discovery ethics & e-discovery

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ELECTRONIC DISCOVERY LAW

DISCOVERY ETHICS
© Richard E. Best 1998-2006 All rights reserved CONTACT

CLE e-discovery ethics presentations

E-DISCOVERY	Intro	Experts	Early Relief	Gen'l Discovery	Privileges	Sanctions & Spoliation	Document Retention	Evidence Admission	New
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Duty of Competence
Duty to Comply with Law
Duty to be Proactive
Duty to Confer Early
Duty to acquire & maintain Expertise
Duty to Supervise
Discipline & Disbarment
Malpractice
Conflicts with Client
Duty of Confidentiality

Changing expectations & technology
Transmission of client data
Storage of client data
Duty to Notify of Access
Unknown disclosure / acquisition of e-data

Metadata

Inadvertent disclosures
Metadata Bar Ethics Opinions

Privilege & waiver issues
CLE e-discovery ethics presentations

See also Legal Ethics . Com http://www.legalethics.com/

Duty of Competence

ABA Rule 1.1

California Rules of Professional Conduct Rule 3-110 [comment re duty to supervise]

Basic knowledge and application of all discovery concepts to the specific facts of the case the potential issues in the case

Basic Concepts: "reasonable particularity", "good cause" , "good faith"
Protective orders & cost/benefit analyses: C.C.P. §§2017.020, 2019.030, 2031.060, [see also California statutes]
Cost shifting factors: C.C.P. §2031.280(b), protective order concepts
Toshiba America Electronic Components, Inc., v. Superior Court 124 CA4th 762 (2004)
Use of early case management requirements to meet & confer

ETHICS IN THE ERA OF ELECTRONIC EVIDENCE 41-OCT JTLATRIAL 56 Christopher D.Wall (October, 2005)
COMING OF AGE ON ETHICS AND THE INTERNET, 22 No. 4 GPSOLO 56 ABA, Mark L. Tuft (June, 2005)
See below re "Changing expectations & technology"

Duty to Comply with discovery obligations

A LAWYER SHALL NOT

Advise violation of law, rule or ruling Calif Rule 3-210
“unlawfully obstruct another party' s access to evidence…” ABA Model Rule 3.4 (a)
Counsel or assist a client to do so ABA Model Rule 3.4 (a)
Fail to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party ABA Model Rule 3.4 (d)
Suppress any evidence that the … client has a legal obligation to … produce. California Rule 5-220

California Rules 3-210, 5-220

Qualcomm Inc. v. Broadcom Corp., 2008 U.S. Dist. LEXIS 911 (January 7, 2008)
“...the Court finds that these attorneys did not conduct a reasonable inquiry into the adequacy of Qualcomm's document search and production and, accordingly, they are responsible,[*56] along with Qualcomm, for the monumental discovery violation.”
In Footnote 10 the court stated. "Leung's attorney represented during the OSC hearing that Leung requested a more thorough document search but that Qualcomm refused to do so. October 12, 2007 Hearing Transcript at 14-15. If Leung was unable to get Qualcomm to conduct the type of search he deemed necessary to verify the adequacy of the document search and production, then he should have obtained the assistance of supervising or senior attorneys. If Mammen and Batchelder were unable to get Qualcomm to conduct a competent and thorough document search, they should have withdrawn from the case or taken other action to ensure production of the evidence. See The State Bar of California, Rules of Professional Conduct, Rule 5-220 (a lawyer shall not suppress evidence that the lawyer or the lawyer's client has a legal obligation to reveal); Rule 3-700 (a lawyer shall withdraw from employment if the lawyer knows or should know that continued employment will result in a violation of these rules or the client insists that the lawyer pursue a course of conduct prohibited under these rules). Attorneys' ethical obligations do not permit them to participate in an inadequate document search and then provide misleading and incomplete information to their opponents and false arguments to the court. Id.; Rule 5-200 (a lawyer shall not seek to mislead the judge or jury by a false statement of fact or law); see also, In re Marriage of Gong and Kwong, 157 Cal. App. 4th 939, 951 (1st Dist. 2007) [*50] ("[a]n attorney in a civil case is not a hired gun required to carry out every direction given by the client;" he must act like the professional he is)."

ABA Model Rules 3.4(a) & (d)

FRCP Rule 1:"They shall be construed and administered to secure the just, speedy, and inexpensive determination of every action."

