Ethical Dilemmas Presented by Social Media and e-Discovery

Both judges and attorneys have recognized that social media not only impacts how and where information is found, but can also act as a useful tool in their litigation portfolio. Savvy in-house counsel can easily use tools like MySpace to conduct initial investigations into parties, jurors, judges and even opposing counsel. The question, however, becomes, “How far is too far?”

The San Diego County Bar Legal Ethics Committee recently provided some helpful guidelines around this question when it issued SDCBA Legal Ethics Opinion 2011-2 on May 24, 2011, which concerned a hypothetical where an attorney in a wrongful termination action “friends” senior employees of the defendant corporation seeking information that could be damaging to the defendant's case. The Committee broke out the various issues in a thorough decision providing guidance to attorneys everywhere. In the case of potential witnesses or opposing parties, the Committee found that it was unethical for a lawyer to submit a “friend” request if his goal in doing so was to get inside information to use in litigation. If the “friend” request were issued to a represented party, it was an unethical ex parte communication, while if it was issued to an unrepresented party, it violated the “attorney's duty not to deceive.” Finally, if it was submitted to a witness, it was unethical if it did not disclose that purpose of the request.

While new guidelines help in determining who can be friended and how, at least one court has also demonstrated that social media can also be used as a discovery tool by the judge.

In Barnes v. CUS Nashville, LLC, 2010 U.S. Dist. LEXIS 52263, 2-3 (M.D. Tenn. May 27, 2010) Judge Joe Brown created a Facebook account for the parties to use to submit photos to in order to be reviewed in camera. On June 3, 2010, he issued the following order:

In order to try to expedite further discovery regarding the photographs, their captions, and comments, the Magistrate Judge is willing to create a Facebook account. If Julie Knudsen and Michael Vann will accept the Magistrate Judge as a “friend” on Facebook for the sole purpose of reviewing photographs and related comments in camera, he will promptly review and disseminate any relevant information to the parties. The Magistrate Judge will then close this Facebook account.

Although Judge Brown's creative use of social media has not yet caught on, it demonstrates what is possible in the future as more and more technically inclined Judges take the bench.

When Using Social Media at Work Becomes a Crime

In-house counsel face the unique challenge of pondering the question of when their corporation's employees' use of social media might constitute a crime. Considering that we spend nearly a quarter of our time on social media networks, it is not surprising that some of this occurs during work hours and through work-issued computers and devices. In a case of first impression, the Ninth Circuit held early this year that an employee's use of a computer in violation of the employer's use policy was grounds for a criminal indictment under the Computer Fraud and Abuse Act. United States v. Nosal, 642 F.3d 781 (9th Cir. Cal. 2011).

In Nosal, the employee allegedly induced current employees to use their credentials to access the company's database and provide him with information from it. While the court's determination under the facts of Nosal is understandable, the possible repercussions from it are concerning. For instance, what if the use violating the company's policy is simply checking a Facebook account or sending a personal e-mail from a company account. Can an employee be charged for a crime under these circumstances? Under strict application of Nosal, the answer could be “yes.”

For those in Florida, however, this question was answered in May, 2011 in Lee v. PMSI, Inc., 2011 U.S. Dist. LEXIS 52828 (M.D. Fla. May 6, 2011), where an employer argued exactly that. In Lee, the employee sued her employer, PMSI, for pregnancy discrimination. PMSI counterclaimed under the Computer Fraud and Abuse Act, alleging that the employee spent an excessive amount of time during work hours using the Internet, visiting social networking websites and sending personal e-mails through her Verizon e-mail account. The Lee court recognized that there would be few employees who would not be liable under such a strict application of the Computer Fraud and Abuse Act, and refused to hold that such a claim was valid.

Can Employers Stop Employees from Talking About Work on Their Private Social Media Accounts?

Likewise, in-house counsel are now facing questions on what limits they can place on corporate employees' use of social media outside of work. These not-uncommon scenarios involve employees writing about work-related issues on their private social media accounts. In Hispanics United of Buffalo, Inc., National Labor Relations Board, Division of Judges, Case No. 3-CA-27872 (Sept. 2, 2011) the employer terminated five employees based on comments they had made on another co-worker's Facebook page. The statements regarded things the co-worker had allegedly said about their team's job performance.

