by Lee Gesmer | Jul 21, 2008 | Courts, Litigation, Technology
Anytime these judges write an opinion, it’s treated like a papal encyclical,” . . . They really influence other judges, who act like these are the rock stars of their profession. . . These ‘rock star’ judges are not surprised that they, and not the new rules, are still the final word in e-discovery. . . .
Quoted from Rockin’ Out the E-Law, ABA Journal, July 2008.
Rock star judges, huh? OK, I’m trying not to wince, laugh or, well, you know… The American Bar Association needs to sell its publications, so you can’t blame them too much, I suppose.
In any event, this article names several judges as prominent in the area of discovery of electronically stored evidence (“ESI”), including Chief Magistrate Judge Paul Grimm of the U.S. District Court for the District of Maryland, Se
by Lee Gesmer | Feb 8, 2008 | Litigation
The words “hostile work environment” get tossed around a lot by lawyers. But, just what constitutes a hostile environment that’s actionable under Title VII of the Civil Rights Act of 1964 is uncertain. It’s sort of a “I can’t define it, but I know it when I see it” standard. That standard may work at the two extremes (clearly egregious vs. obviously benign behavior), but it can be difficult to apply in the grey zone.
The First Circuit has weighed in on this issue with an important decision, reported in today’s Boston Globe, reversing summary judgment against an employee of the Town of Grafton who claimed a hostile work environment based on the assertion that her supervisor repeatedly stared at her breasts. The First Circuit saw the behavior in this case differently than the trial judge, who had dismissed the case.
Quoting from the Boston Globe article:
The three-member appeals panel said that Billings’s sexual harassment suit had raised serious claims, including that Connor had created a hostile work environment by staring at the breasts of several town employees and, after Billings complained to the Board of Selectmen around 2001, had retaliated against her by transferring her to another municipal job.
“Taken in the light most favorable to Billings, the evidence depicts a supervisor who regularly stared at her breasts for much of the 2 1/2 years they worked together,” the appeals court said in its 42-page decision.
The court said a reasonable jury could find that the staring had interfered with Billings’s work performance or changed the terms and conditions of her employment.
This case appears to open the door wider to hostile work environment claims. You can read the full case here.
by Lee Gesmer | Oct 16, 2007 | Courts, Litigation
Courts, Litigation. Back in the early 1980s, when I was new to the Massachusetts Bar, there was an effort by the organized bar to codify the rules of evidence. That effort failed, and to this day the rules of evidence are a confusing patchwork of common law and legislative enactment. The “go to” source for the law of evidence has been, in the memory of almost all living Massachusetts attorneys, the Handbook of Massachusetts Evidence (8th Ed. 2006), by the former Chief Judge of the Supreme Judicial Court, Paul Liacos, and currently edited by Mark Brodin and Michael Avery. (The previous editions of this work were published in 1940, 1948, 1956, 1967 (when Justice Liacos took over), 1981 and 1993). However, the long-dead phoenix of evidence codification may be rising from the ashes, albeit in a slightly different form. In 2006 the SJC established an advisory committee to develop a “Guide” to evidence (not to be confused with “Rules” of evidence), and that Guide is now in its proposed form. The draft Massachusetts Guide to Evidence is available here (a 226 page pdf file).
Not surprisingly, the Guide makes unabashed and extensive use of the Proposed Rules of Evidence which, although never formally adopted, have been cited in Liacos and to trial courts since their “non-adoption” in 1982. Go figure.
by Lee Gesmer | Dec 1, 2006 | Courts, Litigation
At long last, the highly anticipated amendments to the new federal rules of civil procedure are here. The federal court system has amended its rules of procedure to address electronic discovery, aka “e-discovery”. The amendments became effective on December 1, 2006.
Unfortunately, this news has been greeted with yawns from many attorneys who believe this is just another run-of-the-mill procedural change. Far from it; the e-discovery revolution represented by this rules change – and it is a revolution – is anything but ordinary, and the courts (which have been warming up to this issue for some time) have warned that its effects will be profound and far-reaching.
