Just in case you don’t have enough to do, here are some articles of interest:

In-house lawyers: poor data procedures hampering response to litigation and regulatory inquiriesA rise in litigation and regulatory investigations is causing headaches for in-house legal departments, according to research published today by KPMG, the accounting firm.
A survey of over 200 senior lawyers worldwide found that many legal departments are having difficulty responding to disclosure requests because of problems retrieving information from within their organisations. Poor or non-existent procedures for collecting and processing data is causing delays, adding significant extra costs and could even lead to loss of data.

SEC’s expansion of Sarbanes-Oxley Act could mean big costs for smaller companies
This was a newsy little tidbit affecting thousands of small public companies, but it was mostly relegated to the back pages of newspapers, if it was covered at all.

The Securities and Exchange Commission announced recently that small public companies will no longer get a reprieve from complying with the Sarbanes-Oxley Act of 2002.

Next year, they will have to hire auditors to attest to the adequacy of their companies’ internal control systems, and that means heavy additional expense. Internal control basically refers to the way a company tracks inventory, accounts payable and cash.

CFOs High-five on 404 Rollback Bill
The news last week that the requirements of Section 404(b) of the Sarbanes-Oxley Act might never, ever come to bear for small companies had Jeff Klausner, CFO of Infosonics, a wireless-equipment provider with a market cap of around $14 million, “doing backflips,” he says. “This wouldn’t change anything that we do; it would just save us a bunch of money on audit fees.”

The proposed Sarbanes-Oxley amendment, co-authored by Rep. Scott Garrett (R-N.J.) and Rep. John Adler (D-N.J.), has so far been passed only by the House of Representatives Financial Services Committee. Already, though, it has ignited plenty of interest. The proposal would permanently exempt companies with market caps of $75 million or below from 404(b) — following several compliance deadline extensions that the Securities and Exchange Commission has already granted them.

A Call to Dialogue: EU Article 29 Data Protection Working Party Document 158 on Discovery for Cross-Border Civil Litigation
On February 11, 2009, the Article 29 Data Protection Working Party (Working Party) of the European Union issued a “Working Document” on the issue of pre-trial discovery for cross-border civil litigation (WP 158). The purpose of WP 158 is to provide guidance to persons who are involved in the processing and transfer of personal data in the context of cross-border civil litigation and regulatory investigations. This document is the first official EU recognition of the tensions between data privacy concerns of EU Member States and the legitimate need to conduct discovery for cross-border litigation.

WP 158 is “an invitation to public consultation with interested parties, courts in other jurisdictions and others to enter a dialogue with the Working Party,” rather than a fully developed set of principles and guidelines.*

WP 158 limits its discussion to (1) Preemptive document preservation in anticipation of proceedings before U.S. courts or in response to requests for litigation hold, known as “freezing;” and (2) Pre-trial discovery requests in U.S. civil litigation. It does not address the issues of (3) Document production in U.S. criminal and regulatory investigations; and (4) Criminal offences in the U.S. relating to data destruction (WP 158, p. 3).

Spain and Finland are implementing laws that will guarantee a citizen’s right to purchase broadband of at least one megabyte per second. The article on Finland notes that France has made internet access a human right. Of course, France has also passed the controversial three-strikes law, which would forcibly disconnect users from internet access without legal resource.

H/T: Slashdot

U.S. District Court interprets state law.

The Defendants further claim that Perks does not allege when Shelby County erased or “wrote over” the relevant videotapes. “It is well settled that Illinois courts do not recognize negligent spoliation of evidence as an independent cause of action.” “An action for negligent spoliation can be stated under existing negligence law without creating a new tort.” Thus, negligent spoliation of evidence is a derivative action that arises out of other causes of action. Although there typically is no duty to preserve evidence, such a duty may arise through an agreement, a contract or a statute. In such cases, “a defendant owes a duty of due care to preserve evidence if a reasonable person in the defendant’s position should have foreseen that the evidence was material to a potential civil action.”

