Richmond Journal of Law and Technology

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Kill the Dinosaurs, and Other Tips for Achieving Technical Competence in Your Law Practice

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Cite as: Antigone Peyton, Kill the Dinosaurs, and Other Tips for Achieving Technical Competence in Your Law Practice, 21 Rich. J.L. & Tech. 7 (2015), http://jolt.richmond.edu/v21i3/article7.pdf.

by Antigone Peyton*

I.  Introduction

[1]       It is a challenge to practice law in the digital age.  This is particularly true when a practice involves significant e-Discovery, Intellectual Property, and technology law—areas in which technical issues merge with legal ones.  One of the major challenges of bringing a law practice up to twenty-first-century standards relates to dinosaur thoughts, a.k.a. an “old ways are best” mentality.

[2]       Recent spectacular corporate data losses and publicized hacks highlight the frequency and scale of cybersecurity issues.[1]  At least one leaked global surveillance effort focused on electronic information involving U.S. law firms,[2] and hackers’ focus on high-value information repositories, like law firms, has increased.[3]  These realities have sensitized clients to the importance of data protection protocols and secure infrastructure.[4]  In the era of Edward Snowden,[5] WikiLeaks,[6] and global surveillance nets,[7] firms must vigilantly guard against unauthorized third-party access to sensitive client information and privileged communications.  All of this highlights the importance of technical competence in the practice of law.

II.  Dinosaurs Take Risks with Technology

[3]       There are many dinosaur thoughts pervading lawyers’ views regarding the adequacy of their technical knowledge, practices, and systems.  Dinosaurs say quaint things like:

·      “Fax and e-mail are secure ways to communicate with clients.”

·      “It’s ok to use public WiFi, as long as it’s the airport, hotel, or Starbucks.”

·      “E-Discovery is just like paper discovery, except there’s no boxes or warehouses.”

·      “I don’t see a problem with using my firm-issued smart phone to download my favorite free game app and post comments and pictures on social media.”

Dinosaur thoughts can cause trouble if Information Technology (IT) personnel or other colleagues at the firm do not temper them and educate their colleagues regarding the risks.

A.  The Old World Is a Dangerous Place to Live

[4]       About a decade ago, the groundbreaking Zubulake series of opinions were issued. [8]  These cases laid the groundwork for the concept that technical competence is a necessary component of effective legal representation and our ethical obligation to clients.[9]  Dinosaur thoughts were not welcome in Judge Scheindlin’s courtroom then, nor are they today.  Now more judges are talking about the importance of technical competence, particularly when dealing with e-Discovery issues and noncompliance with increasingly complex electronic filing rules and procedures.[10]  As the district court vented in Allstate Ins. Co. v. Linea Latina de Accidentes, Inc.,

 Every federal district now has embraced electronic filing.  The days of attorneys being able to ignore the computer and shift blame to support staff in the event of an error are gone.  The consequences are simply too serious.  To the extent there are attorneys practicing in federal court who are under the impression that someone in the Clerk’s office will comb their filings for errors and call them with a heads-up, the Court delivers this message: It is the responsibility of counsel to ensure that personal identifiers are properly redacted.[11]

The above-mentioned district court sanctioned a lawyer who filed a Complaint with attachments containing personal identifiers in unredacted form.[12]  He then refiled the documents when the defendants raised a concern regarding the information that had not been redacted.[13]

[5]       The second filing was not much better, as it contained removable redactions that could be deleted and expose the underlying information.[14]  Counsel did not understand how to properly apply redactions to a PDF image.[15]

[6]       In delivering its sanction decision, the court concluded that attorneys “who are slow to change run the very real risk of sanctions,” and there was no excuse for not complying with the Federal Rule’s requirement of redacting personal information from public electronic filings.[16]

B.  Rise of the Technology Lawyers

[7]       Lawyers need some technical competence if they are practicing law today, though the skills and knowledge needed vary widely depending on their practice areas and client needs.  In fact, in August 2012 the American Bar Association (ABA) approved a resolution that changed the ABA Model Rules of Professional Conduct (Model Rules) and included technical competency requirements.[17]  This change requires lawyers to keep pace with “relevant technology” to comply with their ethical obligation to competently represent clients.[18]

[8]       Model Rule 1.1 addresses the “client-lawyer” relationship and provides that a lawyer owes clients a duty of competence.[19]  This Rule explains: “[a] lawyer shall provide competent representation to a client.  Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”[20]  While the Rule remains the same, Comment 8 now explains that lawyers should become educated regarding the benefits and risks associated with technology relevant to their practice.[21]  This amendment to Comment 8 illustrates the ABA’s desire to highlight the important role that technology plays in the practice of law today.[22]

[9]       This seemingly minor change to an advisory comment is significant because the Model Rules serve as a guide for the ethical rules governing lawyers in most states, including Virginia.[23]  The Model Rules now formally require lawyers in those jurisdictions following them to understand technology, including technology that relates to fulfilling e-Discovery obligations and protection of client confidences.  Failure to comply with these ethics rules can lead to temporary or permanent disbarment or suspension of their license to practice law.[24]

[10]     Rules aside, in-house counsel should understand the level of technical proficiency required for their internal team and outside counsel to competently represent the company’s interests, and they should hire accordingly.  Outside counsel must receive education regarding the technologies that support the practice, clients’ businesses, and best practices that minimize risks and maximize benefits associated with its use.  Additionally, technical competence is important to satisfy counsel’s obligations to the Court, the clients, and the opposing parties in a litigation or regulatory investigation.

[11]     In short, lawyers are practicing law in a brave new world, and technology plays a starring role.  Whether it is a predictive coding technology, cell phone tracking technology, or a firm’s or company’s communication software and systems—lawyers must roll up their sleeves and learn how to use it.

III.  Running the Shop

[12]     Regardless of size, law firms are becoming more reliant on technology to manage their day-to-day activities, interact with clients, and find critical information among massive data repositories and across the Internet.  Many cases filed in federal courts are subject to electronic document filing requirements, and state courts are following this trend.[25]  With this increased use of technology, a number of risks arise that can harm a firm’s reputation or result in loss of clients’ data and legal liability.  This paper discusses some common risks that firms should be aware of as well as ways in which they can minimize them.

A.  The Nature of the Risk

[13]     Law firms tend to foster a target-rich environment for data theft.[26]  One important risk that law firms must anticipate—and prepare a rapid response plan for—involves security breaches.  There are three major categories of reported data loss breaches involving lawyers and law firms: disposal of client records, mobile device theft or loss, and misuse of firm systems and security protocols.[27]  Other losses can occur because of lax policies, inadequate training, or the inattention of system users.[28]

B.  Data Security Technologies in the Modern Firm

[14]     Law firms often hold a high concentration of clients’ most sensitive information in their files.  State-sponsored hackers have been blamed for several high-profile law firm data breaches motivated by an interest in merger and acquisition information, intellectual property assets, and other sensitive strategic or competitive information.[29] This information may be easily obtainable because of the simple Account-Matter structure that law firms use to keep their client files organized.  However, client systems may be difficult to understand, and it is often harder for outsiders to identify the subset of information they seek.  Lawyers who have pulled a complicated client database or shared team folder can likely commiserate.

1.  Password Management & Security

[15]     Technology systems often require strong passwords and multi-step authentication processes upon sign-in and sign out or lock access after a period of inactivity or attempted access from a suspicious IP address.[30]  These layers of protection are built into technology for a reason, but they can be easily circumvented by poor password management and careless security policies.

[16]     Passwords should be between sixteen and twenty-four or more characters, depending upon the field limits of the software.  Ideal passwords include special characters, uppercase and lowercase letters, and numbers.  Firm employees should be required to change their passwords regularly and should not use the same password for all systems.  Particularly for financial institution access and client data systems, the password used should be complex and unique to that system.  Never keep a temporary or default password provided when receiving access to software or new hardware such as computers and routers.  Some defaults are as simple as username: “admin” and password: “1234.”

[17]     Many people feel overwhelmed by the number of passwords they must track for personal use or firm systems.  Using password management software to store passwords in one place and ensure that newly generated passwords meet certain requirements is an excellent first line of defense.

[18]     Web browsers’ (Chrome, Safari, Firefox, or Internet Explorer) built-in password storage systems have known security issues,[31] and they should be avoided.  Cloud-based systems such as 1Password, KeePass, Roboform Everywhere, and LastPass are more robust than browser management systems and are designed to securely store passwords for websites, mobile apps, notes, credit card information, and other sensitive information.  Many of these management systems can be accessed across platforms, meaning they work on computers, smartphones, and tablet devices equally well.[32]  Several offer the ability to generate random secure passwords, audit your existing passwords, and analyze them to identify those that may have been compromised by major security breaches like the Heartbleed Security Bug of 2014.[33]  All password management systems have potential vulnerabilities,[34] but they are better than a note stuck on your computer.

2.  Data & Traffic Encryption

[19]     Firms should also be using encryption technology to share information between an individual computer, mobile device, or web browser and the system or database where the information resides or a communication is sent.  This is true regardless of whether the information is transferred over the Internet, via cellular and satellite communication channels, or using landlines.

[20]     You might use a Virtual Private Network (VPN) to securely connect the computer networks for two geographically distant offices or connect to your office’s systems while traveling.  Some firms use VPN technologies to encrypt all of their Internet traffic, whether they are in or outside the office, to add another layer of security while the information is in transit.[35]  Other variants on the VPN connection take advantage of the functionality, security, and other benefits obtained from data protection and management protocols.[36]  The right protocol for a firm will depend on the firm’s other security measures and infrastructure and what types of communications will be covered.

[21]     Like data on the move, sensitive data at rest should also be encrypted.  Media coverage of data breaches involving lost laptops that resulted in the potential exposure of very sensitive client or employee information remind us that the loss of one device connected to the firm network can be catastrophic.  Firm laptops and mobile devices should be protected with whole disk encryption or biometric access options and automated device wipe functions if someone tries to access the device without authorization.

[22]     Certain document and data management systems and encryption technologies like FileVault, LUKS, or BitLocker give firms the option to encrypt sensitive information (like client data) where it is stored on a Mac, Linux, or Microsoft system, respectively.[37]  This means that even if someone else—such as a disgruntled former employee or a hacker—accessed the encrypted data, they would be unable to read it without the decryption key.

[23]     While it may seem obvious, the encryption key should not reside on the same system or in a location where it may be accessible to a third party, such as an employee of the cloud-computing provider hosting the document management system.  Public cloud document providers such as Google Drive, Box.net, and Dropbox, which are popular client file storage solutions used by some small and mid-sized law firms, have been criticized for violating this simple data-protection rule.[38]

3.  Security Vulnerabilities

[24]     At a recent Black Hat security conference in Nevada, several researchers disclosed that USB drives can be corrupted with undetectable malware that infects the device and any computer it is connected to.[39]  The researchers disclosed this vulnerability to the USB manufacturers months before the code for those attacks was published in an attempt to spur changes in the manufacturing process and fix these vulnerabilities.[40]

[25]     If a firm does allow USB drives, the firm IT staff might monitor and log activity involving the USB ports of firm equipment.  USB ports are a common vulnerability point for employees or unauthorized third parties to access firm systems and inject viruses or download information that should not leave the firm systems on a separate hard drive.[41]  Without logging, it is hard to prove what and how much information was copied—or who did it.[42]

[26]     Successful firms use a combination of human and software technical support to protect firm systems, equipment, and network against spam, viruses, and malware.  If a firm allows client access to its wireless network, it may want to rethink that strategy.  Once one piece of equipment is infected, it can infect every piece of equipment on the network.[43]  In contrast, if every lawyer’s device is “authorized” to access the firm network and the clients are relegated to a separate secured client wireless network, this provides an added layer of protection for the firm’s systems and equipment.[44]  As previously mentioned, it is a good idea to use encryption for all communications shuttled through the firm’s network.  A competent IT provider should be advising the firm to use security protocols that are adequate in light of the importance and sensitivity of the information that is shared on that network.[45]

4.  Log History & Restricted Access

[27]     Vulnerability issues arise with unsecured File Transfer Protocol (FTP) sites that use the “honor access system,” systems on which any user can issue new user credentials.[46]  The honor system sounds nice, but if a former employee creates new credentials for themselves and accesses information they placed on the site after leaving the company, it is hard to un-ring that bell or determine what information they took.  Often FTP server log files are only kept for a specific (short) period of time.[47]  If the theft is discovered after the log file is destroyed, the primary evidence of theft may be gone forever.

[28]     This illustrates just one area where there is a genuine need for certain technology within the firm to be inaccessible to certain employees who neither need nor merit access to the information contained within it.  This also demonstrates the importance of an IT manager’s oversight of access history and file changes.  In a utopian world, lawyers would all trust their peers to make good decisions 100% of the time, but in the real world they have a duty to verify reasonably diligent behavior when it comes to client confidences.

5.  Due Diligence & Electronic Housekeeping

[29]     With any data system accessible over the Internet, good physical and electronic security measures are crucial.  Firms must do their research before implementing any firm data storage system on site or in the cloud.  Here are some basic questions they might ask during the due diligence process:

•     What is the geographic location of the data center, and what protections have been implemented at that site?

•     Is someone in charge of applying patches and upgrades, particularly updates that address known security vulnerabilities and stability issues?

•     What happens if the primary system goes down; is there a live, redundant backup that is geographically distant from the primary data site?

•     Is there an offline backup, and how often is that backup created?

•     What is the security policy and compliance protocol for the backup solution?

•     Does the provider have direct access to the data, or is it pre-encrypted before being uploaded to the provider?

