LITIGATION AND ADMINISTRATIVE PRACTICE SERIESLitigation

Course Handbook SeriesNumber H-924

Electronic Discovery2013

Co-ChairsGary A. Adler

Steven C. Bennett

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CHAPTER 13 ETHICS AND ELECTRONIC DISCOVERY

David J. Lender

Weil, Gotshal & Manges LLP

Reprinted with permission.

If you find this article helpful, you can learn more about the subject by going to www.pli.edu to view the on demand program or segment for which it was written.

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§ 13.01 Introduction § 13.02 A Lawyer’s Duty to Clients [A] Competency [B] Confidentiality [1] Inadvertent Production of Privileged

Information [a] Quick-Peek Agreements [b] Claw Back Agreements [2] Metadata [3] Unencrypted E-mails [a] ABA Guidance [b] State Bar Guidance [4] Electronic Storage of Client Information [5] Use of Social Media [C] Communication [1] Qualcomm Inc. v. Broadcom Corp. [2] Lawson v. Sun Microsystems, Inc. [D] Ethical Duties Related to Outsourcing [1] Duty to Supervise [a] Prevention of the Unauthorized Practice

of Law [b] Duty of Competency [2] Duty of Confidentiality [3] Duty of Disclosure [a] Client Confidences Will Be Shared [b] Temporary Lawyer Working

Independently [c] Inconsistent with Client’s Reasonable

Expectations [4] Conflicts of Interest [5] Duty to Charge a Reasonable Fee § 13.03 A Lawyer’s Duty to Others [A] Diligently Proceeding in Litigation [B] Duty of Candor [1] Coleman (Parent) Holdings, Inc. v.

Morgan Stanley [2] Qualcomm Inc. v. Broadcom Corp. [3] Bray & Gillespie Management LLC v.

Lexington Ins. Co. [4] Rosenthal Collins Group, LLC v. Trading

Technologies Int’l, Inc.

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[C] Fairness to Opposing Counsel [1] Duty to Preserve and Produce [2] Use of Inadvertently Produced Privileged

Documents [a] Courts Requiring Disclosure and

Refraining from Further Review [b] Courts Permitting Continued Use [c] Ethics Committee Guidance [3] Metadata Mining [a] Metadata Mining Is Unethical [b] Metadata Mining Is Not Per Se Unethical [c] Metadata Mining Can Be Unethical [d] Metadata Mining May Be Ethically

Required [4] Duty to Cooperate [a] The Sedona Conference Cooperation

Proclamation [b] Mancia v. Mayflower Textile Servs. Co. [D] Use of Social Media in Discovery § 13.04 Conflict Between Duties to Client and the Lawyer’s

Self-Interest [A] Ethical Rules Implicated by the Conflict Between

Lawyer and Client [1] Duty of Loyalty [2] Duty of Confidentiality [3] Lawyer-Witness Prohibition [4] Duty to Withdraw [B] Recent Cases Pitting Lawyer Against Client [1] Qualcomm Inc. v. Broadcom Corp. [2] Wachtel v. Guardian Life Ins. Co. [3] Other Recent Cases § 13.05 Conclusion

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§ 13.01 INTRODUCTION

As illustrated in the preceding chapters, electronic discovery is a poten-tial minefield for lawyers. Missteps can have severe ramifications, including the imposition of spoliation sanctions, waiver of the attorney-client privilege, disciplinary action, and even disqualification. Accordingly, lawyers must be well versed with the rules governing civil procedure, the law of evidence, local rules concerning electronic discovery and the rules of professional conduct.1

The American Bar Association’s Model Rules of Professional Con-duct2 (“Model Rules”), the Lawyer’s Code of Professional Responsibility (“Lawyer’s Code”), and state ethical rules3 provide considerable guid-ance to lawyers on how to fulfill their competing obligations to clients, litigants, opposing counsel, the court, and to the system of justice with civility and professionalism. The proliferation of technology, however, has raised novel questions for lawyers seeking to discharge their obliga-tions to these various constituencies. What does it mean to provide com-petent representation in the age of electronic discovery? How familiar must lawyers be with IT issues and must they stay abreast of changes in technology? How does a lawyer fulfill his ethical duty to preserve client confidences? Are quick-peek or claw-back agreements ethical? Can a lawyer communicate with clients using unencrypted e-mail or does its use violate a lawyer’s duty of confidentiality? Does a lawyer have an affirm-ative duty to scrub metadata? Can a lawyer mine documents received from adverse parties for metadata? Does a lawyer have a duty to cooper-ate with his or her adversary? Can a lawyer gather and use evidence from social media for purposes of researching witnesses and potential jurors?

Even more troubling, there is a growing trend by courts to pit law-yers against their clients in trying to cast blame for the failure of a com-pany to preserve and produce relevant materials. Lawyers have been ordered to file affidavits to explain what went wrong, which raises ethi-cal issues when those sworn statements require disclosures of confiden-tial communications. And when the client and the lawyer seek to point

1. A special thanks is extended to Ariane Newell, an associate in the litigation

department of Weil, Gotshal & Manges LLP, who assisted in the preparation of this chapter.

2. See generally MODEL RULES OF PROF’L CONDUCT (2008). 3. The Model Rules are not self-executing. Rather, a lawyer is ultimately bound by

the ethical rules of the state in which he or she practices law.

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the finger at each other, conflicts of interest may arise that implicate other ethical considerations.

This chapter explores some of the ethical conundrums facing lawyers today in the age of electronic discovery.

§ 13.02 A LAWYER’S DUTY TO CLIENTS

[A] Competency

Rule 1.1 of the Model Rules states that “[a] lawyer shall provide competent representation to a client.”4 Providing “[c]ompetent repre-sentation requires the legal knowledge, skill, thoroughness and prepa-ration reasonably necessary for the representation.”5

On August 6, 2012, the ABA’s House of Delegates voted to amend comment [6] to Rule 1.1 of the Model Rules to make clear that a lawyer’s skill set must include a working knowledge of rele-vant technology. The revised comment now includes the following language:

[6] To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.5.1

Similarly, Ethical Consideration 1-1 of the Lawyer’s Code states that “[m]aintaining the integrity and improving the competence of the

4. MODEL RULES OF PROF’L CONDUCT R. 1.1 (2008). 5. Id. 5.1. The ABA Commission on Ethics 20/20 Report noted the importance of making

this requirement more explicit, stating that, “[b]ecause of the sometimes bewil-dering pace of technological change, the Commission believes that it is important to make explicit that a lawyer’s duty of competence, which requires the lawyer to stay abreast of changes in the law and its practice, includes understanding relevant technology’s benefits and risks. Comment [6] of Model Rule 1.1 (Competence) implicitly encompasses that obligation, but it is important to make this duty explicit because technology is such an integral—and yet at times invisible—aspect of contemporary law practice. The phrase ‘including the benefits and risks associated with relevant technology’ would offer greater clarity regarding this duty and emphasize the growing importance of technology to modern law prac-tice.” ABA Commission on Ethics 20/20 Report, Introduction and Overview at 8 (available online at http://www.americanbar.org/content/dam/aba/administrative/ ethics_2020/20120508_ethics_20_20_final_hod_introdution_and_overview_report. authcheckdam.pdf).

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bar to meet the highest standards is the ethical responsibility of every lawyer.”6

The competency requirement is more complicated in an elec-tronic world. In a paper world, a firm grasp of the law of evidence, the rules of civil procedure and the substantive area of law ordinarily satisfied a lawyer’s responsibility to provide competent repre-sentation. A lawyer’s unfamiliarity with (or even phobia of) technol-ogy generally did not undermine a lawyer’s core competencies. This is no longer the case.

