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Andy Cobb

eDiscovery Check-in: How Courts and Practitioners are Handling the 2015 FRCP Amendments

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ediscoveryBackground

While many rules were updated in December 2015, such as Rule 34, which now requires specificity in objections to discovery requests instead of the boilerplate objections, from an eDiscovery perspective, the rules that were most affected by the Federal Rules of Civil Procedure (FRCP) revisions were Rule 26(b)(1), which relates to discovery proportionality and relevance, and Rule 37(e), which relates to the failure to preserve electronically stored information (ESI). The increasing expense of preserving, collecting, reviewing and producing ESI provided the impetus for many of the recent revisions.

Rule 26(b)(1) Changes

While many courts have considered proportionality in discovery decisions, it has not been as explicitly outlined in the rules until the December 2015 changes. In addition to addressing proportionality, the changes to 26(b)(1) removed much of the broad language, such as the sentence: “For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action.” In addition, one of the most significant changes to Rule 26(b)(1) was the removal of the provision that inadmissible evidence was discoverable if it “appears reasonably calculated to lead to the discovery of admissible evidence.”

Rule 37(e) Changes

Prior to the change of 37(e), U.S. District Courts were divided on how to address sanctions and when they were appropriate. Some found that mere “negligence” was enough, while others looked for “intentionality” and/or “bad faith” as the trigger. The result was confusion and over-preserving, which caused mainly large corporations to beg for more consistency. The intent of the changes to 37(e) was to create a uniform standard for imposing sanctions when a party failed to preserve. The rule was modified so that severe sanctions should only be imposed in the most extreme situations when a party acts willfully to avoid preserving ESI.

The revised rule, now called “Failure to Preserve Electronically Stored Information”, states that if data is lost “because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery,” the court has two options: (1) Upon finding prejudice to another party from loss of the information, the court may order measures no greater than necessary to cure the prejudice, or (2) Only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation, the court may:

  • Presume that the lost information was unfavorable to the party;
  • Instruct the jury that it may or must presume the information was unfavorable to the party; or
  • Dismiss the action or enter a default judgment.

Response to 26(b)(1) Changes

When the changes to 26(b)(1) first emerged and were being discussed, many believed the result would be a sea change in the courts, leading them to rein in the perceived excesses of the discovery process. Others felt that not much would change since the idea of proportionality was already being addressed in most courts. On one end of the spectrum is Bentley v. Highlands Hosp. Corp., 2016 U.S. Dist. LEXIS 23539 (E.D. Ky. Feb. 23, 2016) in which the court provided clear guidance on the parameters of relevance and proportionality in discovery. On the other end of the spectrum, the court in Wit v. United Behavioral Health (Case No. 14-cv-02346 JCS (N.D. Cal. Oct. 12, 2016)) cited an outdated 1978 Supreme Court opinion, Oppenheimer Fund v. Sanders, 437 U.S. 340 which supports a broad interpretation of “relevance”.

Generally, what looks like is happening in courts seems to be what was intended: a change in mindset related to discovery. For example, in Gilead Scis., 2016 WL 146574, the court touched on this new mindset: “No longer is it good enough to hope that the information sought might lead to the discovery of admissible evidence. In fact, the old language to that effect is gone. Instead, a party seeking discovery of relevant, non-privileged information must show, before anything else, that the discovery sought is proportional to the needs of the case.” The consensus seems to be that, while some courts already considered limitations and proportionality in discovery – and therefore would not be significantly affected by the changes – the revised rule hopes to move all courts in a unified direction with regard to this new discovery mindset.

Response to 37(e) Changes

Courts have struggled more with the rule changes to 37(e) than those to Rule 26. One issue that courts are struggling with consistently applying the meaning of “reasonable steps” to preserve ESI. The different types, complications and nuances of ESI have caused the courts to apply different standards under different circumstances. For example, in Best Payphones, Inc. v. City of New York, et al, No. 1:2001cv03934 – Document 295 (E.D.N.Y. 2016), the court had to deal with a variety of formats which required different analyses since each format had different definitions of “reasonable steps” for preservation.

In addition, there seems to be a trend in which courts are requiring stronger evidence that, when claimed, ESI is indeed missing, as in FiTeq Inc. v. Venture Corp., No. 13-cv-01946-BLF, 2016 WL 1701794 (N.D. Cal. Apr. 28, 2016). Finally, there seems to be two simultaneous trends that are interacting and complicating decisions for courts: the idea that reasonable steps should be taken to preserve ESI (and the definition thereof) and the fact that courts and litigants continue to learn and become aware of the complex nature of ESI. For this reason, it seems that courts will continue to evolve on the issue of ESI preservation to achieve fairness to the parties.