These are just a few of the questions a firm should cover when considering where and with whom they will store their firm and client data.  Should a data breach involving firm or client information occur, the firm’s diligence in choosing the data storage provider and implementing sound system policies and protections may become a central issue in triggering insurance coverage, weathering legal ramifications of the breach, and managing client communications after any notifications occur.[48]

[30]     It is a bad idea to share passwords and login information.  Often, it is considered a violation of the Terms of Service or Service Level Agreement when a lawyer or other firm employee signs or clicks through a site under another user’s access credentials when purchasing a particular software product or a user license to a product.[49]

[31]     In certain circumstances, such a situation can violate the Computer Fraud and Abuse Act (CFAA)¾a quasi-criminal statute aimed at unauthorized access to proprietary and confidential information on computer systems—or the Stored Communications Act (SCA)¾which protects against unauthorized interception of electronic information if access to the stored communication was “without authorization”[50] or “exceeds authorized access.”[51]

[32]     Both statutes provide for civil liability in particular circumstances.[52]  If an assistant or another employee who has access to other employees’ account passwords leaves on bad terms, it will be hard to isolate and deal with their unauthorized access to the system using another person’s credentials.  And it is difficult to justify the decision to share passwords to the firm’s IT personnel when they have to shut down a lawyer’s user accounts and issue new ones, with new credentials.  Just don not do it.

[33]     Additionally, sometimes law firms are required (or decide) to delete client data, a litigation opponent’s information, or firm electronic records.  When deleting confidential records, consider servers and their backup systems, computers and mobile devices, external drives including USB drives, disks such as CD-ROMs and other non-reusable physical media.

[34]     At a minimum, delete the electronic files and then empty the trash bin.  Optimally, use a secure deletion method like a file shredder program that performs a permanent delete and overwrites the disk several times.[53]  Physical media should be securely destroyed.[54]  Firms should only keep encrypted copies of the minimum data necessary to comply with a data retention policy, legal, or business requirement.

[35]     Many firms are notorious data hoarders and seem to hold old records without any legitimate business justification—such firms have a “sub-standard” information governance and recordkeeping model.[55]  Legitimate business justifications for retaining electronic information do not include “I may need that information someday—you never know.”

6.  Cloud Computing

[36]     Many papers, blog posts, and books have been written about the benefits and risks of using cloud-computing technologies.[56]  This paper will not focus on the benefits and risk analysis that should occur when contemplating adding cloud technologies to the firm’s system.

[37]     However, if a firm is considering a cloud computing solution, which means it will be using computing resources that are delivered over the Internet via a web browser or other interface, it needs to carefully read the documents that cover the contracts that provide the terms of the engagement with the cloud provider.[57]  Some standard contracts state that the cloud provider owns the data, lack an assurance that the system will be live, or lack tools to export data once it is in the cloud system.[58]

[38]     Analyze whether it is reasonable to place certain data in a cloud provider’s hands if they refuse to meet the firm’s needs and expectations.  Also, check the firm’s state bar website for current ethics opinions on this subject before moving to the cloud.  At least nineteen states have issued ethics opinions that directly or indirectly address this subject.[59]  All of those states have indicated that cloud computing or other similar technologies can be used in the practice of law but that reasonable care should be exercised to determine whether a particular provider is appropriate in a particular situation.[60]

[39]     In considering options among cloud computing providers, a firm’s investigation should delve into the question of whether the files are hidden from the cloud provider’s employees.  It would be a huge security risk if any employee who had access to the firm’s accounts could view clients’ files.

[40]     A more subtle risk involves firm employees use of their personal cloud accounts to shuttle files between the office and home.  Ultimately, this opportunity can be used for nefarious purposes, as was the case when one employee of a popular social gaming company allegedly stole confidential trade secrets using his personal Dropbox account before resigning from the company.[61]

7.  Mobile Devices

[41]     Many lawyers have a mobile phone attached to their hand and a tablet in their bag whenever they travel.  Firm employees should use a PIN or password on their mobile device and IT managers should enable remote wiping and tracking technologies in case a device is lost or stolen.

[42]     Additionally, most smartphones and tablets write a surprising amount of data to the device hard drive.[62]  For instance, if a lawyer opens a client document attached to an e-mail on their phone, the device usually stores that information on the hard drive.  Unlike traditional desktop systems, it is very hard to delete these types of files from the mobile device hard drive.[63]  Sometimes, the entire device has to be wiped in order to delete sensitive files that can be casually accessed on them.[64]

[43]     Now, I like mobile app games as much as the next person, but beware of apps that collect and share other data available on the device.  Many mobile apps and mobile system software track a user’s location, web browsing history, purchases, and a host of other information that you may not want to share.[65]  After a number of high profile blow-ups, some privacy controls have been implemented on mobile platforms.[66]  Users need to learn how to access these privacy controls through their system settings and review the terms for any app they download on a device.

[44]     Some free apps give users access to games or information, then collect lots of data from their device.[67]  Other apps deliver targeted ads based upon information that connects a person and past activities on that device.[68]  These seemingly harmless mobile apps represent security breach risks to the firm.  For example, researchers recently revealed that most of the top flashlight apps available on the Android platform are actually spyware.[69]  It can be creepy once one digs into the data being collected and the surveillance that occurs with or without their knowledge.

[45]     Here is another situation that illustrates the problems associated with unmanaged data collection by mobile apps.  Imagine a firm lawyer takes a picture with their phone and posts it on Facebook.  This may reveal their location at the time the picture was taken or when they accessed the Facebook app to post the picture.  What if opposing counsel learned that lawyer is in New York the night before a big hearing because their social media post included their current location?  The fact that the lawyer will be arguing an important motion the next day may be something they did not want to share with opposing counsel ahead of time.

8.  Social Media

[46]     There are many potential pitfalls associated with the use of social media or social media management apps on firm devices.  Be wary of social media applications and platforms, as they are frequently invaded by cybercriminals and hacktivists.[70]  Giving another application access to your credentials for one site or account could result in other linked accounts being hijacked.

[47]     Facebook is a well-known example of a social media site that has seen its share of hacks and complaints about unauthorized sharing of private data with other sites and companies.[71]  Even though Facebook now sends all hyperlinks through Websense first (a vast improvement), be wary of clicking on them.[72]  The firm should have a social media policy and a plan for responding if client confidences or other sensitive information leave the firm through a social media outlet, and it should train everyone in the firm to be responsible ambassadors of the firm brand and client information when using social media.

9.  Travel Troubles

[48]     Attorneys often travel for depositions or client meetings, and they can be most vulnerable to data breaches when on the road.  Aside from remembering to encrypt traffic across open Internet connections, exercising good sense in not accessing client information in a manner that can be readily viewed or recorded by others would be wise.  With the advent of smartphone cameras and the ready availability of lapel cameras, a traveling lawyer would be wise to wait for the privacy of their hotel room to open and work on documents containing privileged information or work product.

[49]     It is easy to look over someone’s shoulder at the airport, on the plane, or in the hotel lobby.  And it can be particularly dangerous to rely on public WiFi or hotspots when traveling—they are often unencrypted and an excellent target for eavesdroppers who want to capture data packets and login credentials for any sites others access while on that WiFi network.[73]  For instance, the recent “Darkhotel” espionage campaign effectively targeted traveling business executives using hotel WiFi.[74]

[50]     Another key point to remember when traveling is that many cellular providers give users the ability to turn their smartphone into a hotspot, but this does not protect their Internet traffic in any way.  Using an unsecured mobile device as a WiFi hotspot for accessing the Internet on a laptop is a security concern.  Anyone within range can eavesdrop on the data a traveling lawyer sends or receives from the Internet and the mobile device.[75]  Some of the larger WiFi hotspot networks are secured (not open) and use enterprise-level security to protect a wireless connection on that network from eavesdroppers.[76]  These networks are a safer option.

[51]     Additionally, in the U.S., many large cellular providers encrypt the data traffic traveling to and from cell towers and the cellular device.  This connection may be slower than a traditional WiFi connection, but the security benefits are significant.  Finally, a VPN connection can be used on both WiFi and cell data connections.  Under these circumstances, all of the user’s Internet traffic and passwords travel through an encrypted tunnel, and already encrypted traffic enjoys double encryption.

10.  Insurance and Audits

[52]     Law firms have heightened responsibility for maintaining the confidentiality of client information because of their professional ethical requirements.  What should law firms be doing to better protect their data and deal with discovered breaches after they occur?

[53]     The firm should consider whether it needs cyber insurance to protect against the possible consequences of a breach.  Most general liability or professional liability insurance policies (and even umbrella business insurance policies) do not cover the cost of investigating a data breach, taking remedial steps to fix the problem, or notifying those who may be affected by it.  Cyber insurance policies are becoming more prevalent in many industries.

[54]     Additionally, the firm might hire someone to test the systems and determine technical and human areas of vulnerability.  Security audits may highlight practices or systems that should be changed in order to reduce these risks before a breach occurs.

11.  Hardware Vulnerabilities

[55]     As computer equipment ages and is replaced, it is vital to wipe all hard drives according to industry standards before either disposing of, or donating, those computers.  The Department of Defense DoD 5220.22-M (ECE) recommends seven complete wipes,[77] and there are a number of free or low cost products that can be used to wipe computers and external hard drives.

[56]     Every typical law office has a multi-function copier/scanner that is networked, and these devices always contain a hard drive with a copy of every page that has been either scanned or copied.  These represent a huge security risk for several reasons.  First, they are risky from a data perspective because of the massive number of stored documents sitting on an unencrypted hard drive in the machine.[78]  Second, their networked permissions often provide access to computers, but the copier/scanner itself has low security measures required to gain access.  People think nothing of leaving their copier code on a sticky note next to their computer—after all, what harm could that pose?  This means anyone who can gain access to the office can access the network through this simple “backdoor” methodology.

III.       What it Takes to Practice Law in the 21st Century

[57]     Law firms are becoming more reliant on technology to manage their day-to-day activities, interact with clients, and work on the substantive aspects of their job.  Now that we have identified dinosaur thoughts relating to technology, how do we extinguish them in the practice of law?  Well, initially, lawyers must purposefully focus on education initiatives involving relevant technology.  Extinguishing dinosaur thoughts also involves raising the bar and hiring good people who understand and embrace technology, then making them an integral part of the team.  Ultimately, law firms must become better stewards of their clients’ sensitive information and have protocols for holding or accessing it.

[58]     Security breaches do not occur at one single point of failure, but at several points.  Thus, a firm should verify that its IT provider is undertaking reasonable efforts to protect firm systems and equipment and ensure that firm employees are educated on those systems.  Finally, firms need to understand and take advantage of the security measures that are already built into the systems.

[59]     Diverse teams with different and complementary technical skills help law firms keep up with technology and continually evolve their practice.  As technology continues to take a starring role in firm infrastructure, processes, and communication channels (and clients’ businesses), lawyers must adapt and keep up with those changes—or go the way of the dinosaurs.


 

* Antigone Peyton is the founder and CEO of Cloudigy Law PLLC, an Intellectual Property and technology law firm located in McLean, Virginia. Antigone is an unabashed technophile focused on IP litigation and cutting-edge legal issues involving patents, trademarks, copyrights, and trade secrets.  A longstanding member of The Sedona Conference Working Group 1 (electronic document retention and production), Antigone is a frequent speaker and lecturer on law and technology issues involving IP, social media, cloud computing, big data, and eDiscovery and a technology panelist for EmeraldPlanetTV.
[1] See, e.g., Reuters, Aramco Says Cyberattack Was Aimed at Production, N.Y. Times, Dec. 10, 2012, at B2, available at http://www.nytimes.com/2012/12/10/business/global/saudi-aramco-says-hackers-took-aim-at-its-production.html, archived at http://perma.cc/39WX-7L76 (noting that “Cutting Sword of Justice” were credited for a hack wiping data from about 30,000 computers at Saudi Arabia’s national oil company, and that hackers are getting more creative, sometimes using devices that seem like everyday objects that belong in the workplace—like a cell phone charger); Greg Kumparak This Fake Phone Charger Is Actually Recording Every Key You Type, TechCrunch (Jan. 14, 2015), http://techcrunch.com/2015/01/14/this-fake-phone-charger-is-actually-recording-every-key-you-type/, archived at http://perma.cc/P4TC-M846 (crediting a fake phone charger that logs the information you type on a wireless keyboard to Samy Kamkar); Kim Zetter, Logic Bomb Set Off South Korea Cyberattack, Wired (Mar. 21, 2013, 7:05 PM), http://www.wired.com/2013/03/logic-bomb-south-korea-attack/, archived at http://perma.cc/3RL8-CA8Q (noting that several banks and broadcasting companies were attacked by a logic bomb that wiped computer hard drives and master boot records that interrupted ATM operations in South Korea); Kim Zetter, Sony Got Hacked Hard: What We Know and Don’t Know So Far, Wired (Dec. 3, 2014, 4:02 PM), http://www.wired.com/2014/12/sony-hack-what-we-know/, archived at http://perma.cc/VL6R-TJ2V (discussing that hacktivists “Guardians of Peace” stole up to 100 terabytes of data from Sony, including login credentials and documents with personal employee information).

[2] See, e.g., James Risen & Laura Poitras, Spying by N.S.A. Ally Entangled U.S. Law Firm, N.Y. Times, Feb. 16, 2014, at A1, available at http://www.nytimes.com/2014/02/16/us/eavesdropping-ensnared-american-law-firm.html, archived at http://perma.cc/AD5Y-G3FT.

[3] See, e.g., Jennifer Smith, Client Secrets at Risk as Hackers Target Law Firms, Wall St. J. (June. 25, 2012, 2:21 PM), http://blogs.wsj.com/law/2012/06/25/dont-click-on-that-link-client-secrets-at-risk-as-hackers-target-law-firms/, archived at http://perma.cc/B696-8ZBB.

[4] See Matthew Goldstein, Law Firms Are Pressed on Security for Data, N.Y. Times, Mar. 27, 2014, at B1, available at http://dealbook.nytimes.com/2014/03/26/law-firms-scrutinized-as-hacking-increases/, archived at http://perma.cc/6Z34-3BGL.

[5] See, e.g., Glenn Greenwald, Ewen MacAskill & Laura Poitras, Edward Snowden: The Whistleblower behind the NSA Surveillance Revelations, Guardian (June 11, 2013, 9:00 AM), http://www.theguardian.com/world/2013/jun/09/edward-snowden-nsa-whistleblower-surveillance, archived at http://perma.cc/D9PZ-KYCH.

[6] See, e.g., Scott Shane & Andrew W. Lehren, Leaked Cables Offer Raw Look at U.S. Diplomacy, N.Y. Times, Nov. 29, 2010, at A1, available at http://www.nytimes.com/2010/11/29/world/29cables.html, archived at http://perma.cc/H9AU-D3GF.

