This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:
- a New York City Bar Association’s Committee on Professional Ethics opinion addressing the obligations of a lawyer who receives inadvertently sent information
- a U.S. Court of Appeals for the First Circuit decision holding that individuals do not have a reasonable expectation of privacy in a phone service provider’s records of incoming or dialed phone numbers
- a U.S. District Court for the District of Minnesota opinion imposing monetary sanctions on defendants who failed to preserve relevant text messages after they should have reasonably anticipated litigation but deferring consideration of more serious sanctions until closer to trial
- a U.S. District Court for the Western District of Kentucky order granting in part plaintiff’s motion to compel defendant to respond to various discovery requests, rejecting defendants’ claims that much of the information sought was protected from disclosure by the Family Educational Rights and Privacy Act, but upholding objections to the production of employee personnel files
1. On May 16, 2019, the New York City Bar Association’s Committee on Professional Ethics (the Committee) issued a formal advisory opinion to address the obligations of a lawyer in litigation or transactions who receives inadvertently sent information and promptly notifies the sender pursuant to Rule 4.4(b) of the New York Rules of Professional Conduct (the Rules) and whether the lawyer may or should use the information for the benefit of the client. Formal Op. 2019-3 at 3.
The Committee began its analysis by considering Rule 4.4(b) of the Rules, which provides that “[a] lawyer who receives a document, electronically stored information, or other writing relating to the representation of the lawyer’s client and knows or reasonably should know that it was inadvertently sent shall promptly notify the sender.” Id. at *2. As the Committee recognized, beyond notification, “Rule 4.4(b) imposes no [other] obligations or restrictions on the receiving” lawyer.
Outside the Rules, substantive or procedural law may limit a lawyer’s use of inadvertently sent information. And if other applicable law, rules, agreements, judicial decisions or court orders govern under the circumstances, then a lawyer must comply with those mandates. Id. at *3. Absent controlling authority to the contrary, however, a lawyer who complies with Rule 4.4(b)’s prompt notification requirement does not violate the Rules by subsequently using the information to his client’s advantage. Id. at *5. Nevertheless, the Rules do not insulate a lawyer from potential sanctions in cases before a tribunal.
The Committee then turned to the remaining question: whether under the Rules a lawyer may choose to refrain from using beneficial information when refraining would disadvantage the client. Id. at *6. In considering this question, the Committee stated that a lawyer faced with this scenario must take into account Rules 1.1, 1.2 and 1.4. In particular, Rule 1.1(c)(1) provides, in the pertinent part, that a lawyer shall not intentionally “fail to seek the objectives of the client through reasonably available means permitted by law and these Rules.” Similarly, Rule 1.2(a) provides that “[s]ubject to the provisions herein, a lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued.” However, Rule 1.2(e) states that a lawyer “may exercise professional judgment to waive or fail to assert a right or position of the client” if “when doing so [the lawyer] does not prejudice the rights of the client.” Finally, under Rule 1.2(g), a lawyer does not violate the Rules “by avoiding offensive tactics, and by treating with courtesy and consideration all persons involved in the legal process.” Id. at *6–*7.
The Committee divided the remaining question into two parts: (1) whether a lawyer must consult with the client about the receipt of inadvertently sent information and (2) whether, after consulting the client and receiving the client’s directive to use the inadvertently sent information, the lawyer must then use the information accordingly.
With respect to consultation with the client, the Committee concluded that assuming the law allows a lawyer to disclose the inadvertently sent information to the client, whether the lawyer must so disclose depends on “the reasonableness standard set forth in Rule 1.2 and 1.4.” Id. at *7. Under the Rules, if the lawyer reasonably expects that the inadvertently sent information will be significant to achieving the objectives of the representation, then the Rules may require the lawyer to consult with the client. If, however, the lawyer reasonably expects that the inadvertently sent information will have only peripheral value to the objectives of the representation, then Rules 1.2(a) and 1.4(a)(2) may not require consultation with the client at all. Id. at *8.
On the second issue, the Committee stated that a lawyer’s determination on whether to follow a client’s directive to use inadvertently sent information “will be informed by, among other things, whether using the information would risk violating other law, rules, judicial decisions, court orders or agreements between the parties, or would risk incurring possible sanctions by a tribunal.” As the American Bar Association has recognized, a lawyer is not required to engage in legally questionable conduct for the client’s benefit or to assume the risk of a professional sanction. Id. (citing ABA Standing Comm. on Ethics and Prof. Resp. Op. 11-460 (2011)). Therefore, when the law is unclear, a lawyer may decline to use the information or insist on seeking a judicial ruling before using it. However, absent a legal risk, a lawyer should treat the client’s directive to use the information as controlling where not using it would constitute a failure “to seek the objectives of the client through reasonably available means permitted by law and the Rules” or would “prejudice the rights of the client.” Id. (quoting Rules 1.1(c) and 1.2(e)). Another consideration under the circumstances is whether reasonable alternative means exist to obtain the information in admissible form from another source, and, if so, any associated time and expense.
Ultimately, assuming a lawyer’s decision not to use inadvertently sent information comports with the lawyer’s obligations to competently and diligently pursue the client’s objectives, if a lawyer reasonably determines that Rules 1.1(c) and 1.2(e) do not require the lawyer to use the information, then she may refrain from doing so. Indeed, Comment 3 to Rule 4.4 provides that “if applicable law or rules do not address the situation, decisions to refrain from reading such a document or other writing or instead to return them, or both, are matters of professional judgment reserved to the lawyer.” If, after consulting the client, the lawyer and client are unable to reach an agreement on whether to use inadvertently received information, the Rules provide that the lawyer may be permitted, or even required, to withdraw from the representation. Id. at *9.
2. In Johnson v. Duxbury, 2019 WL 3406537 (1st Cir. July 29, 2019), the U.S. Court of Appeals for the First Circuit held that individuals do not have a reasonable expectation of privacy in a phone service provider’s records of incoming or dialed phone numbers.
This §1983 suit arose out of an internal investigation opened by the Chief of Police of Duxbury, Massachusetts, concerning the conduct of Brian Johnson, one of the town’s officers. At issue was Johnson’s conduct related to an ongoing murder investigation in another town. Johnson undisputedly received information about the arrest of a potential suspect in the murder and testified before a grand jury about the murder without informing anyone in his department. The chief of police opened the investigation to determine whether Johnson violated any departmental policies or procedures. Id. at *1.
As part of this investigation, the chief of police issued a letter to Johnson ordering him to provide a copy of his phone records for the relevant period of time. The letter stated that the records should be produced by the cell phone provider “in the normal format” and that Johnson’s failure to comply could result in discipline up to and including termination. Johnson’s counsel informed the chief of police that he had advised Johnson to decline to comply with the unreasonably broad order. The parties ultimately agreed that Johnson would instead produce redacted records containing only information related to specific telephone numbers of interest, which would be identified by the chief of police. In accordance with the agreed-upon process, Johnson’s counsel provided the town’s counsel with Johnson’s unredacted phone records. The town’s counsel reviewed and responded with a list of nine telephone numbers that were of interest to the police department. Johnson’s counsel then replied with the redacted records, which the town’s counsel forwarded to the chief of police. Id. at *1–*2.
In 2017, Johnson filed a §1983 action, alleging that by demanding that Johnson turn over his phone records, the town and the chief of police conducted an “illegal warrantless search” in violation of Johnson’s federal constitutional rights. The district court entered summary judgment in the defendants’ favor, finding that the order to Johnson constituted a reasonable workplace search, and thus no constitutional violation had been committed. Johnson appealed. Id. at *2–*3.
On appeal, the First Circuit Court of Appeals affirmed the grant of summary judgment in favor of the defendants but on different grounds. The First Circuit determined that the Fourth Amendment was not at issue because a government employee’s “Fourth Amendment rights are implicated only if the conduct of the ... officials at issue ... infringe[s] ‘an expectation of privacy that society is prepared to consider reasonable.’ ” Id. at *3 (citing O’Connor v. Ortega, 480 U.S. 709, 715 (1987)). The First Circuit determined that Johnson had no reasonable expectation of privacy in the phone records. “Every circuit to have considered the question has held that an individual has no reasonable  expectation of privacy in a phone service provider’s records of the phone numbers that he has dialed or from which he has received calls.” Id. at *4. The First Circuit agreed.
The holdings by the various circuits also found support in Supreme Court precedent. Under the third-party doctrine, individuals do not have a legitimate expectation of privacy in information that they voluntarily provide to third parties, even if it is provided for a limited purpose. Id. (citing Carpenter v. United States, 138 S. Ct. 2206 (2018); United States v. Miller, 425 U.S. 435 (1976)). Therefore, telephone users do not have a legitimate expectation of privacy with respect to the numbers dialed because that user knows that the numbers will be conveyed to the phone company, which records this information for legitimate business reasons. Id. (citing Smith v. Maryland, 442 U.S. 735, 742–43 (1979)).
Johnson attempted to distinguish this case from precedent based on the fact that the request was made to Johnson rather than the phone company itself. The First Circuit pointed out that the request asked that records “be issued by the cell phone provider ... in the normal format.” Id. at *5. Johnson could not argue that an expectation of privacy was established merely because he took physical possession of the records from the phone company before providing them to the town. Therefore, the district court’s grant of summary judgment was affirmed. Id. at *6.
3. In Paisley Park Enterprises, Inc. v. Boxill, 2019 WL 1036058 (D. Minn. Mar. 5, 2019), Magistrate Judge Tony Leung imposed monetary sanctions on defendants who failed to preserve relevant text messages after they should have reasonably anticipated litigation but deferred consideration of more serious sanctions until closer to trial.
In this litigation, plaintiffs represented the estate of the internationally known musician Prince and sued a number of defendants involved in the alleged unauthorized release of songs that Prince had created but not released before his death. Id. at *1. Among the defendants was a record label, an LLC with two principals, involved with releasing the music. Plaintiffs served written discovery on the record label, seeking the production of, among other things, all communications with any third party regarding the music at issue in the lawsuit. Id. at *2. The parties entered into an electronically stored information (ESI) protocol stating that the parties had taken “reasonable steps to preserve reasonably accessible sources of ESI.” Id. at *1. Similarly, the court issued a pretrial scheduling order directing the parties to preserve “all electronic documents that bear on any claims, defenses, or the subject matter of this lawsuit.”
Several months later, plaintiffs discovered that the record label had failed to produce relevant communications with third parties. Id. at *2. Plaintiffs discovered this after receiving a third-party production from a public relations firm that contained text messages that the principals of the record label had exchanged with the firm. During a meet and confer, counsel for the record label explained that the principals had not disengaged the auto-delete function on their phones and had “wiped and discarded” their cell phones on three occasions. As a result, the principals could not recover or produce the text messages. An e-discovery lawyer from plaintiffs’ firm opined that if the phones had not been wiped and discarded, it may have been possible to recover the text messages.
Plaintiffs added the principals of the record label as defendants and moved for sanctions against the principals and the label based on the failure to preserve relevant text messages. Plaintiffs invoked Rule 37(e), which permits the court to sanction a party for failure to take reasonable steps to preserve ESI, provided that the lost ESI cannot be restored or replaced. Id. at *3. Under Rule 37(e)(1), the court may, upon a finding of prejudice to the requesting party, order “measures no greater than necessary to cure the prejudice.” Under Rule 37(e)(2), the court may also order more severe sanctions if the party “acted with the intent to deprive another party of the information’s use in the litigation.” Plaintiffs also invoked Rule 37(b), which permits the court to sanction a party for failing to comply with a discovery order. Plaintiffs argued that Rule 37(b) applied because the record label had failed to comply with the pretrial scheduling order and the ESI protocol entered by the court.
Magistrate Judge Leung first considered when the record label defendants had a duty to preserve the text messages and whether it took reasonable steps to preserve relevant ESI. Id. at *3. On the first point, Magistrate Judge Leung found that the record label defendants had a duty to preserve months before it destroyed the text messages, noting that one of the principals openly acknowledged in an e-mail that releasing the songs could prompt a legal challenge from Prince’s estate. With respect to the reasonableness of the steps undertaken to preserve ESI, Magistrate Judge Leung found the steps taken here unreasonable. Id. at *4. The principals of the record label failed to disengage the auto-delete function on their cell phones, a process that takes “only a few minutes.” And “most troubling,” the principals wiped and destroyed their phones on three occasions, one of which took place after the parties had entered into the ESI protocol.
Magistrate Judge Leung also considered the arguments made by the record label in its defense, none of which were convincing. First, the record label defendants argued that plaintiffs had failed to issue a litigation hold to defendants or otherwise to inform them that plaintiffs were likely to seek text messages in discovery. But the rules require the preserving party to take reasonable steps to preserve ESI and does not require the requesting party to issue a “document preservation letter identifying all types of ESI that it might seek in the future.” Second, the record label defendants claimed that their previous counsel had not instructed them to preserve text messages. Id. at *5. Magistrate Judge Leung rejected this argument, noting that “parties are responsible for the conduct of their attorneys” and that in the “contemporary world of communications”, it is clear that text messages are a relevant form of ESI. Third, the record label defendants argued it was unreasonable to preserve text messages given the “personal nature of their phones.” Magistrate Judge Leung did not find this point persuasive when it was “obvious” that the principals of the record label conducted business on their personal cell phones. Fourth and finally, the principals of the record label argued that sanctions could not be imposed on them personally because they were not named as defendants in the lawsuit until after plaintiffs uncovered the destruction of the text messages. But the duty to preserve relevant documents attached before they were named as individual defendants.
Magistrate Judge Leung next considered whether the text messages could not be restored or replaced from other sources. Id. at *6. Even though plaintiffs had received some text messages from the third-party production, Magistrate Judge Leung concluded that plaintiffs were still missing additional messages, including ones exchanged between the principals. These could not be restored or replaced from another source.
Turning to the appropriate sanction, Magistrate Judge Leung elected to impose monetary sanctions under Rule 37(e) and Rule 37(b) based on the reasonable attorney’s fees and costs that plaintiffs incurred as a result of the record label defendants’ failure to preserve documents. Id. at *7–*8. In imposing these sanctions, Magistrate Judge Leung concluded that plaintiffs had been prejudiced by the destruction of relevant information from the record label defendants and that the record label defendants had acted with the intent to deprive. Id. at *7. On intent, Magistrate Judge Leung emphasized that the record label defendants had taken the additional, voluntary step of wiping and discarding their phones after it was reasonable to anticipate litigation. Plaintiffs had also requested a presumption that the evidence destroyed was unfavorable to the record label defendants or, in the alternative, an adverse inference instruction. Id. at *8. Magistrate Judge Leung thought that these additional sanctions “may well be justified” but deferred consideration of any additional sanctions until discovery closed and the case was closer to trial.
4. In Dahmer v. Western Kentucky Univ., 2019 WL 1781770 (W.D. Ky. Apr. 23, 2019), Magistrate Judge Lanny King granted in part plaintiff’s motion to compel defendant to respond to discovery requests, rejecting defendant's claims that much of the information sought was protected from disclosure by the Family Educational Rights and Privacy Act but upholding objections to the production of employee personnel files.
Plaintiff alleged that she had suffered sex-based discrimination while serving as president of the Student Government Association (SGA) of Western Kentucky University (WKU) and served various discovery on the defendant. WKU objected to three separate interrogatories and to six requests for production, which the Magistrate Judge considered in turn.
The first interrogatory sought communications between WKU and plaintiff regarding the allegations in her complaint. WKU agreed to produce these documents upon entry of an agreed protective order, which was subsequently entered and covered the relevant statements. The magistrate judge therefore ordered the disclosure of the requested communications under the protective order. Id. at *2.
The second and third interrogatories at issue sought statements obtained during WKU’s Title IX investigation, as well as other students’ complaints of similar harassment or sex discrimination. Plaintiff asserted that these records were relevant to showing that an atmosphere of discrimination existed at WKU, which was necessary for her to prove her Title IX claim. WKU, however, objected that these requests sought “education records” protected from disclosure by Family Educational Rights and Privacy Act (FERPA).
Magistrate Judge King agreed with plaintiff that the requests were relevant to her claims — particularly with respect to showing the pervasiveness of the alleged misconduct. FERPA’s definition of exempted “education records” was broad, encompassing documents that “(i) contain information related directly to a student; and (ii) are maintained by an educational agency or institution or by a person acting for such agency or institution.” Id. at *3 (quoting 20 U.S.C. § 1232g(4)(A)(i-ii)). But consistent with several other cases, Magistrate Judge King concluded “student witness statements” and noneducational “incident reports” were not covered, finding that lawmakers were concerned with protecting the confidentiality of educational records rather than “information that could be used to prove claims of gender-based discrimination.” Id. (quoting Smith v. Duquesne Univ., 612 F. Supp. 72, 80 (W.D. Pa. 1985)). He therefore granted plaintiff’s motion as to those two interrogatories.
Plaintiff’s requests for production also sought “any audio or video recordings of [plaintiff] at any time she met with any WKU official,” “any audio or video recordings of any student disciplinary or University Disciplinary Committee meetings relating to any students who were disciplined as a result of any complaints made by [plaintiff],” as well as any written complaints alleging civil rights, gender-based harassment, Title IX or sex discrimination against WKU, its employees or its students. Magistrate Judge King concluded that all of these requests should be granted: “FERPA specifically contemplates the disclosure of student records to a third-party entity with jurisdiction over a Complaint brought by the student who is the subject of those records.” Id. at *4 (citing 20 U.S.C. § 1232g(b)(2)(B)). Further, FERPA allowed disclosure of the final results of student disciplinary proceedings. Id. (citing 20 U.S.C. § 1232g(b)(6)). “[T]he rights of the alleged victim in knowing the results of those proceedings outweighed the privacy interests of the alleged perpetrator. FERPA creates a balancing test in these situations, with the burden placed upon the party seeking disclosure to demonstrate a genuine need for the information that outweighs the privacy interests of the students.” Id. at *5 (internal quotation marks and citations omitted).
With respect to records relating to WKU personnel, Magistrate Judge King noted that FERPA “explicitly excludes ‘records of instructional, supervisory, and administrative personnel and educational personnel ancillary thereto which are in the sole possession of the maker thereof and which are not accessible or revealed to any other person except a substitute.’ ” Id. (quoting 20 U.S.C. § 1232g(B)(i)). The requested evidence was relevant to plaintiff’s claims of discrimination, as well as negligent hiring, training, retention and supervision, and certain documents, including settlement agreements, were public records. Magistrate Judge King therefore granted plaintiff’s motion to compel with respect to these requests.
Finally, Magistrate Judge King considered plaintiff’s requests for the personnel files of Brian Lee and Dr. Karl Laves, two nonparty employees of WKU. While at WKU, plaintiff had sought counseling with Lee and had “shared many of her concerns with WKU and the SGA situation, particularly as related to WKU’s Title IX issues and her lack of confidence in WKU personnel.” Id. at *8. “Mr. Lee allegedly shared Ms. Dahmer’s concerns, and on February 20, 2018, Mr. Lee purportedly locked [plaintiff]’s file, in an apparent attempt to prevent editing by other WKU administrators.” Plaintiff alleged further that Lee told her to contact the Kentucky Attorney General and later asked her permission to speak with the Attorney General regarding the ongoing Title IX issues.
Plaintiff claimed that Laves had access to her counseling file and purportedly edited it. “Plaintiff states that notes dated April 16, 2018, authored by Dr. Laves noted in her [counseling] file, read ‘This note, by Brian Lee, contains a written comment referring to contacting the Atty General on behalf of the client. The notes are on email regarding another client. Need to clarify with [Lee], pending current action, if he is pulling students into decisions that are not in their best interest.’ ” Lee was later terminated, and “Dr. Laves purportedly placed another note into Dahmer’s file, which read ‘[Lee] reports having verbal consent to discuss client with others; advised he secure a document, but his description indicates client willingly provided consent. Before document could be obtained [Lee] was terminated and the client was given the opportunity to work with another therapist.’ ” Further, Laves later served as a co-chair of a committee responsible for reviewing WKU’s Title IX program following plaintiff’s allegations.
Magistrate Judge King noted that the Sixth Circuit had recognized a protected privacy interest in the employment files of public employees and had explained that disclosure of such files was appropriate only when the request was narrowly tailored to serve an important government interest. Id. at *9 (citing Kallstrom v. City of Columbus, 136 F.3d 1055, 1059 (6th Cir. 1998); Norwood v. F.A.A., 993 F.2d 570, 574 (6th Cir. 1993)). “In contrast, this Court has recognized that certain information contained in personnel records and employment files may be discoverable if it is sufficiently relevant to the litigation.” (citing Barrentine v. Home Depot USA, Inc., 2009 WL 10681145 at *1 (W.D. Ky. Oct. 2, 2009)). In Barrentine, the defendant had sought to discover employment files of the plaintiff and her son, both of whom had a direct financial interest in the case, which the court held was sufficient to compel discovery.
In balancing the privacy interests of Mr. Lee and Dr. Laves in the protection of the information in their personnel files against the need for production, Magistrate Judge King noted that plaintiff sought the employee files “to shed light on the inner workings of WKU, particularly as relates to her claims of a rampant environment of gender-based discrimination.” But the files also contained “a litany of personal information, the disclosure of which would create severe harm to the privacy interests of those employees.” In Magistrate Judge King’s view, the presence of relevant information alone did not justify the disclosure of sensitive private information, particularly when there are other, more effective ways of uncovering the information sought, including depositions and other discovery. In addition, unlike the plaintiff and her son in Barrentine, neither Lee nor Laves had any personal stake in the outcome of the litigation. Magistrate Judge King therefore denied the motion to compel production of their employee files.
Sidley Austin LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers.
Attorney Advertising—Sidley Austin LLP, One South Dearborn, Chicago, IL 60603. +1 312 853 7000. Sidley and Sidley Austin refer to Sidley Austin LLP and affiliated partnerships, as explained at www.sidley.com/disclaimer.
© Sidley Austin LLP