The Need for Archiving and FRCP 37(e)


The December 2006 amendments to the Federal Rules of Civil Procedure (FRCP), specifically Rule 37, established when litigation can be reasonably anticipated, the duty of both sides is to immediately stop all alterations and deletions of all potentially relevant content and secure it – also known as a litigation hold and the duty to preserve.

Earlier this year, the Supreme Court approved new amendments to the FRCP which will become effective on December 1, 2015. The new Rule 37(e) reiterates the need to preserve electronically stored information (once litigation can be reasonably anticipated) but also creates a uniform standard for spoliation (destruction of evidence) and so, they hope, will provide greater predictability around the question of loss of ESI during litigation.

The new amended Rule 37(e) allows a court to respond when one party loses electronically stored information (ESI), which then prejudices the other party. Rule 37(e) empowers a court to take reasonable action to cure the prejudice, even if the loss of ESI was inadvertent. The new twist is now the burden to prove prejudice resulting from the missing/lost evidence as a result of willful or intentional misconduct falls on the innocent party before the most severe sanctions can be imposed, and then only if the prejudice shown cannot be mitigated through other remedies, e.g. additional discovery. To complicate matters further, even in cases when there is no demonstrated prejudice to the opposing party, the court can assume the ESI was unfavorable and enter a default judgment in the case. This means that the Judge has wide latitude to respond to parties who don’t take their eDiscovery responsibilities seriously.

The need for information governance and archiving

Many believe the amended Rule 37(e) highlights the need for corporations to get more control of all of their electronic data, not just that data considered a record. Information governance programs including on-going content archiving of those types of information most sought after in eDiscovery, namely email and other forms of communication, enables an organization to quickly find all potentially relevant content, secure it under a litigation hold, and begin the review process immediately – knowing the archive is the “copy of record” repository.

Many Judges look closely at the steps taken by the responding party when eDiscovery mistakes happen. Judges want to see that reasonable actions were taken and a good faith intent was present to reduce or stop eDiscovery mishaps including, regularly updated policies, on-going employee training, and the type of technology purchased. Judges understand that there is no such thing as Perfect; that mistakes happen, and many times it inadvertent.

Keeping everything forever is a mistake

Another related eDiscovery problem many companies find themselves facing is the issue of having too much data to search and review during eDiscovery. Many companies only manage what they consider to be “business records”, which averages 5% of all corporate data,  and leave the other 95% to be managed (or not) by individual employees. This huge unmanaged store of employee data, which is a popular target in discovery, dramatically drives up the cost of eDiscovery, while also driving up the potential of problems occurring during eDiscovery. Defensibly disposing of expired or valueless data will reduce the amount of data that must be pulled into an eDiscovery action reducing the cost and risk of problems later.

A centrally managed archive that proactively captures, for example, all communications (email, IM, social communications) and applies retention/disposition policies to all captured content can insure that expired or valueless data is defensibly disposed of, reducing the size of the overall discovery data set by as much 60%. Because it’s defensibly disposed of via automation and policy, questions of spoliation cannot be raised.

In fact, archiving your most important (and requested) content provides a great deal more granular data management capability then simply relying on individual employees – so you don’t run afoul of the new FRCP Rule 37(e).

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Email Use Policies: The beginning of the end?


A December 2014 National Labor Relations Board (NLRB) decision in reference to the Purple Communications, Inc. case might have started the decline of employer’s rights over how their property and systems can be used by employees.

In the 2007 Guard Publishing decision, the NLRB held that the National Labor Relations Act does not give employees the right to use an employer’s email system for union-related business, i.e., activity not related to the running of the business. Partly because of this decision, employers have regularly created and enforced email use policies that forbid the use of the employer’s email system for anything other than actual company business. This decision was supposedly based on the NLRB’s comparison of an employer’s bulletin board, telephone system, copy machines and PA systems to the employer’s email system. In other words, employees did not have carte blanche to utilize these other systems for non-business-related activities either.

The NLRB Purple Communications decision reversed the 2007 ruling and held that employees do now have the presumptive right to use their employer’s email system for non-work NLRB-protected purposes. But does this decision also reverse the practice of employers restricting the use of the other systems (copy machines, bulletin boards, etc.) to strictly business-related purposes?

There are several points to keep in mind before taking over your employer’s copy machine to print 1,000 garage sale flyers.

