On May 29th the Illinois Supreme Court adopted rules relating to the discovery of electronically stored information for use in state court proceedings. The rules go into effect on July 1st.  Here is the link to an article which summarizes Illinois' new ediscovery rules.  This article will appear in the next edition of the Illinois Association of Defense Trial Counsel's quarterly publication. 

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In his recent article in City-Journal, Northwestern University Law Professor John McGinnis hypothesizes that recent and impressive technological advances will have an increasingly disruptive impact on the legal profession.  McGinnis notes that “law schools are in crisis,” “solo practitioners have been hurting for a decade,” “attorney job growth has been flat,” and “the going rate for associates, even at the best firms, has stagnated since 2007.”  Though the economic downturn has certainly played a part in the current state of the legal industry, the advances in information technology will be the determining factor in the future.  McGinnis predicts that “five key areas of law now face encroachment by this machine intelligence.”  

The first, e-discovery, is already well on its way to changing (and limiting) opportunities for some lawyers.  Most notably, junior litigation associates used to be profit centers for big firms by spending late nights and weekends on hefty document review projects.  With predictive coding, the speed and accuracy of this work is improved and the need for bodies in the office is decreasing.  

The second key area is legal research, which as McGinnis notes, has largely “depended on typing in the right specific keywords.”  As computer technology improves, machine intelligence will be able to recognize concepts rather than just words with the result being more efficient research limiting lawyers’ “traditionally enjoyed leverage over the laity.”

McGinnis’ third area, legal forms, is already replacing many of the tasks traditionally performed by solo practitioners and small firms: trusts, estates, basic corporate documents, etc.  Businesses like Legal Zoom and Kiiac specialize in drafting estate documents and contracts, while “Nevada’s secretary of state has pioneered online registration for small businesses, which can comply with regulations by following the steps of simple computer programs.”  

McGinnis also predicts computers may one-day play a stronger role in a fourth traditional lawyer task: drafting briefs and memos in simple litigation.  Though McGinnis notes “an experienced lawyer could easily shape a computer generated draft into a more polished product” there’s no denying that “once programs start being useful, they get more effective over time.”  Ultimately, computers may be playing the role of entry-level associate in some cases.  

Finally, McGinnis hypothesizes that computers will bring “moneyball” to law.  The term “moneyball”, made famous by Michael Lewis’ bestselling book about the change in baseball statistics and analytics, generally refers to a method of predicting results based on raw data and statistics.  For lawyers, the use of “moneyball” in the law means that computers predict a client’s chance of success in litigation, as opposed to a lawyer’s hunch or gut feeling. To some extent, legal moneyball is already in place.  Legal support companies already track numerous statistics about potential jurors and past jury verdicts in forums across the country. The question is, how much progress can be made using legal moneyball?

Right or wrong, McGinnis raises some interesting points about the changing role of computers and technology in the law.  In a world where lawyers are constantly competing with each other for the next case and the next deal, perhaps the most successful lawyers will be those that are prepared to compete with and for the best legal technology.  Indeed, as MIT’s Eric Brynjolfsson and Andrew McAfee have advised in their recent book Race Against the Machine, “The key to winning the race is not to compete against machines, but to compete with machines.”

You can read the entirety of McGinnis’ article here. 

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E-Discovery Can be Criminal

Posted on March 27, 2014 03:05 by David Hynes

On December 18, 2013, Kurt Mix, a former BP engineer was convicted 18 U.S.C. 1512(c)(1); which prohibits individuals from “corruptly… alter[ing], destroy[ing], mutliat[ing] or conceal[ing] a record, document, or other object, or attempt[ing] to do so, with the intent to impair the object’s integrity or available for use in an official proceeding.” 