It is now commonplace for lawyers to review gigabytes (if not terabytes) of data for production, while simultaneously managing cli-ent demands to reduce costs and increase efficiencies. Lawyers also need to interface with a whole new body of experts, including elec-tronic discovery vendors and consultants. They need to understand new concepts such as de-duping, keyword searching, and concept searching in order to cull down the number of potentially responsive documents to make the review more manageable. They need to be educated on IT issues and be able to discuss the capabilities and computer architecture of their client’s systems with their adversaries at the Rule 26(f) conference. They need to be facile enough to discuss topics such as whether to produce in native, .TIFF, or some other format, what to do about metadata, whether to propose claw back or sneak peak agreements, and whether and when to preserve and/or restore backup tapes, just to name a few.

While it is clear that at least some degree of technological com-petence is necessary,7 the minimum level necessary to competently

6. LAWYER’S CODE OF PROF’L RESPONSIBILITY EC 1-1. 7. See, e.g., Jones v. Goord, No. 95 Civ. 8026, 2002 U.S. Dist. LEXIS 8707, at *17

(S.D.N.Y. May 16, 2002) (noting that “[a]s electronic mechanisms for storing and retrieving data have become more common, it has increasingly behooved courts and counsel to become familiar with such methods, and to develop expertise and procedures for incorporating electronic discovery into the familiar rituals of litigation”); see also State Bar of Arizona, Op. No. 09-04 (Dec. 2009) (available at http://www.myazbar.org/ethics/opinionview.cfm?id=704) (specifically linking the duty to preserve client confidences to a lawyer’s technological competence, explain-ing that “[l]awyers should be aware of limitations in their competence regarding online security measures and take appropriate actions to ensure that a competent review of the proposed security measures is conducted. As technology advances over time, a periodic review of the reasonability of security precautions may be necessary”); E-mailing Documents That May Contain Hidden Data Reflecting Client Confidences and Secrets, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op.

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practice law has not been well defined. Obviously, lawyers are not expected to become experts on every available technology.8 How-ever, lawyers cannot ignore technological advances altogether either.9 In order to competently represent clients lawyers must have at least a basic command of electronic discovery and issues related to the use of common technology,10 or obtain outside assistance to help them.11

No. 782 (Dec. 8, 2004) (New York) (observing that the duty to preserve client confidences “may, in some circumstances, call for the lawyer to stay abreast of technological advances and the potential risks in transmission”).

8. See, e.g., McAleese v. Mazurkiewicz, 1 F.3d 159, 174 (3d Cir. 1993) (finding that a lawyer’s failure to investigate potentially exculpatory phone records was not objec-tively unreasonable because there was “no evidence in the record to support the conclusion that a competent criminal defense attorney should have known about the [phone record] retrieval technology in late 1982 through mid-1983”).

9. See, e.g., McGahee v. United States, 570 F.Supp.2d 723, 734 (E.D. Pa. 2008) (finding trial counsel’s conduct to be objectively unreasonable given the ease with which contact information such as phone numbers can be located due to changes in technology); see also Martin v. Northwestern Mutual Life Ins. Co., No. 804 CV2328T23MAP, 2006 WL 148991, at *2 (M.D. Fla. Jan. 19, 2006) (imposing monetary sanctions against the plaintiff and his lawyer who claimed that his discov-ery violations should be excused because he was “computer illiterate and, therefore, incapable of retrieving any electronically stored documents”); United States v. McNamara, 867 F. Supp. 369 (E.D. Va. 1994) (“As technology and resources develop, the minimum knowledge and preparation required by lawyers develops as well”).

10. See, e.g., In re A&M Florida Props. II, LLC, No. 09-15173 (AJG), 2010 WL 1418861, at *5 (Bankr. S.D.N.Y. Apr. 7, 2010) (imposing monetary sanctions on party and its counsel where counsel failed to become fully familiar with client’s document retention policies, as well as client’s data retention architecture); William A. Gross Constr. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134, 135-36 (S.D.N.Y. 2009) (criticizing attorneys for “designing keyword searches in the dark, by the seat of the pants” and explaining that “it is time that the Bar—even those lawyers who did not come of age in the computer era—understand” how to properly construct search terms); Housing Rights Ctr. v. Ster-ling, No. 03 Civ. 859, 2005 WL 3320739, at *3, 7 (C.D. Cal. Mar. 2, 2005) (find-ing that counsel’s failure to verify whether their client had an e-mail backup system could not be “countenanced,” and that failure to search backup tapes owing to “honest miscommunication” with client “was at least grossly negligent”); see also E-mailing Documents That May Contain Hidden Data Reflecting Client Confidences and Secrets, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 782 (Dec. 8, 2004) (New York) (noting that exercising reasonable care in protecting client confidences “may, in some circumstances call for the lawyer to stay abreast of technological advances and the potential risks in transmission in order to make the appropriate decision with respect to the mode of transmission”).

11. See Garcia v. Berkshire Life Ins. Co. of Am., No. 04-cv-01619-LTB-BNB, 2007 WL 3407376, at *5 (D. Colo. Nov. 13, 2007) (“Perhaps plaintiff’s counsel can be

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[B] Confidentiality

Rule 1.6 of the Model Rules states that, with limited exceptions, “a lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent…”12 Similarly, Disciplinary Rule 4-101(B)(1) of the Lawyer’s Code provides that, with limited exceptions, “a lawyer shall not knowingly reveal a con-fidence or secret of a client.”13 Ethical Consideration 4.4 of the Lawyer’s Code states that “[a] lawyer owes an obligation to advise the client of the attorney-client privilege and timely assert the privi-lege unless it is waived by the client.”14

The scope of a lawyer’s ethical duty of confidentiality15 is broader than the attorney-client privilege.16 The attorney-client privilege

heard to plead technical ignorance or mistake in his initial dealings with the DVD, but by September 21, 2007, upon the receipt of Ms. Yates’ letter, he was on notice of the potential problem and was obligated to seek competent professional assistance to ascertain the truth about the contents of the DVD.”); Phoenix Four, Inc. v. Strategic Resources Corp., No. 05 Civ. 4837 (HB), 2006 WL 1409413, at *5 (S.D.N.Y. May 23, 2006) (imposing monetary sanctions and holding that counsel’s obligation “extends to an inquiry as to whether information was stored on that server and, had the defendants been unable to answer that question, directing that a technician examine the server”).

12. MODEL RULES OF PROF’L CONDUCT R. 1.6 (2008). 13. LAWYER’S CODE OF PROF’L RESPONSIBILITY DR 4-101(B)(1). 14. LAWYER’S CODE OF PROF’L RESPONSIBILITY EC 4.4. Ethic opinions have

extended this obligation to metadata (i.e., data about data) and held that attorneys have an ethical obligation to “exercise reasonable care when transmitting electronic documents to ensure that he or she does not disclose his or her client’s secrets and confidences.” Ethical Propriety of Mining Metadata, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 2007-02 (Mar. 14, 2007) (Alabama); accord Review and Use of Metadata in Electronic Documents, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 341 (Sept. 2007) (D.C.); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 06-2 (Sept. 15, 2006) (Florida); Ethics of Viewing and/or Using Metadata, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 2007-09 (2007) (Maryland).

15. As used herein, the term confidence applies equally to both “confidences” and “secrets.” A “confidence” is not limited to information protected by the attorney-client privilege, but also “includes any information gained in the engagement which the client does not want disclosed or disclosure of which is likely to be embarrassing or detrimental to the client” Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 1993-133 (California); see also LAWYER’S CODE OF PROF’L RESPONSIBILITY DR 4-101(A).

16. Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 1993-133 (California) (noting that a lawyer’s “duty to maintain client confidences and secrets inviolate is broader in scope than the attorney-client privilege”).