[7] See, e.g., David Ljunggren & Mike De Souza, Snowden Files Show Canada Spy Agency Runs Global Internet Watch: CBC, Reuters, (Jan. 28, 2015), http://www.reuters.com/article/2015/01/28/us-canada-spying-idUSKBN0L11W520150128, archived at http://perma.cc/HK3N-GDBF.

[8] See Victor Li, Looking Back on Zubulake, 10 Years Later, A.B.A. J. (Sept. 1, 2014, 10:30 A.M.), http://www.abajournal.com/magazine/article/looking_back_on_zubulake_10_years_later, archived at http://perma.cc/965H-GF38 (discussing the Zubulake opinions and their impact on the body of case law relating to e-Discovery and a lawyer’s obligations including a minimal level of technical competence).

[9] See id.

[10] See, e.g., Baella-Silva v. Hulsey, 454 F.3d 5, 11–12 (1st Cir. 2006) (affirming a $50,000 sanction against a party for electronically filing a confidential settlement document and failing to take the proper precautions to preserve confidentiality in an electronically filed document that could lead to sanctions or other liabilities).

[11] Allstate Ins. Co. v. Linea Latina De Accidentes, Inc., No. 09-3681, 2010 U.S. Dist. LEXIS 124773, at *8 (D. Minn. Nov. 24, 2010).

[12] See id. at 3, 10–11.

[13] See id. at 4–5.

[14] See id. at 6–7.

[15] See id. at 5–7.

[16] 2010 U.S. Dist. LEXIS 124773, at 8–9.

[17] See, e.g., ABA Comm. on Ethics, Res. 105C, 1–2 (2012) (report to the House of Delegates), available at http://www.americanbar.org/content/dam/aba/administrative/ethics_2020/2012_hod_annual_meeting_105c.authcheckdam.pdf; ABA Commission on Ethics 20/20, archived at http://perma.cc/S2XZ-WQS6; ABA, ABA House of Delegates Approves Commission’s Resolutions (Aug. 6, 2012), http://www.americanbar.org/groups/professional_responsibility/aba_commission_on_ethics_20_20.html, archived at http://perma.cc/3QF7-FL4L.

[18] Model Rules of Prof’l Conduct R. 1.1 cmt. 8 (2014).

[19] See id. at R. 1.1.

[20] Id.

[21] See id. at cmt. 8 (“To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.”) (emphasis added).

[22] See, e.g., Matt Nelson, New Changes to Model Rules a Wake-Up Call for Technology Challenged Lawyers, InsideCounsel (Mar. 28, 2013), http://www.insidecounsel.com/2013/03/28/new-changes-to-model-rules-a-wake-up-call-for-tech, archived at http://perma.cc/9U6Q-XT33 (noting the report accompanying the resolution suggests this was always a component of the competence standard for lawyers and that “[t]he proposed amendment, which appears in a Comment, does not impose any new obligations on lawyers.  Rather, the amendment is intended to serve as a reminder to lawyers that they should remain aware of technology, including the benefits and risks associated with it, as part of a lawyer’s general ethical duty to remain competent.”).

[23] See, e.g., Chronological List of States Adopting Model Rules, ABA Center for Prof. Resp., http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/chrono_list_state_adopting_model_rules.html, archived at http://perma.cc/2AJL-EG7V (last visited Feb. 12, 2015).

[24] See Model Rules of Prof’l Conduct Scope para. 19–20 (2014).

[25] See, e.g., Electronic Filing and Case Management, U.S. Dist. Ct. Cent. Dist. Cal., http://www.cacd.uscourts.gov/e-filing, archived at http://perma.cc/VX2T-JQTH (last visited Feb. 12, 2015) (“[E]lectronic filing is mandatory in all civil and criminal cases in the Central District of California.”); EFiling, Super. Ct. Cal. County Orange, http://www.occourts.org/online-services/efiling/, archived at http://perma.cc/JY6H-2Z2D (last visited Feb. 12, 2015) (“Pursuant to section 1010.6 of the Code of Civil Procedure, rule 2.253(b)(2) of the California Rules of Court, Orange County Superior Court Local Rule 352, and Local Rule 601.01 all documents filed by attorneys in probate, limited civil, unlimited civil, and complex civil actions . . . must be filed electronically unless the Court rules otherwise.”).

[26] See, e.g., Lolita C. Baldor, FBI: Hackers Targeting Law and PR Firms, NBC News (Nov. 17, 2009, 10:58 AM), http://www.nbcnews.com/id/33991440/ns/technology_and_science-security/t/fbi-hackers-targeting-law-pr-firms/#.VMKMdV6hy7x, archived at http://perma.cc/C6LS-2GJ8 (discussing the November 1, 2009 FBI issued advisory warning to law firms that hackers were specifically targeting them); Goldstein, supra note 4 (discussing that in 2011, the FBI began organizing meetings with top law firms in the U.S. to highlight the cybersecurity and corporate espionage risks, particularly for firms with offices in countries like Russia and China and in 2012, security company Mandiant reported that an estimated 80% of the 100 largest American law firms had some malicious computer breach in 2011).

[27] See Matthew H. Meade, Lawyers and Data Security: Understanding a Lawyer’s Ethical and Legal Obligations that Arise from Handling Personal Information Provided by Clients, 28 Computer & Internet Law. 1, 1 (2011).

[28] See id. at 2–3.

[29] See, e.g., Michael A. Riley & Sophia Pearson, China-Based Hackers Target Law Firms to Get Secret Deal Data, Bloomberg (Jan. 31, 2012, 4:37 PM), http://www.bloomberg.com/news/2012-01-31/china-based-hackers-target-law-firms.html, archived at http://perma.cc/T6LY-2P4N (noting that China-based hackers targeted several law firms while they were involved in a $40 Billion company takeover deal); see also Breaking the Law: How Legal Firms Get Hacked, ZeroFOX (May 20, 2014) [hereinafter Breaking the Law], http://www.zerofox.com/whatthefoxsays/breaking-law-legal-firms-get-hacked/#.VMKOR16hy7x, archived at http://perma.cc/6CH8-C3QB.

[30] IT Examination Handbook InfoBase: Authentication, FFIEC, http://ithandbook.ffiec.gov/it-booklets/information-security/security-controls-implementation/access-control-/authentication.aspx, archived at http://perma.cc/V89D-978R (last visited Feb. 16, 2015).

[31] See Melanie Pinola, Which Password Manager Is the Most Secure?, Lifehacker (Sept. 20, 2012, 10:00 AM), http://lifehacker.com/5944969/which-password-manager-is-the-most-secure, archived at http://perma.cc/5FC7-YWYP (noting that Malware or tools like WebBrowserPassView can reveal passwords stored in web browsers because those systems rely on the computer login as the cypher for the encrypted password data stored by the browsers, and that web-based password managers that rely on a master password to gain access to the management system are generally more secure options); see also Jill Scharr, Google Chrome’s Security Flaw: How to Safely Store Passwords, Tom’s Guide (Aug. 8, 2013, 11:54 PM), http://www.tomsguide.com/us/chrome-security-password-saver,review-1840.html, archived at http://perma.cc/K24P-UB6W (discussing Google Chrome’s lack of security measures for data storage, easily allowing unwanted access to the user’s password in unencrypted plain text).

[32] Best Password Manager: Dashlane Vs Lastpass Vs 1Password Vs Roboform Vs KeePass, A Secure Life (last updated Mar. 4, 2015), http://www.asecurelife.com/dashlane-vs-lastpass-vs-1password-vs-roboform-vs-keepass/, archived at http://perma.cc/A4PB-9ZQ3.

[33] See The Heartbleed Bug, Heartbleed.com, http://heartbleed.com/, archived at http://perma.cc/8KMU-3NAA (explaining that the Heartbleed Bug allows unwelcome individuals to read the memory of systems protected by versions of the OpenSSL software with design flaws).

[34] See, e.g., Greg Kumparak, LastPass Finds Security Holes in Its Online Password Manager, Doesn’t Think Anyone Exploited Them, TechCrunch (July 11, 2014), http://techcrunch.com/2014/07/11/lastpass-finds-security-holes-in-its-online-password-manager-doesnt-think-anyone-exploited-them/, archived at http://perma.cc/P446-KECS (discussing the discovery of two security flaws in LastPass online password manager products).

[35] See, e.g., VPN Technologies: Definitions and Requirements, VPN Consortium (July 2008), http://www.vpnc.org/vpn-technologies.html, archived at http://perma.cc/724G-UD48.

[36] See id.

[37] See William Ruddy, Moving on After TrueCrypt’s Untimely Departure, Phoenix TS Blog (June 26, 2014), http://www.phoenixts.com/blog/moving-on-after-truecrypt, archived at http://perma.cc/FQC2-8DE4.  In May of 2014, TrueCrypt developers stopped supporting this open encryption software system after Microsoft terminated its support of WindowsXP.  TrueCrypt, http://truecrypt.sourceforge.net/, archived at http://perma.cc/R7HA-JKGJ (last visited Feb. 12, 2015) (“WARNING: Using TrueCrypt is not secure as it may contain unfixed security issues”).  Later versions of the Windows operating systems integrated support for full disk encryption and virtual disk images.  Some have theorized the developers made this announcement because the encryption keys had been compromised or a “back door” had been created in response to a confidential demand from a law-enforcement or national security entity.  See Dan Goodin, Bombshell TrueCrypt Advisory: Backdoor? Hack? Hoax? None of the Above?, Ars Technica (May 29, 2014, 2:45 PM), http://arstechnica.com/security/2014/05/bombshell-truecrypt-advisory-backdoor-hack-hoax-none-of-the-above/, archived at http://perma.cc/JCE2-4AQJ.

[38] See, e.g., Hector Salcedo, Google Drive, Dropbox, Box and iCloud reach the Top 5 Cloud Storage Security Breaches List, Credeon Blog (Nov. 20, 2014, 7:00 AM), http://psg.hitachi-solutions.com/credeon/blog/google-drive-dropbox-box-and-icloud-reach-the-top-5-cloud-storage-security-breaches-list, archived at http://perma.cc/36CD-3FJV.

[39] See Andy Greenberg, The Unpatchable Malware that Infects USBs Is Now on the Loose, Wired (Oct. 2, 2014, 6:30 AM), http://www.wired.com/2014/10/code-published-for-unfixable-usb-attack, archived at http://perma.cc/V345-33WD.

[40] See id. The author’s firm now has a “no thumb drive” policy because the USB attack code is public and the stakes are too high if a firm device becomes infected—the malware cannot be removed even if the USB drive is wiped and reformatted.  See id.

[41] See Caroline Baldwin, USB-Connected Devices Present Cyber Vulnerabilities, Computer Wkly. (Aug. 11, 2014, 11:45 AM), http://www.computerweekly.com/news/2240226605/USB-connected-devices-present-cyber-vulnerabilities, archived at http://perma.cc/8JW6-P2T9.

[42] See id.

[43] See Malware (Viruses et al), Info. Tech.–Miller Sch. Med. U. Miami, http://it.med.miami.edu/x699.xml, archived at http://perma.cc/8HYT-XD6B (last visited Jan. 28, 2015).

[44] See Jeff Beard, Wireless Networking Best Practices: Version 2.0, Law Tech Guru (Aug. 1, 2004), http://www.lawtechguru.com/archives/mobile_tech_gadgets.html, archived at http://perma.cc/KJ6Q-5JWD.

[45] Whether using Wired Equivalent Privacy (WEP) 128-bit or WPA encryption, your IT personnel should make sure that all communications are secure.  WEP is weaker and can be cracked.  See Vangie Beal, The Differences Between WEP and WPA, Webopedia (June 15, 2007), http://www.webopedia.com/DidYouKnow/Computer_Science/WEP_WPA_wireless_security.asp, archived at http://perma.cc/TX4L-6ZTE.  The only wireless encryption standards that have not been cracked (yet) are WPA with the AES (Advanced Encryption Standard) or WPA2.  See Jason Fitzpatrick, HTG Explains: The Difference Between WEP, WPA, and WPA2 Wireless Encryption (and Why It Matters), How-To Geek (July 16, 2013), http://www.howtogeek.com/167783/htg-explains-the-difference-between-wep-wpa-and-wpa2-wireless-encryption-and-why-it-matters/, archived at http://perma.cc/Y3PP-RX88.

[46] Rick Lehtinen, Deborah Russell & G.T. Gangemi Sr., Computer Security Basics 119 (2d ed. 2006).

[47] See IBM Knowledge Center, File Transfer Protocol (FTP), IBM (last visited Feb. 18, 2015), http://www-01.ibm.com/support/knowledgecenter/SSB23S_1.1.0.8/com.ibm.ztpf-ztpfdf.doc_put.08/gtpc1/hftp.html?lang=en, archived at http://perma.cc/EX7T-SWN9.

[48] See Sherilyn Pastor & Kelly Lloyd, When Your Data Goes Viral: Insurance for Data Breaches, Corporate Counsel (Jan. 29, 2015), http://www.corpcounsel.com/id=1202716324082/When-Your-Data-Goes-Viral-Insurance-for-Data-Breaches?slreturn=20150118121934, archived at  http://perma.cc/HQ4M-JAXZ.

[49] See Doug Gross, Facebook Speaks out against Employers Asking for Passwords, CNN (last updated Mar. 23, 2012), http://www.cnn.com/2012/03/23/tech/social-media/facebook-employers/, archived at http://perma.cc/9BP2-SJG7.

[50] 18 U.S.C. § 2701(a)(1) (2012).

[51] 18 U.S.C. § 1030(a)(1)–(2) (2012); see also Eric Matusewitch, Your Facebook Password or Your Job?, NNRC (July 18, 2014), http://blog.nnrc.com/your-facebook-password-or-your-job/, archived at http://perma.cc/8DP3-DEWN.

[52] See 18 U.S.C. § 2707(a)–(b) (2012) (“any provider of electronic communication service, subscriber, or other person aggrieved” by a knowing or intentional violation may recover damages or an injunction in a civil action as well as reasonable attorneys fees); 18 U.S.C. § 1030(g) (2012) (‘‘Any person who suffers damage or loss by reason of a violation of this section may maintain a civil action against the violator to obtain compensatory damages and injunctive relief or other equitable relief.”).

