2007-10-06 Conversion of Software is Actionable Under NY Law --- The tort of conversion of electronic information is actionable in New York.

"The Hand of History Lies Heavy Upon the Tort of Conversion"

In Thyroff v Nationwide Mutual Insurance Co., 493 F. 3d 109 (2d Cir. 2007) the U.S. Court of Appeals for the Second Circuit reversed its earlier decision affirming a dismissal (and also certifying a question to the New York Court of Appeals. Excerpt from the opinion (including the certified question, which the Court of Appeals Answers in the affirmative:

"Is a claim for the conversion of electronic data cognizable under New York law?" Thyroff, 460 F.3d at 408. On March 22, 2007, the New York Court of Appeals answered the certified question in the affirmative. See Thyroff, 8 N.Y.3d at 293, 832 N.Y.S.2d 873, 864 N.E.2d 1272. As we explained in our prior decision, "if a conversion claim may extend to electronic data, Thyroff has stated a claim sufficient to survive Nationwide's motion to dismiss for both his personal and business data." Thyroff, 460 F.3d at 405. Accordingly, based on the response from the New York Court of Appeals that electronic data may be the subject of a conversion claim under New York law, we vacate the district court's dismissal of Thyroff's conversion claim and remand for further proceedings." Thryroff, supra at 493 F. 3d at p. 109.

In New York, at least for the moment, a civil action for conversion of electronic data may be commenced. Under New York law, and unlike the CFAA, there is no jurisdictional damage minimum, and punitive damages may be sought by the aggrieved party. What remains unclear is whether, using the same analysis as in Thyroff, a criminal action for conversion may now be brought

The response by the New York State Court of Appeals to the question certified to it by the Second Circuit contains a short analysis of the history and evolution of conversion, trover and trespass to chattel, together with some impressive prose. Here, an extended excerpt:

"“The hand of history lies heavy upon the tort of conversion” (Prosser, The Nature of Conversion, 42 Cornell LQ 168, 169 [1957] ). The “ancient doctrine” has gone **1274 ***875 through a great deal of evolution over time (Franks, Analyzing the Urge to Merge: Conversion of Intangible Property and the Merger Doctrine in the Wake of Kremen v. Cohen, 42 Hous. L. Rev. 489, 495 and n. 32 [Summer 2005] ), dating back to the Norman Conquest of England in 1066 ( see Ames, The History of Trover, 11 Harv. L. Rev. 277, 278 [1897] [hereinafter Ames] ).Before the English royal government undertook the prosecution of crime, redress for the tortious or criminal misappropriation of chattels was limited to private actions, such as “the recuperatory appeals of robbery or larceny” available to persons whose property had been stolen ( id. at 278).FN3 In general, these appeals took two forms. If a thief was immediately apprehended while in possession of the stolen goods, the wrongdoer “was straightaway put to death [by the court], without a hearing, and the [victim] recovered his goods” ( id.). In other cases, rightful ownership of the property was usually determined by a “wager of battle”-a physical altercation or duel between the victim and the thief ( see Black's Law Dictionary 1544 [8th ed. 2004] ), with the victor taking title to the goods ( see Ames, 11 Harv. L. Rev. at 279). Because this “remedy” could lead to a thief killing or maiming the chattel's owner and taking legal ownership of the stolen property, it was “widely detested” by the populace (Black's Law Dictionary 1544).
FN3. There were also “punitory appeals,” which, as the name connotes, were utilized solely for punishing thieves in situations where property stolen was of a certain value and could not be recovered (Ames, 11 Harv. L. Rev. at 278).Over time, the practice of trial by jury was instituted and wager of battle steadily lost favor ( see Ames, *287 11 Harv. L. Rev. at 279-280). FN4 Contributing to its demise at the end of the 12th century was the advent of criminal prosecutions by the Crown. But successful prosecution by the government could result in forfeiture of the stolen chattels to the King rather than the return of property to its rightful owner-an unwelcome prospect for the victim of a theft.
FN4. Wager of battle was not formally abolished in England until 1818 ( see Black's Law Dictionary 1544).The appeals of robbery and larceny also failed to provide an adequate remedy because a victim could not seek monetary damages from the thief-the only remedy was return of the stolen property. By 1252, a new cause of action- trespass de bonis asportatis FN5-was introduced. It allowed a plaintiff to obtain pecuniary damages for certain misappropriations of property and, following a favorable jury verdict, the sale of the defendant's property to pay a plaintiff the value of the stolen goods.FN6 If, however, the defendant offered to return the property to its rightful owner, the owner had to accept it and “recovery was limited to the damages he had sustained through his loss of possession, or through harm to the chattel, which were usually considerably less than its value” (Prosser, The Nature of Conversion, 42 Cornell LQ at 170).
FN5. A Latin phrase meaning “trespass for carrying goods away” (Black's Law Dictionary 1542).
FN6. “Detinue,” a related cause of action, provided a similar remedy for the improper detention (as opposed to taking) of property ( see Ames, 11 Harv. L. Rev. at 375).In the late 15th century, the common law was extended to “fill the gap left by the action of trespass” (Prosser and Keeton, Torts § 15, at 89 [5th ed.] ) by providing a more comprehensive remedy in cases where a defendant's interference with property rights was so serious that it went **1275 ***876 beyond mere trespass to a conversion of the property ( see Prosser, 42 Cornell LQ at 169). Known as “trover,” this cause of action was aimed at a person who had found goods and refused to return them to the title owner, and was premised on the theory that:“the defendant, by ‘converting’ the chattel to his own use, had appropriated the plaintiff's rights, for which he was required to make compensation. The plaintiff was therefore not required to accept the chattel when it was tendered back to him; and he recovered as his damages the full value of the chattel at the time and place of the conversion.... The *288 effect was that the defendant was compelled, because of his wrongful appropriation, to buy the chattel at a forced sale, of which the action of trover was the judicial instrument” ( id. at 170).An action for trover originally could not be invoked by a person who did not lose personal property or have a right to immediate possession of the property ( see Restatement [Second] of Torts § 222A, Comments a, b; Ames, 11 Harv. L. Rev. at 277). Because of the advantages that trover afforded over older forms of relief, its use was stretched to cover additional misappropriations, including thefts ( see Prosser, 42 Cornell LQ at 169; Restatement [Second] of Torts § 222A, Comment a ).Trover gave way slowly to the tort of conversion, which was created to address “some interferences with chattels for which the action of trover would not lie,” such as a claim dealing with a right of future possession (Restatement [Second] of Torts § 222A, Comment b ). The technical differences between trover and conversion eventually disappeared. The Restatement (Second) of Torts now defines conversion as an intentional act of “dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel” ( id. § 222A [1] ).
IIIAs history reveals, the common law has evolved to broaden the remedies available for the misappropriation of personal property. As the concept of summary execution and wager of battle became incompatible with emerging societal values, the law changed. Similarly, the courts became willing to consider new species of personal property eligible for conversion actions.Conversion and its common-law antecedents were directed against interferences with or misappropriation of “goods” that were tangible, personal property. This was consistent with the original notions associated with the appeals of robbery and larceny, trespass and trover because tangible property could be lost or stolen ( see Prosser and Keeton, Torts § 15, at 90). By contrast, real property and all manner of intangible rights could not be “lost or found” in the eyes of the law and were not therefore subject to an action for trover or conversion ( see id. at 91).Under this traditional construct, conversion was viewed as “the ‘unauthorized assumption and exercise of the right of *289 ownership over goods belonging to another to the exclusion of the owner's rights' ” ( State of New York v. Seventh Regiment Fund, 98 N.Y.2d 249, 259, 746 N.Y.S.2d 637, 774 N.E.2d 702 [2002], quoting Vigilant Ins. Co. of Am. v. Housing Auth. of City of El Paso, Tex., 87 N.Y.2d 36, 44, 637 N.Y.S.2d 342, 660 N.E.2d 1121 [1995]; see e.g. Colavito v. New York Organ Donor Network, Inc., 8 N.Y.3d 43, 49-50, 827 N.Y.S.2d 96, 860 N.E.2d 713 [2006]; Industrial & Gen. Trust, Ltd. v. Tod, 170 N.Y. 233, 245, 63 N.E. 285 [1902] ). Thus, the general rule was that “an action for conversion will not normally lie, when it **1276 ***877 involves intangible property” because there is no physical item that can be misappropriated ( Sporn v. MCA Records, 58 N.Y.2d 482, 489, 462 N.Y.S.2d 413, 448 N.E.2d 1324 [1983] ).Despite this long-standing reluctance to expand conversion beyond the realm of tangible property, some courts determined that there was “no good reason for keeping up a distinction that arose wholly from that original peculiarity of the action” of trover (that an item had to be capable of being lost and found) and substituted a theory of conversion that covered “things represented by valuable papers, such as certificates of stock, promissory notes, and other papers of value” ( Ayres v. French, 41 Conn. 142, 150, 151 [1874] ). This, in turn, led to the recognition that an intangible property right can be united with a tangible object for conversion purposes ( see Agar v. Orda, 264 N.Y. 248, 251, 190 N.E. 479 [1934]; Iglesias v. United States, 848 F.2d 362, 364 [2d Cir.1988] ).In Agar, which involved the conversion of intangible shares of stock, this Court applied the so-called “merger” doctrine because:“for practical purposes [the shares] are merged in stock certificates which are instrumentalities of trade and commerce.... Such certificates ‘are treated by business men as property for all practical purposes.’ ... Indeed, this court has held that the shares of stock are so completely merged in the certificate that conversion of the certificate may be treated as a conversion of the shares of stock represented by the certificate” (264 N.Y. at 251, 190 N.E. 479; see also Pierpoint v. Hoyt, 260 N.Y. 26, 28-29, 182 N.E. 235 [1932] ).More recently, we concluded that a plaintiff could maintain a cause of action for conversion where the defendant infringed on the plaintiff's intangible property right to a musical performance by misappropriating a master recording-a tangible item *290 of property capable of being physically taken ( see Sporn v. MCA Records, 58 N.Y.2d at 489, 462 N.Y.S.2d 413, 448 N.E.2d 1324).FN7
FN7. The Restatement (Second) of Torts reflects the “merger” theory as follows:“(1) Where there is conversion of a document in which intangible rights are merged, the damages include the value of such rights.“(2) One who effectively prevents the exercise of intangible rights of the kind customarily merged in a document is subject to a liability similar to that for conversion, even though the document is not itself converted” (Restatement [Second] of Torts § 242).
IVWe have not previously had occasion to consider whether the common law should permit conversion for intangible property interests that do not strictly satisfy the merger test. Although some courts have adhered to the traditional rules of conversion ( see e.g. Allied Inv. Corp. v. Jasen, 354 Md. 547, 562, 731 A.2d 957, 965 [1999] [interests in partnership and corporation]; Northeast Coating Tech., Inc. v. Vacuum Metallurgical Co., Ltd., 684 A.2d 1322, 1324 [Me.1996] [interest in information contained in prospectus]; Montecalvo v. Mandarelli, 682 A.2d 918, 929 [R.I.1996] [partnership interest] ), others have taken a more flexible view of conversion and held that the cause of action can embrace intangible property ( see e.g. Kremen v. Cohen, 337 F.3d 1024, 1033-1034 [9th Cir.2003] [Internet domain name; applying California law]; Shmueli v. Corcoran Group, 9 Misc.3d 589, 594, 802 N.Y.S.2d 871 [Sup.Ct., N.Y. County 2005] [computerized client/investor list]; see generally **1277 ***878 Town & Country Props., Inc. v. Riggins, 249 Va. 387, 396-397, 457 S.E.2d 356, 363-364 [1995] [person's name] ).FN8
FN8. At least one court has approved of the use of conversion by referencing the merger doctrine ( see e.g. Astroworks, Inc. v. Astroexhibit, Inc., 257 F.Supp.2d 609, 618 [S.D.N.Y.2003] [conversion of idea that was represented by an Internet Web site] ). Conversion claims have also been approved without consideration of the historical limits of the cause of action ( see e.g. Cole v. Control Data Corp., 947 F.2d 313, 318 [8th Cir.1991] [computer software program]; Quincy Cablesystems, Inc. v. Sully's Bar, Inc., 650 F.Supp. 838, 848 [D.Mass.1986] [satellite cable signals]; Charter Hosp. of Mobile, Inc. v. Weinberg, 558 So.2d 909, 912 [Ala.1990] [addiction treatment program]; National Sur. Corp. v. Applied Sys., Inc., 418 So.2d 847, 850 [Ala.1982] [computer program]; Mundy v. Decker, 1999 WL 14479, *4, 1999 Neb App LEXIS 3, *10-12 [Ct.App.1999] [WordPerfect documents] ).A variety of arguments have been made in support of expanding the scope of conversion. Some courts have decided that a theft of intangible property is a violation of the criminal law and should be civilly remediable ( see *291 National Sur. Corp. v. Applied Sys., Inc., 418 So.2d at 850); that virtual documents can be made tangible “by the mere expedient of a printing key function” ( Shmueli v. Corcoran Group, 9 Misc.3d at 592, 802 N.Y.S.2d 871); that a writing is a document whether it is read on the computer or printed on paper ( see Kremen v. Cohen, 325 F.3d 1035, 1048 [9th Cir.2003, Kozinski, J., dissenting from certification] ); and that the expense of creating intangible, computerized information should be counterbalanced by the protection of an effective civil action ( see National Sur. Corp. v. Applied Sys., Inc., 418 So.2d at 850).On the other hand, the primary argument for retaining the traditional boundaries of the tort is that it “seem[s] preferable to fashion other remedies, such as unfair competition, to protect people from having intangible values used and appropriated in unfair ways” (Prosser and Keeton, Torts § 15, at 92). Nonetheless, advocates of this view readily concede that “[t]here is perhaps no very valid and essential reason why there might not be conversion of” intangible property ( id. at 92) and that there is “very little practical importance whether the tort is called conversion, or a similar tort with another name” because “[i]n either case the recovery is for the full value of the intangible right so appropriated” (Restatement [Second] of Torts § 242, Comment e ). The lack of a compelling reason to prohibit conversion for redress of a misappropriation of intangible property underscores the need for reevaluating the appropriate application of conversion.