Gilliam v. Addicts Rehabilitation Center Fund, Inc. 2006 WL 228874 (S.D.N.Y.2006) [rule applied to avoid delay in order to review e-data]

Duty to be Proactive regarding the client's e-discovery

Zubulake v. UBS Warburg (S.D.N.Y. 2004) 229 F.R.D. 422, 432

Phoenix Four, Inc. v. Strategic Resources Corp. (S.D.N.Y.2006), 2006 WL 1409413 Duty of counsel to pursue e-documents of defunct corporation.left behind plaintiff's marketing documents, old prospectuses, and trade publications plus 10 workstations which the landlord disposed but took a server that contained potential evidence in a hidden partition. Suit was filed in May, 2005 and counsel requested the client to produce electronic and hard copy documents. The client did not find electronic documents and advised counsel that none existed. A year later on the eve of trial, the electronic documents were discovered; the client immediately notified counsel who notified opposing counsel. The court found counsel's "deficiencies here to constitute gross negligence" and awarded monetary sanctions against counsel and client.
Defendant notified its insurance company of a dispute in April 2004; it delivered paper and electronic accounting records to Plaintiff in August 2004; it ceased operations and was evicted from its offices in March 2005 and

Counsel "failed in its obligation to locate and timely produce the evidence stored in the server that the ... Defendants took with them .... [Counsel] affirms that it engaged in dialogue with the defendants on the need to locate and gather paper and electronic documents. .... But counsel's obligation is not confined to a request for documents; the duty is to search for sources of information.

It appears that [counsel] never undertook the more methodical survey of the ... Defendants' sources of information ... outlined in Zubulake V. [Counsel] simply accepted the defendants' representation that, because [it] was no longer in operation, there were no computers or electronic collections to search. Had [Counsel] been diligent, it might have asked-as it should have-what had happened to the computers .... Further, [Counsel's] obligation under Zubulake V extends to an inquiry as to whether information was stored on that server and, had the defendants been unable to answer that question, directing that a technician examine the server. In the case of a defunct organization such as SRC, this forensic effort would be no more than the equivalent of questioning the information technology personnel of a live enterprise about how information is stored on the organization's computer system.

....The proposed amendments [to the FRCP] essentially codify the teaching of Zubulake IV & V, of which [Counsel] should have been well aware. I find [Counsel's] deficiencies here to constitute gross negligence.

The trial court held the duty to preserve existed at the time the potential dispute was known by defendants who were also on plaintiff's board which was prior to the abandonment of the property. "Their indifference constituted an act of gross negligence that is not excused by the disarray of their business affairs." But it was not enough for an adverse inference because "I do not find this instance to be one in which gross negligence alone supports an inference that the abandoned evidence was unfavorable". The trial court denied all sanctions except partial monetary compensation.

ABA Civil Discovery Standard 10 duty to advise client of preservation duty & consequences

Samsung Electronics Co., Ltd. v. Rambus, Inc. 2006 WL 2038417 (E.D.Va.) General admonitions by counsel to preserve relevant documents is insufficient and counsel must instruct on the subject matter and kinds of documents to preserve. In denying attorneys' fees, the court discussed the duty of counsel to assure retention of documents relevant to litigation, criticised counsel with regard to advice given in 1998 regarding document preservation, and noted "...in order to have an effective suspension of the document destruction plan during litigation, employees must be specifically instructed respecting what documents are relevant to the litigation (and thus cannot be destroyed) and what documents are not relevant (and thus can be destroyed). "

Duty to Confer Early re e-discovery issues

Federal FRCP 26(f) and Committee Notes re subject matter

California CRC Rule 212

Discovery of e-data is a potential issue in every case

Duty to Acquire & maintain Expertise

Experts: Ethical duty to retain Arizona State Bar Opinion 2005 #05-04

Duty of continuing education on tech and legal matters

Florida Bar Professional Ethics Commitee, Proposed Advisory Opinion 06-2, dated 4/10/06 [revised 6/23/06; further comments solicited and reconsidered in Semptember

"The foregoing obligations may necessitate a lawyer’s continuing training and education in the use of technology in transmitting and receiving electronic documents in order to protect client information under Rule 4-1.6(a)."