Perks v. County of Shelby, 2009 U.S. Dist. LEXIS 77575 (C.D. Ill. Aug. 31, 2009)(internal citations removed)

Parlin v. Cumberland County, 2009 U.S. Dist. LEXIS 83192 (D. Me. Sept. 11, 2009)

District Court of Maine interprets state law.

Factual Background: Prison inmate brings claims against Sheriff and sheriff’s employees for actions during her stay in the counter jail. Plaintiff was an inmate at the Cumberland County jail. She had self-reported to the facility to serve a seven day sentence. During the first day of her stay, she became emotional and disruptive, possibly due to the influence of prescription drugs, which were taken legally (although she admitted to taking double the amount prescribed for one of the medicines). Plaintiff’s outbursts caused her to be moved a number of times to the “detox” cell. The detox cell is a simple cement slab with a metal grate in the floor and no bunk or toilet. During one of these moves, an incident occurred in which the plaintiff and one of the defendant prison guards fell to the ground. Plaintiff landed chin first, while the guard landed on top of her. This incident, according to plaintiff, caused a torn rotator cuff to plaintiff’s shoulder, on which she had already had surgery.

Plaintiff’s Claim under a theory of Spoliation:
Plaintiff had submitted a claim for spoliation in her complaint, contending that defendants failed to preserve videotape of the incident in which she was injured. The court immediately dismissed this part of the complaint, because “Maine does not recognize an independent cause of action for spoliation.”

Plaintiff’s Motion for Sanctions for Spoliation: Plaintiff had moved that the court issue an order: (1) establishing as a matter of fact that Defendants destroyed the videotape and physically assaulted Plaintiff; (2) striking all defenses to Counts VI 1 (spoliation of evidence) and VIII (battery); and (3) prohibiting Defendants from introducing any evidence at trial opposing Counts VI and VIII. Plaintiff also requests an adverse inference instruction at trial.

Defendants argued that any failure to preserve was not their fault. The court agreed, stating that: “[a] key consideration in whether to impose sanctions for spoliation of evidence is the ‘degree of fault of the offending party.’” The court stated that Plaintiff had failed any fault could be attributed to defendants for the failure to preserve the video. Because it would be inequitable to sanction a blameless party for another’s act of spoliation, the court denied the motion.

Lumbermens Insurance company objected to a Trial Court’s admission of computer generated summaries of payments for loss adjustments produced by another insurance company. Each summary related to a specific individual insurance claim. Lumbermens appealed to the ninth circuit.

Lumbermens first contended that the summaries are hearsay not fitting within the business records exception (FRE 803(6)) of the FRE, and therefore should have been excluded.
The court began by explaining that FRE 803(6) allows records of regularly conducted business activity meeting the criterial laid out as follows constitute an exception to the prohibition against hearsay evidence:

A . . . report, record, or data compilation, in any form, of acts, events, condition, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the . . . report, record or data compilation, all as shown by the testimony of the custodian or other qualified witness . . . unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.

The court then reiterated its previous stance that it is immaterial that business records are maintained in a computer rather than in company books. The logical extension of this principle is that evidence that has been compiled from a computer database is also admissible under the business records exception, provided it meets the criterial of FRE 803(6). The court quoted several decisions, including Weinstein’s Federal Evidence, which stated that “The important issue is whether the database, not the printout from the database, was compiled in the ordinary course of business.”

The court concluded that the summaries fit squarely within the exception provided under FRE 803(6). It noted that the trial court had concluded:

1. the underlying data was entered into the database at or near the time each payment was made;
2. the persons entering the data had knowledge of the payments that precipitated the data entry;
3. the data was kept in the course of regularly conducted business activity; and
4. Mr. Matsush, the authenticating witness, was qualified to testify to this information.

The court concluded that nothing in the record indicated that any of these findings were clearly erroneous.

Mr. Matush’s testimony that data entry for each payment occurs at the time of the payment, and that employees routinely queried the database to generate summaries. The court continued it’s description:

Matush testified that he was familiar with the record-keeping practices of the company, testified regarding the computer system used to compile and search the insurance claim records, and testified regarding the process of querying the computer system to create the summaries admitted at trial. This description of the process used to create the summaries was sufficient to authenticate the evidence, and the district court did not abuse its discretion in holding that a sufficient foundation was laid to admit the exhibits.