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generally attaches only to communications made in confidence for the purpose of receiving or conveying legal advice. The ethical duty of confidentiality, on the other hand, covers all aspects of, and information associated with, the representation of a client.17

A lawyer’s efforts to satisfy this broad duty of confidentiality is not governed by a hard and fast set of rules or guidelines.18 Rather, a lawyer’s efforts to protect client confidences are judged by a reason-ableness standard.19

The ABA Commission on Ethics revised the text of and com-ments to Model Rule 1.6 in August 2012, providing further guidance regarding a lawyer’s obligation to protect client confidences in light of evolving technological advances that may increase the likelihood of unintended disclosure. Specifically, new sub-section (c) was added to state: “A lawyer shall make reasonable efforts to prevent the inad-vertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”

The Commission observed that: Because new modes of communication create challenges as lawyers try to fulfill their obligation to protect client confidences, a new paragraph (c) in Model Rule 1.6 (Confidentiality of Information), as well as new language in Comment [16], would make clear that a lawyer has an ethical duty to take reasonable measures to protect a client’s confidential information from inadvertent disclosure, unauthorized disclosure, and unauthorized access, regardless of the medium used. This obligation is referenced in existing Comments [16] and [17], but we concluded that technological change has

17. MODEL RULES OF PROF’L CONDUCT R. 1.6(a), cmt. 3 (2008). 18. See, e.g., David Hricik, Lawyers Still Worry Too Much About Transmitting

E-Mail Over the Internet, 10 J. TECH. L. & POL’Y 265, 269 (2005) (noting that “[t]he duty is not one of strict liability or absolute care”).

19. For example, the ABA and state ethics opinions that have addressed the transmission of unencrypted e-mail over the Internet and electronic storage of client files have employed a reasonableness standard in analyzing the propriety of a lawyer’s use of unencrypted e-mail. See generally ABA Legal Technology Resource Center, Metadata Ethics Opinions Around the U.S. (available at http://www.abanet.org/tech/ltrc/fyidocs/metadatachart.html) (summarizing the reasonableness standard addressed in metadata ethics opinions around the U.S.); see also E-mailing Documents That May Contain Hidden Data Reflecting Client Confidences and Secrets, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 782 (Dec. 8, 2004) (New York) (concluding that a lawyer must exercise “reasonable care” with respect to transmitting metadata to adversaries and the public). Similarly, Federal Rule of Evidence 502 employs the concept of “reasonable steps” in discussing whether the inadvertent production of privileged information constitutes a waiver. See Fed. R. Evid. 502(b).

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so enhanced the importance of this duty that it should be identified in the black letter of Rule 1.6 and described in more detail through additional Comment language.19.1

Thus, a lawyer is not necessarily in violation of his or her duties to protect client confidences in the event of inadvertent or unauthorized disclosure of confidential information. As the Commission made clear, “lawyers cannot guarantee electronic security any more than lawyers can guarantee the physical security of documents stored in a file cabinet or offsite storage facility.”19.2

Instead, of attempting to “impose upon lawyers a duty to achieve the unattainable,”19.3 the new rule strives to provide reasonable guid-ance. As such, new comment 18 identifies several factors that law-yers should consider in order to reasonably ensure the protection of client confidences and remain in compliance with Rule 1.6:

Factors to be considered in determining the reasonableness of the lawyer’s efforts include, but are not limited to, the sensitivity of the information, the likelihood of disclosure if additional safeguards are not employed, the cost of employing additional safeguards, the difficulty of implementing the safeguards, and the extent to which the safeguards adversely affect the lawyer’s ability to represent clients (e.g., by making a device or important piece of software excessively difficult to use).19.4

The comments to Rule 1.6 further makes clear that clients may require “the lawyer to implement special security measures not required by this Rule or may give informed consent to forgo security measures that would otherwise be required by this Rule.”19.5 Finally, the comments also recognize that lawyers should remain aware of developments in state and federal law related to privacy protections, but note that this subject “is beyond the scope of these [rules].”19.6

19.1. See ABA Commission on Ethics 20/20 Report, Introduction and Overview

(August 2012), at 8 (available online at http://www.americanbar.org/content/ dam/aba/administrative/ethics_2020/20120508_ethics_20_20_final_hod_introdution_and_overview_report.authcheckdam.pdf).

19.2. Id. 19.3. Id. 19.4. SeeMODEL RULES OF PROF’L CONDUCT R. 1.6, cmt.18. 19.5. Id. 19.6. Id. Several industries, including the health care and insurance industries, are

highly regulated with respect to data privacy. See, e.g., the Health Insurance Portability and Accountability Act (HIPPA), the Gramm-Leach-Bliley Act; The National Association of Insurance Commissioners 1982 Insurance Information and Privacy Protection Model Act; The National Association of Insurance

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[1] Inadvertent Production of Privileged Information

Given the volume of materials that are retained by companies in electronic form, it is virtually impossible for a party to conduct a privilege review without inadvertently producing some privi-leged information. Moreover, the increased use of technology to assist in privilege reviews—together with the often incomplete understanding of this technology in practice—have made the inad-vertent production and/or accidental disclosure of privileged and/or confidential information increasingly more likely. Even if the inadvertent production of privileged information does not waive the privilege,20 it nevertheless implicates a lawyer’s duty to maintain client confidences.21 Additionally, the Federal Rules of Civil Procedure and Evidence offer opportunities to reduce the costs of conducting page by page privilege reviews, which can be staggering in large-scale litigations. The Federal Rules of Civil Procedure require parties to discuss at their initial Rule 26(f) con-ference “any issues about claims of privilege or of protection as trial-preparation material,”22 including “if the parties agree on a procedure to assert these claims after production—whether to ask the court to include their agreement in an order.”23 The Advisory Committee notes to Rule 26(f) make clear that parties should also discuss issues relating to the discoverability of “embedded data”24

Commissioners Privacy of Consumer Financial and Health Information Regulation No. 672; and The National Association of Insurance Commissioners Standards for Safeguarding Customer Information Model Regulation No. 673. Moreover, some states have implemented laws governing the protection of client confidences. See, e.g., Mass. 201 CMR 17 (effective March 2010, this compliance regulation sets the standard required for the adequate protection of data privacy).

20. The waiver of privilege in federal courts is now governed by Federal Rule of Evidence 502. That rule and the waiver of privilege due to inadvertent production are discussed in detail in Chapter 7.

21. NYCLA Ethics Op. 730, 2002 WL 31962702 (N.Y. Cty. Law Assn. Comm. Prof’l Ethics) (July 19, 2002) (observing that the “ethical duty to preserve client confidences and secrets of a client is the sine qua non of the attorney-client relationship”).

22. See Fed. R. Civ. P. 26(f)(3). 23. Id. 24. Embedded data is “[d]ata that include commands that control or manipulate data,

such as computational formulas in spreadsheets or formatting commands in a word processing document. [It is] [n]ot visible when a document is printed or saved as an image format.” Federal Judicial Center, Managing Discovery of

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and “metadata,”25 as well as how to deal with issues of privilege relating to such data.

The Advisory Committee Notes to Rule 26(f) further identify two methods by which parties can seek to protect themselves against the inadvertent waiver of privilege while at the same time minimize cost and delay—“quick peeks” and “claw back” agree-ments. Federal Rule of Evidence 502(e) recognizes these types of agreements and makes them binding on the parties.26 When incor-porated into a court order, the agreement also binds non-parties pursuant to Federal Rule of Evidence 502(d).27

Lawyers should carefully consider their ethical obligations in deciding on when and whether to use either of these forms of agreement.

[a] Quick-Peek Agreements

Quick peeks are agreements between parties that one side will produce certain requested documents for initial examina-tion by the requesting party without first reviewing them for privilege. The requesting party then designates the documents it seeks for production and only then does the responding party review the documents for privilege. The parties agree that this protocol does not act as a waiver of the privilege.

It is at least questionable whether implementing this type of arrangement would violate the ethical duty to preserve a

Electronic Information: A Pocket Guide for Judges, Federal Judicial Center, 2007 at 23.

25. Metadata is “[i]nformation about a particular data set or document which describes how, when, and by whom the data set or document was collected, created, accessed, or modified; its size; and how it is formatted. Some metadata, such as file dates and sizes, can easily be seen by users; other metadata can be hidden from users but are still available to the operating system or the program used to process the data set or document.” Federal Judicial Center, Managing Discovery of Electronic Information: A Pocket Guide for Judges, Federal Judicial Center, 2007 at 24-25.