Mr. Mix had been the first criminal conviction stemming from the Deepwater Horizon oil spill, indicted in May of 2012, two years after the 2010 disaster. While Mr. Mix was employed at BP, he received ten (10) notices from BP that he was required to preserve all of his spill-related records. However, Mr. Mix deleted a string of texts to and from his supervisor, Jonathan Sprague. While the verdict may be overturned due to jury misconduct, the verdict carries with it a potential twenty (20) years in prison and $250,000 fine. His sentencing is set for March 26, 2014. 
While there is little likelihood that your client or company will be under such heavy scrutiny from the US government than BP following the blowout, there are lessons to learn useful to minimizing risks in all litigation with E-Discovery (which is to say, all litigation). 

1- Know the data storage policies—Almost all companies with any amount of data will eventually purge their information. Find out your organization’s deletion timetable, and if there are “sensitive folders” which are retained for longer.  If there is a lawsuit, you need to know how soon the standard purging will take place.

2-Establish (or broaden) a Policy—while many companies have some kind of policy, make sure the policy includes all methods of communication and data storage. Does your organization’s policies include texting? According to recent Pew Research Center’s studies, over 81% of American adults text.  Over 60% of American adults use their cellphone for the internet, is your corporate cellphone policy inclusive of this data?

3-Education is Key—Your employees will not understand this intuitively. While most employees will not emulate Mr. Mix and erase sensitive data after being told numerous times to keep it. The organization must make sure its employees do not inadvertently destroy potentially sensitive information. 

4.-Create Fail-safes—Like data redundancy, make sure multiple people in your organization truly knows the policy, and comprehends the risk of not complying with the policy. Whether you nominate Human Resources to better educate, or IT to facilitate information exchanges, make sure there are multiple people who can help you say “stop, it’s time to save.”

5. On the flip side—Quickly determine if you need to identify and use an e-discovery forensic specialist. It is possible to recover deleted texts, emails, photos, and other ESI. As technology is constantly changing and individuals’ sense of privacy may change, be proactive, and have a procedure of dealing with sensitive information.  

The year has brought some pretty big rulings on what we are seeing with E-Discovery legal decisions.  The impact of E-Discovery will continue to evolve. Following well-written and comprehensive internal protocol will help protect your company against the harsh rulings of document retention pitfalls. 

David Hynes is an associate at the Carter Law Group. His practice areas include insurance defense litigation, environmental and regulatory compliance. Should you have any questions please feel free to contact the Carter La Group LLC, at 504-527-5055. This article does not constitute legal advice, is not applicable to a factual situation and does not establish an attorney-client relationship.

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Rent to Own Computers and the FTC

Posted on October 12, 2012 02:19 by Chad Godwin

Wired Magazine recently reported that seven rent-to-own companies and a software manufacturer are settling charges with the Federal Trade Commission.  The charges claimed that computers rented from the rent-to-own companies used pre-installed spyware to obtain a host of data from the users.  The settlement only requires the companies to stop using the spyware, known as “Detective Mode,” which has been installed on as many as 420,000 rental computers.  In addition to secretly turning on a computer’s webcam, the software was capable of logging keystrokes, and  taking screen shots of a user’s activity.  The software then transmitted the secretly gathered information to the manufacturer, DesignerWare, who forwarded the material on to the rent-to-own company, all without the user’s knowledge.  The settlement still allows the rent-to-own companies to employ the software so long as they notify the renters.  Further, the FTC lacks criminal jurisdiction, so the companies have yet to face any criminal charges.  However, the FTC acknowledged that criminal activity appears to have occurred in a nod to the potential for ongoing investigations. 

The computers at issue collected everything from addresses, photos and video of often compromising situations, to phone numbers, email and social media passwords and financial logins, begging the question of what type and how much information a user should feel comfortable entering on a computer they don’t own.  In the case of someone renting a computer, it can be easy to see how a user operates under the impression that they have unfettered access to the machine for the term of the rental.  Nonetheless, there are measures that such parties can take in an effort to secure their privacy.  There are free firewall programs, such as Zone Alarm and Windows Firewall, that allow users to designate and monitor every program that accesses and/or attempts to access outbound internet connections.  Had the renters correctly configured and employed such a program, they would have known that a program, by whatever name, was attempting to send information from the subject computer.  In the event that renters were unable to install or configure (in the case of pre-installed Windows Firewall) such programs, it should serve as a red flag to carefully consider the manner in which to employ a rental or loaner computer. 