The Administrative Law Judge in Hispanics United held that the communications were protected under Section 7 of the National Labor Relations Act. The court further held that “Employees have a protected right to discuss matters affecting their employment amongst themselves.” The court also noted that the posts were not made during work hours or at work, and that none of the posts included abusive language.

Risks and Sanctions

Perhaps the reason that there is so much focus on e-discovery and the developing rules around it is because the sanctions granted in this area of law can be staggering. In addition, there is an increasing burden being placed by the courts on both outside and in-house counsel to become experts in technology on top of their day jobs.

Ongoing Sanctions Lead to Heightened Anxiety over The Breadth of Attorneys' Duties

Over the last two years, we've seen a steady pattern of cases where both in-house and outside counsel were held jointly liable for failing to sufficiently oversee the preservation or collection of data in connection with litigation.

In Bray & Gillespie Management, LLC v. Lexington Insurance Co., 2010 U.S. Dist. LEXIS 400 (M.D. Fla. Jan 5, 2010) (Bray III), the court sanctioned in-house and outside counsel jointly for failing to produce relevant data. The court found that the outside counsel failed to oversee or properly investigate or produce key evidence. Moreover, it dismissed the plaintiff's claims connected to the late produced documents, holding that no other sanctions would serve as a future deterrent. In addition to sanctioning counsel for not properly overseeing collections, courts have also sanctioned them for simply not understanding how the collection should be done.

In GFI Acquisition, LLC v. Am. Federated Title Corp. (In re A&M Fla. Props. II, LLC), 2010 Bankr. LEXIS 1217 (Bankr. S.D.N.Y. Apr. 7, 2010), although neither the client nor the outside counsel acted in bad faith, the court still sanctioned both, finding that the outside counsel had failed to properly supervise the client's collection and preservation of electronically stored information. The court stated that the outside counsel “simply did not understand the technical depths to which electronic discovery can sometimes go.”

Counsel have even been sanctioned for not overseeing third-party experts. In Rosenthal Collins Group, LLC v. Trading Technologies International, Inc., 2011 U.S. Dist. LEXIS 17623 (N.D. Ill. Feb. 23, 2011) the court held that the plaintiff and its counsel had a duty to ensure that their third party consultant executed all e-discovery functions appropriately and accurately. The consultant had wiped several disks, USB drives and computer hard drives. The court held that the plaintiff and its counsel “had an affirmative duty to make sure that the metadata was accurate in light of their reliance on the source code contained on the zip disks.” It further held that the plaintiff's action of informing the consultant to preserve the data was not sufficient to meet its duty to properly oversee that consultant. The court held that $1M in sanctions and a default judgment were warranted.

The most famous case for sanctioning inside and outside counsel is now the one that provides both with the most hope for avoiding sanctions. In Qualcomm, Inc. v. Broadcom Corp., No. 05-cv-1958 (S.D. Cal. April 2, 2010) the in-house and outside counsel were jointly sanctioned for failing to oversee the corporation's document production. In the court's final holding, however, sanctions against outside counsel were set aside with a holding from the court that the counsel had “made significant efforts to comply with their discovery obligations,” but were lied to by Qualcomm employees.

The natural question that arises from this line of cases is: What efforts does counsel need to take to ensure that they are complying with their duties to oversee collection without becoming forensic experts themselves? The answer to this question may be the same as the one regarding what steps are acceptable or sufficient to meet the duty to preserve: “What is reasonable, and that in turn depends on whether what was done ' or not done ' was proportional to that case and consistent with clearly established applicable standards.” Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 613 (S.D. Tex. 2010).

Conclusion

In the end, it is prudent for both in-house and outside counsel to do their best to stay on top of this emerging and constantly changing new area of law. Social media websites are appearing every day and their use is growing exponentially, year over year, in every age group. As a result, the issues around it are not going away and until clear rules arise, these will remain murky waters for everyone.

Nadine Weiskopf is Director of Strategic Planning for Litigation Workflow Tools at LexisNexis, and an industry expert in the application of technology tools to the e-discovery process. She may be reached at [email protected].

With Americans spending nearly a quarter of their time on social media websites and new social media sites, like Google Buzz, which already accumulated more than 25 million users before even launching, it is no surprise that social media is changing the way we litigate. Both in-house and outside counsel can use social media to investigate opposing parties, potential witnesses and even jurors. In addition, corporate counsel face the unique challenges of having to determine when the use of social media at or after work violates company policies and may even amount to a crime. A growing number of sanctions cases place as much burden on in-house as outside counsel, forcing corporate counsel to become experts in this emerging area of technology that is not only changing workplace norms, but also the way they litigate.

