In my March 2018 column, E-Discovery Ethics: It's Still-And Always Will Be-About Doing Tech Right, I discussed the opinion in Klipsch Group v. ePRO E-Commerce, No. 16-3637-cvNo. 16-3726-cv (2d Cir. Jan. 25, 2018). In Klipsch, the U.S. Court of Appeals for the Second Circuit affirmed the Southern District of New York's order that even though “the likely valuation of actual damages” caused by the defendant's discovery violations was $25,000, the defendant additionally had to pay the plaintiff a total of $5 million as “compensation” for “discovery efforts” the plaintiff had to take solely because of the defendant's misconduct, as well as for “restraint … appropriate to secure” the plaintiff's “likely recovery of treble damages and attorney fees at the conclusion of the case.” The plaintiff in Klipsch, a manufacturer of headphones, sued a subsidiary of the defendant on the ground that it was selling counterfeit plaintiff headphones. While the trial court was “initially” persuaded by the defendant that the actual damages in the matter were about “$8,000 worldwide,” the defendant's “failure to comply with its discovery obligations began to cast doubt on the reliability” of its valuation, causing the court to give weight to the plaintiff's allegation that the defendant had “sold at least $5 million in counterfeit or otherwise infringing” products. The defendant's discovery failure was in not putting into place a litigation hold, so that the defendant's initial production was of a mere 500 documents, including no “original sales documents” but, instead, “spreadsheets created specifically” for the litigation “that purported to list all relevant sales” but did not. An e-discovery vendor eventually retained by the defendant found “an additional 40,000 documents, including 1,236 original sales documents;” some of the documents contradicted the deposition testimony of the defendant's CEO and suggested that defendant “had misidentified the suppliers of the counterfeit products” and “had artificially limited” its discovery vendor's “investigation into its electronic records.” In November 2013, i.e., 15 months after the complaint was filed and six months after the court found that the defendant had not imposed a litigation hold, “it became clear that” the defendant “still had not imposed” one.

Many of the same issues in Klipsch arise in Schnider v. Providence Health & Services, Case No. 315:cv-00038SLG (D. Alaska March 9, 2018). In Schnider, Jamie Schnider had a sexual relationship with his mental health therapist, Natalie Warner, presumably employed by the defendant (the opinion does not explicitly state this). Plaintiff Tiana Johnson is plaintiff Schnider's former spouse and contemplated the lawsuit before Schnider did. Warner, Schnider's lover, committed suicide in October 2014. Schnider permanently deleted his Facebook account after he retained an attorney and around the time he and Johnson commenced the action. He claimed that he deleted the account simply because he “couldn't stand to look” at photos of his former lover, not because he intended to deprive the defendant of the information contained within the account. At an evidentiary hearing, he “testified that he was a frequent and consistent user of Facebook” while with Warner, describing himself as “the Facebook kid.” He acknowledged that anyone reading his Facebook account for the period in question would be able to assess his “emotional health on a day-to-day basis” and that, in particular, after “Ms. Warner's death, whatever his Facebook account would have contained would have shown the state of his mental health at that time.” Notwithstanding this testimony, he testified that he could not recall having called eight law firms prior to Warner's death, but was certain that they were “not in connection with a possible lawsuit by him against” the defendant. The court found that Schnider deleted his Facebook account, in strong part, to deprive the defendant of the information it contained as that information related to the litigation.

In both matters, no evidence was presented that the parties' counsel acted unethically in any way. The matters, however, do present what counsel should advise their clients to do and what, increasingly, counsel must be on the lookout to prevent their clients from doing.

Discussion

In the beginning, before Zubulake put e-discovery on the map, i.e., roughly 15 to 20 years ago (or a million in the digital age), judges, attorneys, clients, and people in general, did not think of electronic data as we do today. First, people did not think of electronic data as being as “real” as paper files: a letter was “real,” but an email? This led to many litigants not even considering the need to preserve electronic data, and being stunned when, with paper files properly labelled, populated and placed in the proper order, litigants nevertheless were accused of not having preserved evidence properly because their digital evidence was in no way preserved. People also did not recognize that electronic data contained metadata that indicated, among other things, when a file was created, last modified or last accessed, and so litigants did not understand the need to preserve and collect electronic data properly so that metadata was not altered. As well, people did not understand that, especially when Windows operating systems control the devices at issue, electronic data deleted from hard drives on desktop and laptop computers, as well as on servers and other locations, is not literally deleted but, rather, simply is stripped of its protection from being overwritten, and that such “deleted” data will not be inaccessible to ready recovery by forensic examiners unless and until it is overwritten, which is more the exception than the rule, since Windows OS's prefer to write to unused locations before returning to used ones to overwrite “deleted” data.