What Should Practitioners Do?

As a result of the 26(b)(1) changes, practitioners should consider a couple of shifts in focus. First, attorneys should review the complaint with an eye towards phased or iterative discovery. This method starts small, with the most critical issues in question, and grows as information is discovered and produced to and received from opposing parties. This method helps drive relevance to the main issues and has the added benefit of saving resources.

Second, early conversations with clients will help determine where ESI is located and how much effort and resources will be required to review and produce any relevant ESI. Can the number of custodians be limited? Do we need all their ESI or would electronic communications suffice? What are the costs related to the production of that ESI and will they produce the most relevant results?

Since the impacts of the changes to Rule 37(e) are still being worked out in the courts, courts and litigants are still learning the complexities of ESI preservation and no broad consensus exists on what “reasonable steps” means, caution is still the prudent approach. The hope is that the Rule 37(e) revisions will, through the courts, settle into a few general guidelines and precedent that will provide more consistency and prevent the over-preservation of ESI, but we are not there yet.

andyCobbDr. Cobb currently serves as Partner at One Source Discovery, a local, full service eDiscovery firm. He developed the strict procedures used during forensic collections and analysis to ensure accuracy, verifiability and repeatability. Dr. Cobb is the creator of BlackBox, the patented remote forensic collection software tool. Prior to his position at One Source Discovery, he was the founder and President/CEO of AC Forensics and Assistant Professor at the University of Louisville. Dr. Cobb has served as a consultant on hundreds of Electronic Discovery matters, provided expert testimony on various Computer Forensics matters in Federal and State Courts, given several talks and CLE’s related to electronic discovery, and published numerous technology journal articles.

Conflicting Search Warrant Rulings for Microsoft and Google

By | Criminal Defense, eDiscovery, Employment Law, Litigation | No Comments

What happened?

On February 3, 2017 a federal magistrate judge ordered Google to comply with a search warrant to produce foreign-stored emails (In re Search Warrant No. 16-960-M-01 to Google). The magistrate judge disagrees with the U.S. Court of Appeals for the Second Circuit’s Microsoft Ireland Warrant Case, which was recently denied rehearing by an evenly divided court. This decision shows that the Justice Department is asking judges outside the Second Circuit to reject the Second Circuit’s ruling — and that at least one judge has agreed.

At issue are two routine Stored Communications Act (SCA) warrants served on Google for the contents of emails. Google responded with the emails that it knows were stored inside the United States, but it refused to turn over emails that could be outside the United States. Because Google breaks up its emails and the network might distribute them anywhere in the world, Google can’t know where many emails are located and declined to produce them under the Second Circuit’s Microsoft case.

The government moved to compel Google to produce all of the emails within the scope of the warrant. Magistrate Judge Thomas J. Rueter ruled that Google has to comply with the warrant in full because “the conduct relevant to the SCA’s focus will occur in the United States” even for the data that is retrieved from outside the United States. According to the judge:

“…[T]he invasions of privacy will occur in the United States; the searches of the electronic data disclosed by Google pursuant to the warrants will occur in the United States when the FBI reviews the copies of the requested data in Pennsylvania. These cases, therefore, involve a permissible domestic application of the SCA, even if other conduct (the electronic transfer of data) occurs abroad.”

The court reasoned that when a network provider is ordered to retrieve information from abroad, that copying of information abroad and sending back to the United States does not count as a Fourth Amendment “search” or “seizure” outside the United States, stating “Electronically transferring data from a server in a foreign country to Google’s data center in California does not amount to a “seizure” because there is no meaningful interference with the account holder’s possessory interest in the user data.”

Further, the court saw no search abroad: “When Google produces the electronic data in accordance with the search warrants and the Government views it, the actual invasion of the account holders’ privacy- the searches – will occur in the United States.”  Because the search and seizure occurred in the United States, not abroad, the relevant privacy invasion was domestic and a domestic warrant could order it.

Legal Analysis

Bob Dibert is a Member at the Frost Brown Todd, LLC Louisville office practicing business litigation and electronic data discovery, privacy & security law. Referencing the warrants to Google and Microsoft, Dibert states, “These cases show how courts can focus on factual details in reaching different results when the law is uncertain.”

“In Microsoft, the data was located in a different country – the Republic of Ireland – and the account (perhaps including the account holder) was in or proximate to Ireland. In Google, the most that could be said about the data was that at least some of it was located somewhere outside the U.S., at least some of the time.”