New Ethical Dilemmas

Can Attorneys and Judges Ethically Use Social Media
As a Litigation Tool?

Both judges and attorneys have recognized that social media not only impacts how and where information is found, but can also act as a useful tool in their litigation portfolio. Savvy in-house counsel can easily use tools like MySpace to conduct initial investigations into parties, jurors, judges and even opposing counsel. The question, however, becomes, “How far is too far?”

The San Diego County Bar Legal Ethics Committee recently provided some helpful guidelines around this question when it issued SDCBA Legal Ethics Opinion 2011-2 on May 24, 2011, which concerned a hypothetical where an attorney in a wrongful termination action “friends” senior employees of the defendant corporation seeking information that could be damaging to the defendant's case. The Committee broke out the various issues in a thorough decision providing guidance to attorneys everywhere. In the case of potential witnesses or opposing parties, the Committee found that it was unethical for a lawyer to submit a “friend” request if his goal in doing so was to get inside information to use in litigation. If the “friend” request were issued to a represented party, it was an unethical ex parte communication, while if it was issued to an unrepresented party, it violated the “attorney's duty not to deceive.” Finally, if it was submitted to a witness, it was unethical if it did not disclose that purpose of the request.

While new guidelines help in determining who can be friended and how, at least one court has also demonstrated that social media can also be used as a discovery tool by the judge.

In Barnes v. CUS Nashville, LLC, 2010 U.S. Dist. LEXIS 52263, 2-3 (M.D. Tenn. May 27, 2010) Judge Joe Brown created a Facebook account for the parties to use to submit photos to in order to be reviewed in camera. On June 3, 2010, he issued the following order:

In order to try to expedite further discovery regarding the photographs, their captions, and comments, the Magistrate Judge is willing to create a Facebook account. If Julie Knudsen and Michael Vann will accept the Magistrate Judge as a “friend” on Facebook for the sole purpose of reviewing photographs and related comments in camera, he will promptly review and disseminate any relevant information to the parties. The Magistrate Judge will then close this Facebook account.

Although Judge Brown's creative use of social media has not yet caught on, it demonstrates what is possible in the future as more and more technically inclined Judges take the bench.

When Using Social Media at Work Becomes a Crime

In-house counsel face the unique challenge of pondering the question of when their corporation's employees' use of social media might constitute a crime. Considering that we spend nearly a quarter of our time on social media networks, it is not surprising that some of this occurs during work hours and through work-issued computers and devices. In a case of first impression, the Ninth Circuit held early this year that an employee's use of a computer in violation of the employer's use policy was grounds for a criminal indictment under the Computer Fraud and Abuse Act. United States v. Nosal , 642 F.3d 781 (9th Cir. Cal. 2011).

In Nosal, the employee allegedly induced current employees to use their credentials to access the company's database and provide him with information from it. While the court's determination under the facts of Nosal is understandable, the possible repercussions from it are concerning. For instance, what if the use violating the company's policy is simply checking a Facebook account or sending a personal e-mail from a company account. Can an employee be charged for a crime under these circumstances? Under strict application of Nosal, the answer could be “yes.”

For those in Florida, however, this question was answered in May, 2011 in Lee v. PMSI, Inc., 2011 U.S. Dist. LEXIS 52828 (M.D. Fla. May 6, 2011), where an employer argued exactly that. In Lee, the employee sued her employer, PMSI, for pregnancy discrimination. PMSI counterclaimed under the Computer Fraud and Abuse Act, alleging that the employee spent an excessive amount of time during work hours using the Internet, visiting social networking websites and sending personal e-mails through her Verizon e-mail account. The Lee court recognized that there would be few employees who would not be liable under such a strict application of the Computer Fraud and Abuse Act, and refused to hold that such a claim was valid.

Can Employers Stop Employees from Talking About Work on Their Private Social Media Accounts?

Likewise, in-house counsel are now facing questions on what limits they can place on corporate employees' use of social media outside of work. These not-uncommon scenarios involve employees writing about work-related issues on their private social media accounts. In Hispanics United of Buffalo, Inc., National Labor Relations Board, Division of Judges, Case No. 3-CA-27872 (Sept. 2, 2011) the employer terminated five employees based on comments they had made on another co-worker's Facebook page. The statements regarded things the co-worker had allegedly said about their team's job performance.