Duty to Supervise

California Rules of Professional Conduct, Rule 3-110 [comment ] "The duties set forth in rule 3-110 include the duty to supervise the work of subordinate attorney and non-attorney employees or agents." [numerous citations]

Samsung Electronics Co., Ltd. v. Rambus, Inc. 2006 WL 2038417 (E.D.Va.) [duty to instruct with specifiicity]

Cardenas v. Dorel Juvenile Group, Inc., 2006 WL 1537394 (D. Kan. 2006) While granting monetary sanctions, the trial court reiterated counsels duty in conducting discovery relying upon Bratka v. Anheuser-Busch Co., Inc. (S.D.Ohio,1995), 164 F.R.D. 448, 461:

"Trial counsel have a duty to exercise some degree of oversight over their clients' employees to ensure that they are acting competently, diligently, and ethically in order to fulfill their responsibility to the Court and opposing parties. Accordingly, trial counsel have the obligation to communicate with in-house counsel to identify the persons having responsibility for the matters that are the subject of the document requests and to identify all employees likely to have been authors, recipients or custodians of documents falling within the request. Trial counsel also have an obligation to review all documents received from the client to see whether they indicate the existence of other documents not previously retrieved or produced. The Court does not find that these duties were met here...."

Discipline & disbarment

See California Codes

Crime - fraud exception to attorney - client privilege California Evidence Code §981

California Business & Professions Code §6106

Disbarment for felony or misdemeanor

Conviction not condition precedent to disbarment

Spoliation as crime: California Penal Code §135

Calif. Business & Professions Code §6103

Disbarment for Violation of attorney duties

Disbarment for willful violation of court order

Coleman (Parent) Holdings Inc. v. Morgan Stanley, Inc., 2005 WL 674885 (Fla.Cir.Ct., 2005.) [writ striking pro hac vice revocation 5/24/06]

Clare v. Coleman (Parent) Holdings Inc. (Ct.App.Fla 5/24/06), 2006 WL 1409137 Writ issued to strike revocation of pro hac vice status on due process grounds.

Malpractice

Coleman (Parent) Holdings Inc. v. Morgan Stanley, Inc., 2005 WL 674885 (Fla.Cir.Ct., 2005.) [$1.4 billion judgment, rev'd on other grounds, based on discovery misconduct. “In court, Morgan Stanley said it is considering a malpractice suit against the law firm that represented it...."Wall Street Journal, May 16, 2005 p.A.1.] case on appeal.

TIG Ins. Co. v. Giffin Winning Cohen & Bodewes, P.C. 444 F.3d 587 (7^th Cir.2006)
[malpractice action by insurer of client to recover cost of defending against discovery sanctions motion]

Conflicts with Client

Duty to Withdraw

Crime - fraud exception to attorney - client privilege

California Evidence Code §981

Rambus Inc. v. Infineon Technologies AG (E.D. Va. 2004), 222 F.R.D. 280 [consultation re data preservation policy when spoliation alleged]

Hynix Semiconductor Inc. v. Rambus, Inc.(N.D.Cal.2006)Slip Copy, 2006 WL 565893. The trial court rejected claims of spoliation and dismissal based upon unclean hands due to the adoption of a document retention policy while formulating a strategy for licensing and litigation of patent claims. The propriety of the retention policy itself---which reduced the life cycle of backup tapes, eliminated drafts, encouraged elimination of unnecessary email--- was not disputed. The spoliation claim was based on the assertion that Rambus adopted its document retention policy and destroyed documents at the same time it was contemplating litigation. The court reviewed in detail the advice and testimony of counsel regarding the development and implementation of document retention policy.
"The primary question before the court is whether Rambus adopted and implemented its document retention policy in advance of reasonably foreseeable litigation for the purpose of destroying relevant information."

Wachtel v. Guardian Life Ins. Co. (D.N.J.2006 Slip Copy), 239 F.R.D. 376 2006 WL 1286189 [The crime-fraud exception to attorney-client privilege and work product applies to spoliation of e-mail. "The Court also finds... Defendants may have used their counsel to delay discovery. Throughout discovery, Plaintiffs expressed concerns... Defendants were not taking all appropriate steps to preserve and produce relevant documents. In response ... Health Net's counsel...stated...'we are familiar with our obligations' and that the company 'has complied with its obligations to preserve evidence.' Despite these assurances, there has been a prima facie showing that Health Net did not have effective procedures in place to ensure the preservation of employees' electronic mail."]

In re Grand Jury Investigation (3d Cir. 2006), 445 F.3d 266, 2006 WL 1044212. Application of crime / fraud exception to attorney-client and work product was affirmed in grand jury proceedings when the attorney advised the executive of receipt of a subpoena and e-mail was subsequently deleted. Such advice was used in "furtherance" of the crime.