It’s not clear what the reactions will be, if any, of other nations where US companies store data. While data privacy laws in European Union countries have tightly restricted access to their citizen’s data, particularly by outside nations, treaties and legal agreements include provisions for transferring data for criminal matters.

Dibert elaborates, stating, “Although neither decision discusses the context specifically, the Republic of Ireland has both legislation and treaties to provide assistance to foreign prosecutors and courts in criminal matters. And, it was a challenge in Ireland that ultimately declared U.S. laws to provide inadequate privacy protections for citizens and data located in the European Union (including Ireland). The specific case, Schrems v. Data Protection Commissioner, No. C-362/14 (Court of Justice of the European Union, Oct. 6, 2015), involved transfer of a European user’s Facebook data from Ireland to U.S. servers. So Google did not involve territory where it might have been prudent for Microsoft to tread lightly.”

Where do we go from here?

Many law experts believe that the actions ordered by the judge would still be considered seizure, citing Orin S. Kerr, Fourth Amendment Seizures of Computer Data, 119 Yale L.J. 700, 700 (2010), which argues that copying Fourth Amendment-protected files seizes them under the Fourth Amendment when copying occurs without human observation and interrupts the stream of possession or transmission.

Because of the ambiguity of the location of the data that results from the methods Google uses to store data, some data service providers may re-think whether to pursue this hybrid model as opposed to the more “cut-and-dry” methods. Will Google completely overhaul the way they store data?  Probably not. But by appealing the decision, they will force the issue with the courts to address the Fourth Amendment ambiguities. Stay tuned.

 

Suggested Quote to break out: “These cases show how courts can focus on factual details in reaching different results when the law is uncertain.” -Bob Dibert, Frost Brown Todd

andyCobbDr. Cobb currently serves as Partner at One Source Discovery, a local, full
service eDiscovery firm. He developed the strict procedures used during
forensic collections and analysis to ensure accuracy, verifiability and
repeatability. Dr. Cobb is the creator of BlackBox, the patented remote
forensic collection software tool. Prior to his position at One Source
Discovery, he was the founder and President/CEO of AC Forensics and
Assistant Professor at the University of Louisville. Dr. Cobb has served as
a consultant on hundreds of Electronic Discovery matters, provided expert
testimony on various Computer Forensics matters in Federal and State
Courts, given several talks and CLE’s related to electronic discovery, and
published numerous technology journal articles.

Brace Yourself… for the Impacts of the FRE 902 Amendments

By | eDiscovery, Litigation | No Comments

Federal Rules of Evidence 902 (FRE 902) generally outlines evidence that can be described as “self-authenticating”, meaning they don’t require extrinsic evidence of authenticity in order to be admitted. Some examples of self-authenticating documents are public records that are signed and sealed, newspapers and certified copies of government documents. Often times, trial attorneys rely on FRE 902 for the authentication of evidence that is crucial to their cases. In order for digital evidence to be introduced in court, the source of this electronic evidence (also known as electronically stored information or ESI, for short) must be verified, a process known as authentication.

Recent additions to FRE which go into effect December 2017, seek to clarify and streamline the acceptable authentication methods for system-generated electronic records and for data copied from storage media thus making it easier to authenticate ESI evidence. Later we will discuss the impacts of the amendments, but first let’s briefly review and define them.

The 902 Amendments
“(13) Certified Records Generated by an Electronic Process or System. A record generated by an electronic process or system that produces an accurate result, as shown by a certification of a qualified person that complies with the certification requirements of Rule 902(11) or (12). The proponent must also meet the notice requirements of Rule 902(11).”

Here an electronic process or system can mean any IT system, for example, an email system.

“(14) Certified Data Copied from an Electronic Device, Storage Medium, or File. Data copied from an electronic device, storage medium, or file, if authenticated by a process of digital identification, as shown by a certification of a qualified person that complies with the certification requirements of Rule 902(11) or (12).”

Here an electronic device could be a phone or a laptop, for example. A storage medium could be a thumb drive, a CD or a computer hard drive.

It is Important to note that both of these additions require notice per Rule 902 (11) or Rule 902 (12), which stipulates, among other things, that the certification be produced to opposing parties for inspection, thus opening the door for a possible certification/authentication challenge.

The amendments will have broad implications on the processes that data custodians and attorneys follow when producing potentially relevant ESI evidence for legal matters. Chad Main, attorney and the founder of Percipient, a legal technology company, defines data custodians in lay terms as, “a witness (or potential witness) with control of relevant evidence.” He provides the following example: Assume in a products liability case an employee authored the “smoking gun” research document and saved the document on his or her computer. The employee is the “custodian” of the document because he or she has control of it. However, the data custodian is not always the owner of the data. The data custodian can also be a system administrator or IT department within an organization.