 

 

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RETAILERS WHO “SPY” BEWARE

Posted on September 27, 2012 02:22 by Philip M. Gulisano

Retailers providing consumers with electronics on a rent-to-own basis face many challenges in ensuring that they are paid for the electronics that they rent.  In particular, computers are small and easy to hide if a retailer seeks to repossess the computer from a non-paying customer.  The temptation to use software that allows the retailer to view where the computer is located and what the renter is doing with the computer is strong, however, the consequences of doing so can be high.  Obtaining information from the computer without the renter’s knowledge or consent not only erodes the renter’s trust and confidence in the retailer, but also opens the retailer up to possible civil and criminal liability.

The recent settlement of charges brought against several rent-to-own companies by the Federal Trade Commission highlights that using software that can log onto a computer, turn on the webcam to take photographs, take screen shots of the computer user’s activities on the computer, and log the keystrokes of the computer user, comes with a price.   According to one news report, civil penalties are not a part of the settlement because civil penalties cannot be imposed for a first violation of the Federal Trade Commission Act.  However, the companies are required to cease using their “spy tools” and, presumably in the future, advise renters of the use of tracking software.  

Further, aside from possible federal action and the costs associated with defending such actions, retailers need to consider possible civil and criminal liability under state laws.  While laws vary from state to state, several states recognize a tort for invasion of privacy, such as intrusion upon seclusion.  Capturing images of a person in a private setting, particularly while engaged in private acts, without the person’s knowledge or consent, may subject a retailer to a civil action.   Even in states that do not recognize a tort for invasion of privacy, under certain circumstances, a person who secretly videotapes an individual engaged in private actions may be liable for the tort of intentional infliction of emotional distress.  Remember that if you use a webcam to take pictures of the area surrounding the computer, you may be capturing images of individuals other than the renters.  Criminal liability is also arguably possible if the state has a statute prohibiting unlawful surveillance and, in some states, there is the possibility, in certain situations, of criminal liability for installing and using key stroke logging software to collect personal information.

If you decide that despite the risks, it is necessary to install and use tracking software, be sure to advise renters of the presence of the software, its uses, and your policy on its use.  The best practice would be to obtain an acknowledgement from the renter, in writing, that the renter was so advised.

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Ethics 20/20: The Impact of Technology

Posted on August 30, 2012 03:19 by J. Logan Murphy

Every day, we see the impact of technology on the practice of law. Blogs, social networking, electronically stored information, and other legal resources create enormous economies and unprecedented depth in our field. But with these advantages come unrecognized perils. The transparency and mobility of electronic information creates significant risks to clients, unless properly controlled. As part of the project to rein in technology in the practice of law, the American Bar Association launched an ambitious multi-year project called Ethics 20/20. One of the major goals of Ethics 20/20 was to modernize the rules of ethics and bring them into congruence with the state of technology.

At its most recent meeting, the ABA passed multiple resolutions amending the Model Rules of Professional Responsibility to reflect the evolution of technology in the practice of law. This article provides a brief overview of those amendments. Those who are more interested in the details of the amendments can click here to read the reports online.

Confidentiality When Using Computers
Resolution 105A makes changes to help lawyers understand how to protect client confidences when using new technology, including cloud computing, tablets, and smartphones. Though small, one of the most significant changes is included in Comment 6 to Rule 1.1 (Competence). The Rule now includes a requirement that “a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” No longer can attorneys simply ignore developments in favor of staid methods of practice. To be competent, an attorney must work effectively with technology and keep alert to technological improvements and changes.

The amendment to Rule 1.6 (Confidentiality of Information) is probably the largest and most impactful rule change related to confidentiality. Now, Rule 1.6(c) requires attorneys to “make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating the representation of a client.” The comments make it clear that attorneys are required to utilize reasonable safeguards to protect confidential information. These changes are geared toward the protection of electronic data, especially given the innumerable bits of sensitive information flying around every day.