  • The 2014 NLRB-Purple Communications decision was limited to email systems only.
  • The 2014 NLRB-Purple Communications decision was limited to actual employees of the company—not family members or anyone else.
  • The 2014 NLRB-Purple Communications decision relates to activities protected by the National Labor Relations Act, i.e., union-related activities only.
  • The NLRB invalidated the prior validity of prohibitions of the non-work use of company physical property such as the previously mentioned copy machines, bulletin boards, and telephone systems.

Another interesting fact from the 2014 case is that the NLRB (re)confirmed an employer’s right to monitor its email system for “legitimate management purposes” and that employees continue to have no expectation of privacy in their use of the employer’s email system. But the NLRB stated that the employer may not increase employee email monitoring during union-organizing campaigns or focus monitoring activities on “protected” conduct or union activists specifically.

Obviously, the NLRB decision was directed specifically to companies with union membership and activities. But this raises the question of the use of employer equipment and systems for non-union-related activities. Will this decision be used to erode employer restrictions on the use of company property in the future?

Dark (Data) Clouds on the Horizon


Dark Cloud

There have been many definitions of “Dark Data” over the last couple of years including: unstructured, unclassified, untagged, unmanaged and unknown electronic data that is resident within an organization’s enterprise. Most of these definitions center on unstructured data residing in an enterprise. But with the advent of BYOD and employees use of personal clouds, this definition should be expanded to include any corporate owned data, no matter where it resides.

Dark data, especially dark data stored outside of the company’s infrastructure (and awareness that it even exists) is an obvious liability for eDiscovery response, regulatory compliance, and corporate IP security.

Is BYOC a good idea?

Much has been written on the dangers of “Bring Your Own Device” (BYOD) but little has been written on the dangers of “Bring Your Own Cloud” (BYOC) otherwise known as personal clouds. Employees now have access to free cloud storage from many vendors that give them access to their content no matter where they are. These same personal clouds also provide automatic syncing of desktop folders and the ability to share specific documents or even entire folders. These personal clouds offer a fantastic use model for individuals to upload their personal content for backup, sharing and remote availability. In the absence of any real guidance from employers, employees have also begun to use these personal clouds for both personal and work purposes.

The problem arises when corporate-owned data is moved up to personal clouds without the organization’s approval or awareness. Besides the obvious problem of potential theft of corporate IP, effective eDiscovery and regulatory compliance become impossible. Corporate data residing in personal clouds become “Dark Clouds” to the organization; corporate data residing in repositories outside the organizations infrastructure, management or knowledge.

Dark Clouds and eDiscovery

Organizations have been trying to figure out what to do with huge amounts of dark data within their infrastructure, particularly when anticipating or responding to litigation. Almost everything is potentially discoverable in litigation if it pertains to the case, and searching for and reviewing GBs or TBs of dark data residing in the enterprise can push the cost of eDiscovery up substantially. But imagine the GBs of corporate dark data residing in employee personal clouds that the organization has zero awareness of… Is the organization still responsible to search for it, secure it and produce it? Depending on who you ask, the answer is Yes, No, and “it depends”.

In reality, the correct answer is “it depends”. It will depend on what the organization did to try and stop employee dark clouds from existing. Was a policy prohibiting employee use of personal clouds with corporate data in place; were employees alerted to the policy; did the organization try to audit and enforce the policy; did the organization utilize technology to stop access to personal clouds from within the enterprise, and did the organization use technology to stop the movement of corporate data to personal clouds (content control)?

If the organization can show intent and actions to ensure dark clouds were not available to employees, then the expectation of dark cloud eDiscovery search may not exist. But if dark cloud due diligence was not done and/or documented, all bets are off.

Regulatory Compliance and Dark Clouds

Employee personal clouds can also end up becoming the repository of sensitive data subject to regulatory security and privacy requirements. Personally identifiable information (PII) and personal health information (PHI) under the control of an organization are subject to numerous security and privacy regulations and requirements that if not followed, can trigger costly penalties. But inadvertent exposure can occur as employees move daily work product up to their personal clouds to continue work at home or while traveling. A problem is many employees are not trained on recognizing and handling sensitive information; what is it, what constitutes sensitive information, how should it be secured, and the liabilities to the organization if sensitive information is leaked. The lack of understanding around the lack of security of personal clouds and the devices used to access them are a related problem. Take, for example, a situation where an employee accesses their personal cloud while in a coffee shop on an unsecured Wi-Fi connection. A hacker can simply gain access to your laptop via the unsecured Wi-Fi connection, access your personal cloud folder, and browse your personal cloud through your connection (a password would not be required because most users opt to auto-sign in to their cloud accounts as they connect on-line).