One of the biggest impacts will affect the practice known as custodian “self-collection.” Self-collection occurs when the data collection is performed by custodian of the potentially relevant data, rather than independent and qualified third party. The problem with self-collection is that it takes place without the expertise or means to authenticate the data being collected. Guidance software, creator of EnCase, has identified the following eight areas of risk of self collection:

  • Employee has a potential self-interest and intentionally deletes, omits or modifies the ESI.
  • Employee has a potential self-interest and properly preserves the ESI, but opposing counsel discredits the collection based on the self interest.
  • Employee is too busy and uninterested in the case and ignores the preservation instructions.
  • Employee completes the preservation in a haphazard manner and accidentally omits relevant ESI.
  • Employee does not understand how to properly preserve relevant ESI and accidentally deletes or modifies the evidence.
  • Employee moves the ESI to another folder causing changes to important file system metadata.
  • Employee misinterprets the preservation instructions and omits relevant ESI.
  • Employee moves the data to a central location, thereby destroying the context of the document in regards to where it was originally stored.

Properly applying FRE 902 (14) will now involve using specialized digital forensic tools that support authentication methods, such as the practice known as digital hashing. Digital hashing produces a digital “fingerprint” of a chunk of data such as a file or even the contents of an entire hard drive. For example, the simple action of changing the letter “O” to the the number “0” within a file stored on a hard drive, changes the hash for the entire hard drive.

Digital forensics experts routinely use hashing methods to verify that copies of digital evidence match the original data from which the copies are made, i.e. their hashes or “fingerprints” match. The figure shows an example of a hashing algorithm called Message Digest 5 or MD5, which produces a 32-character alpha-numeric fingerprint for a file, email or entire hard drive.

Self-collection has always been inherently risky because it provides a ripe opportunity for challenges. The new amendments to the FRE place more focus on how ESI is collected and authenticated than ever before. Amendment FRE 902(14), in particular, draws a bright red line by requiring that the digital evidence be verified by a “Qualified person”. To drive home the point, the committee notes even go as far as to spell out that digital verification techniques, such as the hashing techniques discussed above, must now be used to verify digital evidence.

The impact of these amendments, especially considering the rapid volume in which data is created, should not be ignored. Experts predict that the FRE amendments, while aiming to clarify and support proper certification of digital evidence, will also provide a foundation for parties to more readily challenge the admission of digital evidence in court. To mitigate or even bypass these challenges altogether, parties presenting digital evidence would be wise to ensure that all ESI evidence is certified either by having qualified digital forensic technicians perform the preservation and collection of the ESI or by setting up reliable systems that utilize built-in, tested digital verification methods when copying digital evidence.

Looking back at 2016: Can Hillary’s emails teach us anything?

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The Hillary Clinton Email Saga, By The Numbers

From Visually.

 

Looking back at 2016: Can Hillary’s emails teach us anything?

by Andy Cobb, PhD, CCE

Introduction
While many cases that affected the practice of electronic discovery popped up in 2016, no eDiscovery topic got more attention or had more impact than the Hillary Clinton email server saga. Are there some lessons we can all take away from the Hillary email debacle? Yes. But before we discuss those lessons, let’s refresh our memories on what happened during the Clinton email debacle according to the USA Today’s summary:

March 2, 2015: The New York Times reports that Hillary Clinton used a private email server while serving as Secretary of State.

March 10, 2015: Clinton defends her use of a private server, saying it was for “convenience” so she could use a single device for personal and business use. “Looking back, it would have been better for me to use two separate phones and two separate e-mail accounts,” she said. “I thought using one device would be simpler. Obviously, it hasn’t worked out that way.”

July 24, 2015: The inspectors general at the State Department and Director of National Intelligence ask the Justice Department to review whether classified information was compromised in Clinton’s use of private email.

August 2015: A federal official confirms the FBI is investigating.

Aug. 11, 2015: Clinton’s campaign says she has directed that her server be turned over to the Justice Department

May 25, 2016: The inspector general at the State Department issues a report critical of Clinton’s use of private email, saying department policies dating to 2005 require that “normal day-to-day operations” be conducted on government computers.

July 1, 2016: Attorney General Loretta Lynch says she will accept recommendations from the FBI and career prosecutors in the email case in an attempt to dispel criticism of her potential conflict of interest after she met with former president Bill Clinton on a Phoenix tarmac.

July 2, 2016: Clinton is interviewed by the FBI for 3-1/2 hours in Washington, D.C.

July 5, 2016: FBI Director James Comey announces the recommendation not to prosecute Clinton.

