the party will then retain and produce all relevant information. Counsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched.”)

But the court went on to ignore Judge Scheindlin on another point and criticized Defendants for not preserving some of their monthly backup tapes. The court correctly quoted Judge Scheindlin “As a general rule, [ ] a party need not preserve all backup tapes even when it reasonably anticipates litigation.” Zubulake IV, 220 F.R.D. at 217. But then went on to incorrectly state that the law had since changed. For this dubious proposition, the Court cited only to Toussie v. County of Suffolk, 2007 WL 4565160, at *8 (E.D.N.Y. Dec. 21, 2007). Id. at *8. But if you read Toussie, you see that it incorrectly cites to Zubulake to support the position that “the law is now clear that any backup tapes containing the documents of a key player must be preserved and accessible.” This is how bad law gets started, much to the joy of some vendors. In any event, this incorrect statement on backup tapes was just a dicta passing statement in Toussie, and not at all essential to its holding. I have previously written a detailed blog on Toussie analyzing the unusual facts of that case. The Toussie court was justified under those circumstances to order a backup tape search in that case, and there was no need to turn Zubulake IV on its head to do that. In so far as Toussie and Treppel are cited for this proposition, they are creating bad law. There needs to be a good reason to preserve backup tapes, and in most cases (but not all) there is no need, because the relevant ESI will be found on live data.

Although I disagree in part with the sanctions road taken here, the end result of the Treppel court’s ruling on sanctions was just. Plaintiff’s request for an adverse inference was denied, and only an inspection of one suspicious laptop was ordered. All other sanctions were denied. In my view, more severe sanctions probably would have been awarded, if Plaintiff had not shot his credibility with the obvious gamesmanship in search.

U.S. v. Johnson, 2008 WL 2060597 (E.D. Va. May 15, 2008).
This is an interesting case to read for its facts, involving the criminal prosecution of Junior Johnson, the founder and CEO of now defunct, This company was a dot com bubble that eventually burst. When it all started falling apart, Junior stopped at nothing, including the law, to try and keep his stock price afloat. For a while he was on top, making millions with a dubious business model involving business to business commerce and a virtual marketplace. At the end of 2000, the market capitalization of his company was almost $1 billion, and Junior’s own shares were worth over $236 million!

If you enjoy reading about how con men operate as much as I do (which is why I loved working on the Lou Pearlman case), you will get a kick, and several laughs, out of reading this 49 page opinion. It lays out an intricate trail of fraud, intrigue and audacious actions, some of which worked for Junior, at least for a while. In the end though he was convicted of numerous felonies, including “attempting to obstruct an official proceeding-his first trial-by giving his counsel an altered e-mail to use as evidence.” That is just one of many of Junior’s “boyish antics” that the opinion recounts in detail, and the only real e-discovery component to the case.

Junior’s first trial ended in a mistrial after his defense counsel withdrew upon learning that Junior had given him four altered emails. The attorney had been tricked by his client into placing altered emails into evidence, and using them in cross examination. This criminal defense counsel did absolutely the right thing upon discovering what happened. Eventually, the true story behind the altered email came out, and in Junior’s second trial, which this time included obstruction of justice, Junior now admitted to altering the emails. He claimed he did that just to see if his attorneys were actually reading all of the stuff, because it was obviously false, and surely his attorney would notice that if he took the time to read it. Id. at *39. He said he played this little prank on his counsel to prove his lack of attention to detail.

The court did not buy this, and instead held that it was “easily foreseeable that giving your trial counsel an altered piece of evidence in the midst of trial naturally and probably will interfere with the trial.” The court found that Defendant had the requisite criminal intent and found him guilty of obstructing justice. Here is the governing law:

To convict Junior of obstruction, the Court must find, that Junior “corruptly … obstruct[ed], influence[d], or impede[d] any official proceeding, or attempt[ed] to do so.”18 U.S.C. § 1512(c)(2). As explained earlier, the word “corruptly” connotes wrongfulness or impropriety. Arthur Andersen, 544 U.S. at 705;see United States v. Matthews, 505 F.3d 698, 706 (7th Cir.2007) (employing Arthur Andersen definition of “corruptly” in the context of section 1512(c)).

I point out that this law on its face applies to any “official proceeding,” not just criminal trials. There is a lesson here for all litigants, including those in civil law suits. Do not try to sneak an altered electronic document into evidence. It may seem easy, and you might even get away with it some of the time, but it is fraud and, if detected, you could face harsh criminal penalties.

U.S. v. Snipes, 2007 WL 5041892 (M.D. Fla. Dec. 24, 2007).
This is the well-known tax evasion case against movie star Wesley Snipes. Many also consider this case to be a good example of an unfair e-document dump. See what you think.

Just before trial in Ocala, Florida, the government produced an electronic database containing the equivalent of 1.6 Million pages of documents! Wesley Snipes and his co-defendants moved for a three-month continuance of trial to have time to sort through the database. They claimed that it was all newly discovered evidence. The government denied it was new evidence and claimed the defendants were previously provided an opportunity to inspect, but declined to do so.