'V“[I]t is the strength of the common law to respond, albeit cautiously and intelligently, to the demands of commonsense justice in an evolving society” ( Madden v. Creative Servs., 84 N.Y.2d 738, 744, 622 N.Y.S.2d 478, 646 N.E.2d 780 [1995]; see Hymowitz v. Eli Lilly & Co., 73 N.Y.2d 487, 507, 541 N.Y.S.2d 941, 539 N.E.2d 1069 [1989], cert. denied 493 U.S. 944, 110 S.Ct. 350, 107 L.Ed.2d 338 [1989] ). That time has arrived. The reasons for creating the merger doctrine and departing from the strict common-law limitation of conversion inform our analysis. The expansion of conversion to encompass a different class of property, such as shares of stock, was motivated by “society's growing dependence on intangibles” (Franks, Analyzing the Urge to Merge: Conversion of Intangible Property and the Merger Doctrine in the Wake of Kremen v. Cohen, 42 Hous. L. Rev. at 498). It cannot be seriously disputed that society's reliance on computers and electronic data is substantial, if not essential. Computers and digital information are *292 ubiquitous and pervade**1278 ***879 all aspects of business, financial and personal communication activities. Indeed, this opinion was drafted in electronic form, stored in a computer's memory and disseminated to the Judges of this Court via e-mail. We cannot conceive of any reason in law or logic why this process of virtual creation should be treated any differently from production by pen on paper or quill on parchment. A document stored on a computer hard drive has the same value as a paper document kept in a file cabinet.The merger rule reflected the concept that intangible property interests could be converted only by exercising dominion over the paper document that represented that interest ( see Pierpoint v. Hoyt, 260 N.Y. at 29, 182 N.E. 235). Now, however, it is customary that stock ownership exclusively exists in electronic format. Because shares of stock can be transferred by mere computer entries, a thief can use a computer to access a person's financial accounts and transfer the shares to an account controlled by the thief. Similarly, electronic documents and records stored on a computer can also be converted by simply pressing the delete button ( cf. Kremen v. Cohen, 337 F.3d at 1034 [“It would be a curious jurisprudence that turned on the existence of a paper document rather than an electronic one. Torching a company's file room would then be conversion while hacking into its mainframe and deleting its data would not” (emphasis omitted) ] ).Furthermore, it generally is not the physical nature of a document that determines its worth, it is the information memorialized in the document that has intrinsic value. A manuscript of a novel has the same value whether it is saved in a computer's memory or printed on paper. So too, the information that Thyroff allegedly stored on his leased computers in the form of electronic records of customer contacts and related data has value to him regardless of whether the format in which the information was stored was tangible or intangible. In the absence of a significant difference in the value of the information, the protections of the law should apply equally to both forms-physical and virtual.In light of these considerations, we believe that the tort of conversion must keep pace with the contemporary realities of widespread computer use. We therefore answer the certified question in the affirmative and hold that the type of data that Nationwide allegedly took possession of-electronic records that were stored on a computer and were indistinguishable from *293 printed documents-is subject to a claim of conversion in New York. Because this is the only type of intangible property at issue in this case, we do not consider whether any of the myriad other forms of virtual information should be protected by the tort.Accordingly, the certified question should be answered in the affirmative." Thyroff v Nationwide Mutual Ins. Co., 8 N.Y.3d 283, 864 N.E.2d 1272 (N.Y. 2007).


A good analysis of this decision (and a comparison with CFAA) appears in the October 1, 2007 edition of the National Law Journal.

2007-09-21 DC Bar Publishes Metadata Ethics Opinion - Sending and Mining Issues Addressed

The District of Columbia Bar recently issued an opinion on a lawyer's ethical obligations and responsibilities in connection with the sending or receipt of electronic data in a non-discovery context, that might contain confidential information.

The DC Bar approach takes a somewhat less balanced approach than does Florida, and permits greater leeway to a receiving party. To that end, the DC Bar opinion places upon the sending attorney a reasonable duty not to send electronic information containing confidence-laden metadata, but places an "actual knowledge" (rather than Florida's more stringent negligence-based "know or should know" standard) that a received document contains metadata.

In actuality the "actual knowledge" element might well prove be difficult to establish, as one might presume that the "actual knowledge" might be acted upon by as recipient in such as way as to *not* give rise to any suspicion of metadata mining. For instance, an attorney might have "actual knowledge" but unless that attorney acted in some way in furtherance upon that "actual knowledge" (such as claiming a fact found only in such metadata, or writing a brief setting forth such confidences, both of which seem fairly unlikely), an allegation of actual knowledge would probably fail.

Excerpt from DC Ethics Opinion 341:

Electronic Documents Provided Outside of Discovery

1. The Sending Lawyer:
Lawyers sending electronic documents outside of the context of responding to discovery or subpoenas have an obligation under Rule 1.6 to take reasonable steps to maintain the confidentiality of documents in their possession. This includes taking care to avoid providing electronic documents that inadvertently contain accessible information that is either a confidence or a secret and to employ reasonably available technical means to remove such metadata before sending the document. See N.Y. State Bar Ass'n Committee Op. 782. Accordingly, lawyers must either acquire sufficient understanding of the software that they use or ensure that their office employs safeguards to minimize the risk of inadvertent disclosures.

2. The Receiving Lawyer:
More often than not, the exchange of metadata between lawyers is either mutually helpful or otherwise harmless. Lawyers routinely exchange contracts, stipulations, and other documents that include “track changes” or other software features which highlight suggested modifications. Similarly, spreadsheets include necessary metadata such as formulas for the columns and rows, thereby providing a useful understanding of the calculations made. But when a receiving lawyer has actual knowledge that the sender inadvertently included metadata in an electronic document, we believe that the principles stated in Opinion Nos. 256 and 318 relating to inadvertent production of privileged material should be used in determining the receiving lawyer’s obligations. In Opinion No. 256, we stated that, where a lawyer knows that a privileged document was inadvertently sent, it is a dishonest act under D.C. Rule 8.4(c) for the lawyer to review and use it without consulting with the sender. We reached a similar conclusion in Opinion No. 318, regarding the receipt of documents from third parties. However, we noted in Opinion 318 that, where the privileged nature of the document is not apparent on its face, there is no obligation to refrain from reviewing it, and the duty of diligent representation under D.C. Rule 1.3 may trump confidentiality concerns.


http://www.dcbar.org/for_lawyers/ethics/legal_ethics/opinions/opinion341.cfm

2007-09-08 Source Code for Breath Alcohol Device Revealed --- With Scathing Expert Analysis and a pre-4th Circ. Crawford v. Washington Testimonial Hearsay Argument - State v. Chun (N.J. Supreme Court, Docket No 58,879)

More proof that "code speaks" after all, and a good reference tool for those who make the argument that examining the source code comprising in a computing environment is essential in making arguments either in support or challenging computer generated evidence.