26. See Fed R. Evid. 502(e) (“An agreement on the effect of disclosure in a Federal proceeding is binding only on the parties to the agreement, unless it is incor-porated into a court order”).

27. See Fed. R. Evid. 502(d) (“A Federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court—in which event the disclosure is also not a waiver in any other Federal or State proceeding”).

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client’s confidences. As explained in the comments to Rule 1.6 of the Model Rules, a lawyer must “act competently to safe-guard information relating to the representation of a client against inadvertent or unauthorized disclosure by the lawyer or other persons who are participating in the representation of the client.”28 Even though the opposing party may not be able to use the documents as evidence in the litigation, the privi-leged information is still in the possession of the opposing party and could still be used to the client’s disadvantage. In addition, unless incorporated into a court order, the agreement between the parties is not binding on a third party who, in a subsequent litigation, may argue that the quick peek arrange-ment waived the privilege.

Given these risks, prior to agreeing to a quick peek arrangement, a lawyer must weigh the cost and time savings that accompany this type of arrangement against the potential disclosure of privileged or confidential information to deter-mine what is in the client’s best interests. The lawyer also should fully discuss these risks with his or her client and make certain that the client fully understands them before agreeing to turn over documents prior to conducting a full privilege review.29

[b] Claw Back Agreements

Under a claw back agreement, which is more typically used in litigations, the parties enter into an agreement which specifies that the production of privileged materials without intent to waive the privilege does not waive the privilege so

28. MODEL RULES OF PROF’L CONDUCT R. 1.6, cmt. 16 (2008). 29. An alternative to a full quick peek arrangement is a quasi-quick peek in which

all documents that contain an attorney’s name are pulled from the production and reviewed for privilege and the remainder is provided to the requesting party without first conducting a privilege review. This arrangement would reduce the costs of review and minimize the risk that privileged documents would be included in the materials turned over to the requesting party since the most likely privileged documents are removed from the production. It also provides a safeguard to the producing party in the event that privileged documents are still included in the remainder provided to the requesting party. However, it does not eliminate the ethical conundrum given that client confidences may still be turned over to the other side.

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long as the producing party identifies the privileged materials that were inadvertently produced and requests their return.30 Although claw back agreements are recommended, they will not immunize the lawyer from claims that the lawyer breached the duty of confidentiality.

[2] Metadata

Metadata, or data about data, contained in electronic docu-ments presents special problems for practitioners in terms of maintaining client confidences.30.1 Not surprisingly, several ethics opinions have been issued reminding lawyers to “exercise reason-able care to ensure that he or she does not inadvertently disclose his or her client’s confidential information.”31 However, what

30. Rule 26(b)(5)(B) of the Federal Rules of Civil Procedure has a provision that

requires the return of inadvertently produced privileged documents. However, the new rule simply provides a protocol for dealing with inadvertently produced materials. It does not resolve the issue of waiver. Thus, the parties’ claw back agree-ment must expressly require the return of inadvertently produced privileged materials and that the production does not constitute a waiver of the privilege. Otherwise, the issue of waiver will be governed by the application of Fed. R. Evid. 502(b).

30.1. In March 2012, the Sedona Conference published its “Commentary on Ethics & Metadata,” which attempts to provide guidance to lawyers and judges on how to deal with the thorny issues raised by metadata. (available online at https:// thesedonaconference.org/download-pub/1286). While the Sedona Conference paper does not supplant state rules and ethics opinions governing the discoverabil-ity and review of metadata, the paper does provide a useful summary of different types of metadata that may be relevant in a litigation context.

31. E-mailing Documents That May Contain Hidden Data Reflecting Client Confi-dences and Secrets, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 782 (Dec. 8, 2004) (New York) (finding that “[a] lawyer must exercise reasonable care when sending a document by e-mail to prevent the disclosure of metadata containing confidential client information”); see also Ethical Propriety of Mining Metadata, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 2007-02 (Mar. 14, 2007) (Alabama) (affirming that “an attorney has an ethical duty to exercise reasonable care when transmitting electronic documents to ensure that he or she does not disclose his or her client’s secrets and confidences.…”); Confidentiality; Electronic Communications; Inadvertent Disclosure, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 07-03 (Nov. 2007) (Arizona) (observing that, under Rule 1.6, lawyers “must take reasonable precautions to prevent the information from coming into the hands of unintended recipients”); Colorado Bar Ass’n, Ethics Op. No. 119 (May 17, 2008) (available at http://www. cobar.org/index.cfm/ID/386/subID/23789/CETH//) (observing that “[t]he burden

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constitutes “reasonable care” has not been well defined. Indeed, “[w]hat constitutes reasonable care will depend on the circumstances.”32

As explained by the American Bar Association in Formal Opinion 06-442, “[a] lawyer who is concerned about the possi-bility of sending, producing, or providing to opposing counsel a document that contains or might contain metadata, or who wishes to take some action to reduce or remove the potentially harmful con-sequences of its dissemination, may be able to limit the likelihood of its transmission by ‘scrubbing’ metadata from documents or by

of protecting sensitive metadata rests with the lawyers who send the electronic documents”); Review and Use of Metadata in Electronic Documents, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 341 (Sept. 2007) (D.C.) (finding that a lawyer who sends electronic documents outside the context of discovery or subpoenas must take reasonable steps to prevent the disclosure of confidential information by removing embedded metadata); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 06-2 (Sep. 15, 2006) (Florida) (noting that “[a] lawyer who is sending an electronic document should take care to ensure the confidentiality of all information contained in the document, including metadata”); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 196 (Oct. 21, 2008) (Maine) (“agree[ing] with the other jurisdictions that attorneys are ethically required to take reasonable measures to avoid the communication of confidential information, regardless of the mode of transmission” and further finding that “this duty logically extends to metadata that the attorney should reasonably know may lie within an electronic document”); Ethics of Viewing and/or Using Metadata, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 2007-09 (2007) (Maryland) (explaining that a “lawyer producing electronic documents in discovery must take reasonable steps to remove confidential information and work product imbedded in the documents”); A Lawyer’s Ethical Obligations Regarding Metadata, Minnesota Lawyers Professional Responsibility Board, Op. No. 22 (available online at http://lprb.mncourts.gov/Documents/ Opinion22.pdf); New Hampshire Bar Ass’n, Op. No. 2008-09/4 (May 16, 2009) (available at http://www.nhbar.org/uploads/pdf/EthicsOpinion2008-9-4.pdf) (“A lawyer who sends a document electronically must take reasonable care to avoid improper disclosure of any confidential information that may be hidden in the document’s metadata”); New York County Lawyers Assoc. Committee on Professional Ethics, Formal Op. No. 738 (Mar. 24, 2008) (“A lawyer must exercise due care when sending a document electronically to prevent the dis-closure of metadata”); Ethics Opinion, Vermont Bar Association Professional Responsibility Section, Op. No. 2009-1 (available online at http://www.vtbar.org/); What is Metadata and Why Should Lawyers Be Cautious?, West Virginia Bar Association, Lawyer Disciplinary Board L.E.O. Op. No. 2009-01 (available online at West Virginia Bar Association, Lawyer Disciplinary Board L.E.O. 2009-01).

32. Colorado Bar Ass’n, Op. No. 119 (May 17, 2008) (available at http://www.cobar. org/index.cfm/ID/386/subID/23789/CETH//).

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sending a different version of the document without the embedded information.”33

While a lawyer may be permitted to remove data from docu-ments that he or she creates during the course of representation, such as pleadings, settlement offers or contracts; a lawyer may not be able to remove metadata from a client’s documents produced in discovery because metadata is oftentimes requested and required to be produced along with the document. Metadata is no different than other types of ESI and, if privileged, should be withheld from production and identified on a privilege log.34 To minimize the risk of inadvertent production of metadata or embedded data, it is recommended that parties negotiate and agree to limit the scope of the production of such data, and negotiate a claw back agreement that will allow the client to pull back any produced documents that contain privileged metadata or embedded data.

