It has become apparent that lawyers must keep informed of changes in the law, including the benefits and risks associated with relevant technology.  And, relevant technology is not limited to electronic dockets (i.e., NYSCEF, and ECF) and preserving text messages a client sends about his/her representation.  Rather, relevant technology includes today’s world of social media including Facebook, Twitter, Instagram, and Snap Chat to name a few.  Today’s blog is intended to highlight a few of the risks associated with social media.

1.  Know What Your Client is Posting on Social Media

In a 2014 case out of the Florida Court of Appeals, the daughter of the winning party posted a comment on her Facebook page commenting about the outcome of the lawsuit and the European vacation paid for as a result.  Unfortunately, the post violated the confidentiality provisions of the parties’ settlement and torpedoed the settlement.  Ouch!  Chances are, the attorneys had no idea what the daughter was up to but this case is a good reminder to know what your client is posting on social media.

2.  Don’t Spoliate, or Condone the Spoliation of Evidence

Social media posts, like any other type of “evidence” may be relevant to the lawsuit in which you are involved.  And so, like any other type of evidence, counsel may not alter or destroy relevant social media posts nor can we direct or assist others in doing so.  But, what happens when you tell your client to “clean up” his Facebook page?

In one particularly egregious example of “deceptive and obstructionist conduct,” a lawyer directed his client to clean up his Facebook page, and then ultimately deactivated the client’s account before signing a discovery response the client did not have a Facebook account. The Court levied a collective fine of $722,000 in sanctions against the lawyer and the client, and referred the attorney to the Virginia State Bar.   Other less egregious “housekeeping efforts” can also result in spoliation motions and adverse inferences at trial (see e.g. Gatto v. United Airlines Inc.,  United States District Court, District of N.J., Civil Action No.: 10-cv-1090-ES-SCM [personal injury plaintiff intentionally deactivated Facebook account during discovery, unbeknownst to his lawyer]).  In addition to the spoliation dangers presented by social media, Gatto dovetails nicely with Point I, supra, and serves as an important reminder to know both what your client is posting, and what your client may be deleting.

3.  If You Resort to Social Media to Research a Prospective or Sitting Juror, Do it Ethically

Various ethics opinions (see e.g., the NY County Lawyer Association Opinion 743 (2011) the New York City Bar Association Commission on Professional Ethics Formal Opinion 2012-2 (2012) say it is okay to research perspective and sitting jurors through social media.  However, make sure you do not communicate with the individual in the process so you don’t run afoul of the “no contact” rule.  See, e.g., Rule 3.5 of the New York Rules of Professional Conduct.  It is therefore critically important before you, a colleague or agent conduct any social media research about a juror, that you understand how the particular network operates. For example, certain jurisdictions find the automatic system-generated notice, “Katy Cole has viewed your LinkedIn profile,” to be a “communication” and therefore an improper communication with a prospective juror (or witness, or party). See previous blog post, “Ethical Information Gathering When Using Social Media.

4.  Understand the Impact of What You Share

Finally, it is important to remember that the essence of the legal profession is confidentiality and discretion.  And yet, there are many public examples of lawyers demonstrating, on social media, a lack of judgment when, for example, they share tweets or posts about clients or trial strategies.  Such behavior is really a recipe for disaster as a lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized to carry out the representation.  Therefore, a comment about even a generic/unidentified client or a case runs the risk of violating one’s duty of confidentiality to the client. See, e.g., Blogging Assistant PD Gets 60-Day Suspension for Posts on Little-Disguised Clients,” American Bar Association, May 26, 2010.

The take-away is simple: Rather than run into an ethics problem as a result of a social media post, tweet, hashtag, etc., think before you post.

Have questions?  Please contact me at kcole@farrellfritz.com.

In this single-plaintiff employment discrimination case (Bailey v. Brookdale Univ. Hosp., 2017 U.S. Dist. LEXIS 93093 (E.D.N.Y. June 16, 2017)), counsel for the parties purportedly met and conferred as directed by the Court and, thereafter, entered into an ESI agreement (“Agreement”).  The Agreement was presented to the Court and represented to be the product of mutual negotiation.  As a result, the Court So-Ordered the Agreement and its terms.

During discovery, Bailey advised the Court that he was no longer able to comply with the Agreement because the data production costs would cause an economic hardship. Specifically, he claimed the cost of production – estimated at $2,000-$3,000 – was unduly burdensome in light of his personal financial situation, notwithstanding the Agreement.  At the Court’s request, Bailey submitted an affidavit estimating the cost of production and that such a cost would inflict a “severe financial hardship” on him given that he earned approximately $90,000 annually and was the sole provider for his family of five.  In evaluating Bailey’s grievance, the Eastern District considered cost-shifting to protect Bailey from incurring an undue burden or expense. For cost-shifting to be properly granted, however, there must be sufficient proof of economic hardship and evidence that the requested data is inaccessible.  The Court found neither was established by Bailey. Nonetheless, the Court found that the Agreement proposed by Defendants was of a type, “typically utilized in a more complex litigation involving multiple parties and corporate entities” and had no applicability to a single plaintiff.   As a result, the Court concluded that Bailey’s counsel did not engage in meaningful discussions with his client regarding the terms of the proposed Agreement and what costs might be incurred by producing the information in the format the defendants sought. Likewise, it further appeared to the Court that Bailey’s counsel did not engage in a meaningful meet-and-confer session with opposing counsel, and did not thoroughly review the Agreement prior to signing it.