As with the previous eDiscovery discussion, if the organization had taken the required steps to ensure sensitive data could not be leaked (even inadvertently by the employee), they leave themselves open for regulatory fines and more.

Reducing the Risk of Dark Clouds

The only way to stop the risk associated with dark clouds is to stop corporate data from leaving the security of the enterprise in the first place. This outcome is almost impossible to guarantee without adopting draconian measures that most business cultures would rebel against but there are several measures that an organization can employ to at least reduce the risk:

  • First, create a use policy to address what is acceptable and not acceptable behavior when using organization equipment, infrastructure and data.
  • Document all policies and update them regularly.
  • Train employees on all policies – on a regular basis.
  • Regularly audit employee adherence to all policies, and document the audits.
  • Enforce all breaches of the policy.
  • Employee systematic security measures across the enterprise:
    • Don’t allow employee personal devices access to the infrastructure – BYOD
    • Stop employee access to personal clouds – in many cases this can be done systematically via cutting specific port access
    • Employ systematic enterprise access controls
    • Employ enterprise content controls – these are software applications that control access to individual content based on the actual content and the user’s security profile.

Employee dark clouds are a huge liability for organizations and will become more so as attorney’s become more educated on how employees create, use, store and share information. Now days,

Law Firms, HIPAA and the “Minimum Necessary Standard” Rule


TMI blogThe HIPAA Omnibus Rule became effective on March 26, 2013. Covered entities and Business Associates had until September 23, 2013 to become compliant with the entirety of the law including the security rule, the privacy rule and the breach notification rule. Law firms that do business with a HIPAA regulated organization and receive protected health information (PHI) are considered a Business Associate (BA) and subject to all regulations including the security, privacy and breach notification rules. These rules are very prescriptive in nature and can impose additional procedures and additional cost to a law firm.

Under the HIPAA, there is a specific rule covering the use of PHI by both covered entities and Business Associates called the “Minimum Necessary Stand” rule or 45 CFR 164.502(b), 164.514(d). The HIPAA Privacy rule and minimum necessary standard are enforced by the U.S. Department of Health and Human Services Office for Civil Rights (OCR). Under this rule, law firms must develop policies and procedures which limit PHI uses, disclosures and requests to those necessary to carry out the organization’s work including:

  • Identification of persons or classes of persons in the workforce who need access to PHI to carry out their duties;
  • For each of those, specification of the category or categories of PHI to which access is needed and any conditions appropriate to such access; and
  • Reasonable efforts to limit access accordingly.

The minimum necessary standard is based on the theory that PHI should not be used or disclosed when it’s not necessary to satisfy a particular job. The minimum necessary standard generally requires law firms to take reasonable steps to limit the use or disclosure of, PHI to the minimum necessary to represent the healthcare client. The Privacy Rule’s requirements for minimum necessary are designed to be flexible enough to accommodate the various circumstances of any covered entity.

The first thing firms should understand is that, as Business Associates subject to HIPAA through their access and use of client data, firms are subject to the Minimum Necessary Standard, which requires that when a HIPAA-covered entity or a business associate (law firm) of a covered entity uses or discloses PHI or when it requests PHI from another covered entity or business associate, the covered entity or business associate must make “reasonable efforts to limit protected health information to the minimum necessary to accomplish the intended purpose of the use, disclosure, or request.”

Law firm information governance professionals need to be aware of this rule and build it into their healthcare client related on-boarding processes.

You Don’t Know What You Don’t Know


Blog_06272014_graphicThe Akron Legal News this week published an interesting editorial on information governance. The story by Richard Weiner discussed how law firms are dealing with the transition from rooms filled with hard copy records to electronically stored information (ESI) which includes firm business records as well as huge amounts of client eDiscovery content. The story pointed out that ESI flows into the law firm so quickly and in such huge quantities no one can track it much less know what it contains.  Law firms are now facing an inflection point, change the way all information is managed or suffer client dissatisfaction and client loss.

The story pointed out that “in order to function as a business, somebody is going to have to, at least, track all of your data before it gets even more out of control – Enter information governance.”