(Emphasis added).

Finally, the court was unconvinced by Lumbermens’ arguments that the summaries were inadmissible under FRE 1006, allowing summaries of “voluminous” writings to admitted only if the original data is accessible. The court stated that the summaries themselves are the business records, and so no additional data needed to be made available.

Miyamoto v. Department of Motor Vehicles, 176 Cal. App. 4th 1210, 1212 (Cal. App. 6th Dist. 2009)

JXN: State Court, California

Procedural Standing: Appeal by DMV from a trial court ruling granting of writ of administrative mandamus and ordering DMV to set aside its order to suspend defendant’s driver’s license after being arrested for driving under the influence of alcohol. The trial court ruled that the forensic laboratory report (Lab Report) of Miyamoto’s blood test results was inadmissible hearsay and that the Lab Report failed to meet the requirements of the public employee records exception to the hearsay rule (CA_Evid_Code_§_1280) because the DMV did not establish that the Lab Report was prepared at or near the time of the analysis of Miyamoto’s blood sample.

Facts of the Case: Defendant driver was pulled over for speeding, and arrested after “performing poorly” in a field sobriety test. The police dept. obtained blood samples from defendant, and had them analyzed for alcohol content. The analyses found that Miyamoto’s blood-alcohol content was twice the legal limit.

The Lab Report contained the following certification: “I, the undersigned certify under penalty of perjury that the above blood … analysis reported herein was performed during the regular course of my duties and is a true and correct representation of the results of my analysis. I further certify that I am a qualified … Forensic Alcohol Analyst (FAA) … employed by the Santa Clara County Crime Laboratory. The equipment used to perform the analysis was in proper working order at the time the analysis was performed and the recording of the analysis results was done at the time of the analysis. I further certify that the transfer of data for reporting purposes was performed electronically in accord with the laboratory’s policies and procedures.” The Lab Report was signed by “R. Desai, FAA.” The signature line, which included a line for the analyst to enter the “Date of review/report,” contained a handwritten date: “3/26/07.” The Lab Report contained the name of the “reviewer,” “Joyner.” A box in the middle of the report indicated that the “Date Printed” was “4/26/2007.”

Procedural History:At Miyamoto’s administrative hearing, the only contested issue was whether Miyamoto was driving with a blood-alcohol content of 0.08 percent or more. Miyamoto objected to the admission of the Lab Report as inadmissible for two reasons:
1. The report was hearsay because it was “untrustworthy” under Evid. Code § 1280(c) because it was certified 32 days before it was printed; and
2. The report wasn’t forwarded by the lab to the DMV within 15 days of the arrest, as required by the Vehicle Code.

The DMV hearing officer rejected Miyamoto’s objections, ruling that the report was admissible, and upholding the suspension of the defendant’s driving license.

Miyamoto petitioned the superior court for a writ of mandate to set aside the suspension order. Miyamoto argued that the Lab Report was not admissible under the public employee records exception to the hearsay rule for two reasons.
First, he asserted that the document was untrustworthy under Evid. Code § 1280(c) because although it was certified on March 26, 2007, it was not printed until April 26, 2007. Miyamoto argued that “[i]t is physically impossible for a person to sign a document which is not yet in existence.” Second, Miyamoto argued that even if the Lab Report was prepared on March 26, 2007, it was not admissible under the public employee records exception because it was not prepared “at or near the time” of the testing under Evid. Code § 1280(d), which occurred on March 23, 2007. He argued that since the Lab Report contained the only evidence of his blood-alcohol content and should have been excluded, there was insufficient evidence to support the hearing officer’s finding that he was driving with a blood-alcohol content in excess of 0.08 percent.