The rule changes themselves may not appear earth-shattering, but they change the standard for both lawyers and clients as it relates to the exchange and management of information in litigation. Since the federal court system has provided summaries of the changes (see rules 16, 26, 33, 34, 37 and 45), we won’t go into fine detail. However, there are a few changes worth highlighting, including the obligations placed on litigants and the courts to confront e-discovery at the outset of a case (see rules 16 and 26), the definitional changes designed to address “electronically stored information” (see rules 26 and 34), and the “safe harbor” exception which protects parties from sanctions if data is lost during the routine, good-faith operation of their computer system (see rule 37).
What is truly special about e-discovery, however, is not really the letter of the law. What all lawyers should know is that courts and the new federal rules have placed a significant part of the responsibility for the location, preservation and production of litigants’ electronic data on their attorneys. One need only review the following examples to get the picture:
- Zubulake v. UBS Warburg LLC, (S.D.N.Y. July 20, 2004) – “Counsel must oversee compliance with the litigation hold, monitoring the party’s efforts to retain and produce the relevant documents. . . Once a ‘litigation hold’ is in place, a party and her counsel must make certain that all sources of potentially relevant information are identified and placed ‘on hold,’ . . . To do this, counsel must become fully familiar with her client’s document retention policies, as well as the client’s data retention architecture. This will invariably involve speaking with information technology personnel, who can explain system-wide backup procedures and the actual (as opposed to theoretical) implementation of the firm’s recycling policy. It will also involve communicating with the ‘key players’ in the litigation, in order to understand how they stored information. . . Once a party and her counsel have identified all of the sources of potentially relevant information, they are under a duty to retain that information . . . and to produce information responsive to the opposing party’s requests. . . . There are thus a number of steps that counsel should take to ensure compliance with the preservation obligation. While these precautions may not be enough (or may be too much) in some cases, they are designed to promote the continued preservation of potentially relevant information in the typical case. First, counsel must issue a ‘litigation hold’ at the outset of litigation or whenever litigation is reasonably anticipated. The litigation hold should be periodically re-issued so that new employees are aware of it, and so that it is fresh in the minds of all employees. Second, counsel should communicate directly with the ‘key players’ in the litigation, i.e., the people identified in a party’s initial disclosure and any subsequent supplementation thereto. Because these ‘key players’ are the ’employees likely to have relevant information’, it is particularly important that the preservation duty be communicated clearly to them. As with the litigation hold, the key players should be periodically reminded that the preservation duty is still in place. Finally, counsel should instruct all employees to produce electronic copies of their relevant active files. Counsel must also make sure that all backup media which the party is required to retain is identified and stored in a safe place.”
- Heng Chan v. Triple 8 Palace, (S.D.N.Y. Aug. 11, 2005) – “The preservation obligation runs first to counsel, who has a duty to advise his client of the type of information potentially relevant to the lawsuit and of the necessity of preventing its destruction. . . Where the client is a business, its managers, in turn, are responsible for conveying to the employees the requirements for preserving evidence. . . Thus, once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents. When the failure to meet these obligations results in the destruction of evidence, sanctions are warranted. And, though the nature of the sanction depends in part on the state of mind of the destroyer, some remedy may be appropriate even where the destruction is merely negligent.”
Until now, issues related to document preservation fell squarely on the client who, after all, typically has exclusive control over their own documents and information. For various reasons, including the dynamic nature of electronic data and modern computer systems as well as several high-profile e-discovery catastrophes involving large corporations, the courts are now are placing affirmative and stringent obligations on attorneys. And in-house attorneys should note that these obligations do not end with outside litigation counsel but expressly include in-house counsel and appear to reach any attorney who advises their clients about litigation or document retention.
The new federal rules require attorneys to confer about their clients’ electronic data and make “electronically stored information” completely discoverable. Therefore, the amended federal rules now require lawyers to investigate and understand their client’s computer systems and data and ensure that the relevant data is preserved and then produced in accordance with their discovery obligations. Gone are the days when lawyers could tell a federal judge that they don’t understand all of this technical computer stuff.
While these e-discovery obligations must be taken seriously, there is no reason to feel overwhelmed. In fact, if you’ve read this far then you should already be able to identify many of the key issues and pitfalls. Moreover, today there are numerous legal decisions highlighting the mistakes of others from which we can all learn a tremendous amount. There is also available a wealth of publications, vendors and other resources focusing on e-discovery. These resources – which were practically nonexistent just 3-4 years ago – now make it possible for lawyers, including the non-specialist, to understand and keep up with this evolving issue.
by Lee Gesmer | Oct 26, 2006 | Courts, Litigation, Technology
The best aspect of law school is the subordination of math.
Anon
________
The schematic displayed above (click for a blow up in pdf format) is a simplified illustration of a corporate network which Microsoft provided to the Federal Rules Committee in connection with proceedings on electronic evidence. It was intended to illustrate a generic corporate computer network.
If you are a lawyer and this seems like an alien concept that no lawyer should ever be required to understand, you’re not alone. Lets face it – like most stereotypes, the old joke that lawyers go to law school to avoid math and technology contains a large element of truth.
So, it’s not hard to sense the anxiety emanating from the hallways of the nation’s law offices as the electronic discovery tsunami picks up speed. Yes, there’s a new technology boom, but it’s not the kind that sent clients flocking to their lawyers for legal representation in the 1990s. Many lawyers in their 50s and 60s can barely find the caps lock key on a computer keyboard, much less learn the intricacies of “IT“.
Nevertheless, every day emails and brochures arrive announcing seminars and warning that the era of electronic data discovery (EDD) has finally, truly arrived. Luddite lawyers are warned that –
- 99% of all documents created today are in electronic form.
- Changes to the federal rules of civil procedure that will take effect on December 1st will require lawyers to be far more familiar with client information systems than in the past, and to work cooperatively with opposing counsel to preserve, retrieve and produce electronic data.
- Ignorance of the law (or of technology) is not a defense (!) The poster child for just how bad this can get is the Morgan Stanley case in Florida, where the trial judge ordered the jury to draw an adverse inference based on Morgan Stanley’s failure to turn over electronic documents, leading to a $600 million plus jury verdict against Morgan Stanley.
Of course, the law being what it is, the full implications of all of this are impossible to forsee. And the more you think about it, the worse it gets. How do you locate relevant electronic data in your client’s network? How do you review electronic data for relevance, work product and privilege? How do you designate individual documents “confidential” or “attorney’s eyes only” when they are part of a massive data file? How do you capture metadata? (What is metadata? Helpful hint: “metadata is information about information”). How do you capture and review data that uses software systems the client has abandoned (a surprisingly common problem)? How do you ensure that attachments accompany their original emails?
If you think the last question doesn’t present a problem, our firm can tell you about an opposing party that produced a massive Outlook email file that had been converted to an ASCII text file, and in the process had all the attachments stripped away. It took quite a bit of explaining on our part for the opposing lawyer to even understand the problem. Then, rather than incur the cost of reviewing this mass of material, the opposing party produced its entire email database for a several year period, disclosing not only irrelevant, privileged and technical client information, but personal medical records of employees.
Of course, what’s bad for the lawyers and courts is always good for the experts. The demand for computer forensic experts that can address these questions (and a hundred more), as well as take potshots at the opposing party’s EDD, will undoubtedly flourish. Kroll has already staked out a big piece of this business, but there is room for countless smaller players as the industry evolves. Courts and lawyers can’t possibly be expected to understand all of this stuff themselves. In the end, the losers will be the lawyers and law firms that can’t master this process, and the clients who are forced to pay for it.
by Lee Gesmer | Oct 4, 2006 | Courts, Litigation
Lawyers know that one of the most unpredictable decisions a Superior Court judge can make involves long-arm jurisdiction – that is, whether the defendant has enough “contacts” with the state to be sued here. (For an article by the author discussing the state long-arm statute in depth, click here).