33. American Bar Ass’n, Standing Comm. on Ethics and Professional Responsibility,

Formal Op. 06-442 (Aug. 5, 2006) (Review and Use of Metadata) (providing examples of techniques for reducing risk of inadvertent disclosure of client confi-dences contained in metadata including scrubbing metadata or sending TIFF images); see also Review and Use of Metadata in Electronic Documents, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 341 (Sept. 2007) (D.C.) (“Lawyers sending electronic documents outside of the context of responding to discovery or subpoenas have an obligation under Rule 1.6 to take reasonable steps to maintain the confidentiality of documents in their possession. This includes taking care to avoid providing electronic documents that inadvertently contain accessible infor-mation that is either a confidence or a secret and to employ reasonably available technical means to remove such metadata before sending the document. Accordingly, lawyers must either acquire sufficient understanding of the software that they use or ensure that their office employs safeguards to minimize the risk of inadvertent disclosures”). The New York County Lawyers Association Committee on Professional Ethics has taken this reasoning one step further and concluded that “[a] lawyer who sends opposing counsel correspondence, contracts, or other similar documents electronically—as is now often the case—has the burden to take due care in appropriately scrubbing documents prior to sending them outside of the office or in sending them in a way that otherwise ensures that the documents are free of metadata.” New York County Lawyers Assoc. Comm. on Prof’l Ethics, Formal Op. No. 738 (Mar. 24, 2008).

34. Logging of metadata is discussed more fully at Chapter 7, §�7.05[E][3].

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[3] Unencrypted E-mails

When it comes to communications with a client, Model Rule 1.6 contemplates that lawyers will balance the risk of harm against the likelihood of a breach:

This duty…does not require that the lawyer use special security measures if the method of communication affords a reasonable expectation of privacy. Special circumstances, however, may warrant special precautions. Factors to be considered in determining the reason-ableness of the lawyer’s expectation of confidentiality include the sensitivity of the information and the extent to which the privacy of the communication is protected by law or by a confidentiality agreement. A client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to the use of a means of communication that would otherwise be prohibited by this Rule.35

As discussed below, the available ethical guidance suggests that unencrypted e-mail carries a reasonable expectation of pri-vacy, which is generally sufficient to meet a lawyer’s ethical obli-gations to maintain client confidences.

[a] ABA Guidance

In 1999, the ABA’s Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 99-413, which affirmed that, despite the risks of interception and dis-closure, the use of unencrypted e-mail36 is sufficiently secure to afford the user a reasonable expectation of privacy and therefore its use does not breach a lawyer’s ethical obligations under Model Rule 1.6.37 In reaching this conclusion, the ABA

35. David Hricik, Lawyers Still Worry Too Much About Transmitting E-Mail Over the

Internet, 10 J. TECH. L. & POL’Y 265, 269 (2005) (citing MODEL RULES OF PROF’L CONDUCT R. 1.6, cmt. 17 (2003)).

36. The ABA explicitly concluded that direct e-mail (e.g., a direct connection between computers), private network e-mail (e.g., the isolated local area network of a law firm or an extranet), online service provider (OSP) e-mail (e.g., AOL), and even ordinary unencrypted email were safe. See American Bar Ass’n, Standing Comm. on Ethics and Professional Responsibility, Op. No. 99-413 (Mar. 10, 1999) (Protecting the Confidentiality of Unencrypted Email). For unencrypted Internet e-mail in particular, Opinion 99-413 emphasized the difficulty of third-party interception. Id. It also relied in part on the fact that the unauthorized third-party interception of Internet e-mail messages is a criminal offense. Id.

37. See American Bar Ass’n, Standing Comm. on Ethics and Professional Respon-sibility, Op. No. 99-413 (Mar. 10, 1999) (Protecting the Confidentiality of Unencrypted

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explicitly analogized to other common forms of communi-cation, such as telephones and facsimiles,38 and concluded that “it is not…reasonable to require that a mode of com-municating information must be avoided simply because interception is technologically possible, especially when unau-thorized interception or dissemination of the information is a violation of the law”.39

The use of unencrypted e-mail sent over the Internet was not, however, given a complete safe harbor. Opinion 99-413 cautioned that a lawyer must continue to carefully consider whether a particular communication carries with it a higher sensitivity and, if so, consult with the client to determine whether a more secure method of communication is necessary.40

More recently, the ABA offered some guidance regarding communications with clients in situations where the right of privacy is unclear. Because of certain employers’ monitoring of e-mail on company computers, the ABA warned in Opin-ion 11-459 that, “as soon as practicable after a client-lawyer relationship is established, a lawyer typically should instruct the employee to avoid using a workplace device or system for sensitive or substantive communications, and perhaps for any attorney-client communications.…” The Opinion went further and instructed that “[a] lawyer sending or receiving substan-tive communications with a client via e-mail or other elec-tronic means ordinarily must warn the client about the risk of sending or receiving electronic communications using a computer or other device, or e-mail account, to which a third party may gain access.”41

Email) (concluding that “based upon current technology and the law as we are informed of it, a lawyer sending confidential client information by unencrypted e-mail does not violate Model Rule 1.6(a) in choosing that mode to communicate. This is principally because there is a reasonable expectation of privacy in its use”).

38. Id. (noting that “[t]he same privacy accorded U.S. and commercial mail, land-line telephonic transmissions, and facsimiles applies to Internet e-mail”).

39. Id. 40. Id. (“A lawyer should consult with the client and follow her instructions, however,

as to the mode of transmitting highly sensitive information relating to the client’s representation”).

41. ABA Formal Op. 11-459 (8/4/11).

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[b] State Bar Guidance

In addition to the ABA, various state bar associations have attempted to provide guidance on the ethics of com-municating client confidences via unencrypted Internet e-mail. Although not all of the ethical opinions are binding, and not every state appears to have issued an opinion on the subject, the state bar associations generally have followed the ABA and permitted the use of unencrypted, Internet e-mail for client communications. The differences between the state bar opinions on this issue turn on the degree of client notifi-cation and consent required, and generally fall into one of three categories: (1) an attorney does not need to use encrypted e-mail to

communicate with a client, but should take special pre-cautions to protect communications where highly sensitive information is involved;42

42. The opinions in this category mirror the approach taken by the ABA in Opinion

99-413. The logic underlying these opinions is that special circumstances may warrant special precautions. In other words, while unencrypted Internet e-mail is a generally acceptable mode of communication, attorneys must weigh the specific content of the communication against the risks inherent in Internet e-mail trans-mission. Potential factors to be taken into account in this calculation include the sensitivity of the information, the damage its disclosure would have on the client, and the extent to which the secrecy of the information is protected by law or a confidentiality agreement. See Transmission of Confidential Information by Electronic Mail, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 281 (1998) (D.C.); Del. State Bar Ass’n Comm. on Prof’l Ethics, Op. 2001-02 (2001) (holding attorneys can use e-mail to transmit confidential information to clients “absent extraordinary circumstances”); Electronic Communications; Confidentiality of Client Information; Advertising and Solicitation, Nat’l Rep. Legal Ethics (Univ. Pub. Am.) Op. No. 96-10 (1997) (Illinois); Electronic Communications’ Confidentiality of Client Information, Advertising and Solicitation, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. E-403 (1998) (Kentucky); Using Technology to Communicate Confidential Information to Clients, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 92-19 (Apr. 1, 1992) (Maryland); Using Technology to Communicate Confidential Infor-mation to Clients, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 19 (Jan. 22, 1999) (Minnesota); Use of Internet to Advertise and to Conduct Law Practice Focusing on Trademarks; Use of Internet E-mail; Use of Trade Names, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 709 (Sept. 16, 1998) (New York); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. 99-2 (Apr. 9, 1999) (Ohio); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. 97-5 (1997) (Vermont).