Today we may know more about the digital world than we did when e-discovery was becoming the “next big thing,” and what we know may lead us to different assumptions about areas of that world with which we are not familiar—for example, we may have gone from assuming that data was unrecoverable once the user had deleted it to assuming that data was always recoverable because somewhere there should be some backup of that data. Regardless, the two cases under discussion illustrate that the increase of our knowledge of the digital world has not led litigants, as a group, to being more moral, ethical or honest.

In Klipsch, the defendants failed to collect electronic data properly, such that the collection of that data by a neutral vendor led to the discovery of thousands of relevant files. The defendants also failed to review properly the data they had collected and so failed to produce from even that limited set of files all of those responsive to discovery demands. In Schnider, the plaintiff Schnider, perhaps believing that the defendant would not get wind of his Facebook usage, deleted his account, falsely believing that so long as it was not recovered, no one could produce evidence regarding what it contained or why he may have wished to delete it.

It is interesting that the court in Schnider states, “It is undisputed that Mr. Schnider permanently deleted his Facebook account at some point after Ms. Warner's death, and after he had hired an attorney to represent him in this case,” but provides no reference to any evidence of that fact. It is equally interesting that the opinion makes no reference to any forensic evidence of deletion of, or any attempt to recover, the Facebook account. The discussion of deletion of data without the backing of the testimony of forensic experts indicates that the court here, and possibly courts elsewhere, are more comfortable addressing these issues the more frequently they see them.

The two opinions discussed illustrate the evolution and devolution of legal ethics over the last 20 years of e-discovery. In the beginning, a notable portion of litigants did not preserve digital data properly because they did not appreciate how it worked and also thought there would be no trace of their destruction of that data. Following a rise in the digital literacy of litigants and the judiciary, caused both by a younger population, familiar with computers, replacing an older one for whom digital devices were simply bothersome, as well as by the rise in digital literacy across the population, litigants worked to preserve digital data because they understood it better, doing so did not seem as burdensome to a population familiar with computer, and notable cases, e.g., Zubulake, convinced the litigant pool, and their counsel, that they would be caught red-handed should they destroy, or simply fail to preserve, digital data. With the expansion of digital media, however, with “traditional” devices (desktop and laptop computers, servers) able to store millions of files, Cloud storage increasing the retention capacity of both business-related and personal email and other digital files even greater, and the rise of everyday usage of social media and the growth of social, we see a portion of litigants and litigators, at least, slipping back to the days before Zubulake because, at least as it concerns social media and the means of storing data that is not business-related, some do not recognize that their duties extend to these new data repositories, some are simply overwhelmed, and some believe that they can get away with unethical behavior.

Conclusion

Steps, then, must be taken to make it clear to litigants, as well as to some counsel and judiciary, that the ethics of data preservation apply to social media—and, for that matter, personal emails, texts and other data pertaining to the litigation—just as they do to business-related data. Indeed, given the increase in control by individual persons (as opposed to businesses) over digital media in the world of social media (Facebook, tweets, and so on), texting and other resources, it should by no means be surprising that many potential litigants think only of their work data, but not their personal data, as requiring preservation as part of litigation. CLEs on the subject would help litigators in their discussions with clients; counsel at law firms and within organizations who can focus on e-discovery issues would also be helpful. Overall, counsel must understand and accept that one of their roles is to make it as clear as possible to litigants and those involved with them that digital media must be preserved when litigation is reasonably expected or has commenced, and that such digital media is not confined to what falls within a business's IT, but may just as often (if not more so) be of the personal type that twenty years ago seemed futuristic but now we take for granted. Counsel must then work with clients, and those involved with clients, to preserve the digital data that will have to be searched so that whatever is responsive will be produced upon request.

Leonard Deutchman is vice president, legal for KLDiscovery, which handles data recovery, data archiving, electronic discovery, data hosting, TAR and managed review, collections and digital forensics. Before joining KLDiscovery, he was a chief assistant district attorney at the Philadelphia District Attorney's Office, where he founded the Cyber Crime Unit and conducted and oversaw hundreds of long-term investigations involving cybercrime, fraud, drug trafficking and other offenses.