Using Technology for Marketing
Resolution 105B was designed to help lawyers understand how the principles of attorney advertising already incorporated into the Rules are affected by the growth of Internet-based marketing and social networking. This particular resolution accomplishes three main goals. First, changes to Rule 1.18 offer guidance on how to market online without inadvertently forming an attorney-client relationship. Recent cases have demonstrated confusion on behalf of the general public regarding whether an attorney-client relationship is formed when the potential client emails the attorney or fills out a communication form on the attorney’s website. The amendments to Comment 2 of Rule 1.18 address the concern by stating that a person becomes a prospective client by “consulting” with a lawyer. While the existence of a consultation depends on the circumstances, the Comment eliminates potential passive liability to prospective clients. A consultation “does not occur if a person provides information to a lawyer in response to advertising that merely describes the lawyer’s education, experience, areas of practice, and contact information, or provides legal information of general interest.” But, if the lawyer actively invites information about a possible representation, the lawyer is probably stuck with a prospective client.

Second, the Rules contain a prohibition against paying others for a “recommendation,” and this Resolution modifies that prohibition to account for online lead generation services through chances to Comment 5 of Rule 7.2. Lawyers may now pay others for generating client leads, as long as the Internet-based lead generator does not “recommend” the lawyer. The lawyer is also responsible for the representations of the lead generator, with Comment 5 placing the onus on attorneys to ensure that the lead generator is not making statements that are inconsistent with the rules.

Finally, amendments to Rule 7.3 assist attorneys in determining when communications on the Internet, particularly through social networking sites, may constitute a “solicitation.” Only a “target communication initiated by the lawyer” directed to a “specific person” that “offers to provide” legal services is a solicitation. Communications to the general public, including Internet banners, are not solicitations, so feel free to jump on that Facebook advertising spot.

Outsourcing
Lawyers have been slow to adopt the economies of scale that outsourcing can provide, in part because of the perceived ethical dilemmas presented in outsourcing. Outsourcing can endanger confidential client information and presents a quandary over legal work being performed by attorneys not licensed in the United States. Resolution 105C encourages attorneys to ensure the efficiency, competence, and ethics of any outsourcing process. An entirely new comment is added to Rule 1.1, requiring the informed consent of the client to contract with any lawyer outside of the lawyer’s own firm. And, lest we forget, lawyers are always charged with supervising non-lawyers; that requirement does not abate simply because work is being outsourced to a foreign country. Comments 1 and 3 to Rule 5.3 incorporate this concept and apply the general rule to all non-lawyers outside of the lawyer’s own firm. The basic gist of the changes in Rule 105C is to encourage lawyers to keep a sharp eye on professionals hired from outside their own firm, and to work closely with clients in determining the proper scope of outside contracting and supervision. No surprise there—constant communication with the client is a harbinger of a durable and responsible attorney-client relationship.

Mobile Lawyers
A prevalent by-product of an informationally small, but geographically large, practice is the tendency of lawyers to move their practice. The world does indeed get smaller every year. No longer do lawyers move down the street; more and more, attorneys are moving their practice to different jurisdictions, and virtual law offices are sprouting in all states. The remaining resolutions that passed enable attorneys to establish a practice in another jurisdiction—subject to stringent information protection requirements—while pursuing admission in that jurisdiction. Resolutions 105D and 105E address the ABA Model Rule of Practice Pending Admission and the ABA Model Rule on Admission by Motion, respectively. With a few states signaling their intent to adopt a uniform bar exam, these model rules and their amendments continue the progress toward a more uniform practice of law. In case you have never encountered these model rules, or their state versions, their purpose is to allow experienced lawyers who have moved into a different jurisdiction to continue to practice while awaiting an expedited admission to the Bar. 

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On Friday, August 24, a nine member jury entered a verdict in favor of Apple and awarded almost $1.05 billion in damages.  Apple filed suit against one of its largest competitors, Samsung Electronics, in April 2011, and alleged that Samsung’s Galaxy line of smartphones and tablets infringed seven of Apple’s patents covering the iPhone and iPod products.  In turn, Samsung countersued alleging that Apple infringed Samsung’s patents covering various wireless software components of its products.  After more than a year of highly contentious litigation and following a trial that began at the end of July and lasted the better part of August, the jury deliberated for less than three days before delivering the verdict in favor of Apple. 