The Court did not find sufficient grounds to terminate the Agreement, and instead ordered partial cost-shifting [so that Defendants received the form of production they negotiated for], requiring the defendants to bear 40% of discovery costs and Bailey’s counsel, rather than Bailey himself, to bear the remaining 60%.

This case serves as an important reminder of counsels’ obligation to engage in good faith in all aspects of the discovery process – including negotiating an ESI production protocol.  Here, the Court was unwilling to revise the Agreement, and instead required Bailey’s counsel to abide by the terms of the Agreement and pay for the production.  This case also serves as an important reminder of our duty, as lawyers, to be competent in the law and the technological world in which we practice.  Indeed, as attorneys practicing in today’s ever-increasingly electronic world, we must remain abreast of the intricacies involved in electronic production and the costs associated with that ESI.  (See earlier blogs discussing duty of competence)

According to the Complaint filed in Michael Distefano and Nicole Distefano v Law Offices of Barbara H. Katsos, PC and Barbara H. Katsos, Michael DiStefano and a non-party were owners of a limited liability company that was the franchisee of three Cold Stone Creamery Inc. ice cream parlors.  In 2006, the three stores suffered financial difficulties due to an extended power failure earlier in 2006.  The Complaint further alleges that as a result, DiStefano sought legal advice from Barbara Katsos, Esq., and eventually retained her for the purposes of commencing a Chapter 11 bankruptcy proceeding.   That proceeding was ultimately withdrawn in 2010 and subsequently the DiStefanos filed the instant lawsuit. The Complaint interposes claims of legal malpractice in connection with the Chapter 11 proceeding along with claims for breach of contract and breaches of fiduciary duty.

The focus of this blog will be Katsos’ failure to preserve data relevant to the malpractice lawsuit.

Relevant Facts Per Court’s Decision

During a discovery status conference before Magistrate Judge A. Kathleen Tomlinson, counsel for Defendants advised the Court that Katsos had discarded her computer at some point prior to the malpractice litigation being commenced.  In response, the Court directed defense counsel to provide the Court with an affidavit detailing the circumstances of how the computer was discarded.   After receipt of the affidavit, the DiStefanos moved for spoliation sanctions pursuant to Rule 37.   The Court temporarily denied that motion, without prejudice, pending a hearing.  See DiStefano v Law Office of Barbara H. Katsos, PC, No. CV 11-2893, 2013 WL 1339548, at *9 (EDNY Mar 29, 2013).  Specifically, the Court found that “a hearing is necessary to explore the circumstances under which the alleged spoliation occurred” (id. at *8) (internal quotations omitted).  The Court instructed Katsos to be prepared to testify – or bring someone who could testify – as to specific topics relevant to the issue of spoliation (i.e., the document preservation undertaken when the DiStefanos instituted an adversary proceeding in March 2010).

Which Rule 37 Applies?

Before assessing the testimony presented at the evidentiary hearing, Judge Tomlinson was required to determine which version of Rule 37(e) was applicable to the motion – those in effect pre-2015 amendment? Or those currently in effect in 2017?    Citing Magistrate Judge Francis’ decision in Cat3, LLC v Black Lineage, Inc. (144 FSupp3d 488 [SDNY 2016]) (previously mentioned in my August 31, 2016 E-Discovery Update: ESI Sanctions in Federal Court During 2016 (Well, through July)), the Court noted that for cases filed before the effective date of the amendments, courts have discretion to determine which version of the Rule to apply based upon what is “just and practicable.”    Thus, Judge Tomlinson opted for the older version of the Rules based upon three considerations. First, the parties briefed the spoliation motion in 2013 based upon the former Rule 37 in.  Second, the evidentiary hearing was conducted under the tenants of former Rule 37.  And third, the conduct relevant to the motion began more than seven years before the current version of Rule 37 took effect.

Relevant Testimony At Hearing*

According to the Court, the testimony at the evidentiary hearing established the following facts:

  • While representing the DiStefanos in 2009, Katsos’ office computer crashed and a freelance computer technician told Katsos it “was bad and that nothing could be recovered”;
  • That same technician replaced the defective computer parts and drilled holes in the replaced hard drives;
  • At no time after this litigation began did Katsos take any affirmative steps to save electronic information;
  • Katsos did not issue any written instructions to her staff regarding the obligation to preserve ESI;
  • Katsos testified she was “amazed” she did not find more emails when searching her AOL accounts;
  • Katsos contacted her email provider only to learn that AOL “had no ability to save emails past the 27-day mark” absent some affirmative action by Katsos earlier;
  • Katsos’ electronic retention policies were essentially non-existent in that “everything was made in hardcopy” (and emails Katsos deemed subjectively relevant were often printed) and filed in storage cabinets;
  • There was no backup system in place to preserve electronic data;
  • Katsos was unaware of any method to set up automatic deletion of emails from her email account nor was she aware of how emails might be saved or deleted from a “sent folder”; and
  • Katsos’ office manager was not computer savvy and Katsos knew this when she hired the office manager.