[53] See Richard Kissel et al., Nat’l Inst. of Standards & Tech., U.S. Dep’t of Commerce, NIST Special Publication 800-88: Guidelines for Media Sanitization 27–28 (rev. 1 Dec. 2014), available at http://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-88r1.pdf, archived at http://perma.cc/9MP7-UQVN (relating to secure reuse of hardware after data deletion and disposal of electronic information).  The National Institute of Standards and Technology (NIST) is responsible for developing information security standards and guidelines, including minimum standards for Federal information systems.  Id. at ii.

[54] See id. at 36–37.

[55] See ARMA Int’l, Generally Accepted Recordkeeping Principles: Information Governance Maturity Model (2013), available at http://www.arma.org/docs/bookstore/theprinciplesmaturitymodel.pdf, archived at http://perma.cc/8Q9F-PFEF; see also Cohasset Assocs., ARMA Int’l, 2013–2014 Information Governance Benchmarking Survey for Legal Services 6–7, available at http://www.arma.org/r1/news/2014/06/16/2013-2014-information-governance-benchmarking-survey-for-legal-service, archived at http://perma.cc/J4MG-WLS5.

[56] See, e.g., Abby Shagin, The Risks and Benefits of Cloud Computing, SAP Bus. Innovation (Oct. 25, 2012), http://blogs.sap.com/innovation/cloud-computing/risks-and-benefits-of-cloud-computing-020025, archived at http://perma.cc/4GHW-NEAX.

[57] See, e.g., Eric Griffith, What is Cloud Computing?, PC Mag (Mar. 13, 2013), http://www.pcmag.com/article2/0,2817,2372163,00.asp, archived at http://perma.cc/7R6H-8J9A.

[58] See Joe McKendrick, 9 Questions to Ask Before Signing a Cloud Computing Contract, Forbes (Jan. 14, 2013, 4:00 AM), http://www.forbes.com/sites/joemckendrick/2013/01/14/9-questions-to-ask-before-signing-a-cloud-computing-contract/, archived at http://perma.cc/6BYB-3Q83.

[59] See Cloud Ethics Opinions Around the U.S., A.B.A., http://www.americanbar.org/groups/departments_offices/legal_technology_resources/resources/charts_fyis/cloud-ethics-chart.html, archived at http://perma.cc/JN7T-L3YJ (last visited Jan. 27, 2015) (collection of ethics opinions around the United States that deal with questions regarding law firms’ use of cloud computing).

[60] See id.

[61] See Complaint at 1–2, Zynga Inc. v. Alan Patmore, No. CGC-12-525099 (Cal. Super. Ct. Oct. 12, 2012) (a former employee transferred 760 confidential Zynga files to his personal account then uninstalled Dropbox to cover his tracks), available at http://tsi.brooklaw.edu/sites/tsi.brooklaw.edu/files/filings/zynga-inc-v-alan-patmore-et-al/20121012complaint-zynga.pdf, archived at http://perma.cc/MFQ3-SRXD.

[62] See Daniel P. Dern, How to Keep Your Smartphone (and It’s Data) Secure, Computerworld (Apr. 22, 2014, 7:30 AM), http://www.computerworld.com/article/2488450/mobile-security/how-to-keep-your-smartphone–and-its-data–secure.html, archived at http://perma.cc/AP2Q-932Q.

[63] See id.

[64] See id.

[65] See, e.g., Rolfe Winkler & Elizabeth Dwoskin, Google’s New User Tracking Bridges Mobile Apps and Mobile Web, Wall St. J. (Aug. 7, 2014, 7:57 PM), http://blogs.wsj.com/digits/2014/08/07/googles-new-user-tracking-bridges-mobile-apps-and-mobile-web/, archived at http://perma.cc/2G2U-3EGH.

[66] See Zack Whittaker, Seven Privacy Settings You Should Change Immediately in iOS 8, ZDNet (Sept. 17, 2014, 2:30 PM), http://www.zdnet.com/article/seven-privacy-settings-you-should-change-immediately-in-ios-8/, archived at http://perma.cc/F4V5-9M8B; see also Klint Finley, Out in the Open: How to Protect Your Secrets from Nosey Android Apps, Wired (Mar. 31, 2014, 6:31 PM), http://www.wired.com/2014/03/x-privacy/, archived at http://perma.cc/RPZ2-TN3R.

[67] See, e.g., James Geddes, Flashlight Apps are Spying on Users Android, iOs, Windows Phone Smartphones, is Yours on the List?, Tech Times (Oct. 26, 2014, 7:36 AM), http://www.techtimes.com/articles/18762/20141026/flashlight-apps-are-spying-on-users-android-ios-windows-phone-smartphones-is-yours-on-the-list.htm, archived at http://perma.cc/4SEQ-EKA3.

[68] See Kia Kokalitcheva, Twitter Will Soon Track the Apps on Your Smartphone to Deliver More Targeted Ads, VentureBeat (Nov. 26, 2014, 10:09 AM), http://venturebeat.com/2014/11/26/twitter-will-soon-track-the-apps-on-your-smartphone-to-deliver-more-targeted-ads/, archived at http://perma.cc/83VE-QNJW.

[69] See Waqas, Flashlight Apps Stealing Personal Information Stored on Your Smartphone, HackRead (Oct. 27, 2014), http://hackread.com/flashlight-apps-stealing-your-personal-information/, archived at http://perma.cc/C7G2-48GX.

[70] See, e.g., Dan Lamothe, U.S. Military Social Media Accounts Apparently Hacked by Islamic State Sympathizers, Wash. Post, Jan. 12, 2015, available at http://www.washingtonpost.com/news/checkpoint/wp/2015/01/12/centcom-twitter-account-apparently-hacked-by-islamic-state-sympathizers/?Post+generic=%3Ftid%3Dsm_twitter_washingtonpost, archived at http://perma.cc/94LC-AM6V.

[71] See Matthew J. Schwartz, How to Hack Facebook in 60 Seconds, InformationWeek (June 28, 2013, 11:08 AM), http://www.informationweek.com/mobile/how-to-hack-facebook-in-60-seconds/d/d-id/1110576?, archived at http://perma.cc/G8N2-ZUPE; see also Fred Stutzman, Ralph Gross & Alessandro Acquiti, Silent Listeners: The Evolution of Privacy and Disclosure on Facebook, 4 J. Privacy & Confidentiality, no. 2, 2012, at 7, 7.

[72] See Breaking the Law, supra note 29 (noting that social media engineering is an effective method for hacking law firms when employees click on links in social media postings with messages aimed at persuading them to access the link).
[73] See Michael Kassner, Convenience or Security: You Can’t Have Both When it Comes to Wi-Fi, Tech Republic (June 24, 2013, 1:09 AM), http://www.techrepublic.com/blog/it-security/convenience-or-security-you-cant-have-both-when-it-comes-to-wi-fi/, archived at http://perma.cc/4BEX-P8H6.

[74] See Press Release, Kaspersky Lab, Kaspersky Lab Sheds Light on “Darkhotel,” Where Business Executives Fall Prey to an Elite Spying Crew (Nov. 10, 2014), available at http://usa.kaspersky.com/about-us/press-center/press-releases/kaspersky-lab-sheds-light-“darkhotel”-where-business-executives, archived at http://perma.cc/PH46-Y7LK.

[75] See, e.g., Eric Geier, Here’s What an Eavesdropper Sees When You Use an Unsecured Wi-Fi Hotspot, PC World (June 28, 2013, 5:35 AM), http://www.pcworld.com/article/2043095/heres-what-an-eavesdropper-sees-when-you-use-an-unsecured-wi-fi-hotspot.html, archived at http://perma.cc/33BF-ZFUV.

[76] See Wi-Fi Hotspots: Connecting While Traveling, Norton, http://us.norton.com/travel-hotspot-security/article, archived at http://perma.cc/A6Y5-T4AD (last visited Feb. 18, 2014).

[77] See, e.g., Erase Hard Disk Wipe Parameters, KillDisk, http://www.killdisk.com/notes.htm, (last visited Mar. 5, 2015) (describing the U.S. Department of Defense DoD 5220.22-M (ECE), a seven pass overwriting algorithm used to erase data).

[78] See Armen Keteyian, Digital Photocopiers Loaded with Secrets, CBS News (Apr. 19, 2010, 6:12 PM), http://www.cbsnews.com/news/digital-photocopiers-loaded-with-secrets/, archived at http://perma.cc/GVD6-7H8E.

The New ESI Sanctions Framework Under the Proposed Rule 37(e) Amendments

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Cite as: Philip J. Favro, The New ESI Sanctions Framework under the Proposed Rule 37(e) Amendments, 21 Rich. J.L. & Tech. 8 (2015), http://jolt.richmond.edu/v21i3/article8.pdf.

 by Philip J. Favro*

I.  Introduction

[1]       The debate over the necessity, substance, and form of the proposed e-Discovery amendments to the Federal Rules of Civil Procedure (Rules) has been ongoing for over four years.[1]  Since the Duke Conference convened in May 2010, the Judicial Conference Advisory Committee on the Civil Rules (Committee) has been working to address many of the perceived shortcomings in the current Rules regime.[2]  Their efforts have not been conducted in a vacuum.  Interest groups representing parties on either side of the “v” in litigation, the U.S. Department of Justice, and even individual federal judges have lobbied the Committee in an effort to shape the final form of the proposed amendments.[3]  This process, while both lengthy and necessary, may be reaching its closing stages.  With the Judicial Conference of the United States having approved the Rules amendment package in September 2014, the proposed changes appear to be on track for implementation by December 1, 2015.[4]

[2]      Viewed holistically, the proposed changes are designed to usher in a new era of proportional discovery, increased cooperation, reduced gamesmanship, and more active judicial case management.[5]  For many litigants the amendments of greatest significance are those affecting Rule 37(e).[6]  If enacted, the changes to Rule 37(e) would provide a uniform national standard regarding the issuance of severe sanctions to address spoliation of electronically stored information (ESI).[7]  They would also introduce a new framework for determining whether sanctions of any nature should be imposed for ESI preservation shortcomings.[8]  Counsel, clients, and the courts should all be aware of the impact these changes could have in litigation and on client information governance programs.[9]

[3]      In this article, I will analyze these issues.  After covering the deficiencies with the current version of Rule 37(e) in Part II, I consider in Part III the new sanctions framework under the proposed amendments.  This includes an analysis of the factors parties would be required to satisfy in order to justify the imposition of sanctions.  I also describe the severe measures calculated to remediate the most harmful ESI preservation failures, along with lesser sanctions designed to cure prejudice stemming from less egregious forms of spoliation.  In Part IV, I focus on some key questions about the Rule 37(e) revisions that remain unanswered and that will likely be resolved only by motion practice.  This includes, among other things, a discussion of how a revised Rule 37(e) might apply to failures to preserve ESI stored with cloud computing providers.

II.  The Need for Revisions to Rule 37(e)

[4]      The Committee has spent countless hours considering the over-preservation of ESI and the appropriate standard of culpability required to impose sanctions for its spoliation.[10]  Even though the current iteration of Rule 37(e) is supposed to provide guidance on these issues, amendments were deemed necessary given the inherent limitations with the rule.[11]

[5]      As it stands, Rule 37(e) safeguards litigants from discovery sanctions when the good faith, programmed operation of their computer systems automatically eliminates ESI.[12]  Nevertheless, the rule has largely proved ineffective as a national standard.[13]  While there are many reasons that could explain its futility, three problems predominate in the present version of the rule.

[6]      First, Rule 37(e) did not expressly abrogate the negligence standard that the U.S. Court of Appeals for the Second Circuit implemented for severe sanctions involving preservation failures under Residential Funding Corp. v. DeGeorge Financial Corp.[14]  By allowing Residential Funding to remain in effect, courts in the Second Circuit and beyond are free to impose adverse inference instructions or order other doomsday sanctions for negligent spoliation of ESI.[15]  With the Second Circuit—one of the epicenters of U.S. litigation—following a sanctions touchstone that generally varies from the rest of the country, the rule has failed to become a uniform national standard for ESI sanctions.[16]

[7]      The second reason Rule 37(e) has failed as a so-called “safe harbor” from sanctions is the emphasis the 2006 Committee note placed on requiring litigants to stop the routine destruction of ESI once a preservation duty attached.[17]  While litigants may be required to suspend particular aspects of their electronic information systems once a preservation duty is triggered, this is not the exclusive or the determinative factor in every sanctions analysis.[18]  For instance—as U.S. District Judge Paul Grimm emphasized in Victor Stanley, Inc. v. Creative Pipe, Inc.—a court should also consider as part of that analysis the “reasonableness and proportionality” of a party’s efforts to preserve relevant ESI.[19]  Nevertheless, most courts applying Rule 37(e) have instead generally focused on whether and when a party suspended particular aspects of its computer systems after a preservation duty attached.[20]  This has led to sanctions rulings that are out of step with mainline ESI preservation jurisprudence.[21]

[8]      The third factor contributing to the futility of Rule 37(e) is that courts have frequently used their inherent authority to bypass the rule’s protections.[22]  This is because Rule 37(e) only applies to conduct that occurred during the litigation.[23]  It does not govern pre-litigation activities such as the destruction of ESI that occurred before the commencement of litigation.[24]  As a result, courts have often wielded their inherent powers to fashion remedies for ESI destruction free from the rule’s present constraints.[25]

[9]      With varying preservation standards, the inordinate focus on one factor in the preservation analysis, and the ease with which the rule’s protections can be bypassed, there can be little doubt as to why a revised version of Rule 37(e) is needed.