A breakthrough has occurred during the pendency of an appeal of a DUI conviction involving breath alcohol device in the New Jersey Supreme Court. The manufacturer of the device, the "Draeger Alco-Test 7110 Mk III" voluntarily provided the source code in advance of a decision by the Supreme Court of New Jersey. A source code examination was performed by software house "Base One."

Overview of Expert Findings - (Which identified more than 19,400 potential errors in the code):

"1. The Alcotest Software Would Not Pass U.S. Industry Standards for Software Development and Testing: The program presented shows ample evidence of incomplete design, incomplete verification of design, and incomplete “white box” and “black box” testing. Therefore the software has to be considered unreliable and untested, and in several cases it does not meet stated requirements. The planning and documentation of the design is haphazard. Sections of the original code and modified code show evidence of using an experimental approach to coding, or use what is best described as the “trial and error” method. Several sections are marked as “temporary, for now”. Other sections were added to existing modules or inserted in a code stream, leading to a patchwork design and coding style. The software development life-cycle concept is governed by one of the nationally and internationally recognized development standards to prevent defects from entering the software during the design process, and to find and eliminate more defects as the software is coded, tested, and released to the field. This concept of software development using standards requires extensive and meticulous supporting data, and notations in source files, and a configuration management system. None of this methodology is evident in the Alcotest code. Further, the decision method of how to allocate the architecture and assignment of tasks does not match any of the software standards. This further substantiates that software development standards were not used to verify or test the software, including the ISO 9000 family of standards. It is clear that, as submitted, the Alcotest software would not pass development standards and testing for the U.S. Government or Military. It would fail software standards for the Federal Aviation Administration (FAA) and Federal Drug Administration (FDA), as well as commercial standards used in devices for public safety. This means the Alcotest would not be considered for military applications such as analyzing breath alcohol for fighter pilots. If the FAA imposed mandatory alcohol testing for all commercial pilots, the Alcotest would be rejected based upon the FAA safety and software standards.

2. Readings are Not Averaged Correctly: When the software takes a series of readings, it first averages the first two readings. Then, it averages the third reading with the average just computed. Then the fourth reading is averaged with the new average, and so on. There is no comment or note detailing a reason for this calculation, which would cause the first reading to have more weight than successive readings. Nonetheless, the comments say that the values should be averaged, and they are not.

3. Results Limited to Small, Discrete Values: The A/D converters measuring the IR readings and the fuel cell readings can produce values between 0 and 4095. However, the software divides the final average(s) by 256, meaning the final result can only have 16 values to represent the five-volt range (or less), or, represent the range of alcohol readings possible. This is a loss of precision in the data; of a possible twelve bits of information, only four bits are used. Further, because of an attribute in the IR calculations, the result value is further divided in half. This means that only 8 values are possible for the IR detection, and this is compared against the 16 values of the fuel cell.

4. Catastrophic Error Detection Is Disabled: An interrupt that detects that the microprocessor is trying to execute an illegal instruction is disabled, meaning that the Alcotest software could appear to run correctly while executing wild branches or invalid code for a period of time. Other interrupts ignored are the Computer Operating Property (a watchdog timer), and the Software Interrupt.

5. Implemented Design Lacks Positive Feedback: The software controls electrical lines, which switch devices on and off, such as an air pump, infrared source, etc. The design does not provide a monitoring sensory line (loop back) for the software to detect that the device state actually changed. This means that the software assumes the change in state is always correct, but it cannot verify the action.

6. Diagnostics Adjust/Substitute Data Readings: The diagnostic routines for the Analog to Digital (A/D) Converters will substitute arbitrary, favorable readings for the measured device if the measurement is out of range, either too high or too low. The values will be forced to a high or low limit, respectively. This error condition is suppressed unless it occurs frequently enough.

7. Flow Measurements Adjusted/Substituted: The software takes an airflow measurement at power-up, and presumes this value is the “zero line” or baseline measurement for subsequent calculations. No quality check or reasonableness test is done on this measurement. Subsequent calculations are compared against this baseline measurement, and the difference is the change in airflow. If the airflow is slower than the baseline, this would result in a negative flow measurement, so the software simply adjusts the negative reading to a positive value.If the measurement of a later baseline is taken, and the measurement is declared in error by the software, the software simply uses the last “good” baseline, and continues to read flow values from a declared erroneous measurement device.

8. Range Limits Are Substituted for Incorrect Average Measurements: In a manner similar to the diagnostics, voltage values are read and averaged into a value. If the resulting average is a value out of range, the averaged value is changed to the low or high limit value. If the value is out of range after averaging, this should indicate a serious problem, such as a failed A/D converter.

9. Code Does Not Detect Data Variations

10. Error Detection Logic: The software design detects measurement errors, but ignores these errors unless they occur a consecutive total number of times. For example, in the airflow measuring logic, if a flow measurement is above the prescribed maximum value, it is called an error, but this error must occur 32 consecutive times for the error to be handled and displayed. This means that the error could occur 31 times, then appear within range once, then appear 31 times, etc., and never be reported. The software uses different criteria values (e.g. 10 instead of 32) for the measurements of the various Alcotest components, but the error detection logic is the same as described.

11. Timing Problems: The design of the code is to run in timed units of 8.192 milliseconds, by means of an interrupt signal to a handler, which then signals the main program control that it can continue to the next segment. The interrupt goes off every 8.192 ms, not 8.192 ms from my latest request for a time delay. The more often the code calls a single 8.192 ms interrupt, the more inaccurate the software timing can be, because the requests from the mainline software instructions are out of phase with the continuously operating timer interrupt routine.

12. Defects In Three Out Of Five Lines Of Code: A universal tool in the opensource community, called Lint, was used to analyze the source code written in C. This program uncovers a range of problems from minor to serious problems that can halt or cripple the program operation. This Lint program has been used for many years. It uncovered that there are 3 error lines for every 5 lines of source code in C. While Draeger's counsel claims that the "The Alcotest [7110] is the single best microprocessor-driven evidential breath tester on the market", Draeger has already replaced the antiquated 7110 with a newer Windows® based version, the 9510. The computer code in the 7110 is written on an Atari®-styled chip, utilizing fifteen to twenty year old technology in 1970s coding style."

The link to the Overview: http://www.dwi-nj.com/pdf/DRAEGERALCOTEST7110MKIII-C.pdf

The link to the complete Base One Expert Report: http://www.dwi-nj.com/pdf/AlcoTestReportBaseOne82707v2.pdf

Crawford v Washington Argument re: Testimonial Hearsay: As for the application of Crawford v. Washington to computer generated information used to accuse (and convict), appellant's counsel Evan Levow argues in Appellant's Brief that ""[T]he Framers would be astounded to learn that ex parte testimony could be admitted against a criminal defendant because it was elicited” not “by ‘neutral’ government officers,”178 but by a machine." Mr. Levow's argument is on point, but his brief concludes that the computer code is testimonial hearsay, without addressing whether there is a human "declarant" uttering the out of court statement. Here, the link to Appellant's Brief: http://www.dwi-nj.com/pdf/Chun-Defense-Brief.pdf. He does not address the definitional issue elevating the source code from non-hearsay to hearsay status.