The DMV opposed the petition, arguing that Miyamoto’s contentions were “without merit because the lab report expressly states that the recording of the analysis results was done at the time the analysis was performed.” The DMV argued that Miyamoto’s contentions were based on a mistaken interpretation of the report and that March 26, 2007, was not the date the lab results were reported but the date they were reviewed by the “reviewer.”

The court sided with defendant, finding that the Lab Report was “insufficient to meet the requirements of Evidence Code Section 1280, [subdivision] (b) because it does not establish that it was prepared at or near the time of the analysis and the entry of the data.” The court reasoned that both arguments were “equally probable,” and that the DMV had the burden of proving the report’s admissibility. Having failed to do that convincingly, the court ruled the document was not “trustworthy” under §1280(c) of the Evid. Code. Because it failed to establish that it was prepared at or near the time of the analysis and the entry of the data,” the court granted the writ. The court ordered the DMV to set aside its order suspending Miyamoto’s license, and awarded Miyamoto his costs of suit.

DMV appealed to the appellate court, contending that the trial court erred when it concluded that the Lab Report was inadmissible hearsay and asserts that, as a matter of law, the Lab Report was admissible under section 1280, because the test results were recorded at the time that the test was done. The DMV also contends that after the court found two equally probable interpretations of the March 26, 2007 date on the Lab Report, the court erred in finding in favor of Miyamoto because Miyamoto, not the DMV, had the burden of proof in the trial court.

Findings: The appellate court started by noting that in this case, the appropriate standard for review was the defferential abuse of discretion.

The trial court found that the lab report did not meet the timeliness requirement under § 1280(c) because it did not establish that it was prepared at or near the time of the analysis of the blood sample. The court reasoned that how soon a writing must be made after the act or event is a matter of degree and calls for the exercise of reasonable judgment on the part of the trial judge. This judgment is not to be made arbritrarily or by use of artificial time limits, but rather must take into account practical considerations, such as: the nature of the information recorded; and the immutable reliability of the sources from which the information was drawn. ‘Whether an entry made subsequent to the transaction has been made within a sufficient time to render it within the [hearsay] exception depends upon whether the time span between the transaction and the entry was so great as to suggest a danger of inaccuracy by lapse of memory.

§ 1280 applies to “writings” made as records of acts, conditions or events, and the evidence code defines the term broadly. The term includes: handwriting, typewriting, printing, photostating, photographing, photocopying, transmitting by electronic mail or facsimile, and every other means of recording upon any tangible thing, any form of communication or representation, including letters, words, pictures, sounds, or symbols, or combinations thereof, and any record thereby created, regardless of the manner in which the record has been stored. Here, the writing consists of records from a database, thus the critical date for the purpose of the public employee records exception to the hearsay rule is the date that the test results were first recorded in that database. In reviewing the timeliness requirement, the court should consider the length of time between the act, condition, or event and the date of its recording, not the date of its eventual retrieval by computer printout.

The court reviewed two cases in which the admissibility of lab reports was properly disallowed. In Glatman v. Valverde (2006) 146 Cal.App.4th 700, 703 [53 Cal. Rptr. 3d 319], the motorist’s blood sample was analyzed on July 25, 2005, and analyzed a second time, by another analyst, a day later. Both analysts signed the report, which was dated one week after the first test was done. The DMV argued that the analysts entered the test results into the lab’s computer database shortly after completing each test and that the preparation of the report one week later simply involved retrieving the data from the database. The appellate court disagreed and observed that the record was silent regarding the procedures that the analysts used to record their test results and that there was no evidence that the test results were recorded in a computer database or anywhere else before the report was prepared. The court in that case ruled that the trial court did not abuse its discretion in ruling the report inadmissible.

In Molenda v. Department of Motor Vehicles (2009) 172 Cal.App.4th 974, 987 [91 Cal. Rptr. 3d 792], this same appellate court held that the trial court did not abuse its discretion when it held that a forensic lab report was inadmissible because it was not prepared at or near the time of the recorded event. In Molenda, “there [was] no evidence the test result was entered into a computer database or recorded in any manner prior to the preparation of the written report, which was done one week after the analysis was completed. The report stated that information regarding the examination and conclusions are entered into and are maintained within the DOJ Laboratory Information Management System (LIMS) database. It did not state when the test results were entered into the database. Further, the record was silent regarding the lab’s policies and procedures for recording test results.