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(2) an attorney does not need to use encrypted e-mail to communicate with a client, but should take special pre-cautions to protect communications where highly sensi-tive information is involved and should discuss the risks of using unencrypted email with the client;43 and

(3) an attorney should use encryption when communicating with a client to protect the client’s confidentiality unless the client approves the use of an unencrypted system.44

43. The opinions in this category approve of an attorney’s use of unencrypted e-mail

with a client on any matters that the attorney would feel free to discuss using other forms of communication (e.g., telephone or facsimile transmission). The logic is that e-mail offers no less of an expectation of privacy than these other forms of communication, which have been found to be acceptable under the applicable ethics rules. These decisions generally provide that, while it is not necessary to seek specific client consent to use unencrypted e-mail, attorneys should none-theless caution their clients that unencrypted e-mail communications are not absolutely secure. These decisions also recognize that there may be circumstances involving an extraordinarily sensitive matter that might require enhanced security measures (e.g., encryption), and caution that attorneys should take appropriate precautions when the communication is of such a nature that normal means of communication would be deemed inadequate. See Communication by Electronic Mail, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 98-2 (Jan. 16, 1998) (Alaska); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 97-04 (Apr. 7, 1997) (Arizona); Propriety of Transmitting Information Relating to Repre-sentation of a Client by Means of Unencrypted Electronic Mail (“E-mail”), Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Informal Op. 99-52 (Dec. 21, 1999) (Connecticut); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 00-01 (May 29, 1998) (Massachusetts); Modern Communications Technology and the Duty of Confidentiality, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Proposed RPC 215 (Apr. 13, 1995) (North Carolina); Advisory Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. 97-08 (1997) (South Carolina) (stating that a “lawyer should discuss with a client options such as encryption in order to safeguard against even inadvertent disclosure of sensitive or privileged information when using email”); Advisory Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 00-01 (Mar. 9, 2000) (Utah).

44. This is the strictest of the three approaches taken by state bar associations. While no state bar flatly prohibits the use of unencrypted Internet e-mail under its ethics rules, these states require affirmative consent on the part of the client before it can be used. See Internet: Sensitive Material, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. 97-1 (Sept. 18, 1997) (Iowa); Confidentiality’ Advertising and Solicitation, Computers, Internet, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Informal Op. No. 97-130 (Sept. 26, 1997) (Pennsylvania); Board of Prof’l Responsibility of the Supreme Court of Tennessee, Advisory Op. No. 98-A-650(a) (Nov. 19, 1998) (available at http://www.tba.org/news/encrypt.html#Anchor-BOARD-11845).

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[4] Electronic Storage of Client Information

Model Rule 1.15 states that “[a] lawyer shall hold property of clients or third persons that is in a lawyer’s possession in con-nection with a representation separate from the lawyer’s own property,…[the] property shall be identified as such and appro-priately safeguarded.”45

Lawyers often store client documents and information elec-tronically. The electronic storage of client information implicates several ethical duties, including the duty to safeguard client prop-erty, the duty to maintain confidentiality and the duty of compe-tency. The electronic storage of client information is generally ethically permissible.46 The ethics opinions to address this practice have focused on reasonable steps or precautions used to protect client information that is maintained electronically by lawyers.47

45. MODEL RULES OF PROF’L CONDUCT R. 1.15(a). 46. See, e.g., American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsi-

bility, Informal Op. No. 1127 (Jan. 20, 1970) (Lawyer Organizing Corporation to Perform Routine Correspondence and Filing for Law Firms); see also Retention, Storage, Ownership, Production and Destruction of Client Files, State Bar of Alabama, Op. No. 2010-02 (available online at http://www.alabar.org/ogc/PDF/ 2010-02.pdf); May Lawyers Maintain Electronic Copies of Business Records In Lieu Of Paper Copies?, State Bar of Alaska, Op. No. 2008-1 (available online at https://www.alaskabar.org/servlet/content/2008_1.html); State Bar of Arizona, Op. No. 09-04 (Dec. 2009) (available at http://www.myazbar.org/ethics/opinionview. cfm?id=704); Maintaining Client Files; Client’s Papers and Documents; Electronic Storage, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 07-02 (June 2007) (Arizona); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 05-04 (July 2005) (Arizona); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 2010-179 (2010) (California); Former Client Records Maintained in Electronic Form, D.C. Bar, Op. No. 357 (available online at http://www. dcbar.org/for_lawyers/ethics/legal_ethics/opinions/opinion357.cfm); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 06-01 (Apr. 10, 2006) (Florida); Scanning Client Files, Advisory Committee of the Supreme Court of Missouri, Op. No. 127 (available online athttp://www.mobar.org/formal/formal-127.doc); NY Eth. Op. 680, 1996 WL 421805 (N.Y. St. Bar Assn. Comm. Prof. Eth.) (Jan. 10, 1996); State Bar of Nevada, Standing Committee on Ethics and Prof’l Responsibility, Formal Op. No. 20 (Feb. 9, 2006) (available at http://www.nvbar. org/ethics/opinion_33.htm); NC Ethics Op No. 5, 2008 WL 5021161 (N.C.St. Bar.) (July 18, 2008) (Web-based Management of Client Records).

47. See, e.g., State Bar of Arizona, Ethics Op. No. 09-04 (Dec. 2009) (available athttp://www.myazbar.org/ethics/opinionview.cfm?id=704); Maintaining Client Files; Client’s Papers and Documents; Electronic Storage, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 07-02 (June 2007) (Arizona); Opinion, Nat’l

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Essentially, these opinions require that “[l]awyers providing an online file storage and retrieval system for client access of docu-ments must take reasonable precautions to protect the security and confidentiality of client documents and information.”48 A recent ethics opinion issued by the State Bar of California’s Standing Committee on Professional Responsibility and Conduct, outlines the factors attorneys should consider before using a specific tech-nology to store client information.49 These factors include: 1. The attorney’s ability to assess the level of security afforded

by the technology, including without limitation: a. Consideration of how the particular technology differs

from other media use; b. Whether reasonable precautions may be taken when using

the technology to increase the level of security; and

Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 05-04 (July 2005) (Arizona); State Bar of Nevada, Standing Committee on Ethics and Prof’l Responsibility, Formal Op. No. 20 (Feb. 9, 2006) (available at http://www.nvbar.org/ethics/opinion_33. htm) (“If the lawyer acts competently and reasonably to ensure the confidentiality of the information, then he or she does not violate SCR 156 simply by contracting with a third party to store the information, even if an unauthorized or inadvertent disclosure should occur”); Iowa State Bar Ass’n, Ethics Op. No. 11-01 (discussing due diligence that lawyers should perform before using cloud computing services) (Sept. 9, 2011) (available online at http://www.iabar.net/ethics.nsf/e61beed77a215f 6686256497004ce492/02566cb52c2192e28625791f00834cdb/$FILE/Ethics%20Opinion%2011-01%20--%20Software%20as%20a%20Service%20-%20Cloud%20 Computing.pdf); Massachusetts Bar Ass’n., Op. No. 12-03 (available online at http://www.massbar.org/publications/ethics-opinions/2010-2019/2012/opinion-12-03) (May 17, 2012) (concluding that a “lawyer generally may store and synchronize electronic work files containing confidential client information across different platforms and devices using an Internet based storage solution, such as ‘Google docs,’ so long as the lawyer undertakes reasonable efforts to ensure that the provider's terms of use and data privacy policies, practices and procedures are compatible with the lawyer's professional obligations, including the obligation to protect confidential client information reflected in Rule 1.6(a)”); NC Ethics Op. No. 5, 2008 WL 5021161 (N.C. St. Bar.) (July 18, 2008) (web-based Management of Client Records); NC Ethics Op. No. 6 (January 27, 2012) (discussing the use of software as a service).

48. State Bar of Arizona, Op. No. 09-04 (Dec. 2009) (available at http://www. myazbar.org/ethics/opinionview.cfm?id=704).

49. Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 2010-179 (California).

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c. Limitations on who is permitted to monitor the use of the technology, to what extent and on what grounds.

2. Legal ramifications to third parties of intercepting, accessing or exceeding authorized use of another person’s electronic information.50

3. The degree of sensitivity of the information. (The greater the sensitivity of the information, the less risk an attorney should take with technology).

4. The possible impact on the client of an inadvertent disclosure of privileged or confidential information or work product, including possible waiver of the privileges.

5. The urgency of the situation.51 6. Client instructions and circumstances.52

In addition, lawyers have an ethical duty to retain e-mails and electronic documents relating to the representation and to organize and store such e-mails in a way so as not to “detract from the com-petence of the representation” or “result in the loss of documents that the client may later need and may reasonably expect the lawyer to preserve.”53

50. The committee specifically noted that “[t]he fact that a third party could be

subject to criminal charges or civil claims for intercepting, accessing or engaging in unauthorized use of confidential client information favors an expectation of privacy with respect to a particular technology.” Id. at 5.

51. Id. at 6 (noting that “[i]f use of the technology is necessary to address an imminent situation or exigent circumstances and other alternatives are not reasonably available, it may be reasonable in limited cases for the attorney to do so without taking additional precautions”).

52. Id. (“If a client has instructed an attorney not to use certain technology due to confidentiality or other concerns or an attorney is aware that others have access to the client’s electronic devices or accounts and may intercept or be exposed to confidential client information, then such technology should not be used in the course of the representation.”).

53. The Association of the Bar of the City of New York, Comm. on Prof’l and Judicial Ethics, Op. No. 2008-1 (available at http://www.abcny.org/Publications/ reports/show_html.php?rid=794). The City Bar recommended coding e-mail with identifying characteristics (such as a client/matter number) when the e-mails are first sent or received in order to facilitate later retrieval. Id. See also Lawyer’s Code of Prof’l Responsibility, DR 6-101, EC 6-1 (“Because of the lawyer’s vital role in the legal process, the lawyer should act with competence and proper care

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[5] Use of Social Media

Violations of Model Rule 1.6 can occur when a lawyer posts comments to blogs,53.1 or uses social networking sites to comment about their cases or communicate with their clients. In In The Matter of Peshek,53.2 for example, a lawyer was found to have violated Illinois Rule of Professional Conduct Rule 1.6, which is patterned after ABA Model Rule 1.6, based on numerous comments the lawyer posted on her blog regarding her work as a public defender. The disciplinary commission determined that in her work-related blogs, the lawyer disclosed “confidential infor-mation about [the lawyer’s] clients and [made] derogatory com-ments about judges.”53.3 Among other things, the lawyer “referred to her clients by either their first name, a derivative of their first name, or by their jail identification number.”53.4 The commission deemed the information contained in the blog posts “sufficient to identify those clients and judges [mentioned].”53.5 As a result of these postings, which the commission found violated the lawyer’s duty of confidentiality, the lawyer’s license to practice law was suspended in both Illinois and Wisconsin.53.6

in representing clients”); DR 7-101(A)(3) (“A lawyer shall not intentionally… [p]rejudice or damage the client during the course of the professional relationship”).

53.1. But see New York State Bar Ass’n., Op. No. 912 (noting that the “Rules of Professional Conduct” do not prohibit a lawyer from hosting or participating in a blog dedicated to publishing factually accurate criticism of another lawyer’s professional conduct) (available online at http://www.nysba.org/AM/Template. cfm?Section=Ethics_Opinions&ContentID=65004&template=/CM/ContentDisplay.cfm) (Mar. 15, 2012).

53.2. In re Peshek, Ill. Attorney Registration and Disciplinary Comm’n, Commission No. 09CH89 (Aug. 25, 2009) (available at http://www.iardc.org/09CH0089CM. html) (last visited Aug. 27, 2012).

53.3. Id. 53.4. Id. In one instance, the lawyer blogged that “[t]his stupid kid is taking the rap for

his drug-dealing dirtbag of an older brother because ‘he’s no snitch.’ I managed to talk the prosecutor into treatment and deferred prosecution, since we both know the older brother from prior dealings involving drugs and guns. My client is in college. Just goes to show you that higher education does not imply that you have any sense.” Id.¶4. In other posts, the lawyer disclosed information concerning her clients’ drug use, including describing an incident where a client misinformed the court regarding her drug usage and drug habits and the lawyer advised the client not to correct the misstatement to the court. Id.¶8.

53.5. Id. 53.6. Id.

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[C] Communication

Model Rule 1.4 provides that “[a] lawyer shall: (1) promptly inform the client of any decision or circumstance with respect to which the client’s informed consent…is required by these Rules; (2) reasonably consult with the client about the means by which the client’s objectives are to be accomplished; (3) keep the client reason-ably informed about the status of the matter; (4) promptly comply with reasonable requests for information; and (5) consult with the client about any relevant limitation on the lawyer’s conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law.”54 Model Rule 1.4 also requires lawyers to “explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.”55

Rule 1.4 facially seems quite simple—lawyers must maintain reasonable communication with a client. The ease of communication made possible by advances in technology, however, has complicated this seemingly simple rule. Moreover, electronic discovery has gen-erated an entire new universe of issues that lawyers and clients need to discuss—including, for example, when to implement a litigation hold, instructions on how to preserve documents once the hold is in place, the specifics of the client’s document retention system, and issues related to the selection of e-discovery vendors, just to name a few.

The failure to adequately discuss these issues—or even to have these conversations at all—can result in sanctions against lawyers for electronic discovery misconduct or disciplinary action.55.1 As one

54. MODEL RULES OF PROF’L CONDUCT R. 1.4. The last sentence of

Comment [4] to Model Rule 1.4, which previously stated that “[c]lient telephone calls should be promptly returned or acknowledged,” was revised in 2012 to reflect technological changes in lawyer-client communications. The revised Comment now reads: “A lawyer should promptly respond to or acknowledge client communications.” See Rule 1.4 comment [4] (available online at http://www. americanbar.org/content/dam/aba/administrative/ethics_2020/20120808_revised_ resolution_105a_as_amended.authcheckdam.pdf).

55. MODEL RULES OF PROF’L CONDUCT R. 1.4(b). 55.1. See, e.g., Play Visions, Inc. v. Dollar Tree Stores, No. C09-1769 MJP, 2011 WL

2292326, at *3 (W.D. Wash. June 8, 2011) (sanctioning counsel jointly and sev-erally with client who “provided little assistance…in making responsive discovery productions” and who “was not involved in identifying records custodians, did

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court quipped when analyzing a party’s failure to satisfy their elec-tronic discovery obligations, “what we’ve got here is a failure to communicate.”56

[1] Qualcomm Inc. v. Broadcom Corp.

As exemplified in Qualcomm Inc. v. Broadcom Corp.,57 the failure to discuss electronic discovery issues can have disastrous consequences. In that case, Qualcomm claimed that Broadcom’s sale of products that complied with a certain standard (the H.264 standard) infringed its patents. A significant issue that arose during discovery and trial was whether Qualcomm had played a role in setting this standard. If Qualcomm had participated in creating this standard, it would have been required to disclose its patents and license them on royalty-free or non-discriminatory terms, thus prohibiting its lawsuit against Broadcom. In the course of preparing one of its witnesses to testify at trial, Qualcomm learned of the existence of 21 e-mails that had not previously been pro-duced to Broadcom, which showed that the authors discussed vari-ous issues related to the H.264 standard before it was published. These e-mails therefore undercut Qualcomm’s main argument about its involvement in the standard setting process. The Qual-comm lawyers decided not to produce the e-mails, claiming that they were not responsive to Broadcom’s discovery requests. Nonetheless, during cross-examination of the witness, Broadcom exposed the existence of these e-mails.

Qualcomm lost the trial, and the court found Qualcomm’s patents unenforceable based, in part, on its litigation misconduct and concealment of evidence.58 Thereafter, Broadcom filed a motion seeking discovery to determine the scope of Qualcomm’s miscon-duct. Qualcomm uncovered more than 46,000 documents (totaling

nothing to familiarize himself with [plaintiff’s] document retention and destruction policies, and did not assist in searching for or responding” to discovery requests).