Court’s Conclusion

Notwithstanding the foregoing facts, Magistrate Judge Tomlinson spared Katsos the most severe sanctions available to the Court under the pre-amendment Rule 37(e) because the Court believed that Katsos’ actions were not taken in bad faith.   Specifically, the Court noted that “[r]ather than bad faith…Katsos’ actions were occasioned by (1) her position as a solo practitioner utterly naïve about her obligations to preserve electronic evidence and (2) her total reliance upon and complete delegation to an outside consultant the responsibility for setting up and maintaining the computer system in her office.”   Moreover, the Court found that Katsos’ “utter ignorance of (i) her ESI preservation responsibilities and (ii) her efforts to save ‘substantive’ emails can be considered, to some degree, as ‘positive evidence’ of good faith.”

Ultimately, the Court concluded, “on the ‘continuum of fault ranging from innocence to the degree of negligence to intentionality’….this case falls on the spectrum between negligence and gross negligence, and closer to the former than the latter.’” Indeed, the Court found no evidence of intentional or malicious spoliation but said Katsos had “at the very least, acted with a ‘pure heart and an empty head.’”

Thus, the Court ordered Katsos to pay Defendants’ attorneys’ fees and costs incurred in connection with the spoliation motion as a sanction.

Lesson

Although the Court demonstrated leniency when imposing its sanctions, there are many important lessons to internalize from the Court’s 60-page decision.  Included among them:

  • The pre-Amendment Rules are alive and well.  Given that litigations tend to span many years, it is possible you/client could be subject to stiffer sanctions under the still-viable former Rule 37(e);
  • Ignorance of one’s preservation obligations will not insulate you from sanctions.  In fact, while Katsos’ lack of computer sophistication may have helped her when it came time for sanctions to be imposed (i.e., she was merely negligent), the fact remains she was sanctioned!  And remember – certain state’s ethics decisions expressly find that ignorance of technology is a violation of one’s duty of competence; and
  • Finally, there are resources available to help smaller firms and solo practitioners comply with their various discovery obligations – including me!  Farrell Fritz’s E-Discovery practice group is always willing to help so don’t hesitate to contact us if confronted with an ESI issue

* Memorandum and Order, dated May 10, 2017

It is the beginning of a new year and I thought it the ideal time to list out those steps that are absolutely critical when an attorney is confronting his/her obligation to produce e-discovery in connection with a litigation.  Bear in mind, the below list is not exhaustive and each step is replete with technical and tactical sub-steps and decisions.  However, the nine steps below are a useful road map to get started.

  • Assess whether your case involves e-discovery. In today’s technology-laden world where emails are ubiquitous and many of us interface daily with the internet of things, chances are your case will involve e-discovery.
  • Implement (or cause to be implemented) a comprehensive and appropriate ESI preservation protocol.  Remember, it is wise to cast a large net when it comes to preserving data.  That strategy likely changes when it comes time to collect/process data.  Make sure to familiarize yourself with the client’s deletion policies, backup tapes, and shredding procedures.  See next step.  The scope of your hold notice is necessarily informed by your client’s data including its location.
  • Understand the client’s ESI systems and storage.  Remember, data maps can be helpful but are often out of date.
  • Understand (and educate your client about) the various options available for collecting ESI (i.e., self-collection vs retaining a vendor; targeted collection vs robust collection).
  • Identify the various custodians (and meet with/conduct collection interviews of live custodians) who may have potentially relevant ESI and understand the various media on which that ESI resides.
  • Meet and confer with opposing counsel to develop a mutually agreeable discovery plan that addresses common ESI issues including production costs and deduplication methods.
  • Collect ESI (ideally using a vendor especially when the custodians include complex or dynamic databases or servers) in a manner that is defensible and preserves the integrity of the data (for example, do not forensically image the hard drive of a Mac using a tool designed for Windows or run the risk of overwriting the hard drive’s boot sector).
  • Explore ways to minimize the review costs associated with reviewing for production the collected documents.
  • Finally, produce responsive non-privileged ESI in a recognized and appropriate manner.

As discussed in past blog posts, it is critically important for counsel to be involved in each step of the process as the recent case law makes plain that Courts expect counsel to be actively involved in collection/review and production.  Indeed, we have seen a spate of case law from 2016 where the Court imputes a client’s failures on counsel and sanctions both!  Finally, if you feel incapable of handling any of the above steps, get help!  Various ethics opinions (not yet adopted in New York) suggest an attorneys’ duty of competence owed to one’s client includes being competent in matters of ESI.