October 28, 2016: In a letter to Congress, Comey says the FBI is reviewing new emails related to Clinton’s time as secretary of state, according to a letter sent to eight congressional committee chairmen. The emails are discovered as part of an investigation into Anthony Weiner and were sent or received by Clinton aide Abedin.

November 6, 2016 — Based on a review of the newly discovered emails, Comey tells lawmakers that the agency has not changed its opinion that Clinton should not face criminal charges.

Sifting Through the Talking Points
After all of this, Clinton’s campaign Communications Director, Jen Palmieri said she was “glad this matter is resolved.” Trump, however, pushed back against the announcement: “Right now, she is being protected by a rigged system,” Trump said Sunday night at a rally in Michigan. “It’s a totally rigged system. I’ve been saying it for a long time. You can’t review 650,000 new emails in eight days. You can’t do it, folks.”

Actually you can – easily. And you can do it in a matter of a couple of days. It’s a matter of filtering emails by metadata (fields such as: to, from, dates, etc.). 650,000 emails become a few hundred with some smart filtering and maybe some keyword searching. Which brings us to Comey, who said the email review wouldn’t be complete until after the election. This is what we call managing expectation in our industry.

What Can we Take Away from how this played out?
From an information governance and Ediscovery perspective, Clinton’s use of a personal server to send State Department messages, some of which were at some point deemed classified, was clearly a mistake. One must keep in mind that the records/emails policies of the state department were fluid from 2000 through 2014, when they were strengthened. We’ve seen this same tightening of records retention policies in the private sector over the past decade, with the appending of the Federal Rules of Civil procedure and court decisions. Clearly she didn’t err on the side of caution, which is always the best policy. Our advice would have been to keep the email sets entirely separate – separate email accounts, separate physical server, separate service provider, separate location. Notice the emphasis on separate. There is a lesson here for all of us: keep professional and personal emails separate. At the very least, in the event of an inquiry, this practice prevents the work of having to sort out which emails are professional and which ones are personal.

BYOD and Hillary
If there was one trend that emerged in 2016 for which Clinton’s personal/State Department emails were a metaphor, and a serious topic that will remain a concern for information governance past 2016, it’s the critical importance of BYOD (Bring-Your-Own-Device) policies. These policies are designed to address issues related to an organization’s data being stored on devices that are owned by employees or associates, rather than being owned by the organization. Even though an individual may have two different email addresses, they may still have one device in a BYOD-friendly environment. So a client using their own personal device for professional and personal communication can, at the very least, complicate discovery.

For example, say a client sends you, their attorney, a question via text and a privileged conversation ensues. The following week, opposing counsel issues a discovery request for client’s phone because they believe there are relevant, non-privileged communications relating to the legal matter at hand. Now you must take the extra step (and the client must incur the extra cost) of reviewing the information on the phone since you knew there were protected text messages and possible emails, before other information is turned over.

Takeaways
The key, as was missing with Clinton’s handling of her emails, is to have in place, and follow, good records retention and BYOD policies outlining how communications should be preserved and managed. Ideally, IT (Information Technology) and the legal department should collaborate on policies for the security of corporate data (and devices that data could be transferred to/ accessed from). Specifically, policies that contain the following elements can make a big difference:

-Restrictions on usage of devices on unsecure networks, which can be common attack venues for hackers
-Encryption of sensitive corporate data should be implemented to prevent access by those other than the end-user and/or select IT staff
-Regular audits of the system to ensure securities are in place and effective
-The capability to remotely wipe a lost or stolen device

Additionally, from a legal standpoint there are certain guidelines that can prevent lawsuits arising from an employee’s loss of data. Some of those measures can be captured in an agreement signed between the employer and each employee with elements such as:

-Acknowledgement by the employee that personal data on BYOD devices is subject to potential exposure during discovery proceedings

-Acknowledgement that the data on the device may be wiped if the device is lost or stolen

-An indemnity clause, stating that while the employer will make efforts to protect employee’s personal data on devices, the employee acknowledges that data placed on the device is at risk of deletion

-Acknowledgement that the employer has the right to audit device(s) upon request

Conclusion
Hillary Clinton’s email server has brought into the public eye the complications of having personal and professional communications in the same location (and may have cost her the election!). Unfortunately, this issue is not limited to presidential candidates; it can have major impacts on individuals everywhere involved in discovery for legal matters.

andyCobb

Andy Cobb is a Partner with One Source Discovery, a full-service eDiscovery firm, and is the creator of the patent-pending BlackBox remote forensic collection software tool. He has served as a consultant on eDiscovery matters, provided expert testimony on various computer forensics matters and published numerous technology journal articles.