Duty to be proactive / client desire to control costs & conduct search & production

Selection of vendor / financial conflicts, duty to supervise, responsibility & loyalty

Duty of Confidentiality

ABA Model Rule 1.6

California Rule 3-100,

California Business & Professions Code §6068(e)

Changing expectations of privacy

E-mail transmission: ethics opinions re reasonable expectation of privacy

ABA Formal Ethics Opinion 99-413, March 10, 1999: unencrypted e-mail generally OK but consult with client re highly sensitive information
Tuft,22 No. 4 GPSOLO 56, ABA(2005) at p.57 "Although encrypted e-mail is not required for lawyers, it could be considered a standard if the content is sufficiently sensitive...."Lawyers must be aware of the characteristics of various e-mail systems and employ appropriate security measures in transmitting sensitive client information."

Disclosures of hacking, spyware, communication intercepts, data loss

Employee expectations; employer monitoring

Changing technology

Reasonable care requires staying abreast of tech advances

New York State Bar Opinion 782(2004)

Florida Proposed Advisory Opinion 06-2 (4/10/06) [revised 6/23; see above]

Nevada State Bar Formal Opinion. 33 (2/9/06) encryption etc already required per commentators

Transmission of client data

Florida Bar Prof. Ethics Com., Proposed Advisory Opinion 06-2 (4/10/06) [Sender duty: take reasonable steps to safeguard the confidentiality "including information contained in metadata... "; Recipient duty: "not to try to obtain" confidential information from metadata

New York State Bar Ethics Opinions 782 (2004) 749 (2001)

Alabama State Bar Office of Gen. Counsel, Op. RO-2007-02, 3/14/07

See above re changing expectations

Privileged communications

Attorney-client privilege not lost solely by e-transmission Ev.Code §917(b)

Storage of client data
Client data on attorney network: take reasonable precautions

Duty to take steps to prevent loss, destruction or disclosure by theft, accident

Arizona State Bar Opinion #05-04 (July 2005)[not unethical if take steps to assure (1) confidences not disclosed through theft or inadvertence. (2) electronic information is not lost or destroyed ]

Professional Ethics of the Florida Bar, Proposed Advisory Opinion 06-01: 6/12/06 update

Client data stored with 3d parties

Reasonable care re selection to protect confidentiality

Instruct & require 3d party to prevent access or loss of confidentiality

Enforceable agreement to protect confidentiality

Nevada State Bar Formal Opinion.33 (2/9/06) [Storage of E-data with 3d parties permitted if attorney acts competently and reasonably "1. Exercises reasonable care in the selection of the third party contractor, such that the contractor can be reasonably relied upon to keep the information confidential; and 2. Has a reasonable expectation that the information will be kept confidential; and 3. Instructs and requires the third party contractor to keep the information confidential and inaccessible."]

New Jersey Opinion 701, Advisory Comm. on Professional Ethics [Require an enforceable obligation to preserve confidentiality and security, and use of available technology to guard against reasonably foreseeable attempts to infiltrate the data]

Virginia Legal Ethics Opinion 1818 footnote 2

"provided the lawyer exercises due care in the selection of the agency, advises the agency that the information must be kept confidential and reasonably believes that the information will be kept confidential."

Duty to Notify of access to personal information:

California Civil Code 1798.82, 1798.29 aka SB 1386
See privacyrights.org re list of persons whose data has been accessed

Unknown disclosure / acquisition of e-data

Knowledge & use of tech to obtain e.g. metadata, versions, undo, track changes

Unethical use of technology to surreptitiously examine and trace electronic documents.

New York Committee on Professional Ethics, Opinion 749 – 12/14/01

Metadata

Discoverable

In re Verisign, 2004 WL 2445243 (N.D.Cal.2004)
Nova Measuring Instruments Ltd. v. Nanometrics, Inc., 2006 WL 524708 (N.D.Cal. 2006)
Rodriguez v. City of Fresno (E.D.Cal.2006 slip op.), 2006 WL 903675
Williams v. Sprint/United Management Co., 230 F.R.D. 640, 2005 WL 2401626 (D.Kan.,2005)
Hagenbuch v. 3B6 Sistemi Elettronici Industriali S.R.L 2006 WL 665005 (N.D.Ill.2006)
In Re: Priceline.com Inc., Securities Litigation (D.Conn.2005), 2005 U.S. Dist. LEXIS 32154