Senior District Court Judge Terrell Hodges denied the request for continuance and concluded that defendants “had an ample opportunity to review and analyze the discovery material and prepare adequately for the trial of the case.” Judge Hodges explained that the ESI in the database consisted primarily of “computer software programs or copies of documents previously provided to the defendants in hard copy or other form.” Not sure exactly how they did that. The Court also seemed to be impressed that the government only intended to use 20 documents at trial that originated solely from the electronic form. But what about the 1,599,980 pages of documents they did not not want to use?

Wesley Snipes was acquitted of the tax evasion felony charges, even though he did not put on any defense witnesses. He was, however, convicted of three misdemeanors and sentenced to the maximum penalty of three years in prison. He has been allowed to remain out on bail, and even to travel overseas, so that he can continue to make movies such as GalloWWalker while his attorneys appeal the convictions to the Eleventh Circuit.

Waste Services, Inc. v. Waste Management, Inc., 2007 WL 1174116 (M.D.Fla. April 18, 2007).
This is one of the first cases in the country to consider what e-discovery costs can be awarded as a court cost to the prevailing party after a summary judgment. The decision of Orlando District Court Judge Anne C. Conway affirmed the recommendations of Magistrate David A. Baker. Judge Baker disallowed some of the costs for “tiffing” as excessive, but allowed other less expensive tiffing costs incurred with a different vendor. Interestingly, all of the costs of “blow back” (converting electronic documents to paper) were allowed.

WIREdata, Inc. v. Village of Sussex, 2008 WL 2512963 (Wis., June 25, 2008).
The Supreme Court of Wisconsin reversed a lower appeals court recently, much to the relief of state and local governments around the country. The intermediate appeals court had held that municipalities violate the Open Records Law when they deny citizens access to a government database, and only provide copies of the records in PDF format. WIREdata, Inc. v. Village of Sussex, 298 Wis.2d 743, 729 N.W.2d 757 (Wis. App., 2007). The court had stated, “The organization and compilation of the data into the Microsoft Access database, done at public expense, allows greater ease of public access to the public assessment information. In keeping with the letter and spirit of the open records law, we will not allow the municipalities to deny [Plaintiff], and others who seek the information, the value-added benefit of this computerization.”

Allowing citizens access to live databases poses a host of technical and other problems to governments trying to comply with Sunshine laws. The Wisconsin Supreme Court realized this and reversed. It is all explained in detail in a 30 page opinion, that only a Foley lawyer would want to read in full. Here is the key section of the ruling:

We share the DOJ’s concern, as expressed in its amicus brief, that allowing requesters such direct access to the electronic databases of an authority would pose substantial risks. For example, confidential data that is not subject to disclosure under the open records law might be viewed or copied. Also, the authority’s database might be damaged, either inadvertently or intentionally. We are satisfied that it is sufficient for the purposes of the open records law for an authority, as here, to provide a copy of the relevant data in an appropriate format

Xpel Technologies Corp. v. Am. Filter Film Distribs., 2008 WL 744837 (W.D. Tex. Mar. 17, 2008).
In this copyright case, the magistrate judge granted plaintiff’s motion for an expedited forensic examination of Defendants’ computers. The court stated that good cause was shown at a hearing, but did not explain what it was. The party moving for the examination (Plaintiffs) were required to pay for the exam. The court set out a specific protocol for the computer expert and the parties to follow in the forensic examination of the computers. Care was taken to preserve the confidentiality of Defendants’ information. The protocol included a hashing requirement: “All images and copies of images shall be authenticated by generating an MD5 hash value verification for comparison to the original hard drive.”

5 Responses to More “Must Read” 2008 Cases – Part Three – Including My Favorite, the Wesley Snipes Tax Evasion “e-Document Dump” Case

  1. Craig Ball says:

    First, thanks for once again boiling down the key cases in your usual clear and lively way. Reading your blog is always time well spent.

    Now for the quibble…

    You take plaintiff’s counsel to task in Treppel v. Biovail Corp. for what you term “e-discovery gamesmanship.” From your point of view, the plaintiff was supposed to tweak the defendant’s keywords and contribute some of his own. But, please consider that position through the lenses of O’Keefe, Equity Analytics and Victor Stanley. If, as Judges Grimm and Facciola contend, lawyers really aren’t well qualified to frame effective keyword searches, working with the other side to sanctify a flawed approach is just shooting yourself in the foot. If you help design the house, you’re hard pressed to complain when it falls on your head.

    You know that I’m as zealous an advocate of transparency and cooperation as anyone on the block, and I agree that counsel unwilling to wade into the keyword swamp should offer constructive alternatives. But, I hope you’ll perhaps rethink the notion that the requisite cooperation requires contributing or critiquing keyword selections, or at least disabuse readers who’ll surely glean same from your remarks. Absent a fulsome disclosure of systems, applications, customary data formats and a solid working knowledge of the argot of the organization, offering up keywords is, as Judge Facciola said, going “where angels fear to tread.” Is it possible that counsel just needed more time and information to be in a position to challenge or offer search terms?