Prior to trial, Apple received a significant e-discovery victory when the court sanctioned Samsung for its failure to preserve emails after Samsung should have anticipated the lawsuit by Apple.  The court determined that Samsung had a duty to preserve evidence as of August 23, 2010, and while Samsung issued a litigation hold and provided instructions detailing how to save emails using its email system, Samsung failed to disable the auto-delete function of its email system, which automatically deleted all emails every two weeks in Samsung’s Korean offices.  The court ordered that, as part of the sanctions, the jury would be allowed to draw an adverse inference against Samsung and that the jury would be told to presume that relevant evidence was destroyed and that the lost evidence was favorable to Apple.  

The court also entered pretrial preliminary injunctions against Samsung barring the sale of the Galaxy Nexus phone and the Galaxy Tab 10.1 in the United States. Moreover, the court delivered various ruling for and against both parties on various in limine motions.  One ruling against Samsung appeared to be very significant: Samsung took issue with the court’s ruling that, because Samsung failed to disclose in time contentions that Samsung’s designs were in development before the iPhone, Samsung was precluded from using slides containing images of the Samsung designs.      

In opening statements and during trial, Apple set forth its theory that Samsung had ripped off the unique design features of the iPad and iPhone and infringed certain utility patents.  Apple focused on comparisons between Samsung’s phones from 2006 to its newer smartphones from 2010.  Also, Apple relied on internal documents from Samsung comparing Samsung’s products with the iPhone hardware.  On the other hand, Samsung maintained the position that Apple had no right to claim a monopoly on certain design features that were not revolutionary.  Samsung’s theory to demonstrate non-infringement was to get the jury to focus on the specific legal requirements relating to each of Apple’s patents.  Samsung also went on the offensive by attempting to prove that Apple’s products use certain Samsung features for mobile devices, such as the process for emailing photos and the technology relating to easily finding photos in an album.  Moreover, Samsung attempted to demonstrate that Apple’s patents were invalid due to developments in technology that existed before Apple claimed to have invented such technology.  The parties relied on various liability and damages experts to support their respective positions. 

During closing arguments, counsel for Apple argued that Samsung copied Apple’s designs after realizing that Samsung could no longer compete with Apple.  Samsung, in turn, argued that a verdict in favor of Apple would severely suppress competition and reduce consumer choices.  In the end, with more than 100 pages of legal instructions, the jury was able to complete a 20 page-long verdict form and return a verdict in less than three days.    
       
For the specific articles from which the information in this summary was obtained, please visit http://newsandinsight.thomsonreuters.com/Legal/.  

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Apple, Samsung and Possible Sanctions

Posted on August 9, 2012 02:33 by Stacy Moon

Apple recently asked a judge hearing a patent infringement case to sanction attorneys for Samsung after those attorneys issued a press release with a link to documents that had been ruled inadmissible.  The actual quote from the press release was apparently, “"fundamental fairness requires that the jury decide the case based on all the evidence.”  Essentially, Samsung’s attorneys decided to try the case in the media, as well as in the courtroom.  Apple took the position that the press release was an attempt to influence the jury.  The attorneys for Samsung argued it was simply a press release.  The Judge has indicated additional investigation may take place after the trial, but that he would not allow “theatrics” or “sideshows” (his words, not mine) to interfere with the trial.

Trial publicity is an issue that crosses various legal disciplines.  It affects criminal and civil cases alike.  In Alabama, a lawyer is not permitted to make “an extrajudicial statement that a reasonable person would expect to be disseminated . . . if . . . it will have a substantial likelihood of materially prejudicing an adjudicative proceeding.”  Ala. R. Prof. Cond. 3.6.  Unfortunately, the vast majority of that rule deals with publicity around a criminal case, not a civil case.