Inadvertent Disclosures: Ethical duties if opponent inadvertently produces

Inadvertent production as possible waiver under applicable law of jurisdiction

Risk of FRCP 26 & CRC 212 early discussion / stipulation

FRCP Rule26 protocol
Agree but don't rely
Hopson v. Mayor and City Council of Baltimore (D.Md.2005), 232 F.R.D. 228 ["Absent a definitive ruling on the waiver issue, no prudent party would agree to follow the procedures recommended in the proposed rule." ]

ABA Rule 4.4 (b)
ABA Opinion 05-437 notify sender but can review [October 1, 2005 revokes Opinion 92-368]

Prior ABA opinions superseded by Rule 4.4 and ABA Formal Op. 06-442 below [ABA Formal Opinion. 94-382, 7/5/94; notify & refrain from using]

FRCP 26(b)(5)(B) if notified, return, sequester, destroy; can't use

California case law: notify and refrain from further examination

Rico v. Mitsubishi Motors (2007), Cal.4th (Filed 12/13/07) Ethical duty for inadvertent production.

“When a lawyer who receives materials that obviously appear to be subject to an attorney-client privilege or otherwise clearly appear to be confidential and privileged and where it is reasonably apparent that the materials were provided or made available through inadvertence, the lawyer receiving such materials should refrain from examining the materials any more than is essential to ascertain if the materials are privileged, and shall immediately notify the sender that he or she possesses material that appears to be privileged. The parties may then proceed to resolve the situation by agreement or may resort to the court for guidance with the benefit of protective orders and other judicial intervention as may be justified.”

The Supreme Court determined a document, in toto, to be absolute work product and to have been inadvertently produced. It adopted the ethical standard set forth in State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal. App. 4th 644. It also agreed that the “standard applies to documents that are plainly privileged and confidential, regardless of whether they are privileged under the attorney-client privilege, the work product privilege, or any other similar doctrine that would preclude discovery based on the confidential nature of the document.”
The Supreme Court found no abuse of discretion and affirmed the disqualification of counsel as an appropriate remedy.

“Thus, ‘the record shows that Johnson not only failed to conduct himself as required under State Fund, [supra, 70 Cal.App.4th 644,] but also acted unethically in making full use of the confidential document.’ The Court of Appeal properly concluded that such use of the document undermined the defense experts’ opinions and placed defendants at a great disadvantage. Without disqualification of plaintiffs’ counsel and their experts, the damage caused by Johnson’s use and dissemination of the notes was irreversible.”

State Comp. Ins. Fund v. Telanoff (1999),70 Cal.App.4th 644
Aerojet General Corp. v. Transport Indemnity Ins.(1993), 18 Cal.App.4th 996

Evid C. §912 proposed amendment to add "intentionally"

NYC: prompt notification, no review, return or destroy if requested
Opinion 2003-04 New York City Bar Assn. Comm on Prof & Jud Ethics

Florida Bar Ethics Opinion 93-3, 74-7: prompt notification of mistake

Florida. Bar Prof. Ethics Com., Proposed Advisory Opinion 06-2, dated 4/10/06

Alabama State Bar Office of Gen. Counsel, Op. RO-2007-02, 3/14/07

Metadata Bar Ethics Opinions:

Duty of Sender duty: don't send
Duty of Recipient ethics: don't use

New York State Bar Ethics Opinions 782 (2004) 749 (2001)

Alabama State Bar Office of Gen. Counsel, Op. RO-2007-02, 3/14/07

Absent express authorization from a court, it is ethically impermissible for an attorney to mine metadata from an electronic document he or she inadvertently or improperly receives from another party.
Lawyers have a duty under Rule 1.6 to use reasonable care when transmitting electronic documents to prevent the disclosure of metadata containing client confidences or secrets.

F.R.C.P. Rule 26 (b)(5)(B) If notified of privilege claim return and don't use documents until claim resolved

California case law: If privileged, notify holder of privilege and refrain from use

CONTRA

ABA Model Rule 4.4(B) "generally" permits "...a lawyer to review and use embedded information contained in e-mail and other electronic documents, whether received from opposing counsel, an adverse party or an agent of an adverse an adverse party. "
ABA Formal Op. 06-442 “Review and Use of Metadata” August 5, 2006
Maryland Bar Assoc. Committee on Ethics October 19, 2006 Opin.# 2007-09 "Ethics of Viewing and/or Using Metadata."

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