The result of the Base One examination provides additional support for the proposition that the "statements" of the computer programmers in fashioning a series of "if-then" statements, particularly when taken together with the remarks that may be recorded as part of uncompiled source code used to create a software and hardware environment for a breath-alcohol testing device (or any computer, for that matter) are the "statements" of a human declarant made out of court. This critical issue has been misaddressed, or because of semantic confusion, misinterpreted by the 4th and the 10th Circuit in their view that the computer code used to produce (and I am careful not to limit the code process to "calculate" results) is a not a "statement" made by a "person" --- and therefore also not hearsay which might be subject the code to the 6th Amendment scrutiny afforded such testimony by the Supreme Court in Crawford.

2007-08-27 Peskoff v Faber, Round 2 - Refinements to Accessibility, Duty to Preserve and Litigation Holds

Judge Facciola issued a second decision involving what appears to be a rather ugly dispute between the parties. (See in particular, Footnote 7 to the opinion). The Court provides additional guidance in connection with the duty to preserve and for litigation holds as they relate to a party's discontinuation of "automatic deletion features" in a data generating system.

Anticipation of Litigation: Applicable Standard

The Court first revisits and again endorses its interpretation of the advisory committee comments to Fed. R. Civ. P. Rule 37(f) that any automatic deletion feature should be turned off and a litigation hold imposed once litigation can be reasonably anticipated:

"While the new amendment to Rule 37 of the Federal Rules of Civil Procedure indicates that, absent exceptional circumstances, a court may not impose sanctions on a party for “failing to provide electronically stored information lost as a result of the routine,good-faith operation of an electronic information system,” it is clear that this Rule does not exempt a party who fails to stop the operation of a system that is obliterating information that may be discoverable in litigation. . . . [T]he advisory committee note to that Rule states: [the Rule] applies to information lost due to the routine operation of an information system only if the operation was in good faith. Good faith in the routine operation of an information system may involve a party’s intervention to modify or suspend certain features of that routine operation to prevent the loss of information, if that information is subject to a preservation obligation. A preservation obligation may arise from many sources, including common law, statutes, regulations, or a court order in the case. The good faith requirement of [the Rule] means that a party is not permitted to exploit the routine operation of an information system to thwart discovery obligations by allowing that operation to continue in order to destroy specific stored information that it is required to preserve. When a party is under a duty to preserve information because of pending or reasonably anticipated litigation, intervention in the routine operation of an information system is one aspect of what is often called a“litigation hold.”"
Disability Rights Council v. Washington Metro. Transit Auth., 242 F.R.D. 139, 146 (D.D.C. 2007)."

Legitimate Exercise of Discretion to Act, Including Sanction: The Court then affirms the approach set out in Peskoff v Faber I: "Thus, as to the most recent time period at issue, Faber’s not turning the automatic deletion feature off once informed of pending litigation may serve as a premise for additional judicial action, including a sanction, without offending amended Rule 37(f). It is a legitimate exercise of discretion to require Faber to participate in a process to ascertain whether a forensic examination can yield emails that were deleted after February 6, 2004, because at that time Faber could reasonably anticipate that Peskoff would sue him."

Period Prior to Notice of Litigation: Applicable Standard

The Court notes that, for the period prior to a party's having notice of pending litigation, Fed. R. Civ. P. 37(f) imposes no obligation for a party to suspend automatic deletion operations that are conducted in good faith and in a routine fashion.

"[Rule 37(f)] acts as "no impediment whatsoever to Faber and NextPoint continuing to operate the email system and its automatic deletion features as the system had operated before."

The Court then finds support for this approach in the words of the rule themselves: "[T]o the precise contrary, amended Rule 37(f) indicates that “[a]bsent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored nformation lost as a result of the routine, good faith operation of an electronic information system.” I find no exceptional circumstances here and the automatic deletion features of the email system cannot be the basis for any sanctions in that period of time. "

Ah, but then, you know, we operate in a world of rules, subject to exception, which are in turn subject to other conditions...and here, "balancing factors"

The Fed. Rule Civ.P. 26(b) Balancing of Factors Test Exception to Rule 37(f)'s "Good Faith" and "Routine Operation" Safe Harbor Provisions: The Court then interprets Fed. R. Civ. P. Rule 26(b)(2)(C) to reads an exception into Rule 37(f)'s "good faith" and "routine activity" safe harbor provision:

"Nonetheless, Rule 37(f) must be read in conjunction with the discovery guidelines of Rule 26(b). In doing so, as discussed above, I find that balancing the factors in Rule 26(b)(2)(C) authorizes me to require Faber to participate in a process designed to ascertain whether a forensic examination is justified because the emails are relevant, the results of the search that was conducted are incomprehensible, and there is no other way to try to find the emails."

It therefore appears that some fairness and/or hardship showing may be used by counsel to overcome Rule 37(f)'s safe harbor provisions for automatic deletion operations even for "pre" notice of litigation periods.

The Court also supports its decision to bypass the safe harbor provisions of Rule 37(f) by noting that the party from whom such information was requested never objected to the document production request. Discovery fans will recognize that the rules provide that the failure to object to a discovery request can be deemed a waiver of objection. The Court points out that:

"First, I can begin with the premise that Faber never made any objection to Peskoff’s document request and, as I have noted, it is common ground that the emails sought are relevant... Courts have found that failure to state any objections to the production of documents in a timely manner constitutes a waiver of any objections, similar to Rule 33, even though Rule 34 does not contain an automatic waiver provision. Myrdal v. District of Columbia, Civ. A. No. 05-2351, 2007 WL 1655875 (D.D.C. June 7, 2007); Fonville v. District of Columbia, 230 F.R.D. 38, 42 (D.D.C. 2005) (finding that failure to object to document production in a timely manner, like the failure to object to an interrogatory, constitutes an automatic waiver of any objections). Thus, any objection Faber has to the document request at this late date on the grounds that the request should have issued separately to NextPoint under Rule 45 is waived. See Fed. R. Civ. P. 34(b)."

Accessibility Standard Redux

Judge Facciola first reflects upon comments upon a New York Law Journal article from June 2007 that describes the approach taken in Peskoff v Faber I: to include "a per se rule that a party must search accessible data, irrespective of whether the cost of the search is justified by the relevance of what may be found, and to have “rejected Faber’s cost-shifting request.” The Court corrects this mis-impression by pointing out that: "...Faber has never made any “cost-shifting request” under Rule 26(b)(2)(B), nor has he ever contested the relevancy of the emails that Peskoff seeks. See Peskoff, 2006 WL 1933483 at *4"

Judge Facciola then drives the point home: "I readily concede that when the argument is made, the search for data, even if accessible, must be justified under the relevancy standard of Rule 26(b)(1).By performing the analysis under Rule 26(b)(2)(C), which assumes the relevancy standard under Rule 26(b)(1) is met, I do not mean to suggest the contrary. The point is that that balancing under Rule 26(b)(2)(C) was not invoked here to oppose the search,and I cannot accept the proposition that Faber may be relieved of searching accessible data when he does not argue that the search is not justified by the potential relevancy of what may be found." [Emphasis Added]

So?