Two recent decisions illustrate this point. In Saint-Gobain Ceramics v. Happy Hewes Judge Bruce Henry ruled that there was no personal jurisdiction over Hewes, who lived in Illinois, despite the fact that Hewes had been an employee of Saint-Gobain, engaged in phone calls with Saint-Gobain in Massachusetts, had made multiple visits to Massachusetts on company business and had received paychecks from Saint-Gobain’s facility in the state. Most lawyers would tell you that this was more than enough to establish personal jurisdiction, but Judge Henry disagreed, noting that “whatever Hewes did during the unspecified number of contacts with Massachusetts was at his employer’s behest and not for his own purposes.” This line of reasoning has little basis in Massachusetts law that I’m aware of, but it persuaded Judge Henry, who dismissed the case against Happy Hewes, leaving Saint-Gobain to pursue him in Illinois.
On the other hand, in Deutch Williams v. Naturopathic Laboratories Int’l a Massachusetts law firm sued its former client for attorney’s fees. Even though the former client had no operations in Massachusetts and had never visited here in connection with the representation, Judge John Cratsley held that the client’s decision to hire the Massachusetts law firm, together with communications between the law firm and its client over a period of seven months, was enough to establish jurisdiction.
It’s hard to reconcile these two decisions on legal grounds. There’s little doubt that had the cases (but not the judges) been switched, the outcome in the two cases would have been reversed. The moral? The outcome of long-arm jurisdiction motions are hard to predict at best, but the luck of the draw (which judge you draw, that is), may have a greater impact on the outcome than the facts of the case.
by Lee Gesmer | Sep 26, 2006 | Courts, Litigation
Courts. Judge Jack B. Weinstein is a legend in the federal judicial system. A district court judge from 1967 to 1993, he has been on “senior status” (but with a full case load) for the last 13 years. Yesterday, this 85 year old judge issued one of the longest decisions ever published: the 540 page decision certifying a class action in Schwab v. Philip Morris USA, a case alleging that smokers were defrauded into believing that “light” cigarettes were less dangerous than regular cigarettes.
A link to this exhaustive and carefully reasoned decision, which may be the most significant by Judge Weinstein in his forty years on the bench, is here. Proponents of “early retirement” should take a look.
by Lee Gesmer | Sep 18, 2006 | Business Lit. Session, Litigation
Litigation. Lawyers love to argue about attorney-client privilege. What could be juicier than to find out what your adversary in litigation said to his or her attorney, believing it to be covered by this privilege, a privilege that is so sacrosanct that the Supreme Court has ruled that it extends beyond the grave?
Nevertheless, the attorney-client privilege can easily be lost or waived. For example, if the communication is revealed to a non-attorney third party, it risks waiver.
The world of computer technology and email has given rise to new grist for the waiver doctrine. Most companies inform their employees (in employee manuals, for example) that communications utilizing the company’s internal email system are open to review and examination by the employer. According, it is established law that an employee who uses her employer’s email system to communicate with an attorney has waived the privilege. Most lawyers, aware of this, instruct their clients who wish to communicate from work to use an Internet-based email system, such as Google’s Gmail or Yahoo Mail. The theory is that since the employer doesn’t have access to these emails and the emails are protected by a user name and password, they retain their privilege.
This assumption was challenged in a recent case before Judge Gants, sitting in the Massachusetts Business Litigation Session. In this case, NERA v. Evans, the former employer argued that since, unbeknownst to the former employee, the computer used by the employee (who was now suing the company) stored screen shots of the emails, which were then technically accessible to the employer, the privilege had been waived. Judge Gants rejected this argument, but he did posit a “test” that, until something better comes along, should be viewed as highly persuasive precedent, at least in Massachusetts. Judge Gants stated:
The bottom line is that if an employer wishes to read an employee’s attorney-client communications unintentionally stored in a temporary file on a company-owned computer that were made via a private, password-protected e-mail account accessed through the Internet, not the company’s Intranet, the employer must plainly communicate to the employee that:
1. All such emails are stored on the hard disk of the company’s computer in a “screen shot” temporary file; and
2. the company expressly reserves the right to retrieve those temporary files and read them.