    Is it “gamesmanship” if it’s also the smart and sensible thing to do?

    I feel obliged to disclose that I’ve lately consulted with plaintiff’s counsel in this case, so anyone has all they need to simply dismiss what I’ve said above as biased. Still, my involvement comes long after the events discussed and through new counsel, so I hope you’ll give it a fair shake nevertheless.

    While I’m picking nits, might I respond to your challenge to In Re: Honza. You wrote, “There is no explanation as to why the Defendants did not simply produce the native files with all metadata.” I have no connection to the case, but I can certainly see a compelling reason why simply producing the native files would be insufficient to the task.

    It’s easy to forget that most metadata of the sort that reveals the provenance of a document resides outside the file itself. Certainly, native Microsoft Word or Excel files do hold some relevant metadata that must be examined when weighing the vintage, origins and authenticity of the doument. I agree with you that this data must be routinely produced in a dispute like this one. But equally- or more relevant metadata exists within the file system of the computer used to author the document, and this metadata will not accompany the native files if produced as you describe. To preserve this revealing system metadata, forensically imaging the drive is the way to go. I, for one, would want to see, e.g., the master file table metadata concerning the documents, as well as the RECENT LNK entries, Registry MRUs, NTUser.dat values and the contents of folders holding temp files. That’s all metadata, too, and it’s often of greater value because it tends to be overlooked when folks are forging and fudging e-documents. You’re an e-discover guru, but would you feel comfortable collecting, preserving and preserving this critically important ESI without the assistance of a competent forensic expert?

    So, perhaps the explanation you wondered about is that simply producing the native files for this inquiry wouldn’t suffice because the embedded application metadata alone is likely insufficient to the task, and the lawyers probably didn’t know where to begin to find the system metadata without corrupting it in the effort. A forensic exam was the correct approach.

    Warm regards,

    Craig Ball

  2. Ralph Losey says:

    Thanks for your thoughtful comments as usual. Not too surprised Plaintiff has new counsel in “Treppel,” and no doubt things will change now with your assistance and tempering influence.

    I did not mean to suggest that the collaboration would consist only of trading keywords, and I admit that too often that is the extent of counsels’ discussions. I looked at it only as the beginning of a full discussion, not the end. I agree with what Judges Grimm and Facciolla are trying to do. Search protocols must be carefully planned and well thought out. Moreover, search experts may be needed in many cases, depending on the circumstances, including especially the amount at issue. That is one service I myself frequently offer to other members of my law firm, and no doubt is also a service you offer to many of your clients. Still, cooperation has to begin somewhere, and talking about keywords is as as good a place to start as any. From reading the opinion I saw no evidence of that on Plaintiff’s side (all, as you say, well before your intervention). That was the main thrust of my comment, a plea for openness and cooperation in e-discovery.

    On the metadata issue comment on “In re Honza,” you provide a very nice list of external metadata. Thanks. I know you meant the “e-discovery guru” label as a compliment. (Computer guru was a common label in the 80s and 90s.) Still, in the world of law, much like spirit, I am inclinded to think that the only good “guru” is a “kangaroo.” Anyway, your forensics’ expertise is outstanding and folks like you are indispensable in e-discovery, while I am not so sure the same can be said about gurus.

    You are right, that if they had produced the files with just internal metadata, it might not have provided the kind of time information needed to resolve the dispute. On the other hand, maybe it would have, and the full forensics might not have been needed. As a general rule, for cost efficiency purposes, I always look to the active data and simple internal metadata first before bringing in the heavy guns of a forensic expert. I still do not understand why they did not at least start by producing the unaltered native files, and then if necessary, bring in a forensic expert to inspect and report on the external metadata. Of course, one obvious answer to the question is that the plaintiff was right, and the assignments were modified after the fact.

    Anyway, thanks again Craig, I appreciate your time and attention, and your “consciousness raising” comments. Please keep them coming!

  3. […] and I would probably include it in my top 10. Indeed, I also wrote about Peskoff in my article: More “Must Read” 2008 Cases – Part Three. I have my own thoughts on what case should be ranked number two for 2008 and I will get to that […]

  4. […] v. Arch Wireless, 529 F.3d 892, 2008 WL 2440559 (9th Cir., June 18, 2008), which I wrote about in More “Must Read” 2008 Cases. In this unusual case the employee’s supervisor had implemented a different informal policy […]

  5. […] v. Arch Wireless 529 F.3d 892, 2008 WL 2440559 (9th Cir., June 18, 2008), which I wrote about in More “Must Read” 2008 Cases. In Quan the Ninth Circuit held that a company’s disclosure of text messages to the employer, who […]

%d bloggers like this: