This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:
- U.S. Supreme Court decision that the government’s acquisition of cell-site records from a cell carrier constitutes a Fourth Amendment search that ordinarily requires a search warrant supported by probable cause
- U.S. Court of Appeals for the District of Columbia Circuit ruling that certain communications related to business matters were protected by the attorney-client privilege because providing legal advice was one of the significant purposes of those communications
- U.S. District Court for the Eastern District of Michigan opinion granting a motion for a protective order requiring the defendant to submit new search terms because its initial terms were overbroad and violated the terms of a stipulated discovery order
1. In Carpenter v. United States, 138 S. Ct. 2206 (2018), the United States Supreme Court held that the government’s acquisition of cell-site records from a cell carrier constitutes a Fourth Amendment search that ordinarily requires a search warrant supported by probable cause.
To connect to a network, cell phones continuously scan the area looking for the best signal, which generally comes from the closest cell site. Every time the cell phone connects to the cell site, it generates a time-stamped record or “cell-site location information” that will give an approximate location of the cell phone at that time. The precision of the location information depends on how large the coverage area is for a particular cell site, though precision has increased over time as more carriers install more cell sites. Id. at 2212.
Because cell-site records can place a phone (and, presumably, the phone’s owner) at a particular place and time, these records are a powerful tool for law enforcement looking to track the historical movements of a suspect. In Carpenter, the FBI used cell-site records to link Timothy Carpenter to a series of robberies in Michigan and Ohio. Prosecutors had applied for court orders to obtain Carpenter’s cell-site records from the carriers pursuant to the Stored Communications Act. The act permits disclosure of telecommunication records when the government “offers specific and articulable facts showing that there are reasonable grounds to believe” the records sought “are relevant and material to an ongoing criminal investigation.” 18 U.S.C. § 2703(d). Carpenter was convicted at trial and appealed, arguing that seizure of the cell-site records violated the Fourth Amendment because they had been obtained without a warrant supported by probable cause. The U.S. Court of Appeals for the Sixth Circuit affirmed, holding that Carpenter lacked a reasonable expectation of privacy in the location data. Carpenter v. United States, 819 F.3d 880 (6th Cir. 2016). Carpenter, 138 S. Ct. at 2212-13.
Chief Justice John Roberts delivered the opinion of the Court, joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Elena Kagan, and Sonia Sotomayor, with four justices dissenting. Chief Justice Roberts began by orienting his opinion as lying at the intersection of two lines of Supreme Court cases. Id. at 2215-16. First, in a number of cases the Court had addressed a person’s expectation of privacy in his physical location and movements. The expectation of privacy matters to the analysis because, following Katz v. United States, 389 U.S. 347 (1967), the Court had expanded the concept of a Fourth Amendment search to include official intrusions into personal information when persons have a reasonable expectation of privacy in the information. A majority of the present Court had already recognized a reasonable expectation of privacy in the whole of a person’s movements. See United States v. Jones, 565 U.S. 400 (2012).
In a second line of cases addressing the “third-party doctrine,” the Court had held that persons have no reasonable expectation of privacy in information voluntarily turned over to a third party. In these cases, the government could obtain records from the third party without triggering the protections of the Fourth Amendment. See Smith v. Maryland, 442 U.S. 735 (1979) (phone records showing outgoing phone numbers); United States v. Miller, 425 U.S. 435 (1976) (bank records).
Faced with these two lines of cases, Chief Justice Roberts and the majority held that persons have a reasonable expectation of privacy in cell-site information and declined to extend Smith and Miller to cover cell-site records. Carpenter, 138 S. Ct. at 2217. Accordingly, the acquisition of Carpenter’s cell-site information was a “search” under the Fourth Amendment. That search was illegal because it was a warrantless search conducted without probable cause that did not fall within one of the recognized exceptions to the warrant requirement, such as exigent circumstances. Id. at 2221.
Chief Justice Roberts argued that time-stamped location information tied to cell phones — which many Americans carry at all times — “provides an intimate window into a person’s life, revealing not only his particular movements, but through them his familial, political, professional, religious, and sexual associations.” Id. at 2217 (quotation omitted). The information was thus more revealing than the types of information previously considered in Smith and Miller. Moreover, Chief Justice Roberts explained that Carpenter’s expectation of privacy in his location information was not extinguished by the act of sharing the information with his cell carrier. A user’s cell-site information is not truly voluntarily “shared” when cell phones are an indispensable component of modern life and when phones transmit this information without any affirmative user action beyond turning on the phone. Id. at 2220.
Each of the four dissenting justices wrote a dissenting opinion. Justice Anthony Kennedy, joined by Justice Clarence Thomas and Justice Samuel Alito, argued in the lead dissent that the outcome of the case was controlled by Smith and Miller. Id. at 2224-35 (Kennedy, J., dissenting). Indeed, in Justice Kennedy’s view, cell-site records reveal less intimate, personal information than the financial and telephone records at issue in Smith and Miller. Justice Kennedy defended Smith and Miller and their application to cell-site records on two principal grounds. First, embedded in the Fourth Amendment are fundamental notions of property, as the amendment protects “[t]he right of the people to be secure in their ... persons, houses, papers, and effects.” On this view, Carpenter lacked a protected interest in his cell-site records because the records were held by cell service providers and were not Carpenter’s “papers” or “effects.” Second, subpoenas are, by their nature, less intrusive than search warrants, and for that reason the Court had previously held that subpoenas need not comply with the procedures applicable to search.
Justice Thomas wrote his own dissent to criticize the reasonable expectations test in Katz as having no basis in the text or history of the Fourth Amendment. Id. at 2235-46 (Thomas, J., dissenting). For that reason, Justice Thomas urged the Court to jettison Katz and return to a property-based interpretation of the Fourth Amendment. Under that interpretation, Carpenter had no property right in the cell-site records for substantially the reasons articulated in Justice Kennedy’s lead dissent.
Justice Alito, joined by Justice Thomas, issued a dissent that focused on the distinction between a Fourth Amendment “search” and a subpoena duces tecum requiring a party to look through its own records and produce specified documents. Id. at 2247-61 (Alito, J., dissenting). Justice Alito argued that the Fourth Amendment, as originally understood, did not apply to the compulsory production of documents pursuant to subpoena. Rather, the amendment prohibited only “searches and seizures,” which was understood to encompass the physical invasion of person or property.
Finally, Justice Neil Gorsuch issued a dissent that was silent on the proper resolution of Carpenter’s case on the merits. Id. at 2261-72 (Gorsuch, J., dissenting). In Justice Gorsuch’s view, Smith and Miller announced a categorical third-party rule that is difficult to defend because people often do reasonably expect that information entrusted to third parties will be kept private. As far as Katz, Justice Gorsuch echoed the other dissents in arguing that Katz was untethered to the original meaning of the Fourth Amendment and difficult for courts to apply consistently in practice. As to whether cell-site data in the hands of the telephone carrier was nonetheless Carpenter’s “papers and effects” — the key inquiry under the property-based theory of the Fourth Amendment — Justice Gorsuch declined to express a view, concluding that Carpenter had forfeited this argument by failing to raise it below, although he did leave the door open to finding that cell-site data might constitute a person’s “papers and effects” even when held by a third party.
2. In Federal Trade Commission v. Boehringer Ingelheim Pharmaceuticals, Inc., 2018 WL 3028972 (D.C. Cir. June 19, 2018), the District of Columbia Circuit ruled that certain communications related to business matters were protected by the attorney-client privilege because providing legal advice was one of the significant purposes of those communications.
In this case, the Federal Trade Commission (FTC) subpoenaed certain documents that Boehringer Ingelheim Pharmaceuticals, Inc. (Boehringer) claimed as attorney-client privileged. The documents at issue related to a patent dispute between Boehringer and a third party that resulted in a “reverse payment” settlement that the FTC was investigating. Boehringer claimed certain documents as privileged that were created by employees at the direction of the general counsel for the general counsel to review for potential antitrust issues but also in furtherance of certain business decisions. Id. at *1.
Judge Brett M. Kavanaugh, writing for the District of Columbia Circuit panel, acknowledged that application of the attorney-client privilege can be more complicated when a communication has multiple purposes — in particular, a legal purpose and a business purpose in the corporate context. Judge Kavanaugh noted that in situations where a communication has multiple purposes, courts apply the Kellogg “primary purpose” test. In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014). Under Kellogg, the question is whether obtaining or providing legal advice was one of the significant purposes of the communications at issue. Boehringer, 2018 WL 3028972, at *2.
In this instance, Judge Kavanaugh found that the relevant communications at issue consisted primarily of the transmission of factual information from Boehringer’s employees to the general counsel, at the general counsel’s request, for the purpose of assisting the general counsel in formulating her legal advice regarding a possible settlement. All of those communications are protected by the attorney-client privilege because one of the significant purposes of the communications was “obtaining or providing legal advice.” Thus, despite the fact that these communications had a business purpose, the key factor is whether obtaining or providing legal advice was “one of the significant purposes of these communications.” Judge Kavanaugh found that the facts showed that legal advice was one of the significant purposes of these communications.
As a final point, Judge Kavanaugh emphasized that that the attorney-client privilege “only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney.” Id. at *3 (citation and internal quotations omitted). Therefore, the attorney-client privilege did not and does not prevent the FTC’s discovery of the underlying facts and data possessed by Boehringer and its employees. Nor did it prevent the FTC’s discovery of pre-existing business documents. But the attorney-client privilege does protect the communication of facts by corporate employees to the general counsel when, as here, the communications were for the purpose of obtaining or providing legal advice.
Judge Cornelia Pillard added a concurring opinion, to emphasize that the panel’s opinion should not be mistaken for an expansion of the attorney-client privilege. She noted that courts enjoy considerable discretion in making an attorney-client privilege determination in the first instance, and its fact-finding is owed appreciable deference. Because there was no clear error in the district court’s finding, Pillard concluded that the district court’s ruling should stand.
3. In Webasto Thermo & Comfort North America Inc. v. BesTop, Inc., 2018 WL 3198544 (June 29, 2018 E.D. Mich.), Magistrate Judge R. Steven Whalen granted a motion for a protective order requiring the defendant to submit new search terms because its initial terms proposed were overbroad and violated the terms of a stipulated discovery order.
In this patent case involving convertible roofs on Jeep brand automobiles, because of the large number of irrelevant emails at issue, the magistrate judge entered a stipulated order regarding electronically stored information (ESI) with a protocol for discovery limiting production to eight custodians and 10 search terms per custodian. The ESI order stated: “Indiscriminate terms, such as the producing company’s name or its product name, are inappropriate unless combined with narrowing search criteria that significantly reduces the risk of overproduction.” Id. at *1.
Plaintiffs argued that the defendant’s proposed terms — “Jeep,” “Swap Top,” “Bestop,” “ThrowBack,” “Magna,” “Aftermarket,” “Sale*,” “Top,” “Bow,” “Fabric,” “Fold,” “ ‘Drawing’ or ‘dwg’ ” — were overbroad, indiscriminate and contrary to the terms of the ESI order. As explained in plaintiffs’ motion, the search terms returned dozens of gigabytes of data, which translated into over half a million documents. Plaintiffs reviewed the first 100 documents returned using the search terms and found them all to be completely unresponsive, relating to irrelevant matters such as projects concerning refrigeration, RV accessories and conference attendance. Id. at *2.
The magistrate judge began his analysis by noting that under Fed. R. Civ. P. 26(c), parties can obtain a protective order limiting discovery for good cause shown. Satisfying this standard requires the moving party to articulate specific facts showing a clearly defined and serious injury. Further, under Rule 26(b)(2)(B),
A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. Id. at *3 (quoting Fed. R. Civ. P. 26(b)(2)(B)).
The magistrate judge concluded that defendant’s terms were indeed overly broad and, in some cases, “violate[d] the ESI Order on its face. For example, the terms ‘throwback’ and ‘swap top’ refer to Webasto’s product names, which are specifically excluded” by the ESI order. The magistrate judge further explained that the terms were ill tailored for the purposes of the lawsuit as many of the terms related to convertible tops generally, and the use of the term “dwg” would “call into play files with the common file extension .dwg.”
The magistrate judge found that the request’s overbreadth was confirmed by the specific facts averred by plaintiffs regarding the size of the proposed production and the irrelevance of a sample of the documents. The magistrate judge rejected defendant’s reliance on City of Seattle v. Professional Basketball Club, LLC, 2008 WL 539809 (W.D. Wash. 2008), explaining that in that case the party failed to offer facts supporting its assertion that discovery would be unduly burdensome, while this matter was supported by hard numbers and concerned terms that were obviously overbroad.
Magistrate Judge Whalen concluded his discussion by appealing to Fed. R. Civ. P. 1’s direction that the rules “be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding” and to the Sedona Conference’s Cooperation Proclamation’s statement that “gamesmanship” about e-discovery was wasteful and destructive. Id. at *4.
The motion for a protective order was granted, and the parties were directed to come up with better-tailored search terms and to seek an extension of the deadline for the production of ESI with the district judge. The magistrate judge denied plaintiffs’ request for cost shifting in light of the impending narrowing of the search terms, noting that he would potentially “reconsider the issue of cost-shifting if BesTop does not reasonably narrow its requests.”
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