There are many definitions of information governance (IG) floating around but the story presented one specifically targeted at law firms: IG is “the rules and framework for managing all of a law firm’s electronic data and documents, including material produced in discovery, as well as legal files and correspondence.” Richard went on to point out that there are four main tasks to accomplish through the IG process. They are:

  • Map where the data is stored;
  • Determine how the data is being managed;
  • Determine data preservation methodology;
  • Create forensically sound data collection methods.

I would add several more to this list:

  • Create a process to account for and classify inbound client data such as eDiscovery and regulatory collections.
  • Determine those areas where client information governance practices differ from firm information governance practices.
  • Reconcile those differences with client(s).

As law firms’ transition to mostly ESI for both firm business and client data, law firms will need to adopt IG practices and process to account for and manage to these different requirements. Many believe this transition will eventually lead to the incorporation of machine learning techniques into IG to enable law firm IG processes to have a much more granular understanding of what the actual meaning of the data, not just that it’s a firm business record or part of a client eDiscovery response. This will in turn enable more granular data categorization capability of all firm information.

Iron Mountain has hosted the annual Law Firm Information Governance Symposium which has directly addressed many of these topics around law firm IG. The symposium has produced ”A Proposed Law Firm Information Governance Framework” a detailed description of the processes to look at as law firms look at adopting an information governance program.

Emails considered “abandoned” if older than 180 days


The Electronic Communications Privacy Act – Part 1

Email Privacy

It turns out that those 30 day email retention policies I have been putting down for years may… actually be the best policy.

This may not be a surprise to some of you but the government can access your emails without a warrant by simply providing a statement (or subpoena) that the emails in question are relevant to an on-going federal case – criminal or civil.

This disturbing fact is legally justified through the misnamed Electronic Communications Privacy Act of 1986 otherwise known as 18 U.S.C. § 2510-22.

There are some stipulations to the government gaining access to your email;

    • The email must be stored on a server, or remote storage (not an individual’s computer).This obviously targets Gmail, Outlook.com, Yahoo mail and others but what about corporate email administered by third parties, what about Outlook Web Access, remote workers that VPN into their corporate email servers, PSTs saved on cloud storage…
    • The emails must have already been opened. Does Outlook auto-preview affect the state of “being read”?
    • The emails must be over 180 days old if unopened

The ECPA (remember it was written in 1986) starts with the premise that any email (electronic communication) stored on a server longer than 180 days had to be junk email and abandoned.  In addition, the assumption is that if you opened an email and left it on a “third-party” server for storage you were giving that “third-party” access to your mail and giving up any privacy interest you had which in reality is happening with several well-known email cloud providers (terms and conditions).  In 1986 the expectation was that you would download your emails to your local computer and then either delete it or print out a hard copy for record keeping.  So the rules put in place in 1986 made sense – unopened email less than 180 days old was still in transit and could be secured by the authorities only with a warrant (see below); opened email or mail stored for longer than 180 days was considered non-private or abandoned so the government could access it with a subpoena (an administrated request) – in effect, simply by asking for it.

Warrant versus Subpoena: (from Surveillance Self-Defense Web Site)

To get a warrant, investigators must go to a neutral and detached magistrate and swear to facts demonstrating that they have probable cause to conduct the search or seizure. There is probable cause to search when a truthful affidavit establishes that evidence of a crime will be probably be found in the particular place to be searched. Police suspicions or hunches aren’t enough — probable cause must be based on actual facts that would lead a reasonable person to believe that the police will find evidence of a crime.

In addition to satisfying the Fourth Amendment’s probable cause requirement, search warrants must satisfy the particularity requirement. This means that in order to get a search warrant, the police have to give the judge details about where they are going to search and what kind of evidence they are searching for. If the judge issues the search warrant, it will only authorize the police to search those particular places for those particular things.

Subpoenas are issued under a much lower standard than the probable cause standard used for search warrants. A subpoena can be used so long as there is any reasonable possibility that the materials or testimony sought will produce information relevant to the general subject of the investigation.

Subpoenas can be issued in civil or criminal cases and on behalf of government prosecutors or private litigants; often, subpoenas are merely signed by a government employee, a court clerk, or even a private attorney. In contrast, only the government can get a search warrant.

With all of the news stories about Edward Snowden and the NSA over the last year, this revelation brings up many questions for those of us in the eDiscovery, email archiving and cloud storage businesses.

In future blogs I will discuss these questions and others such as how does this effect “abandoned” email archives.