Frankly, I don’t expect many companies to adopt such a policy, but at least there is some guidance on this issue from a well-respected Massachusetts Superior Court judge.
by Lee Gesmer | Sep 15, 2006 | Litigation
Litigation. In Pease v. Tyco Electronics Corp., decided on September 7, 2006, Massachusetts Federal District Court Judge Ponsor dismissed wrongful termination claims by a former employee of Tyco, based on evidence that the employee had lied to Tyco regarding his education (an MBA), and then modified and destroyed files on his computer to cover up his actions during the litigation. Among other things, this case shows how effective forensic examination of a computer can be in litigation, as well as the fact that federal judges simply won’t tolerate this kind of conduct.
Of course, the case also shows that when an employee brings a suit like this he had better make sure that he has no skeletons in the closet.
by Lee Gesmer | Sep 11, 2006 | Litigation
Litigation.
“Of course, this letter is not intended to create, nor do you or we presently have any binding legal obligation whatever in any way . . ..”
In 1991 those words played a major role in the Massachusetts Appeal Court’s reversal of a $32 million trial judgment against Federal-Mogul Corp. in the case (infamous to Massachusetts business lawyers of the time) of Schwanbeck v. Federal-Mogul. The plaintiff in that case claimed he had a deal to buy a division of Federal-Mogul, and FM had breached that agreement. While the trial court agreed (resulting in the $32 million judgment), the Appeals Court reversed, in part on the language quoted above.
That case was an object lesson to attorneys in our firm involved in M&A transactions that it was essential to include “no legal obligation” language in every transaction, unless and until our client was prepared to be legally bound. An article that I wrote in 1991 discussing this case in more detail is linked here.
However, this problem is not limited to contracts – it arises surprisingly often in settlement discussions in litigation. Not too long ago our firm had a case in which the attorneys for the other side insisted that a verbal conversation with an attorney in our firm, followed by a confirmatory letter that outlined a settlement at a high level of generality, was enough to result in a settlement binding on our client. After months of depositions, days of arbitration, and well over a million dollars in legal fees on both sides, an arbitrator ruled that the agreement was not binding on our client, leading to even more litigation and, ultimately, a favorable settlement for our client.
Another permutation of this legal trap is illustrated in a recent decision by Superior Court Judge Allan van Gestel in the case Targus Group Int’l v. Sherman. There, following a private and nonbinding mediation, the parties entered into a written and signed “Agreement in Principle,” setting out settlement terms. The Agreement did call for “execution and exchange of final settlement documents and mutual releases in a form satisfactory to counsel ….,” but did not contain “no legal obligation” language.
The settlement faltered as the parties tried to negotiate final settlement documents, and the parties ended up in court, with Targus arguing the Agreement in Principle was binding on Sherman.
The result? Judge van Gestel granted summary judgment for Targus, holding that the Agreement in Principle contained all the essential terms and therefore was binding.
Practice pointer: unless you intend to be bound, always, always, include language to the effect that there is no binding agreement until a final agreement is reached. Calling a settlement agreement an agreement “in principle” and making it subject to a later agreement satisfactory to counsel is not enough to guarantee avoiding the result in the Targus case. Although this should be obvious to most experienced lawyers, its surprising how many lawyers miss this simple point. In my office I have an easy way avoid this result: whenever settlement negotiations begin I send an email to opposing counsel, stating that we have no deal until we have a final settlement agreement, approved and signed by the clients. Opposing counsel inevitably writes back agreeing, and the risk of having an agreement forced on my client is avoided.