The Administrative Law Judge in Hispanics United held that the communications were protected under Section 7 of the National Labor Relations Act. The court further held that “Employees have a protected right to discuss matters affecting their employment amongst themselves.” The court also noted that the posts were not made during work hours or at work, and that none of the posts included abusive language.

Risks and Sanctions

Perhaps the reason that there is so much focus on e-discovery and the developing rules around it is because the sanctions granted in this area of law can be staggering. In addition, there is an increasing burden being placed by the courts on both outside and in-house counsel to become experts in technology on top of their day jobs.

Ongoing Sanctions Lead to Heightened Anxiety over The Breadth of Attorneys' Duties

Over the last two years, we've seen a steady pattern of cases where both in-house and outside counsel were held jointly liable for failing to sufficiently oversee the preservation or collection of data in connection with litigation.

In Bray & Gillespie Management, LLC v. Lexington Insurance Co., 2010 U.S. Dist. LEXIS 400 (M.D. Fla. Jan 5, 2010) (Bray III), the court sanctioned in-house and outside counsel jointly for failing to produce relevant data. The court found that the outside counsel failed to oversee or properly investigate or produce key evidence. Moreover, it dismissed the plaintiff's claims connected to the late produced documents, holding that no other sanctions would serve as a future deterrent. In addition to sanctioning counsel for not properly overseeing collections, courts have also sanctioned them for simply not understanding how the collection should be done.

In GFI Acquisition, LLC v. Am. Federated Title Corp. (In re A&M Fla. Props. II, LLC), 2010 Bankr. LEXIS 1217 (Bankr. S.D.N.Y. Apr. 7, 2010), although neither the client nor the outside counsel acted in bad faith, the court still sanctioned both, finding that the outside counsel had failed to properly supervise the client's collection and preservation of electronically stored information. The court stated that the outside counsel “simply did not understand the technical depths to which electronic discovery can sometimes go.”

Counsel have even been sanctioned for not overseeing third-party experts. In Rosenthal Collins Group, LLC v. Trading Technologies International, Inc., 2011 U.S. Dist. LEXIS 17623 (N.D. Ill. Feb. 23, 2011) the court held that the plaintiff and its counsel had a duty to ensure that their third party consultant executed all e-discovery functions appropriately and accurately. The consultant had wiped several disks, USB drives and computer hard drives. The court held that the plaintiff and its counsel “had an affirmative duty to make sure that the metadata was accurate in light of their reliance on the source code contained on the zip disks.” It further held that the plaintiff's action of informing the consultant to preserve the data was not sufficient to meet its duty to properly oversee that consultant. The court held that $1M in sanctions and a default judgment were warranted.

The most famous case for sanctioning inside and outside counsel is now the one that provides both with the most hope for avoiding sanctions. In Qualcomm, Inc. v. Broadcom Corp., No. 05-cv-1958 (S.D. Cal. April 2, 2010) the in-house and outside counsel were jointly sanctioned for failing to oversee the corporation's document production. In the court's final holding, however, sanctions against outside counsel were set aside with a holding from the court that the counsel had “made significant efforts to comply with their discovery obligations,” but were lied to by Qualcomm employees.

The natural question that arises from this line of cases is: What efforts does counsel need to take to ensure that they are complying with their duties to oversee collection without becoming forensic experts themselves? The answer to this question may be the same as the one regarding what steps are acceptable or sufficient to meet the duty to preserve: “What is reasonable, and that in turn depends on whether what was done ' or not done ' was proportional to that case and consistent with clearly established applicable standards.” Rimkus Consulting Group, Inc. v. Cammarata , 688 F. Supp. 2d 598, 613 (S.D. Tex. 2010).

Conclusion

In the end, it is prudent for both in-house and outside counsel to do their best to stay on top of this emerging and constantly changing new area of law. Social media websites are appearing every day and their use is growing exponentially, year over year, in every age group. As a result, the issues around it are not going away and until clear rules arise, these will remain murky waters for everyone.

Nadine Weiskopf is Director of Strategic Planning for Litigation Workflow Tools at LexisNexis, and an industry expert in the application of technology tools to the e-discovery process. She may be reached at [email protected].