III.  The Proposed Rule 37(e) Amendments

[10]      The proposed amendments to Rule 37(e) are designed to address these issues by providing a straightforward framework for the issuance of any sanctions stemming from failures to preserve relevant ESI.[26]  They also encourage courts to draw on a wide range of factors to fashion sanctions awards that cure prejudice caused by less harmful forms of ESI spoliation.[27]  In addition, the proposed changes establish “a uniform standard in federal court” for the imposition of severe remedial measures resulting from ESI preservation failures.[28]

A.  The New Sanctions Framework

[11]      The Committee has established a set of requirements in the proposed rule that must be satisfied before a court could impose sanctions on a litigant for failing to preserve ESI.[29]  The reason for doing so is to ensure sanctions for preservation failures are based on the designated criteria and not the potentially arbitrary use of a court’s inherent powers:

New Rule 37(e) . . . . authorizes and specifies measures a court may employ if information that should have been preserved is lost, and specifies the findings necessary to justify these measures.  It therefore forecloses reliance on inherent authority or state law to determine whether measures should be used.[30]

[12]      The prerequisites a party must satisfy when moving for sanctions under the amended Rule 37(e) proposal are as follows:

1. Relevant ESI “should have been preserved in the anticipation or conduct of litigation,”

2. Relevant ESI was “lost,”

3. The party charged with safeguarding the lost ESI “failed to take reasonable steps to preserve” the information, and

4. The lost ESI “cannot be restored or replaced through additional discovery.”[31]

[13]      While the first two steps essentially reflect existing common law requirements,[32] the third step includes a key notion memorialized in Victor Stanley II and Rimkus Consulting Group, Inc. v. Cammarata: preservation efforts must be analyzed through the lens of reasonableness.[33]  This is a significant step since it would oblige courts to examine preservation issues with a broader perspective and not focus exclusively on whether and when the party modified aspects of its electronic information systems.[34]  Moreover, it would direct preservation questions away from a mythical standard of perfection that has unwittingly crept into discovery jurisprudence over the past several years.[35]  Instead of punishing parties that somehow failed to preserve every last e-mail that could conceivably be relevant, the rule would essentially require a common sense determination of the issues based on a benchmark—reasonableness—with which courts and counsel are familiar.[36]

[14]      The fourth and final provision is significant since it would prevent the imposition of sanctions where there is essentially no harm to the moving party given the availability of replacement evidence.[37]

B.  Severe Sanctions vs. Curative Measures

[15]      To obtain the most severe measures under Rule 37(e)(2), the moving party must additionally demonstrate that the alleged spoliator “acted with the intent to deprive another party of the information’s use in the litigation.”[38]  This specific intent requirement is designed to create a uniform national standard by ensuring severe sanctions are imposed only for the most flagrant violations of ESI preservation duties.[39]  These violations appear to include bad faith destructions of ESI that occur in connection with the instant lawsuit.[40]  They do not, however, include negligent or grossly negligent conduct.[41]  The draft Committee note makes clear that the Rule 37(e) amendments “reject[] cases such as Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99 (2nd Cir. 2002), that authorize the giving of adverse-inference instructions on a finding of negligence or gross negligence.”[42]

[16]      The severe sanctions a court could issue under Rule 37(e)(2) are limited to dismissing the case, entering default judgment, or “instruct[ing] the jury that it may or must presume the information was unfavorable to the party.”[43]  Alternatively, a court could presume that the lost ESI was unfavorable to the alleged spoliator.[44]  Nevertheless, a court is under no obligation to order any of these measures even if the specific intent requirement is satisfied.[45]  As the Committee cautions in the draft note, “[t]he remedy should fit the wrong, and the severe measures authorized . . . should not be used when the information lost was relatively unimportant or lesser measures . . . would be sufficient to redress the loss.”[46]

[17]      If the moving party cannot satisfy the specific “intent to deprive” requirement, the court could then resort to curative measures under Rule 37(e)(1) to address prejudice resulting from the loss of the ESI.[47]  The sanctions a court could order pursuant to that provision would be “no greater than necessary to cure the prejudice” to the aggrieved party.[48]  That wording was drafted broadly to ensure that jurists would have sufficient discretion to craft remedies that could ameliorate the prejudice.[49]  While the precise range of these remedies is not delineated in the rule, a Committee report and the draft Committee note suggest the remedies could include the following:

•         “[P]reclude a party from presenting evidence,”[50]

•         “[D]eem some facts as having been established,” [51]

•         “[P]ermit the parties to present evidence and argument to the jury regarding the loss of information,”[52]

•         “[G]ive the jury instructions to assist in its  evaluation of such evidence or argument, other than instructions to which subdivision (e)(2) applies,”[53] or

•         “[E]xclude a specific item of evidence to offset prejudice caused by failure to preserve other evidence that might contradict the excluded item of evidence.”[54]

[18]      Thus, a moving party could very well obtain weighty penalties against an alleged spoliator even if it is unable to establish the specific intent to deprive.[55]  Nevertheless, the draft Committee note establishes that any such sanctions must be tailored so they do not equal or exceed the severe measures of Rule 37(e)(2).[56]

IV.  Key Issues for Motion Practice under the New Rule 37(e)

[19]      While the new Rule 37(e) proposal addresses the main problems associated with the current rule, there are several questions about the revised rule that remain unanswered and will likely be the subject of vigorous motion practice.  I will consider three of those questions in this section.

A.  What Are “Reasonable Steps to Preserve” ESI?

[20]      One of the principal battlegrounds under the revised version of Rule 37(e) will certainly involve deciphering the meaning of “reasonable steps to preserve” ESI.[57]  This is because the “reasonable steps” provision is an express—though undefined—prerequisite for obtaining sanctions.[58]  This is confirmed by the wording of the draft Committee note: “Because the rule calls only for reasonable steps to preserve, it is inapplicable when the loss of information occurs despite the party’s reasonable steps to preserve.”[59]  Thus, a party who employs “reasonable steps” to keep relevant ESI cannot be sanctioned for its loss.[60]

[21]      However, as to the precise meaning of “reasonable steps,” the Committee provides only general guidance.  For example, the draft note suggests sanctions may not be appropriate if the destroyed ESI is either outside of a preserving party’s control or has been wiped out by circumstances (e.g., flood, fire, hackers, viruses, etc.) beyond the party’s control.[61]  Nevertheless, the note does not suggest these force majeure circumstances are an absolute defense to a sanctions request.[62]  Instead, it advises courts to view the context of the destruction and what steps the preserving party could reasonably have taken to prepare for the problem before it occurred.[63]  However, the Committee acknowledges that engaging in this type of hindsight analysis has its limitations.[64]

[22]      The note also suggests that the range of a party’s preservation efforts should be tempered by proportionality standards.[65]  However, as U.S. Magistrate Judge James Francis observed in Orbit One Communications, Inc. v. Numerex Corp., proportionality is an “amorphous” and “highly elastic” concept that may not “create a safe harbor for a party that is obligated to preserve evidence.”[66]  Therefore, while notions of proportionality may factor into the preservation analysis, it is unlikely they alone will determine the issue of “reasonable steps to preserve.”[67]

[23]      In the absence of meaningful direction on this issue, courts will likely turn to existing case law to help guide their decision on whether a party has taken “reasonable steps” to retain ESI.[68]  To be sure, the jurisprudence on this issue is far from uniform.[69]  Nevertheless, there are many cases that delineate the acceptable boundaries of preservation conduct.[70]  How those cases are applied under the revised Rule 37(e) will turn—as they always have—on the facts of the case,[71] the quality of counsel’s advocacy,[72] and the court’s perception of the issues.[73]

B.  What Does “Intent to Deprive” Mean?

[24]      Another likely area of dispute between litigants will be on the meaning of the “intent to deprive” requirement of revised Rule 37(e)(2).[74]  While the draft Committee note makes clear that this specific intent requirement does not include negligent or grossly negligent conduct,[75] the question confronting clients, counsel, and the courts is what conduct does it refer to?

[25]      The Committee report issued in connection with the Rule 37(e) proposed amendments explains that the “intent requirement is akin to bad faith.”[76]  Despite this straightforward explanation, the draft Committee note does not take such a restrictive view.[77]  Instead, the note indicates that sanctions under Rule 37(e)(2) are limited “to instances of intentional loss or destruction.”[78]  Conduct that is “intentional” and which results in the spoliation of ESI is not necessarily tantamount to bad faith.[79]  Indeed, that intentional conduct is a lesser standard than bad faith was confirmed by the United States Court of Appeals for the Seventh Circuit many years ago.[80]  In addressing a document spoliation question, the Seventh Circuit noted the distinction between bad faith and intentional conduct: “[t]hat the documents were destroyed intentionally no one can doubt, but ‘bad faith’ means destruction for the purpose of hiding adverse information.”[81]

[26]      If the “intent to deprive” requirement does encompass lesser forms of ESI spoliation than bad faith, the question then becomes what is the level of conduct punishable under Rule 37(e)(2)?  The answer is that “intentional” spoliations may very well include instances where parties have been reckless or willful in their destructions of ESI.[82]  Whether that conduct is sufficient to justify the severe measures that a revised Rule 37(e) authorizes will once again turn on the nature and circumstances surrounding the spoliation.[83]  In other words, the courts will again be left to sort out the meaning of a key provision from the rule.[84]

C.  How Would Rule 37(e) Apply to Cloud Computing Preservation Failures?

[27]      A third unanswered question is how the revised Rule 37(e) might apply in the context of cloud computing.  This is a particularly significant issue given that many organizations and individuals have moved or will move their data to cloud-based storage platforms.[85]  Even though petabytes of data are now being stored in the cloud, there are few lawyers who possess the expertise or understanding required to preserve and produce that data in discovery.[86]  These factors suggest cloud-related ESI preservation breakdowns should be expected in the coming years.[87]  Given these circumstances, how should courts address cloud preservation breakdowns under the amended Rule?

[28]      One recent case that provides some insight into the issues is Brown v. Tellermate Holdings.[88]  In Brown, the court imposed an issue preclusion sanction on the defendant employer for failing to preserve relevant information stored in the cloud.[89]  The plaintiffs had sought various categories of data from their former employer in order to substantiate their age discrimination claims.[90]  In particular, the plaintiffs—who previously worked as sales representatives at the company—requested their former employer produce sales records maintained by the employer on cloud provider Salesforce.com to establish that they either met or exceeded their sales quotas in comparison to younger employees.[91]

[29]      While the employer’s counsel issued a “general directive” that relevant documents be kept for litigation, neither the employer nor its lawyers took meaningful follow-up steps to ensure the responsive cloud-stored data was preserved.[92]  For example, the employer did not export the requested data from Salesforce.com and neglected to back up that information.[93]  Nor did the employer keep the plaintiffs’ Salesforce.com account information.[94]  Instead, it repurposed these accounts, thereby enabling other employees to modify or revise the data.[95]  Finally, the employer did not ask Salesforce.com for a back-up of the requested account data until after the cloud provider recycled the data pursuant to its own retention schedule.[96]  All of which compromised and spoliated the requested information that ultimately could have established (or negated) the plaintiffs’ claims.[97]

[30]      Would a revised Rule 37(e) change the outcome in Brown?  The employer almost certainly would not have escaped sanctions under the amended Rule since it “failed to take reasonable steps to preserve” [98] the relevant Salesforce.com ESI and due to the lack of replacement evidence.[99]  Given the importance of the spoliated evidence to the plaintiffs’ claims and the court’s other findings on the issues,[100] the issue preclusion sanction would likely be an appropriate curative measure under the updated version of Rule 37(e)(1).[101]

[31]      Indeed, the new sanctions framework suggests the only change in Brown might be in the gravity of the sanction issued against the employer.

Was the employer’s preservation failure tantamount to an “intent to deprive”[102] the plaintiffs of the Salesforce.com ESI under amended Rule 37(e)(2)?  While the employer unquestionably allowed the ESI to be destroyed, its conduct seems more akin to recklessness than bad faith,[103] i.e., the purposeful concealment of adverse information.[104]  And yet, given the ambiguity created by the draft committee note, such reckless conduct arguably could satisfy the “intentional loss or destruction” language.[105]

[32]      Though impossible to predict how a court would precisely rule in this instance, it is clear that the new sanctions framework would not dramatically change the analysis of the matter.  In essence, courts will continue to adjudicate ESI preservation failures—regardless of whether they occur in the cloud or in more conventional storage locations—based on the traditional notions of reasonableness and proportionality.[106]

V.  Conclusion

[33]      While not every issue associated with ESI preservation failures has been addressed by the Rule 37(e) proposal, it is unrealistic to expect that any rule could do so.  Moreover, the revised rule appears to have resolved many of the shortcomings with the current version.  By creating a basic analytical framework, widening the analysis to ensure a broad set of factors are considered in connection with preservation conduct, and establishing a uniform standard for severe sanctions, lawyers may finally have a workable paradigm to provide straightforward advice to clients on ESI preservation questions.


* Philip Favro is Senior Discovery Counsel, Recommind, Inc.; J.D., Santa Clara University School of Law, 1999; B.A., Political Science, Brigham Young University, 1994.  An earlier version of this article was first published by the Electronic Discovery & Digital Evidence Journal of the American Bar Association.  Philip Favro, The New ESI Sanctions Framework Under The Proposed Rule 37(e) Amendments, EDDE J., Summer 2014, at 12–19, available at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&ved=0CCAQFjAA&url=http%3A%2F%2Fapps.americanbar.org%2Fdch%2Fthedl.cfm%3Ffilename%3D%2FST203001%2Frelatedresources%2FEDDE_JOURNAL-volume5_issue3.pdf&ei=pzKPVPeVA9KpogTR9oCoDA&usg=AFQjCNHpsxbsPwzvNEQ7Ku–x8m3x3oydw&sig2=gSNo1bbZeqtfCyHf2A2j0g&bvm=bv.81828268,d.cGU, archived at http://perma.cc/JKJ9-R6RY.

[1] See Judicial Conference Comm. on Rules of Practice & Procedure, Report of the Judicial Conference Committee on Rules of Practice and Procedure 13–14, app. B-1 to B-2 (Sept. 2014) [hereinafter Sept. ‘14 Report], available at http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Reports/ST09-2014.pdf, archived at http://perma.cc/S4YH-RF9T.

[2] Id. at 13–14, app. B-2.

[3] See generally Judicial Conference Advisory Comm. on Civil Rules, Report of Advisory Committee on Civil Rules 95-305, 331-411 (May 2, 2014) [hereinafter May ’14 Report], available at http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Agenda%20Books/Standing/ST2014-05.pdf, archived at http://perma.cc/6UFS-XLFQ (summarizing the nature of the comments the Committee received on the published versions of the proposed Rules amendments).