Because the trial court, in ruling the report inadmissible, focused on the date of certification rather than the date the results were recorded, it applied the wrong legal standard in drawing its conclusions, and abused its discretion in doing so. The trial court’s decision was reversed, and the case remanded with instructions to deny defendant’s petition for writ of mandamus and reinstate the suspension of his driver’s license.

Post Process: Previous decisions in this contentious case required, among other things, that the producing party submit itself to a third party forensics expert for an examination of its search protocol. In the instant decision, producing party was defending the fact that, after having produced e-mail in hard copy format, and then being ordered to re-produce it in native format, it only produced a native sub-set of the original imaged production. The producing party, in effect, blamed the processing platform for its difficulties in reconciling the two production sets. The court responded:
While the nature of the discrepancy is not explained, I have to assume that fewer e-mails have been produced in native format than were produced on paper. Revonet explains that the platform that Revonet originally used to search for documents was only capable of exporting documents to an HTML format. Thus, Revonet had to use a different platform to obtain .pst files and therefore could not re-run the original search exactly. This may explain the discrepancy. Neither party provides information about the magnitude of the discrepancy, however, largely because Revonet claims that it would be too burdensome for it to cross-reference the electronic documents against the hard copies to determine how many and which e-mails are missing.

While I appreciate that it would be difficult for Revonet to go back through its papers to determine whether all of the documents contained therein have since been produced and that Revonet’s present counsel did not supervise or conduct the August, 2008 search for e-mails, I also appreciate that it is a burden of Revonet’s own making. Covad should not be penalized by Revonet’s failure to maintain its discovery materials in some sort of organized fashion or keep some record of its own actions in this lawsuit. Wyeth v. Impax Labs., Inc., 248 F.R.D. 169, 171 (D. Del. 2006) (“[P]roducing party must preserve the integrity of the electronic documents it produces. Failure to do so will not support a contention that production of documents in native format is overly burdensome.”).

Post Process: In other words, a burden of one’s own making is not a basis for asserting undue burden. Another maxim: choose your platform wisely.

Covad Communs. Co. v. Revonet, Inc., 2009 U.S. Dist. LEXIS 75325 (D.D.C. Aug. 25, 2009).

From Michigan comes an article that warns about the evidentiary value of data posted to social media sites. The bottom line quote:

“Don’t put anything on a social network page, blog, Web site or in an email,” he said, “that you don’t want printed on the front page of the newspaper.”

Although you’ve heard it before…you’ll hear it again here.

According to Michelle Lange, writing in the ABA Journal, we’ve seen an E-Discovery boom…are we now facing a bust? According to the article:

But growth has slowed sharply from annual rates of more than 40 percent just a few years ago, according to Socha’s surveys. And it’s getting much harder to compete profitably in an industry that is coming of age during the worst economic downturn in decades. For one thing, clients no longer are willing to write open-ended checks for services that easily can exceed $1.75 million for an average case.
“Growth has started to moderate and margins have started to decrease,” says Nick Baughan of investment banking firm Marks Baughan & Co. in Cornshohocken, Pa., which advised such deals as
Applied Discovery’s sale to LexisNexis.

One interesting quote is:

“It was almost like a gold rush,” says John Bace, research vice president of Gartner Inc. in Stamford, Conn. “People saw e-discovery as a quick and easy way to make money.”

All I can say to that is that it has been possible to make good money in the industry…but at least for me, it has never been easy.

The Electronic Discovery Blog posts a brief note on the importance of Project Management in the EDD space. From the blog:

Project management is likewise the key to success in e-discovery. Project management facilitates the coordination of the many parties involved, promotes communication between those parties, allows a record of the process to be created, and promotes discipline throughout the process. Project management fosters the creation of a repeatable process, and is an essential requirement for a successful e-discovery outcome.