Most clients carefully control the amount and type of publicity regarding a case, recognizing that the publicity can be a two-edge sword.  In many cases, clients do not want any public statements regarding the case.  In my opinion (and my personal opinion only), it is therefore unlikely that Samsung did not approve the press release.  The question is what purpose did it serve?  If it was a backdoor attempt to get the jurors to view the inadmissible documents, the press release and link was clearly improper, and (I would argue) potentially demonstrated contempt for the rules of evidence, and Samsung’s counsel should have refused.  If it was an attempt to put public pressure on the judge to reconsider his ruling on the admissibility of the documents, it failed miserably, and has potentially adversely affected the judge’s opinion of counsel.  Save such an attempt for the appeal.  Now, at trial, if it is a close call, the judge is unlikely to give Samsung’s attorneys the benefit of any doubt.  If it was for neither purpose, it seems like a somewhat pointless exercise (akin to a temper tantrum), which has now brought the attorneys’ credibility and professionalism into question in the middle of a high-profile trial.

All attorneys should ask themselves whether the risk of damaging their credibility in front of a trial judge in such a matter is really in the best interest of their clients.  Additionally, all firms should ensure that they have a clear policy in place, including designating one attorney to respond to press requests for a statement or release regarding a case.  That person should be required to carefully analyze the pros and cons of making any statement to the press before doing so.

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New Google Service - Creative or Creepy

Posted on July 30, 2012 01:57 by Chad Godwin

Google recently launched a new service called Google Now that is available to users of its most current mobile operating system, Android Jelly Bean.  Google Now automatically creates and presents a series of “cards” that try to organize your life by presenting information Google thinks you’ll need at a given moment.  The information presented via the cards is based on data Google collects based on how you use various Google services - such as Google searches and Gmail.  For example, a recent Tech Crunch article notes that the cards may present you with information relevant to your current location, such as nearby restaurants, weather, schedules for nearby mass transit or how long it will take you to drive home from your given location.  Similarly, the cards may present you with flight schedules and currency exchange rates if you’re in a foreign country.  The first time you click on the Google search box within Jelly Bean, Google pops up an introductory screen to provide more information about Google Now.  Users can then explore the topic further.  To use Now, users must explicitly opt in.

Once a user opts in, Google collects and aggregates even more information about you on a daily basis: accessing your email, your calendar, your contacts, your text messages, your location, your shopping habits, your payment history, as well as your choices in music, movies and books.  In other words, what Google Now does is simply take the new, unified privacy policy you had to opt into a short time ago and regurgitates that information to you in what it considers to be useful ways.  When Google first introduced its new privacy policy, at the beginning of this year, more than 30 U.S. state attorneys general protested.  Now, by opting in to this program, users are providing even more information to Google, including the GPS coordinates for their home.  Nonetheless, there has not been a great deal of attention placed on Google Now or its accompanying privacy implications. Although users may appreciate the convenience of the features that are transparent, they may not consider the significance of the information they are providing access to and what Google may elect to do with their data in the future.  A case can be made that Google essentially “forced” users into agreeing to its new privacy policy, as you could not continue to use Google services without doing so.  However, by actively “opting in” to the new Google Now program, it becomes more difficult to argue that you did not willingly provide Google with access to your data.  So for now, users need to be aware of what they are providing access to.

 

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With recent amendments to Federal Rule of Civil Procedure 26 and a proliferation of Motions to Strike/Exclude Expert Testimony under the Court’s responsibility as a gatekeeper of information that is to be considered by a jury, keeping apprised of recent rulings on these issues is key to effectively using experts in defending mass tort claims. This presentation will discuss the changes to Rule 26, including how courts have handled discovery disputes involving experts, and will address recent Daubert and Frye decisions that may assist in having an opponent’s experts testimony stricken before presentation to a jury as well as other considerations as you work on expert preparation for mass tort cases. 

To hear the entire presentation and three other timely and important topics relating to Mass Torts and Class Actions, please join us Wednesday afternoon at 3:30pm at the Mass Torts and Class Actions SLG presentation. You'll be glad you did. 
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