[4] See Thomas Y. Allman, The Civil Rules Package as Approved by the Judicial Conference (Sept. 18, 2014), available at http://www.theediscoveryblog.com/wp-content/uploads/2014/10/2014CommentsonRulePackage.pdf, archived at http://perma.cc/QVF2-GPD4 (discussing the timetable for approving and enacting the Rule amendments).

[5] See Philip J. Favro, A Comprehensive Look at the Newly Proposed Amendments to the Federal Rules of Civil Procedure, 26 Utah Bar J. 38, 38–41 (2013).

[6] See Raymond M. Ripple & Krystle Guillory Tadesse, Proposed Amendment to FRCP Rule 37 Addresses Sanctions for Failure to Preserve ESI, Inside Counsel (May 21, 2014), http://www.insidecounsel.com/2014/05/21/proposed-amendment-to-frcp-rule-37-addresses-sanct, archived at http://perma.cc/8BA6-BCY9.

[7] See Favro, supra note 5, at 42.

[8] See Sept. ‘14 Report, supra note 1, at app. B-59 to B-62.

[9] See Philip J. Favro, Getting Serious: Why Companies Must Adopt Information Governance Measures to Prepare for the Upcoming Changes to the Federal Rules of Civil Procedure, 20 Rich. J. L. & Tech. 5, ¶¶ 32–36 (2014) [hereinafter Getting Serious], http://jolt.richmond.edu/v20i2/article5.pdf, archived at http://perma.cc/LUN9-T76D.

[10] See Sept. ‘14 Report, supra note 1, at app. B-14 to B-15.

[11] Id. at app. B-58.

[12] Getting Serious, supra note 9, at ¶ 27.

[13] See Sept. ‘14 Report, supra note 1, at app. B-58; see also Hawley v. Mphasis Corp., 302 F.R.D. 37, 47, n.4 (S.D.N.Y. 2014) (describing that the purpose of the amendments is “to replace the disparate treatment of preservation/sanctions issues in different circuits by adopting a single standard”).

[14] Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 113 (2d Cir. 2002); see also Sept. ‘14 Report, supra note 1, at app. B-17 to B-18, B-65.

[15] See, e.g., Sekisui Am. Corp. v. Hart, 945 F. Supp. 2d 494, 502–03 (S.D.N.Y. 2013) (relying on Residential Funding to impose an adverse inference instruction as a sanction for the plaintiffs’ grossly negligent spoliation of ESI).

[16] See Philip J. Favro, Sea Change or Status Quo: Has the Rule 37(e) Safe Harbor Advanced Best Practices for Information Management?, 11 Minn. J.L. Sci. & Tech. 317, 328–29, 332 (2010) [hereinafter Sea Change] (discussing the Committee’s intent to establish the present version of Rule 37(e) as a national standard when it was implemented in 2006).  The Second Circuit’s negligence standard is increasingly viewed as an anachronistic rule given the current challenges associated with ESI preservation.  See Sept. ‘14 Report, supra note 1, at app. B-18 (observing, among other things, that because “ESI is more easily lost than tangible evidence, . . . the sanction of an adverse inference instruction imposes a heavy penalty for losses that are likely to become increasingly frequent as ESI multiplies”).

[17] See Sea Change, supra note 16, at 327–28.

[18] Victor Stanley, Inc. v. Creative Pipe, Inc. (Victor Stanley II), 269 F.R.D. 497, 523 (D. Md. 2010).

[19] Id. (observing that an “assessment of reasonableness and proportionality should be at the forefront of all inquiries into whether a party has fulfilled its duty to preserve relevant evidence”).

[20] See Sea Change, supra note 16, at 327–28.

[21] See, e.g., In re Actos (Pioglitazone) Prods. Liab. Litig., No. 6:11-md-2299, 2014 U.S. Dist. LEXIS 86101, at *219–20 (W.D. La. June 23, 2014) (issuing an adverse inference instruction against one of the defendants for its failure to preserve relevant ESI and holding that a general litigation hold issued in an unrelated products liability suit filed nine years earlier had given rise to a duty to preserve relevant ESI in the instant litigation); Phillip M. Adams & Assocs., L.L.C. v. Dell, Inc., 621 F. Supp. 2d 1173, 1191 (D. Utah 2009) (finding that industry-related litigation that was initiated years before the lawsuit was filed against the defendant should have “sensitized” the defendant to the reasonable anticipation of litigation and that its subsequent failure to preserve relevant ESI merited sanctions).

[22] Thomas Y. Allman, Dealing with Spoliation in the Federal Rules (Again): The Proposed Amendment to Rule 37(e) at 5, IAALS/NJC E-Discovery Summit 2013 (Sept. 19–20, 2013), available at http://iaals.du.edu/images/wygwam/documents/publications/E-Discovery_Panel_2_Preservation.pdf, archived at http://perma.cc/72GB-U82V.

[23] Nucor Corp. v. Bell, 251 F.R.D. 191, 196, n.3 (D.S.C. 2008); see also Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 611–12 (S.D. Tex. 2010) (delineating the nature and scope of the court’s inherent authority to issue sanctions and its interplay with Rule 37(e)).

[24] Nucor, 251 F.R.D. at 196, n.3 (“Rule 37(e)’s plain language states that it only applies to sanctions imposed under the Federal Rules of Civil Procedure (e.g., a sanction made under Rule 37(b) for failing to obey a court order).  Thus, the rule is not applicable when the court sanctions a party pursuant to its inherent powers.”).

[25] See, e.g., id.; see also Escobar v. Houston, No. 04-1945, 2007 U.S. Dist. LEXIS 72706, at *51–52, n.5 (S.D. Tex. Sept. 29, 2007) (describing the circumstances under which courts may exercise their inherent authority).

[26] See Sept. ‘14 Report, supra note 1, at app. B-56 to B-57.

[27] See id. at app. B-63 to B-64.

[28] Id. at app. B-65.

[29] See id. at app. B-56 to B-57, B-61 to B-62.

[30] Id. at app. B-58 (emphasis added).

[31] Id. at app. B-56.

[32] See Sept. ‘14 Report, supra note 1, at app. B-59.

[33] Victor Stanley II, 269 F.R.D. 497, 523 (D. Md. 2010); Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 613 (S.D. Tex. 2010) (observing that reasonableness is the touchstone of the preservation analysis); see also Sept. ‘14 Report, supra note 1, at app. B-59 to B-62.

[34] See Sept. ‘14 Report, supra note 1, at app. B-59 to B-62.

[35] See id. at app. B-61 (“This rule recognizes that ‘reasonable steps’ to preserve suffice; it does not call for perfection.”); Reinsdorf v. Skechers U.S.A., Inc., 296 F.R.D. 604, 615, 631 (C.D. Cal. 2013) (holding that the Rules “do not require perfection” and discussing related authorities).

[36] Rimkus, 688 F. Supp. 2d at 613.

[37] See Sept. ‘14 Report, supra note 1, at app. B-62 (“[i]f the information is restored or replaced, no further measures should be taken.”).

[38] Id. at app. B-56 to B-57.

[39] See id. at app. B-64 to B-65.

[40] See id. app. B-17 (“This intent requirement is akin to bad faith.”).

[41] See id. at app. B-65.

[42] Id.

[43] Sept. ‘14 Report, supra note 1, at app. B-56 to B-57.

[44] See id.

[45] See id. at app. B-67.

[46] Id.

[47] Id., at app. B-55 to B-57.

[48] Id.

[49] See Sept. ‘14 Report, supra note 1, at app. B-63 to B-64 (“The range of such measures is quite broad . . . [; m]uch is entrusted to the court’s discretion.”).

[50] May ‘14 Report, supra note 3, at 312.

[51] Id.

[52] Sept. ‘14 Report, supra note 1, at app. B-64.

[53] Id.

[54] Id.

[55] Id. at app. B-63 to B-64; see also May ‘14 Report, supra note 3, at 312.

[56] See Sept. ‘14 Report, supra note 1, at app. B-64 (“Care must be taken, however, to ensure that curative measures under subdivision (e)(1) do not have the effect of measures that are permitted under subdivision (e)(2) only on a finding of intent to deprive another party of the lost information’s use in the litigation.”).

[57] Id. at app. B-56.

[58] Id. at app. B-56, B-61.

[59] Id. at app. B-61.

[60] See id. (“Because the rule calls only for reasonable steps to preserve, it is inapplicable when the loss of information occurs despite the party’s reasonable steps to preserve.”).

[61] See id.

[62] See Sept. ‘14 Report, supra note 1, at app. B-61.

[63] See id. at app. B-61 to B-62 (“Courts may, however, need to assess the extent to which a party knew of and protected against such risks.”).

[64] See id. at app. B-59 (cautioning generally about the limited perspective that hindsight provides into the nature of a party’s conduct).

[65] See id. at app. B-61 to B-62; see also Philip J. Favro & Derek P. Pullan, New Utah Rule 26: A Blueprint for Proportionality Under the Federal Rules of Civil Procedure, 2012 Mich. St. L. Rev. 933, 952 (2012) (citing authorities holding that preservation efforts “must be viewed through the lens of proportionality” and not just the “kaleidoscope of relevance”).

[66] Orbit One Commc’ns, Inc. v. Numerex Corp., 271 F.R.D. 429, 436, n.10 (S.D.N.Y. 2010).

[67] See Pippins v. KPMG L.L.P., No. 11 Civ. 0377(CM)(JLC), 2011 U.S. Dist. LEXIS 116427 (S.D.N.Y. Oct. 7, 2011), aff’d, 279 F.R.D. 245, 255–56 (S.D.N.Y. 2012) (rejecting the defendant’s proportionality-based argument because it failed to consider reasonable conditions upon its request to retain only excerpts of its preserved ESI).

[68] See Sea Change, supra note 16, at 334–39 (discussing various cases).

[69] Compare Stevenson v. Union Pac. R.R. Co., 354 F.3d 739, 746–48 (8th Cir. 2004) (holding an adverse inference instruction was appropriate given the defendant’s failure to suspend its 90-day audio recording retention policy, which resulted in the destruction of relevant evidence), with Morris v. Union Pac. R.R., 373 F.3d 896, 899–902 (8th Cir. 2004) (holding an adverse inference instruction was not proper despite the defendant’s failure to suspend its 90-day audio recording retention policy, which could have resulted in the destruction of relevant evidence).  See also Victor Stanley II, 269 F.R.D. 497, 523 (D. Md. 2010) (observing “in terms of what a party must do to preserve potentially relevant evidence, case law is not consistent across the circuits, or even within individual districts.”).

[70] See, e.g., Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1322 (Fed. Cir. 2011) (approving information retention policies that eliminate documents for “good housekeeping” purposes); Brigham Young Univ. v. Pfizer, Inc., 282 F.R.D. 566, 572–73 (D. Utah 2012) (denying plaintiffs’ motion for sanctions since the evidence at issue was destroyed pursuant to defendants’ “good faith business procedures”).

[71] See, e.g., Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598, 613 (S.D. Tex. 2010) (explaining a preservation “analysis depends heavily on the facts and circumstances of each case and cannot be reduced to a generalized checklist of what is acceptable or unacceptable.”); see also Chin v. Port Auth. of N.Y. & N.J., 685 F.3d 135, 162 (2d Cir. 2012) (reasoning that a “case-by-case approach” is the preferred method for determining the appropriate remedial measures for failures to preserve relevant information).

[72] See, e.g., Mathis v. John Morden Buick, Inc., 136 F.3d 1153, 1155 (7th Cir. 1998) (affirming an order of judgment against the plaintiff despite the defendant’s destruction of relevant evidence and expressing “surprise” at the “perplexing failure” of the plaintiff’s counsel to formally move for discovery sanctions).

[73] See Sept. ‘14 Report, supra note 1, at app. B-59 to B-60.

[74] Id. at app. B-56 to B-57.

[75] Id. at app. B-65.

[76] Id. at app. B-17.

[77] See id. at app. B-65.

[78]  Id.

[79] See Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1327 (Fed. Cir. 2011) (“In determining that a spoliator acted in bad faith, a district court must do more than state the conclusion of spoliation and note that the document destruction was intentional.”).

[80] See Mathis v. John Morden Buick, Inc., 136 F.3d 1153, 1155 (7th Cir. 1998) (explaining the differences between bad faith and intentional conduct in connection with a defendant’s destruction of relevant information).

[81] Id.

[82] See generally Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456, 463–65 (S.D.N.Y. 2010) (“willfulness involves intentional or reckless conduct that is so unreasonable that harm is highly likely to occur”).

[83] See Chin v. Port Auth. of N.Y. & N.J., 685 F.3d 135, 162 (2d Cir. 2012); see also Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 613 (S.D. Tex. 2010).

[84] See generally Victor Stanley II, 269 F.R.D. 497 (D. Md. 2010) (discussing cases and the challenges associated with evidence preservation confronting courts and organizational litigants).

[85] See Ned Smith, Why More Businesses Are Using Cloud Computing, CNBC (July 25, 2012, 1:00 PM), http://www.cnbc.com/id/48319526/Why_More_Businesses_Are_Using_Cloud_Computing, archived at http://perma.cc/JB7Q-D2ES (“More than eight in 10 companies currently use some form of cloud solution, and more than half plan to increase cloud investments by 10 percent or more this year . . . [and] more than half of micro (one to nine employees) and small (10 to 99 employees) businesses use cloud-based business productivity applications.”); see also Nicole Black, Introduction, Global Cloud Survey Report 2012, Legal IT Professionals 4, 7, available at http://www.legalitprofessionals.com/wpcs/cloudsurvey2012.pdf, archived at http://perma.cc/HXK7-ZS2H (“[N]early all respondents acknowledged that cloud computing would ultimately overtake on-premise computing in the legal industry.”); Sept. ‘14 Report, supra note 1, at app. B-15.

[86] See Philip Favro, ‘Mind Over Matters: Q & A with eDiscovery and Litigation Guru Craig Ball, Recommind (Aug. 7, 2014), http://www.recommind.com/blog/q-ediscovery-litigation-guru-craig-ball, archived at http://perma.cc/4D7H-7ZTF (observing that most lawyers generally lack the training and are unprepared to “preserve and produce data stored with cloud providers, maintained on mobile devices, or exchanged on social networking sites”).

[87] See id.

[88] Brown v. Tellermate Holdings Ltd., No. 2:11-cv-1122, 2014 U.S. Dist. LEXIS 90123, *4–6, *27 (S.D. Ohio July 1, 2014).

[89] Id. at *72–74.

[90] Id. at *9–10, *70–71.

[91] Id.

[92] Id. at *56–58.

[93] Id. at *24–26.

[94] Brown, 2014 U.S. Dis. LEXIS 90123 at *21–23.

[95] Id.

[96] Id. at *57–58.

[97] See id. at *72–74.

[98] Sept. ‘14 Report, supra note 1, at app. B-56, B-60 to B-62.

[99] See Brown, 2014 U.S. Dist. LEXIS 90123, at *72–74.

[100] See id. at 66–74.

[101] See Sept. ‘14 Report, supra note 1, at app. B-55 to B-57, B-63 to B-64.

[102] Id. at app. B-55 to -57, B-64 to B-67.

[103] See Brown, 2014 U.S. Dist. LEXIS 90123, at *69–70.

[104] See Mathis v. John Morden Buick, Inc., 136 F.3d 1153, 1155 (7th Cir. 1998).

[105] See Sept. ‘14 Report, supra note 1, at app. B-65.

[106] This line of reasoning appears to be equally applicable to ESI preservation failures on mobile devices.  See Philip Favro, The Impact of Cloud Computing and Mobile Devices on Litigation Holds, Law Journal Newsletters (Jan. 2015), available at http://www.lawjournalnewsletters.com/issues/ljn_legaltech/31_9a/news/the_impact_of_cloud_computing_and_mobile_devices_on_litigation_holds160645-1.html, archived at http://perma.cc/MB8Z-FAQ8 (describing the preservation challenges associated with data stored on mobile devices).

 

Blog: Uber: Who Owns Whom?

By: Jillian Smaniotto, Associate Manuscripts Editor

On Wednesday, March 11, U.S. district court judges in California denied motions for summary judgment in two separate cases involving Uber and Lyft that could mean massive changes in the rapidly developing on-demand services market.[1]  Both cases will go to jury trial.[2]

Both Uber and Lyft are the subjects of suits brought by drivers seeking classification as employees, claiming they have been misclassified as independent contractors.[3]  The classification of these drivers as employees could lead to massive changes to the existing Uber and Lyft schemes, as the companies could then be held responsible for reimbursing drivers for costs incurred incidental to providing rides arranged via the Uber and Lyft services.[4]

These suits come at an interesting time as labor disputes between drivers and rideshare companies have been on the rise of late.  Recently, Uber came under fire in January for claiming to pay its drivers in New York city roughly twenty-five dollars per hour, while reports showed that estimate to be inaccurate, with the figure typically closer to nineteen dollars per hour.[5]  As a result, drivers have begun to move away from working exclusively for one service or the other, choosing instead to combine apps in order to take advantage of the differences.[6]  For example, drivers take advantage of Uber’s surge system—whereby fares rise based on demand—by using Lyft and turning off the Uber app during slow periods, and switching to Uber during surge periods.[7]  Some feel this is the best way to combat the expense of driving for one of these services, as drivers are responsible for gas, insurance, maintenance, and sometimes the purchase of a new-enough vehicle—all necessary expenses for Uber and Lyft drivers.[8]

In the cases brought against Uber and Lyft in the Northern District of California, juries will decide whether drivers have been correctly characterized as independent contractors.[9]  Drivers for both Uber and Lyft, seeking class-action status, argue that they are subject to the control of their respective services, as their fares are set and they are subject to termination for failure to follow certain rules.[10]  Uber and Lyft argue that their drivers are better classified as independent contractors because drivers have the flexibility to set their own schedules and choose their passengers.[11]

The ultimate outcomes in these cases may have far-reaching impacts on ridesharing services, as well as on other on-demand service companies and tech startups.[12]  Classification of Uber drivers—or perhaps on-demand grocery shoppers or housemaids—as employees would ultimately mean that these services would be required to pay for employee benefits and pay into state unemployment programs, clearly increasing overhead costs.[13]  Such changes could stifle the burgeoning startup on-demand service market, especially as the more traditional service sector has begun adopting similar customer-friendly policies.[14]

It is fitting that the District Court judges ruled that this issue is not one appropriate for summary judgment as it is clear that a reasonable jury may reasonably decide either way.  The platforms supporting these services are still evolving, and the regulation has yet to catch up; instead, juries will be “handed a square peg and [be] asked to choose between two round holes.”[15]

 

[1] See Ellen Huet, Juries to Decide Landmark Cases Against Uber and Lyft, Forbes (Mar. 11, 2015, 8:21 PM), http://www.forbes.com/sites/ellenhuet/2015/03/11/lyft-uber-employee-jury-trial-ruling/.

[2] See id.

 [3] See Katy Steinmetz, Uber, Lyft Lawsuits Could Spell Trouble for the On-Demand Economy, Time (Mar. 12, 2015, 2:11 PM), http://time.com/3742608/uber-lyft-lawsuits/.

 [4] See Huet, supra note 1; Steinmetz, supra note 3.

 [5] See Brian Fung, Why Drivers are Winning the Labor War Between Uber and Lyft, Wash. Post (Mar. 3, 2015), http://www.washingtonpost.com/blogs/the-switch/wp/2015/03/03/why-drivers-are-winning-the-labor-war-between-uber-and-lyft/.

[6] See id.

[7] See id.

[8] See id.

[9] See Steinmetz, supra note 3.

[10] See Huet, supra note 1; see also Ellen Huet, How Uber’s Shady Firing Policy Could Backfire on the Company, Forbes (Oct. 30, 2014, 10:00 AM), http://www.forbes.com/sites/ellenhuet/2014/10/30/uber-driver-firing-policy/ (describing how Uber drivers may be “deactivated” under no clear policy and with little to no warning).

Uber_ride_Bogota_(10277864666)[11] See Huet, supra note 1.

[12] See Bob Egelko, Court: Juries to Decide if Uber, Lyft Drivers Are Employees, SFGate (Mar. 11, 2015, 6:42 PM), http://www.sfgate.com/bayarea/article/Juries-to-decide-whether-Uber-Lyft-drivers-are-6128899.php.

[13] See id.; Huet, supra note 1.

[14] See, e.g., Taylor Soper, Taxi Companies Adopt New Apps to Keep Up with Uber, Lyft in Seattle, GeekWire (Mar. 9, 2015, 3:40 PM), http://www.geekwire.com/2015/taxi-companies-adopt-new-apps-to-keep-up-with-uber-lyft-in-seattle/.

[15] Tim Fernholz, Uber and Lyft Drivers Want To Be Paid Like Employees, Not Contractors. But What if They Are Neither?, Quartz (Mar. 12, 2015), http://qz.com/361293/uber-and-lyft-drivers-want-to-be-paid-like-employees-not-contractors-but-what-if-they-are-neither/.

 

Blog: The Likely Impacts of Patenting a Clean Energy Economy

By: Andrew Landrum, Associate Technical & Public Relations Editor

The clean energy industry has soared to new heights in recent years.  Clean energy investment and development have continued to surge despite oil price fluctuations[1], and the Energy Industry Association predicts clean energy production capacity will increase by sixty percent between now and 2016.[2]  New data shows that, concomitant to this expansion, clean energy patents have reached an industry high.[3]  “Everyone is scrambling to stake out their territory and nobody knows how valuable the technology will be,” says C. Erik Hawes of Morgan Lewis & Bockius.  “Those factors . . . have . . . [created] a gold rush on renewable patents[.]”[4]  The skyrocketing rate of new clean energy patents will likely produce mixed results for market participants.

Patents serve a valuable role in development.  They introduce new innovations to the public by requiring the dissemination of technical knowledge in exchange for exclusive rights over the technology.[5]  Small businesses then have access to the patent’s information, which drastically reduces industry learning curves and encourages building upon successful ideas.[6]  The Coalition for Innovation Development & Employment Alliance (IDEA) is a pro-business group launched by the United States Chamber of Commerce, which fights hard for powerful protections to the United States’ patent system.  The patent system, IDEA says, is vital to a growing cleantech industry, which will result in the creation of millions of American jobs.[7]

However, the increase in clean energy patents may also burden companies with increased costs in litigation.  Clean energy companies used to be able to avoid costly patent infringement battles.[8]  But, with the increase in clean energy revenues, that may soon change.[9]  Patent infringement suits are notoriously costly and recent clean energy cases have resulted in up to $170 million in damages.[10]  Surveys show average infringement litigation costs generally run parties over $5 million, and generally last for two to four years.[11]  The actual impact on cleantech patent litigation will be decided once the margin of growth stabilizes and the true value of clean energy is realized.[12]

But, the market is still growing and there are few big players in the renewable market. Once the market is established, however, the patent cases will follow.  According to Ropes & Gray partner, William McCabe, “[o]nce [the companies] build the market, they will become targets of the smaller players and nonpracticing entities who would not find economic value in an injunction.”  Solar and wind companies, in particular, will see an increase in patent infringement claims.[13]  “Wind and photovoltaic solar are very complex technologies that require large capital investments[,]” says McCabe.  “Those manufactures tend to be very large, sophisticated companies who tend to protect their IP rights and who don’t seem timid about protecting them via enforcement.”[14]

This is good news for attorneys as small and medium-sized clean energy companies will have to innovate and work hard to protect their product.  These companies have an interest in creating strong, diverse energy patent portfolios, and will begin to take offensive measures to protect competitive technologies.[15]  Building a patent portfolio may seem daunting, but the companies that get it done will be “be prepared for battle and will reap the rewards.”[16]

Ultimately, it is an exciting time to be involved in the clean energy market.  The renewable patent explosion will continue for the foreseeable future.  Federal and state support will continue to fund research and development, and the potential for green revenue is still uncertain.  Patent attorneys should see this as a gold rush opportunity and work hard to protect the property of these clean energy startups.  Once the patent system starts working for the cleantech companies, America’s “all-of-the-above” energy approach becomes that much more more accessible.

Alternative_Energies

[1] Louise Downing, Clean Energy Investment Jumps 16% Shaking Off Oil’s Drop, Bloomberg (Jan. 9, 2015, 4:00 AM), available at http://www.bloomberg.com/news/articles/2015-01-09/clean-energy-investment-jumps-16-on-china-s-support-for-solar.

[2] U.S. Energy Information Administration, Short-Term Energy Outlook (2015), pp. 10-11, available at http://www.eia.gov/forecasts/steo/report/renew_co2.cfm (noting capacity increases by more than 60%).

[3] Clean Energy Patent Growth Index 2013 Year in Review, Cleantech Group (Apr. 23, 2014), http://www.cepgi.com/2014/04/clean-energy-patent-growth-index-2012-year-in-review.html#more.

[4] Keith Goldberg, Clean Energy Patent Boom Sets Stage for IP Wars, Law360 (Oct. 30, 2013, 6:09 PM), http://www.law360.com/articles/484594/clean-energy-patent-boom-sets-stage-for-ip-wars.

[5] Jeanne C. Fromer, Patent Disclosure, 94 Iowa L. Rev. 540, 548-50 (2009).

[6] Margaret McInerney, Note, Tacit Knowledge Transfer with Patent Law: Exploring Clean Technology Transfers, 21 Fordham Intell. Prop. Media & Ent. L.J. 449, 462 (2011).

[7] Eric Raciti, Is IP Standing in the Way of a Green Planet?, Renewable Energy World (Nov. 5, 2010), http://www.renewableenergyworld.com/rea/news/article/2010/11/is-ip-standing-in-the-way-of-a-green-planet.

[8] Goldberg, supra n. 3.

[9] Teague Donahey, Expect Patent Disputes to Accelerate as Clean Energy Expands, Green Tech Media (Oct. 6, 2014), http://www.greentechmedia.com/articles/read/patent-activity-in-clean-energy-picks-up.

[10] Jess Davis, Mitsubishi Can’t Knock Out $170M Wind Patent Judgment, Law360 (May 29, 2013, 2:00 PM), http://www.law360.com/articles/445617.

[11] Donahey, supra n. 10.

[12]Goldberg, supra n. 3.

[13] Id.

[14] Id.

[15] Donahey, supra n. 10.

[16] Teague Donahey, From Enphase to Wanxiang, How Cleantech Companies are Building Patent Portfolios, Green Tech Media (Doc. 17, 2014), http://www.greentechmedia.com/articles/read/as-patent-disputes-accelerate-clean-energy-firms-look-to-bolster-portfolios.

Blog: Third Time’s a Charm: Serial’s Adnan Syed is Granted an Appeal

By: Brooke Kargman, Associate Staff

Media has the transformative ability to turn anonymous pursuits into vastly supported missions.  For Adnan Syed, Serial podcast has played the part of a catalyst in bringing his questionable conviction to the attention of the Maryland Court of Special Appeals.[1]

Debuting in October 2014, Serial began sharing the story of Adnan Syed, who was convicted for the 1999 murder of his ex-girlfriend, Hae Min Lee, and is currently serving a life sentence plus thirty years.[2]  The twelve episodes pieced together the minutiae of the case exposing the unnerving partiality and inconsistencies within the investigation and the trial.  Each episode has been downloaded approximately 3.4 million times making Serial the most downloaded podcast in history.[3]

No eyewitnesses and not a single piece of physical evidence tied Syed to the murder.[4]  It was the prosecutor’s lead witness, Jay Wilds, who testified to helping him bury the body, that ultimately lead to Syed’s conviction.[5]  Wilds has changed his story numerous times and even conceded that he had lied on the stand.[6]  A former classmate who has provided an alibi for Syed, at the time prosecutors claim he was committing the murder, was never asked to testify during trial.[7]  Additionally, Syed’s counsel never sought a plea deal from the prosecutor.[8]

Over the span of twelve years, Syed has attempted to appeal his conviction three times claiming ineffective assistance of counsel and an unfair trial.[9]  Two months after the final episode aired, the Maryland Court of Special Appeals has granted Syed an appeal.[10]  As evidence of the media’s vast captive audience, news of the appeal became a trending topic on Facebook.[11]

There are many incarcerated persons who maintain their innocence and whose cases remain unknown and unpublicized.  You could say Adnan Syed is lucky that a radio producer zealously investigated his case and that his case was chosen as the story for Serial’s first season.[12]  It is concerning to think, though, that had Serial not broadcasted his story, he may never have been given the chance to appeal his conviction.serial-social-logo

 

[1] Serial, http://serialpodcast.org (last visited Feb. 24, 2015).

[2] See id.; Abby Phillip, Md. Court Allows Adnan Syed to Proceed With Appeal in ‘Serial’ Case, The Washington Post (Feb. 7, 2015), http://www.washingtonpost.com/news/post-nation/wp/2015/02/07/md-court-will-allow-adnan-syed-to-appeal-his-conviction-in-serial-case/.

[3] Justin George, State: ‘Serial’ Murder Case Should Not Be Reopened, The Baltimore Sun (Jan. 14, 2015), http://touch.baltimoresun.com/#section/-1/article/p2p-82536091/.

[4] Id.

[5] Phillip, supra note 2; George, supra note 3.

[6] Catie Talarski, Rabia Chaudry: “Serial” Had Impact On Adnan Syed’s Appeal, WNPR (Feb. 10, 2015), http://wnpr.org/post/rabia-chaudry-serial-had-impact-adnan-syeds-appeal.

[7] See Phillip, supra note 2 (“Asia McClain,… who attended Woodlawn High School… with Syed, claims in letters that she wrote him in 1999 while he was in jail, and in a new affidavit filed in January, that she remembered speaking to Syed at the public library next to their school at the time…”); Jessica Glenza, Serial: Maryland Special Appeals Court Grants Rare Hearing to Adnan Syed, The Guardian (Feb 7, 2015, 1:39 PM), http://www.theguardian.com/us-news/2015/feb/07/serial-podcast-court-grants-adnan-syed-rare-hearing.

[8] George, supra note 3 (“Syed said that he asked Gutierrez to see what prosecutors would offer as a plea deal, and that she told him there was none when she had never asked prosecutors about it. A prosecutor testified… that Gutierrez never approached him about a plea deal.”).

[9] See Talarski, supra note 6; George, supra note 3.

[10] See Talarski, supra note 6.

[11] George, supra note 3.

[12] Serial, http://serialpodcast.org (last visited Feb. 24, 2015) (“Sarah Koenig, who hosts Serial… she’s been sorting through box after box (after box) of legal documents and investigators’ notes, listening to trial testimony and police interrogations, and talking to everyone she can find who remembers what happened between Adnan Syed and Hae Min Lee… In Season One of Serial, she looks for answers.”).

Blog: Facebook Data Security – Is Your Private Data at Risk on Social Media?

privacy-policy-445153_640By: John Danyluk, Associate Notes & Comments Editor

It is uncertain exactly how much information Facebook has about its users.  The social media giant not only has all of the content uploaded by its 1.35 billion users, it has the information that could be obtained from the staggering 100 billion friendships among those users.  So just how secure is this massive amount of private data, and what would the legal consequences be if a breach occurred?

Facebook suffered one such breach in June 2013.[1]  Although the impact of this particular breach turned out to be relatively minor, it signaled a larger problem for protecting personal data on the internet.  The glitch that occurred in 2013 exposed email addresses and personal phone numbers for contacts even if that data was not visible on Facebook itself.[2]  Although Facebook corrected the problem within twenty-four hours, over six million users had their sensitive personal data exposed.[3]  For these six million individuals, their reasonable expectation of privacy was infringed upon when sensitive details that were not shared on their public profile were not protected.[4]

A data breach not only puts Facebook at significant risk of a public relations nightmare, but it also may result in regulatory investigations from the FTC and civil liability to its users for negligence.[5]  But Facebook would not be left without recourse, as it could institute civil actions under the Computer Fraud and Abuse Act and the Stored Communications Act (among other laws) against the perpetrators.[6]  Additionally, the federal government would likely step in to enforce the criminal provisions of these acts as well.[7]

How can companies like Facebook, who are trusted with sensitive data, prevent data exposure in the future?  In sum, these companies must have “strong security configuration management all the way from the servers through the applications and the user permissions assigned to the data.”[8]  Users of these websites can help themselves as well, by minimizing the number of companies and apps that have access to their personal data.[9]  By taking the time to understand privacy controls and removing apps that the user no longer uses, the threat of one’s privacy being invaded through a data breach can be curtailed.

 

[1] Tony Bradley, Facebook Breach Highlights Data Security’s “Weakest Link” Syndrome, PCWorld, available at http://www.pcworld.com/article/2043042/facebook-breach-highlights-data-securitys-weakest-link-syndrome.html.

[2] Id.

[3] Id.

[4] Id.

[5] Evan Brown, Six Interesting Technology Issues Raised in the Facebook IPO, Internetcases, available at http://blog.internetcases.com/2012/02/01/6-interesting-technology-law-issues-raised-in-the-facebook-ipo/.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

The Internet of Things and Wearable Technology: Addressing Privacy and Security Concerns without Derailing Innovation

Blog: The New Four Walls of the Workplace

social-media-488886_640By: Micala MacRae, Associate Notes and Comments Editor

The Supreme Court has recognized workplace harassment as an actionable claim against an employer under Title VII of the Civil Rights Act of 1964.[1]  The rise in social media has created a new medium through which workplace harassment occurs.  Courts are just beginning to confront the issue of when social media harassment may be considered as part of the totality of the circumstances of a Title VII hostile work environment claim.  Traditionally, harassment has occurred through face-to-face verbal and physical acts in the workplace.  However, the changing nature of the workplace has continued to expand with the rise of new technology, which allows employees to stay connected to the work environment at different locations outside the physical boundaries of the office.  Harassment has moved beyond the physical walls of the workplace to the virtual workplace.  The broadening conception of the workplace and increasing use of social media in professional settings has expanded the potential employer liability under Title VII.

Social media has become a powerful communication tool that has fundamentally shifted the way people communicate.  Employers and employees increasingly utilize social media and social networking sites.[2]  While companies have turned to social media as a way to increase their business presence and reduce internal communication costs, there has been the consequence of increased social media harassment.  Although social media and social networking sites are not new forms of communication, their legal implications are just now coming into focus.[3]  Several cases have addressed hostile work environment claims stemming from other forms of electronic communication, there are few addressing claims based on social media communications.[4]

The New Jersey Supreme Court, in Blakey v. Continental Airlines, Inc., was one of the first courts to consider whether an employer is responsible for preventing employee harassment over social media.[5]  In Blakey, an airline employee filed a hostile work environment claim arising from allegedly defamatory statements published by co-workers on her employer’s electronic bulletin board.[6]  The electronic bulletin board was not maintained by the employer, but was accessible to all Continental pilots and crew members.[7]  Employees were also required to access the Forum to learn their flight schedules and assignments.[8]

The court analyzed the case under a traditional hostile work environment framework, concluding that the electronic bulletin board was no different from other social settings in which co-workers might interact.[9]  Although the electronic bulletin board was not part of the physical workplace, the employer had a duty to correct harassment occurring there if the employer obtained a sufficient benefit from the electronic forum as to make it part of the workplace.[10]  The court made clear that an employer does not have an affirmative duty to monitor the forum, but that liability may still attach if the company had direct or constructive knowledge of the content posted there.[11]  The court limited consideration of social media harassment to situations where the employer derived a benefit from the forum and it could therefore be considered part of the employee’s work environment.[12]

Workplace harassment is not longer limited to the traditional four walls of the workplace.  As technology and the boundaries of the workplace have changed, courts have struggled to modernize their framework for assessing hostile work environment claims under Title VII.  These problems will only become exacerbated as society continues to embrace social media throughout our daily lives and employers continue to integrate social media into their business practices.

 

[1] See Meritor Sav. Bank v. Vinson, 477 U.S. 57, 64-67 (1986) (finding that workplace harassment based on individual’s race, color, religion, sex, or national origin is actionable under Title VII of the Civil Rights Act).

[2] Jeremy Gelms, High-Tech Harassment: Employer Liability Under Title VII for Employee Social Media Misconduct, 87 Wash. L. Rev. 249 (2012).

[3] See, e.g., Kendall K. Hayden, The Proof Is in the Posting: How Social Media Is Changing the Law, 73 Tex. B.J. 188 (2010).

[4] Id.

[5] Jeremy Gelms, High-Tech Harassment: Employer Liability Under Title VII for Employee Social Media Misconduct, 87 Wash. L. Rev. 249 (2012).

[6] Blakey v. Continental Airlines, Inc., 751 A.2d 538 (N.J. 2000).

[7] Id. at 544.

[8] Id.

[9] Id. at 549.

[10] Blakey, 751 A.2d at 551.

[11] Id.

[12] Id.

Blog: The New Meaning of Back Seat Driving

2014-03-04_Geneva_Motor_Show_1186By: Peyton Stroud, Associate Notes and Comments Editor

Are we there yet?  The common adage of road trips has a whole new meaning with the advent of driverless cars.  Imagine a world where the front seat driver can face the backseat passengers, with the car driving itself down the highway.  As of this past January, this dream is becoming a reality.  Automotive giants such as BMW, Audi, and Mercedes-Benz unveiled prototypes of self-driving technologies in the recent 2015 Consumer Electronics Show (CES).[1]  These new vehicle models function autonomously while allowing its passengers to sit back and relax.  Industry experts expect these driverless vehicles to be on the road between 2017 and 2020.[2]

Many current models of cars are already featuring some self-driving technologies including automatic braking systems, adjustable cruise controls, and 360° cameras capable of stopping collisions while at low speeds.[3]  However, this year’s CESs brought more to the table than ever before.  During this year’s CES, Audi unveiled its self-driving car, nicknamed “Jack,” using its system known as the company’s Piloted Driving system.[4]  “Jack” drove an astounding 560 miles to the CES, more than any driverless car has driven before.  Its state of the art system incorporates a series of sensors and laser scanners allowing the car to drive itself in speeds of up to 70 mph.[5]  The Piloted Driving system is intended to be used for highway driving and does not work as well in urban environments, where drivers need to be at the wheel.[6]  Similarly, Mercedes-Benz introduced its driverless model called the Mercedes-Benz F105 Luxury in Motion.[7]  Its new features include a self-driving technology and a zero carbon emissions system, but most notably a new interior design.[8]  The new design allows for the vehicle’s front seats to swing around and face backwards while the vehicle drives its passengers on the highway.[9]

Other technology developers are joining forces with car manufactures to help advance this technology.[10] Nvidia, a large computer chip manufacturer, has introduced the Tegra X1 chip equipping vehicles with deep neural learning, which allows for recognition of pedestrians, cyclists, and other vehicles. More technological innovations on the horizon include systems setting a predetermined route, more adjustable cruise controls, and self-parking technologies.[11]

Legally, self-driving smart cars could pose some significant problems in both the regulatory and data privacy realm.[12]  In a regulatory sense, there are currently no transportation laws regarding self-driving cars.[13]  Furthermore, others remain weary of the “data collection” required by the cars. [14]  However, the most profound legal implication could be liability ridden – Who is responsible when something goes wrong?  More specifically, who is liable if a self-driving cars hits and kills someone?  Who is responsible for the parking ticket when the car did not recognize a no parking sign?[15]  Only four states and the District of Columbia have addressed laws regarding self-driving vehicles.[16]  Some of these states have passed laws allowing manufacturers solely for testing purposes.[17]  In an effort to predict the legal implications of these new cars, lawyers look to current liability laws for guidance.[18]  For example, in cases of parking tickets, the owners of the car will be liable.[19]  In cases of injury, product’s liability law will most likely govern cases of injury thereby allowing the victim to sue both the owner of the car and also the car’s manufacturer.  According to Professor John Villasenor, “product liability law, which holds manufacturers responsible for faulty products, tends to adapt well to new technologies.”[20]  Furthermore, Sebastian Thrun, inventor of driverless cars, opines that these driverless cars could help in reconstructing accidents and making assignment of blame more clear-cut.[21]  In his view, the trial lawyers are the ones in trouble.[22]

However, criminal penalties pose a more significant problem than civil penalties.[23]  Since criminal law centers around the intent of the perpetrator, it will be difficult to figure out how to adapt these laws to technology because robots cannot be charged with a crime.[24]  Further, “the fear of robots” and of a machine malfunctioning raise concerns for the American public.[25]  However, it seems as if Americans are willing to take the risk.  According to the Pew Research Center, nearly half of Americans would ride in a driver-less car.[26]  Time will tell if these self-driving cars will endure public scrutiny.

 

[1] See Steve Brachmann, Self-driving Cars and Other Automotive Technologies Take Center Stage at CES, IPWatchdog.com (Jan. 11, 2015), http://www.ipwatchdog.com/2015/01/11/self-driving-cars-center-stage-at-ces/id=53480/.

[2] Bill Howard, Self-driving Cars Are More Than A Promise, Extreme Tech (Jan. 12, 2015, 11:45 AM), http://www.extremetech.com/extreme/197262-its-2015-self-driving-cars-are-more-than-a-promise.

[3] Brachmann, supra note 1.

[4] Id.

[5] Brachmann, supra note 1.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] See Howard, supra note 3.

[11] See id.

[12] See id.

[13] See id.

[14] Id.

[15] See Claire Cann Miller, When Driverless Cars Break the Law, N.Y. Times (May 13, 2014), available at http://www.nytimes.com/2014/05/14/upshot/when-driverless-cars-break-the-law.html?_r=0&abt=0002&abg=0.

[16] See id.

[17] See id.

[18] See id.

[19] See id.

[20] Miller, supra note 11 (quoting John Villasensor, Products Liability and Driverless Cars: Issues and Guiding Principles for Legislation, Brookings (Apr. 2014), available at http://www.brookings.edu/~/media/research/files/papers/2014/04/products%20liability%20driverless%20cars%20villasenor/products_liability_and_driverless_cars.pdf).

[21] See Miller, supra note 11.

[22] See id.

[23] Id.

[24] See id.

[25] Miller, supra note 11.

[26] See id.

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