Make the Argument or Waive the Argument

The upshot here is a party must object to the necessity (and relevancy) for a requested electronic systems discovery search in order to have a court invoke the balancing test required by Fed. R. Civ. P. Rule 26(b)(2)(C). If no objection is made, a court will not invoke a utility against cost balancing test sua sponte:

"I persist in my view that a party must search available electronic systems to answer any discovery request not objected to, see McPeek v. Ashcroft, 202 F.R.D. 31, 32 (D.D.C. 2001), and since Faber has never argued that the search is unnecessary or irrelevant but only that Peskoff should pay for it, I am hard pressed to understand why I am required to, sua sponte, balance utility against cost and relieve Faber of searching accessible, relevant data any more than I would have to do the same balancing before I required him to look through the file cabinet outside his office for a paper file."

Words to the wise..

S

2007-08-22 U.S. v Washington Computer Generated Information and Testimonial Hearsay - 4th Circuit Decision Applied to Breath Alcohol Testing Devices

Today's decision by the U.S. Court of Appeals for the 4th Circuit interprets the Supreme Court's Crawford v Washington 6th Amendment Confrontation clause/testimonial hearsay doctrine to computer generated information. In U.S. v. Washington (No. 05-4883p), the Court appears to adopt the 10th Circuit's approach in United States v. Hamilton, 413 F.3d 1138 (10th Cir. 2005). The 10th Circuit in Hamilton held that a declarant, for purposes of the Fed. R. Evid. 801(c) hearsay provision, must be human. Accordingly if no "human" makes the statement, the information cannot, according to the 4th Circuit, be considered hearsay and therefore is not subject to the 6th Amendment Confrontation Clause protections in connection with testimonial hearsay asserted against an accused.

Two things are interesting about this decision. First, the argument made by Appellant's counsel misses the mark. Appellant's counsel does not claim that the computer output is testimonial hearsay, but rather that the technician's report interpreting the data converts that data into testimonial hearsay. The court here seems to hold that it was indeed the computer output that accused, but since the output was not made by a "human" the computer's accusations, although testimonial, could not be considered hearsay, and therefore did not fall under the protection of Crawford v Washington.

The dissent holds out some hope for a more realistic and appropriate analysis. Although the dissent holds that the computer output is a "statement" it arrives at the right decision (that the output is testimonial hearsay) for the wrong reasons. The dissent reasons that since the computer output was interpreted by a human administrator, and the computer's "statement was somehow thus imbued with "statement" (from a human) quality sufficient to deem it hearsay and to trigger Crawford v Washington Confrontation Clause protection. The dissent also appears to give deference to the 10th Circuit reasoning in U.S. v Hamilton that information "automatically" generated by a computer "without assistance or input by a person" is not a statement made by a declarant and hearsay.

Second, it is interesting that the Appellant focused on neither the statements made by the code, nor the programmer who created the code contained in the computing device through assertions made in code (incontrovertibly, a language, such as "C"). Instead, Appellant chose to graft the interpretation of a technician with the statement made by the computing device. Once it is better understood that computers only make statements, and then only on behalf of a human who inputs an instruction to make a statement on behalf of that human, then perhaps we will see a shift in approach to treatment of computer generated information for hearsay analysis purposes. That it was not a unanimous decision holds out some hope for future cases, and for disagreement by other jurisdictions.

I think this decision creates more issues than it resolves, and should provide some additional fuel differing decisions, and ultimately, an opinion from the Supreme Court.

Cites: Crawford v Washington 541 U.S. 36 (2004)

2007-08-19 Wiki Data Not Sticky - "Conflict of Interest Editing", and a Tip

When adversary counsel refers a court's attention to a Wiki posting as "the" definitive answer to, or description of, anything, be alert. It will be helpful to point out how easily entries are manipulated to cater to one bias or another. In an article in today's New York Times (subscription required), Jimmy Wales, the founder of the Wikimedia Foundation, "which runs Wikipedia, says the site discourages such “conflict of interest” editing. “We don’t make it an absolute rule,” he said, “but it’s definitely a guideline.”

The article also notes that this non-peer reviewed ability to edit has not gone unnoticed by others: "Internet experts, for the most part, have welcomed WikiScanner. “I’m very glad that this has been exposed,” said Susan P. Crawford, a visiting professor at the University of Michigan Law School. “Wikipedia is a reliable first stop for getting information about a huge variety of things, and it shouldn’t be manipulated as a public relations arm of major companies.”

Sourcing Wikipedia posts: It is helpful to understand that a Wikipedia page cannot be traced to an individual, only to a network "owner."

An concordance about an error in fact does not make that asserted fact "true."

Techlaw Tip o' the Day: Many (if not most) networked copy machines have hard drives that store images of documents, etc. produced by the copier. These images may reside in that hard drive until they are overwritten. If your client uses this technology, include the copier hard drives in your data retention program. If you're on the discovery highway, remember to ask for images of same.

2007-07-25 Former SafeNet CFO/President Indicted for Backdating - More Than Option Prices

Civil charges relating to options backdating were filed by the SEC against SafeNet and KLA/Tencor. Perhaps more interesting is the indictment of Carol Argo, former SafeNet CFO/President. A read of the indictment, which was made public yesterday, sets forth allegations that Argo backdated options prices, BoD minutes, and her signature on documents in connection with stock option grants.


Excerpted From the Argo indictment filed in the United States District Court for the Southern District of New York:

"a. ARGO and her co-conspirators picked dates on which SafeNet’s stock price was at or near its low over a certain period, usually within the prior quarter, and made it appear as if options were granted at fair market value on those dates, when in fact they were granted at a later date.

b. ARGO and her co-conspirators prepared and caused others to prepare unanimous written consents for the Compensation Committee’s approval with backdated dates to make it appear as if the Compensation Committee had approved option grants on those dates.

c. ARGO and her co-conspirators ignored or modified existing option grants after the Compensation Committee had already executed unanimous written consents or otherwise approved option grants to take advantage of falling stock prices.

d. ARGO and her co-conspirators caused and directed false and misleading entries to be made in SafeNet’s financial books and records, thereby falsely overstating SafeNet’s publicly reported income during the period 2000 through 2006."

The question always begged (and now answered in part) --- what else is being backdated?

2007-06-19 Digital Evidence Destruction --- by Attorneys and Client, but no bears.

Case: IN RE SEPTEMBER 11TH LIABILITY INSURANCE COVERAGE CASES 03 Civ. 332 (SDNY 2007)
Date of Order: June 18, 2007

An opinion in the World Trade Towers insurance cases issued by United States District Judge Alvin Hellerstein and imposing sanctions of more than 1 million dollars againt Wiley Rein, LLP, Coughlin Duffy, LLP and client Zurich American Insurance Company the importance of generating, and managing provably persistent digital data integrity, something not adequately addressed by the plaintiff's counsel. Not rising to the level of spoliation (the evidence, which consisted of a printout of digital data that had apparently been intentionally deleted from a Zurich American computer, resulted in an untimely production, rather than an outright destruction of evidence. Of course, this raises some interesting issues. First, we really don't know what that digital evidence might have been, and so the print out of something, which can only very loosely (and only be corroborating witness testimony) associated with the origination evidence is itself highly suspect. Remember that a printout is at best merely a view of a view of a view of native, or source data.

