Friday, December 07, 2007

2007-12-07 Printout of Metadata Held Sufficient for Discovery Purposes

The Sedona Principles' blanket approach to most metadata as "irrelevant" was adopted in Williams v. Sprint/United Management Co., 230 F.R.D. 640, 646 (D.Kan.2005). The Sprint court embraced the Sedona argument that "[I]n most cases and for most documents, metadata does not provide relevant information." Williams v. Sprint, 230 F.R.D. at 651. The Sprint court also noted that "[e]merging standards of electronic discovery appear to articulate a general presumption against the production of metadata[.]"

The recent decision in Michigan First Credit Union v. Cumis Ins. Society, Inc., Slip Copy, 2007 WL 4098213 (E.D.Mich. 2007) follows the Sprint approach and represents yet another example of how the Sedona Conference's blanket pronouncement is susceptible to misinterpretation. Here, the Court found that a printout of email metadata was sufficient and denied a motion to compel production of native, or source data. Curiously, even though the data and time information contained in the metadata was considered relevant, the "unique identifier" data was not, and since all was "printed out" in a pdf, the Court ruled that no further relevant information could be gleaned from the native, or source data:

"This includes the date and time of the creation of the message file, as well as a long string of characters that serves as a unique identifier for each message." She further states that she has reviewed the screen-shots of the email message produced for Plaintiff, and that "[a]ll metadata pertaining to the individual messages, except for the unique identifier referred to in the above paragraph is visible on these printouts." Hence, except for an "identifier" that would have no evidentiary value, the relevant metadata (such as date and time of creation) appears in the PDF copy. Were this not the case, there would be value in producing the metadata. However, since the PDF copies contain all the relevant information that Plaintiff would otherwise glean from the metadata, I agree with Defendant that producing the metadata for the emails would be unduly burdensome." Ibid, at *2.

Of course, no challenge to the metadata itself was apparently made. Imo, this is a clarion call not only to have the Sedona Principles properly reflect digital litigation reality, but also for counsel to bring themselves up to speed, and understand what it is they must challenge, or defend. Knowing what to ask for, and why, is a good start. The flip side is that being uninformed or misinformed as to the importance of metadata will at this time be more likely to result in this type of "gotcha."
2007-12-07 Options Backdating Update - Former United Health CEO Returns 418 Million

The New York Time and the Wall Street Journal report today that William W. McGuire has settled with the SEC and agreed to return an estimated 400 million dollars in connection with the options backdating civil action pending against him. According to one account, the total returned by McGuire will exceed 600 million dollars. Options backdating involves altering the date of an option grant, typically to increase it's value at the date of granting. The option grant's strike price is typically (and some argue should only) be the date on which the grant is made. This grant date also typically coincides with the commencement of a new position, or a bonus.

The grant date maneuverability necessarily involves some time based computer data manipulation, as I highly doubt that any of these time-shifted options grants were accomplished by the efforts Aunt Tillie typing on her Selectric, bottle of White-Out by her side, in the typing pool.

The malleability of computer data (and the difficulties involved in challenging and detecting same) are well set forth in In re Texlon Corporation Securities Litigation 2004 WL 3192729 (WD Ohio 2004). The Texlon court roundly excoriated the defendant's auditor PriceWaterhouseCoopers for violating its duty of preservation. The court noted that auditing documents were altered "well after the close of the [relevant auditing period] and that [PWC should have been on notice to preserve these documents..." The Texlon court further noted that expert testimony discovered that the metadata of certain documents had been altered or deleted, specifically that data had been time-and-date shifted.

What is perhaps most important is that the Texlon court also implicitly recognizes the issue of time based data manipulation, as it also took notice of expert testimony that "it is possible to alter any document in the database, and if the date on the computer used to alter the document is reset, the incorrect date will be incorporated in the metadata fields as the date of modification." Texlon, 2004 WL 319729 at *19. It should be noted that the matter ended prior to the judge's action on the reports and recommendations of the magistrate.

Perhaps in the future the time and date malleability of computer generated information will become the focus of more intense scrutiny by counsel as well as the Courts.