e-Discovery Team Training

Welcome to Module 1-O.

Language and Talk of e-Discovery.

This module should arguably have come first, namely a review of the vocabulary and specialized terms used in e-discovery. The bible for this task, like so many in e-discovery, comes from the Sedona Conference: The Sedona Conference® Glossary: E-Discovery & Digital Information Management (Second Edition). We will also explore some of the problems of communication in this area, especially in a team composed of lawyers and IT, and the question of embarrassing emails. Why do people write them when they know we live in such a litigious society? Don’t they know that the “e” in e-mail stands for evidence?

Many of the problems of e-discovery derive from issues of language. As we have seen, the peculiarities of language make simple keyword search ineffective. That is why more sophisticated multi-modal approaches are needed. But there is more to language issues than that. There is also the inability of the cultures of law and IT to communicate well that hinders the development of effective teamwork. The different disciplines sometimes think they understand each other when they do not. The first essay after the list of vocabulary words explores this issue. The second goes to the more fundamental issue as to why the discovery of electronic communications often turns up such critical information, namely the fact that people often say very frank and honest things in emails. They seem to forget that these emails might someday be discovered and used against them in a court of law or public opinion. This is unlikely to change and people become more and more reliant on electronic communications.

VOCABULARY

Study all of the Sedona Glossary, but note that below are a few of the words that I have found to be most important. I do not include many more basic terms that I assume you are already familiar with. The Sedona Glossary is designed for an older generation with virtually no knowledge of computers.

Active Data and Records

Architecture

Archival Data

Archive

ASCII

Attachment

Backup, Backup Data, Backup Tape Recycling, Backup Tapes

Client Server

Cluster

Concept Serach

Corrupted File

Data

Data Mining

De-Duplication

Deleted Data

Digital FZingerprint

Disposition

Distributed Data

Document Metadata

Email String

FAT

File Server

File Slack

File System Metadata

Forensic Copy

Form of Production

Fuzzy Search

Harvesting

Hash, Hash Coding

Image

IT Infrastructure

Janitor Program

Latent Data

Legacy Data

Legal Hold

Lifecycle

Logical File Space

Make-Available Production

Media

Memory

Metadata

Migration

Mirroring

Native Format

Network

On-Line Review

Physical File Space

Privilege Data Set

Production Data Set

PST

Record, and all terms beginning with Record

Residual Data

Restore

Sampling

Sector

Server

Slack Space

SQL

Subjective Coding

Tape Drive

Taxonomy

Temporary File

Unallocated Space

URL

User-Added Metadata

WORM

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Who’s On First?

The “Who’s on First?” word play by Bud Abbot and Lou Costello captures a core problem of e-discovery today. In this famous comedic example of miscommunication, the tall Abbot says one thing, and the portly Costello hears another. No matter how they played this skit, the resulting confusion was always hilarious. Unfortunately, when this kind of miscommunication happens in the world of e-discovery, and I contend it happens every day in a thousand different ways, the results can be sanctionable. The case of Great American Ins. Co. v. Lowry Development, 2007 WL 4268776 (November 30, 2007, S.D.Miss.) provides us with a good example.

You know, strange as it may seem, they give computer parts peculiar names nowadays. On a personal computer, we have memory, hard drives, files, and even a motherboard. All of these names were used frequently in Great American, although based on the opinion, not always correctly. The plaintiff insurer moved for sanctions against one of the defendants, the insured’s insurance broker, Danny Groves. Groves disposed of his personal computer after suit was filed when he had a duty to preserve all relevant information. He disposed of his PC after it was damaged by a lightning strike! Since I live in the lightning capital of the U.S., I happen to know a lot about what lightning can do to a computer, and none of it is good.

The parties all agreed that Groves’ computer was hit by lightning, but, aside from that, all of the other facts surrounding the destruction of his PC were disputed. So much so, that the Senior District Court Judge in Mississippi trying to sort this all out, L. T. Senter, Jr., required an evidentiary hearing.

After the hearing, where Groves and others testified, Judge Senter was persuaded that sanctions should be imposed against Groves because his disposal of the PC made it impossible for the insurer, Great American, to get documents from computer memory, documents that could have been relevant. Yes, you heard right – the computer memory. Groves argued there was nothing of value in his computer anyway, and so sanctions were not appropriate. To this retort, all the insurer could do was make speculative arguments that two documents might have been in Groves’ computer, since they could not be found anywhere else, and admittedly might not even exist. But if these two documents did exist, the insurer was convinced they would probably support its position that the policy did not cover wind damage, and so they did not have to pay for damages caused by Hurricane Katrina. Here is how Senior Judge Senter. Jr. explains it:

Other than these two documents, Great American has not specifically identified any relevant document that is missing from this record, but it is Groves’s disposal of his computer, the very act at issue, that deprives Great American of the ability to specify the documents in the computer memory that may have been relevant to the issues in this case. Whatever information the computer contained is now permanently unavailable.

Of course, the documents in the computer memory, assuming there were any, were permanently unavailable the minute Groves turned his computer off for the night, not to mention when it was struck by lightning. Computer memory, which is generally understood to mean RAM memory unless otherwise specified, is inherently ephemeral, and only exists in the memory chips as long as they have power. The instant a computer is powered down, the data stored in memory is lost.

How did the judge in Mississippi get as mad as Costello at the end of the ‘Who’s on First?” routine? Well, perhaps not that mad, but upset enough to impose sanctions to support the insurer’s “mutual mistake” argument. This “mutual mistake” argument is quite creative and bears some explanation. The insurer contends that it should not have to pay damages caused by Hurricane Katrina because when the policy was purchased, neither party thought that the policy covered wind damage, even if the courts in Mississippi now say it does. Since both parties were mistaken, the contract is voidable by the insurer. It is a novel defense, one I have made myself a few times, but I cannot recall that it has ever succeeded. Moreover, I would consider it a very long shot in these circumstances, where a jury in Mississippi must be convinced to side with an insurance company trying to avoid payment of a Hurricane Katrina claim.

But back to the circumstances in this case which agitated the judge enough to sanction Groves. It all started when Groves testified in his first deposition that his computer, the one he used in connection with the purchase of the insurance policy at issue, had been struck by lightning, and so he had no documents to produce. Groves testified that:

Took it in, he couldn’t fix it. He kept it. I don’t know what he did with it. I bought a new one from Dell, and that’s what I have.

The insurer followed up on this deposition testimony by requesting inspection of Groves’ “electronic files.” Groves’ attorney, who presumably was sitting next to Groves when he testified at the deposition, wrote an objection to the request where he stated:

… the only computer that contained such files and/or data was damaged by lightning in the summer of 2006. This computer was thereafter examined by Tech Advanced Computers and determined to be inoperable, and the files and data contained were not retrievable or capable of restoration. This motherboard of the computer was therefore replaced and the old motherboard discarded and is no longer in Groves’s possession.

So, the motherboard was fried by the lightning strike – no surprise there. But was the hard drive also zapped? Cannot tell from this answer, but you can tell that the motherboard was replaced and the old motherboard was discarded. Didn’t Groves just testify that the tech could not fix the computer, so he had to buy a new one from Dell? Did the lawyer think motherboard was the same thing as a computer?

Naturally, the insurance lawyer responded to that objection by talking to the Tech Advanced Computer technician who worked on Grove’s computer, Shawn Cusolito, and persuaded Cusolito to sign an affidavit. The way these things usually work is, the lawyer interviews the witness, and then the lawyer prepares an affidavit for them to sign, using language as favorable as possible for his or her client, in this case the Great American Insurance Company. Not too surprisingly, the tech’s affidavit contradicted both Groves’ testimony, and his attorney’s reponse to the production request. For some reason, Shawn Cusolito was not called to testify at the hearing, and the judge instead relied only on the affidavit, thereby depriving Groves of any chance of cross-examination of this witness. Here is how the Court summarized Cusolito’s affidavit statements:

… the technician reported that he was able to repair Groves’s computer by replacing its motherboard and that he returned the computer to Groves in good working order. Cusolito’s affidavit indicates that damage to the motherboard of this computer would not have caused a loss of any file or data stored in the computer.

I wonder how Cusolito knew that the lightning strike that fried the motherboard would not have caused any loss of data on the hard drive(s)? Did he run complete diagnostic tests on the hard drives to be sure no sectors were damaged? Did he even check that at all? Or did he just replace the motherboard, turn it on, and see that it booted ok? We’ll never know because all we have is his affidavit.

The Tech Responds

After I wrote an article on this Mr. Cusolito read the above questions and contacted me and provided the following explanation:

Thought I would answer some of your questions.

“I wonder how Cusolito knew that the lightning strike that fried the motherboard would not have caused any loss of data on the hard drive(s)?” This is an alleged lightning strike as stated by the customer, I can neither prove nor disprove lightning damage, as there was no physical evidence of lightning damage.

“Did he run complete diagnostic tests on the hard drives to be sure no sectors were damaged?” Thorough diagnostics were run on each and every component of the system prior to generating a quote for repair. Both the Dell diagnostics and a third party diagnostic were run on the hard drive to check the sectors. Additionally, there was no evidence of corruption to the file indexes.

“Did he even check that at all? Or did he just replace the motherboard, turn it on, and see that it booted ok?” The faulty part was already identified and the customer issued a quote for repair prior to a logic board ever being ordered based on the diagnostics of all of the components. I did not slap in a board and say “I reckon it was just the motherboard.”

Additionally, it defies logic that one would spend money on a repair that carries both a labor and parts warranty, for them to simply discard the system.

Here is my public response to Mr. Cusolito:

Thanks for commenting Shawn. I am glad to hear from your comment that you did the right thing. Not all store techs are as careful, as I am sure you know. Moreover, from my reading, you never actually testified in court, so that is why I asked what I thought would be rhetorical questions. Who knew you would actually answer them on this blog! Also, your use of the term “logic board” instead of “motherboard” illustrates my fundamental point nicely.

As to why anyone would discard the system, the answer is not too hard to understand, but only if there was a lightning strike as Groves testified. Why waste more time on it? He trusted that you did your best and the logic board was functioning, but something else failed. Why return it to have another repair, and likely be told it is something else. If Groves was telling the truth and it was a lightning strike, then its not too hard to believe the computer had more problems then an illogical board. He could be facing more charges to try and fix hopelessly damaged goods, and in any event, more wasted time and effort dealing with it. Lots of folks dont like coming in and talking to computer technicians and trying to enforce warranties. Good money after bad, he might think, might as well buy a new computer.

But you seem to question whether there was in fact lightning strike damage, and say you saw no evidence of that. That is troubling, there should be some evidence of it. I assume something was wrong with the mother board, since you replaced it, but you did not say what was wrong, or why it had to be replaced? What caused the damage? My analysis is based on the assumption that the computer was damaged by ligtning. The opinion indicates the insurer did not challenge this, so I assumed it. If there was no strike, then I agree, Groves whole story falls apart, and it logical to assume that even his mother might not believe him.

Anyway, thanks for setting the record straight on your work, and giving us all better insights into this case!

Back to the Case

After the insurance company attorney got the Cusolito affidavit, he noticed Grove for a second deposition. This is unusual, but strangely there is no indication of any complaint by Grove or his attorney to a second deposition shortly after the first. At the second deposition, Grove was surprised by the affidavit and asked to explain the discrepancies with his prior testimony. Groves then admitted that his computer had been returned to him; in effect, the affidavit refreshed his memory about that. Still, Groves testified that the computer malfunctioned again a few days later, and this time he just threw it away, rather than waste his time with another repair trip. Once again, to anyone with any experience with computers damaged by a lightning strike, this has a certain ring of truth to it. If portions of a hard drive were damaged, or perhaps other components, then even after the motherboard was replaced, the computer could very well stop working again, or work only sporadically, until it had to access damaged sectors of the drive.

Even though the judge never heard Cusolito testify, and never heard any other expert testimony, he did hear Groves testify, and based on this evidence, he held that Groves’ first deposition testimony was “untruthful” and Groves’ attorney’s response to the production request was “inaccurate and incomplete.” The Judge did not fault the attorney, however, stating that “the attorney could only have relied on Groves for the information set out as grounds for this objection.” Not every judge would take such a forgiving attitude, especially in view of the ability to simply call Cusolito, like the insurer’s counsel later did, to inquire of the facts before signing his name to the pleading in conformity with Rules 11 and 26(g)(1), Federal Rules of Civil Procedure. (Rule 26(g)(1) states: “By signing, an attorney or party certifies that to the best of the person’s knowledge, information, and belief formed after a reasonable inquiry: (A) with respect to a disclosure, it is complete and correct as of the time it is made; …”)

Judge Senter was inclined to go easy on Groves too, since Groves had suffered a terrible personal tragedy a few months before the deposition. For that reason, the judge was inclined to believe Groves’:

… assertion that his misstatements were not the product of a deliberate intention to deceive but rather the product of his emotional distress and general inattention to his business affairs in the wake of his son’s death.

Still, even though he was inclined to believe Groves’ story of “inattention to business affairs,” which is another way of saying “negligence,” as a result of great personal distress, the judge held that Groves’ deposition testimony, contradicted as it was by the Cusolito affidavit, was “sufficient to infer the necessary element of bad faith in connection with his actions.”

For that reason, Judge Senter imposed spoliation sanctions against Groves for throwing away his old computer. He did so based on the assumption that the computer was in “good working order” as Cusolito’s affidavit said, and that this meant there there was still retrievable data on the computer that might have supported the insurance company’s mutual mistake argument against Groves. In explaining his decision, Judge Senter used the correct words this time, and did not refer to destruction of data in computer “memory,” but instead correctly referred to “hard drive.”

I am of the opinion that Great American has established, by clear and convincing evidence, that the destruction of this computer has deprived the parties and the Court of the benefit of any records that may have been contained in the computer hard drive. I am also of the opinion that the data stored on this computer, whatever it may have been, was relevant evidence that Groves was under a duty to preserve during the pendency of this litigation. Great American has also established that the destruction of this computer was not a result of simple negligence or any cause beyond the control of Groves.

It is hard to understand how the insurer was able to prove, and to do so by “clear and convincing evidence,” that the destruction was not the result of negligence, or of causes beyond Groves’ control, such as a lightning strike of his computer.

Still, the sanctions imposed were really not too harsh. Mississippi law apparently imposes a strict “clear and convincing evidence” standard to prove that a contract should be rescinded based on mutual mistake. That is no doubt why the judge found the spoliation evidence met such a high standard, when the typical “preponderance of the evidence” standard (51% or more) is all that is required to prove spoliation.

The Mississippi mutual mistake recession law would require the Great American Insurance Company to prove by clear and convincing evidence that both it and the insured thought that the insurance policy did not cover wind damage at the time the policy was purchased. One wonders why they purchased it? There may be a good answer to that, but still, this defense seldom, if ever, succeeds. Certainly it would be a very hard sell to any jury in Mississippi considering a Hurricane Katrina claim. With a clear and convincing standard, instead of the typical “preponderance of the evidence” standard, it would be a proverbial wild goose chase.

The sanction imposed here for the alleged spoliation was merely to reduce the insurer’s burden of proof from clear and convincing to preponderance. The court will also allow the insurer to present evidence to the jury as to the alleged destruction of evidence. At such time Groves could also present his own evidence on the issue, including, I would hope, expert testimony as to the impact of a lightning strike on a computer. Moreover, Groves could, for the first time, cross-examine the key witness against him, the repair technician, Shawn Cusolito.

I am reminded of a well known line in the the Abbott and Costello movie “The Wistful Widow of Wagon Gap“:

That wild goose chase of yours is going to lay an egg!

It remains to be seen whether it will be rotten or golden.

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Top Corporate Officers Continue To Write Embarrassing Emails

 

 

Everyone in e-discovery knows that people writing emails will, much like kids on the old Art Linkletter show, “say the darndest things“. Of course, instant messaging is even worse, as Congressman Mark Foley showed. Private emails and instant messages have a way of becoming public, especially when discovered in litigation and introduced into evidence at trial. There are hundreds of examples of this from past lawsuits, and the phenomena has been widely discussed since the late 1990s. See for instance the scholarly observation by Kenneth Withers in his 1999 article, Is Digital Different?:

Much is made in the electronic discovery literature of the informal, revealing, and often embarrassing nature of e-mail. E-mail is considered the window into the corporate soul, and is therefore a highly sensitive area for discovery. The literature also notes a deep disconnect between individuals’ perceptions of e-mail as private and transitory, and the reality of e-mail as a permanent and discoverable corporate record, although only rarely does the literature suggest that this phenomenon has been studied empirically in any other discipline, such as linguistics or psychology.

Since this has been known for a long time, you might think that, at the very least, senior management in businesses that are frequently involved in litigation would watch what they say. But you would be wrong, and that is why email continues to be the best field for “smoking gun” searches.

Unfortunately for Microsoft, which was one of the first companies to be burned by email in its antitrust cases, Microsoft offers the latest proof that senior corporate officers continue to say the darndest things in email. The point is proven by a horde of once private Microsoft emails that were introduced into evidence at a trial in Iowa in December 2006. The case is a class action styled Comes et al. v. Microsoft. After the emails were admitted into evidence, plaintiff’s counsel, Roxanne Conlin, a former United States Attorney, posted them on the Internet, just as she has done with all of the other evidence in this case. (Note: when this blog was originally written, all of these materials were published on the web and some were linked here. A few weeks later the case settled and all of the materials were removed as part of the settlement. I then removed the links since they no longer functioned.)

Plaintiff’s Exhibit 7,264, which Bates marking indicates was originally produced on June 15, 2005, and marked “Confidential”, was circulated on the Net as soon as it was admitted into evidence, even before plaintiff’s counsel posted it on her website. It is an email dated January 7, 2004, from Jim Allchin to Bill Gates and Steve Ballmer. The subject line of the email is “losing our way.” Mr. Allchin’s email to his bosses begins like this:

This is a rant. I’m sorry. I am not sure how the company lost sight of what matters to our customers (both business and home) the most, but in my view we lost our way.

The second paragraph of the email gets worse and he says: “I would buy a Mac today if I was not working at Microsoft.” This is the line that is now being widely quoted. Today Mr. Allchin is not working for Microsoft; he retired from Microsoft on the day Vista was released, January 30, 2007. According to Microsoft, “Allchin was a member of the Senior Leadership Team, responsible for developing Microsoft’s core direction along with Steve Ballmer and Bill Gates.” No news yet on what kind of computer Jim Allchin is now using, but he did leave a humorous blog on what his life after Microsoft is like.

In fairness to Microsoft and Jim Allchin, this is the reply which Jim posted on the Windows Vista Team blog when this story first broke on December 12, 2006:

In the email, I made a comment for effect about buying a Mac if I was not working at Microsoft. Taken out of context, this comment could be confusing. Let me set the record straight:

This email is nearly 3 years old, and I was being purposefully dramatic in order to drive home a point. The point being that we needed to change and change quickly. We did: We changed dramatically the development process that was being used and we reset the Windows Vista development project in mid-2004, essentially starting over.

2-and-½ years later, Windows Vista has turned into a phenomenal product, better than any other OS we’ve ever built and far, far better than any other software available today, in my opinion. It’s going to be available to customers on Jan 30, and I suggest everyone go out and get it as soon as you can. It’s that good.

The spirit of being self-critical continues to flourish at Microsoft. Within Microsoft everyone considers it their duty to always put their convictions and our product quality ahead of everything else. That was the intent of my mail to Bill and Steve, and I consider it a great example of how this company can focus and do what’s right for customers.

It is interesting to note that the evidence admitted was not the original email from Jim Allchin to Bill Gates, but rather an email from Allchin to another Microsoft executive, Eric Rudder, sharing his private email to Gates. Again, this shows the danger of email and other electronic documents; they can easily be circulated to others without your knowledge, and turn up later as part of an email chain. Email has an amazing way of surviving and appearing later, sometimes where you least expect it, despite all efforts to the contrary.

Lats time I looked, Eric Rudder still works for Microsoft. He has reported directly to Bill Gates since September 2005, when promoted to Senior Vice President leading what Microsoft calls the “Developer and Platform Evangelism division.” Hmmm. Wonder if he knows what the “e” in email stands for? Evangelical?

MANDATORY READING ASSIGNMENT AND EXERCISE. Find a recent case, article, or news report describing an astounding admission or embarrassing fact put in writing in an email, text message or IM and later uncovered in an investigation. Anything you find particularly crazy about it?

Students are invited to leave a public comment below. Insights that might help other students are especially welcome. Let’s collaborate!

Copyright Ralph Losey 2015