I imagine that some better arguments might have been made challenging the authenticity of the printout itself based on the ephemerality of the digital data processed to create same, but the presence of one copy of what may well have represented the "true" digital evidence, supported by testimony (including some very pointed memos) seemed to have won the day in favor of a finding by the Court of Fed. R. Civ. P. Rule 11 and 37 sanctions, rather than finding of spoliation with its attendant sanctions-set.

Oh, and btwe, how much litigation, time, resources, etc. have been spent to "discover" that source data had been deleted, altered and substituted? Did anyone ask for document retention policy, logs of activity of the subject network (such as deletions, etc.) locations of "pristine" non-managed backups, etc.

Here's an excerpt from the decision by Magistrate Judge

"However, on January 11, 2002, four days later, Zurich underwriter Lynn Maier sent an email to underwriting assistants Dorothy Kelly and Gloria Fonseca-Matos, and to her supervisor, Dennis Zervos, instructing an important exception concerning the version of the policy printed out on September 11, 2001 for Mary Merkel. Maier’s email stated in relevant part:

'As per our conversation, please confirm ASAP, that the old version of the policy has been deleted from the Document Library and replaced with the final corrected policy. This information needs to be relayed to MaryMerkel in home office.Hametz Decl., Ex. 21. On January 22, 2002, claims representative William Salvatore sent anemail to two other representatives, inquiring:Do you have a copy of the Silverstein / WTC GL policy from the document library, not the copy we provided but a copy you may have printed way back when?'
Hametz Decl., Ex. 22."

"...The document, at 62 pages in length and clearly important, is not the type of document that inadvertently becomes lost without a trace. Indeed, Mary Merkel noted the importance by making a handwritten note on the cover page of the policy: “pulled from [Zurich computer system] 9-11-2001.” By the time of its First Amended Complaint, Zurich had reviewed Merkel’s files, see Platt Decl. ¶ 3, and knew, or should have known, of the “Broad Form Named Insured” endorsement."

Not the first instance of digital evidence tampering, and it won't be the last.

2007-06-14 Battering RAM Discovery: Excerpts from the Brunelli ruling follow.

Based on the court's consideration of the extensive arguments and evidence presented, the court's assessment of the credibility of the declarants and witnesses who testified at the evidentiary hearing in this matter, and the applicable law, the court finds: (1) the data in issue is extremely relevant and within the scope of information sought by plaintiffs' discovery requests; (2) the data in issue which was formerly temporarily stored in defendants' website's random access memory ("RAM") constituted "electronically stored information" and was within the possession, custody and control of defendants; (3) the data in issue which is currently routed to a third party entity under contract to defendants and received in said entity's RAM, constitutes electronically stored information," and is within defendants' possession, custody or control by virtue of defendants' ability to manipulate at will how the data in issue is routed; (4) defendants have failed to demonstrate that the preservation and production of such data is unduly burdensome, or that the other reasons they articulate justify the ongoing failure to preserve and produce such data; (5) defendants must preserve the pertinent data within their possession, custody or control and produce any data in such a manner which masks the Internet Protocol addresses ("IP addresses") of the computers used by those accessing defendants' website;(6) sanctions against defendants for spoliation of evidence are not appropriate in light of the lack of precedent for requiring the retention of data in RAM, the lack of a preservation request specifically directed to data present only in RAM, and the fact that defendants' failure to retain such data did not violate any preservation order; and (7) awarding attorneys' fees and costs are not appropriate.

Well, at least defendant wasn't hit with attorneys fees and costs. Time to amend those requests for production...That way, you might have a chance obtaining an order finding spoliation, with a sanctions garnish...

2007-06-14 Battering Ram - New Discovery Tool Unleashed

In this unsealed order from Columbia Pictures, et al. v. Brunelli, cv-06-1093 (CD Cal) [the Torrentspy copyright case], the federal magistrate ruled that information contained in a server's RAM constitute discoverable documents, and has ordered its production. Looks like a wire-tap, smells like a wire tap... That issue aside, this gives new meaning to the concept of a "continuing obligation" to produce.

cNEt calls this a "weapon of mass discovery." It certainly is, Ollie. More details soon.

2007-05-23 Older Case, Good Law: Incorporation of Website by Reference

In Affinity Internet, Inc., d/b/a Skynetweb, v. Consolidated Credit Counseling Services, Inc. No. 4D05-1193 (4th Dist. FL 2006), the Court of Appeals refused to enforce an arbitration clause which had been incorporated by reference --- to a web site. Chief among the reasons for rejecting such incorporation was that the link was a dead link, or did not point to the arbitration clause. Of course, an argument could have been made as well that no foundation was laid to establish that the link was *the* link in question to specific arbitration clause asserted. Imo, the evidentiary quality is otherwise very weak.

2007-05-20 Magistrate Judge's eDiscovery Rulings Subject To Abuse of Discretion Standard

Which means, of course that a District Judge will (at least in the Southern and Eastern District of New York) accord substantial deference to an eDiscovery ruling.

From the May 15, 2007 Eastern District decision in Curto v. Medical World Communications, Inc. Slip Copy, 2007 WL 1452106 (E.D.N.Y. 2007).

"This Court reviews a magistrate judge's decision regarding non-dispositive pretrial matters under a “clearly erroneous or contrary to law” standard. See 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). Discovery matters are generally considered non-dispositive of litigation. See Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir.1990).

An order is “clearly erroneous” only if a reviewing court, considering the entirety of the evidence, “ ‘is left with the definite and firm conviction that a mistake has been committed’ “; an order is “contrary to law” when it “fails to apply or misapplies relevant statutes, case law, or rules of procedure.' “ EEOC v. First Wireless Group, Inc., 225 F.R.D. 404, 405 (E.D.N.Y.2004) (quoting Weiss v. La Suisse, 161 F.Supp.2d 305, 320-21 (S.D.N.Y.2001)). This standard is “highly deferential,” “imposes a heavy burden on the objecting party,” and “only permits reversal where the magistrate judge abused his discretion.” Mitchell v. Century 21 Rustic Realty, 233 F.Supp.2d 418, 430 (E.D.N.Y.2002). Because it is clear that a magistrate judge is best qualified to “judge the entire atmosphere of the discovery process,” Bogan v. Northwestern Mut. Life Ins. Co., 144 F.R.D. 51, 53 (S.D.N.Y.1992), his discovery-related rulings are entitled to substantial deference. See Nikkal Indus., Ltd. v. Salton, Inc., 689 F.Supp. 187, 189 (S.D.N.Y.1988) ( “Consistently, it has been held that a magistrate's report resolving a discovery discourse between litigants should be afforded substantial deference and be overturned only if found to be an abuse of discretion.”)."

2007-05-20 Electronic Discovery Requests - Be Very Careful What You Ask For...And How You Ask For It


Just because you ask for electronically stored information, does not mean the producing party must produce the information requested in electronic format.

In Pace v. International Mill Service, Inc. Slip Copy, 2007 WL 1385385 (N.D.Ind. 2007), the Court denied a motion to compel, holding that "[Plaintiff's] assumption that Rule 34 can be read to provide a general standard for electronic documents, without reference to his specific request, is incorrect. The Court reasoned that so long as the production is "reasonably usable" it complies with discovery rules.

The Court then offers a wonderful gotcha issued in Northern Crossarm Company, Inc. v. Chemical Specialities, Inc., 2004 WL 635606 (W.D.Wis.2004) in which it notes with approval that Court's observation that “First, plaintiff did not specifically request production of the e-mail in electronic format, it simply asked for production of documents, adopting the definition in Rule 34(a). This certainly entitled plaintiff to disclosure of the information stored electronically, but it did not require production in electronic format.”

Moral: Competency competency check: Just because you make an Fed. R. Civ. P. Rule 34 Request does not mean that you will get electronically stored information in the manner in which it is stored. Stripped electronic information, by way of .pdf or .tiff format may, absent a specific request (and be ready understand how to defend that request) suffice.

2007-05-15 Attorney's Competency Includes Technology

From The May 15 Issue of the Florida Bar News

Said Bar Ethics Counsel Elizabeth Tarbert: “Lawyers have an obligation of confidentiality, which requires that lawyers take reasonable precautions from inadvertently disclosing client information, as well as from purposefully disclosing client information. “Lawyers also have a duty of competence, which includes keeping current with technological changes that may affect the lawyers’ clients.”

2007-05-15 Materiality to Change to a Qualitative Test?

The latest issue of Compliance Magazine reports that the SEC is thinking about, if not formally considering, reviewing and changing the definition of materiality. The last revision to that definition was, according to the article, eight years ago, and the current question is whether to shift from a quantitative to a qualitative definition. This type of shift would actually align with the shift to "risk based" guidelines. My bet is that the SEC does shift to this, because it will appear to allow more wiggle room. If this shift does occur, it will open a litigation floodgate, because a failure to implement proper info-sec policies and processes, which only by extension could be argued to be material, now would be a component of materiality (what's info-sec if not qualitative)

I've had (rather loud) discussions as to whether info-sec policies and processes can be factored into current materiality criteria. A good argument can be made for content authentication technology, but PKI deployments such as identity authentication present more attenuated analyses.

Substituting, or even incorporating a qualitative test into a materiality analysis would, imo, remove the attenuation between info-sec and materiality. It would also open the litigation floodgates.

2007-05-04 Lorraine v Markel -Excerpts: Evidentiary Treatment of Computer Generated Information from the Decision. Here, eMails

You can find the opinion here
http://www.mdd.uscourts.gov/Opinions152/Opinions/Lorraine%20v.%20Markel%20-%20ESIADMISSIBILITY%20OPINION.pdf

CIVIL ACTION NO. PWG-06-1893

MEMORANDUM OPINION
"Be careful what you ask for, the saying goes, because you might actually get it. For the last several years there has been seemingly endless discussion of the rules regarding the discovery of electronically stored information (“ESI”). The adoption of a series of amendments to the Federal Rules of Civil Procedure relating to the discovery of ESI in December of 2006 has only heightened, not lessened, this discussion. Very little has been written, however, about what is required to insure that ESI obtained during discovery is admissible into evidence at trial, or whether it constitutes “such facts as would be admissible in evidence” for use in summary judgment practice. FED. R. CIV. P. 56(e).3 This is unfortunate, because considering the significant costs associated with discovery of ESI, it makes little sense to go to all the bother and expense to get electronic information only to have it excluded from evidence or rejected from consideration during summary judgment because the proponent cannot lay a sufficient foundation to get it admitted. The process is complicated by the fact that ESI comes in multiple evidentiary “flavors,” including e-mail, website ESI, internet postings, digital photographs, and computer-generated documents and data files.

Whenever ESI is offered as evidence, either at trial or in summary judgment, the following evidence rules must be considered: (1) is the ESI relevant as determined by Rule 401 (does it have any tendency to make some fact that is of consequence to the litigation more or less probable than it otherwise would be); (2) if relevant under 401, is it authentic as required by Rule 901(a) (can the proponent show that the ESI is what it purports to be); (3) if the ESI is offered for its substantive truth, is it hearsay as defined by Rule 801, and if so, is it covered by an applicable exception (Rules 803, 804 and 807); (4) is the form of the ESI that is being offered as evidence an original or duplicate under the original writing rule, of if not, is there admissible secondary evidence to prove the content of the ESI (Rules 1001-1008); and (5) is the probative value of the ESI substantially outweighed by the danger of unfair prejudice or one of the other factors identified by Rule 403."

Excerpted from the conclusion, which pretty much sums it all up.

"In this case the failure of counsel collectively to establish the authenticity of their exhibits,resolve potential hearsay issues, comply with the original writing rule, and demonstrate the absence of unfair prejudice rendered their exhibits inadmissible, resulting in the dismissal, without prejudice,of their cross motions for summary judgment. The discussion above highlights the fact that there are five distinct but interrelated evidentiary issues that govern whether electronic evidence will be admitted into evidence at trial or accepted as an exhibit in summary judgment practice. Although each of these rules may not apply to every exhibit offered, as was the case here, each still must be considered in evaluating how to secure the admissibility of electronic evidence to support claims and defenses. Because it can be expected that electronic evidence will constitute much, if not most, of the evidence used in future motions practice or at trial, counsel should know how to get it right on the first try. The Court hopes that the explanation provided in this memorandum will assist in that endeavor."

Steven

2007-05-04 Seminal Computer Generated Evidence Admissibility Analysis --- Lorraine v Markel,
PWG-06-1893 (DC MD May 4, 2007) Getting It Right on the First Try.



Chief Magistrate Judge Paul Grimm of the United States District Court for the District of Maryland issued what is more guidance and analysis than decision in this magnum opus opinion. Largely directed at counsel, the opinion exposes the heightened scrutiny for computer generated information generally, and almost literally talks a walk through almost every section of the Federal Rules of Evidence. The 9th Circuit's decision in In re Vee Vinhnee, the Connecticut Court of Appeals decision in Swinton, and others are all viewed quite the positive light.

Oh, and btw, counsel failed to meet their authentication burden.

The last paragraph of the Markel decision sums it up:

"In this case the failure of counsel collectively to establish the authenticity of their exhibits,resolve potential hearsay issues, comply with the original writing rule, and demonstrate the absence of unfair prejudice rendered their exhibits inadmissible, resulting in the dismissal, without prejudice,of their cross motions for summary judgment. The discussion above highlights the fact that there are five distinct but interrelated evidentiary issues that govern whether electronic evidence will be admitted into evidence at trial or accepted as an exhibit in summary judgment practice. Although each of these rules may not apply to every exhibit offered, as was the case here, each still must be considered in evaluating how to secure the admissibility of electronic evidence to support claims and defenses. Because it can be expected that electronic evidence will constitute much, if not most, of the evidence used in future motions practice or at trial, counsel should know how to get it right on the first try. The Court hopes that the explanation provided in this memorandum order will assist in that endeavor."