56. In re Seroquel Products Liability Litig., 244 F.R.D. 650, 660 (M.D. Fla. 2007). 57. No. 05cv1958-B (BLM), 2008 WL 66932 (S.D. Cal. Jan. 7, 2008); see also

Qualcomm Inc. v. Broadcom Corp., No. 05cv1958-B (BLM), 2010 WL 1336937 (S.D. Cal. Apr. 2, 2010).

58. On appeal, the Federal Circuit limited the unenforceability remedy to any H.264 compliant products. Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1026 (Fed. Cir. 2008).

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more than 300,000 pages) that had not previously been produced, which showed Qualcomm’s participation in the standard-setting process.

Based on these discovery violations, the magistrate court ordered Qualcomm to reimburse Broadcom for all of its lawyers’ fees incurred in the case, in excess of $8.5 million.59 The magis-trate court also sanctioned the lawyers representing Qualcomm and referred several of Qualcomm’s lawyers to the bar for disciplinary proceedings.60

After an appeal and remand, the magistrate court ultimately overturned the sanctions against the outside counsel.61 However, in deciding whether sanctions were appropriate the court observed that “[t]here is still no doubt in this Court’s mind that this massive discovery failure resulted from significant mistakes, oversights, and miscommunication on the part of both outside counsel and Qualcomm employees. The new facts and evidence presented… revealed ineffective and problematic interactions between Qualcomm employees and most of the Responding Attorneys during the pretrial litigation.”62 Indeed, this case thus illustrates the need for effective communication on both the part of the lawyer and the client:

The fundamental problem in this case was an incredible breakdown in communication. The lack of meaningful communication permeated all of the relationships (amongst Qualcomm employees (including between Qualcomm engineers and in-house legal staff), between Qualcomm employees and outside legal counsel, and amongst outside counsel) and contributed to all of the other failures. The Court was not presented with any evidence establishing that either in-house lawyers or outside counsel met in person with the appropriate Qualcomm engineers (those who were likely to have been involved in the conduct at issue and who were likely to be witnesses) at the beginning of the case to explain the legal issues and discuss appropriate document collection. Moreover, outside counsel did not obtain sufficient information from any source to understand how Qualcomm’s computer system is organized: where emails are stored, how often and to what location laptops and personal computers are backed up, whether, when and under what circumstances data from laptops are copied into repositories, what type of information

59. 2008 WL 66932, at *17. 60. Id. at *18-19. 61. Qualcomm Inc. v. Broadcom Corp., No. 05cv1958-B (BLM), 2010 WL 1336937,

at *7 (S.D. Cal. Apr. 2, 2010) 62. Id. at *2.

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is contained within the various databases and repositories, what records are maintained regarding the search for, and collection of, documents for litigation, etc. Finally, no attorney took supervisory responsibility for verifying that the necessary discovery had been conducted (including ensuring that all of the correct locations, servers, databases, reposi-tories, and computers were correctly searched for potentially relevant documents) and that the resulting discovery supported the important legal arguments, claims, and defenses being presented to the court. These fundamental failures led to the discovery violations.63

[2] Lawson v. Sun Microsystems, Inc.

In Lawson v. Sun Microsystems, Inc.,64 Sun produced “massive amounts of ESI” and, rather than reviewing and removing all priv-ileged documents from the production, it password protected and produced some privileged documents in the data set.65 In the course of reviewing the documents, Lawson, the plaintiff, obtained a utility off the internet and unlocked the password protected files. Lawson sent at least two e-mails to his lawyers informing them that he had unlocked these files, which his lawyers claimed they had never seen or reviewed.66 When Sun later learned that Lawson had accessed the information contained in these password protected files, Sun filed a motion for sanctions.

Based on the lawyers’ failure to oversee the discovery process and to communicate with their client, the magistrate court sanc-tioned the lawyers. The court held that Indiana Rule of Profes-sional Conduct 1.4 imposes upon lawyers a responsibility to communicate with their clients. The court held that the lawyers’ failure to review Lawson’s e-mails informing them of his conduct “was blatantly careless.”67 As the magistrate court explained, had the lawyers “timely read Lawson’s emails, or even simply taken proper note of the subject line on Lawson’s November 2, 2007, email, they would have been aware much sooner that Lawson had accessed the password-protected documents. Addressing this issue contemporaneously may well have minimized some of the massive

63. Id. 64. No. 1:07-cv-196-RLY-TAB, 2010 WL 503054 (S.D. Ind. 2010). 65. Id. at *3. 66. One e-mail, dated November 2, 2007, contained the subject line: “Password

protected files—Unlocked!” Id. at *5. 67. Id. at *27.

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storm clouds that resulted…[and] [c]ertainly…would have pre-vented Lawson from continuing to access these documents on later dates.”68

On appeal, the district court vacated the sanctions against the lawyers. Although the court noted that the magistrate court found their conduct to be careless, the court did not find that their con-duct was wanton or in bad faith.69 The district court also relied on the fact that the magistrate court did not analyze counsel’s conduct in light of the requirements of Rule 1.4 or conclude that they had violated this rule.

[D] Ethical Duties Related to Outsourcing

Due to the complexity and volume of today’s electronic dis-covery, it has become increasingly common for parties to outsource document-management services to third-party vendors.70 “Outsourcing affords lawyers the ability to reduce their costs and often the cost to the client to the extent that the individuals or entities providing the outsourced services can do so at lower rates than the lawyer’s own staff.”71 The American Bar Association72 and several state ethics

68. Id. 69. Id. at *3. 70. See American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility,

Op. No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services) (“Many lawyers engage other lawyers or nonlawyers, as independent contractors, directly or through intermediaries, on a temporary or an ongoing basis, to provide various legal and nonlegal support services. Outsourced tasks range from the use of a local photocopy shop for the reproduction of documents, to the retention of a document management company for the creation and maintenance of a database for complex litigation, to the use of a third-party vendor to provide and maintain a law firm’s computer system, to the hiring of a legal research service to prepare a 50-state survey of the law on an issue of importance to a client, or even to the engagement of a group of foreign lawyers to draft patent applications or develop legal strategies and prepare motion papers in U.S. litigation”).

71. Id. 72. In 2008, the ABA’s Standing Committee on Ethics and Professional Responsibility

issued Formal Opinion 08-451, which recognizes the benefits of having non-lawyer assistance, such as lower costs and access to specialized expertise, but cautions lawyers that this does not absolve them of their ethical obligations to the client. See American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services).

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committees have concluded that outsourcing is ethically permissible.73 However, outsourcing continues to implicate a number of thorny ethical issues.

As a practical matter, responsibility for ensuring a vendor’s com-pliance with discovery obligations falls on the lawyer and the client. Lawyers will not be able to blame vendors, most of whom are not authorized to practice law, for failure to comply with discovery obli-gations or for confidentiality breaches.74 Lawyers who outsource work must also monitor the vendor’s work closely to ensure compli-ance with discovery and ethical rules. Additionally, lawyers should obtain the client’s informed consent prior to outsourcing work and specifically discuss with the client issues related to supervision, con-fidentiality, billing, conflicts of interest, and the impact outsourcing may have on these duties.75

[1] Duty to Supervise

Primary among the ethical considerations raised by out-sourcing is the duty to supervise.75.1 When outsourcing services,

73. See ABA Commission on Ethics 20/20, Resolution 105C (revising Model

Rules 1.1, 5.3, and 5.5 to incorporate guidance from prior ABA and state ethics opinions regarding outsourcing of legal services) (available online at http://www. americanbar.org/content/dam/aba/administrative/ethics_2020/2012_hod_annual_ meeting_105c.authcheckdam.pdf); American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services); NYC Ethics Op. 2006-3, 2006 WL 2389364 (N.Y.C. Assn. B. Comm. Prof. Jud. Eth.) (Aug. 2006); see also Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 07-2 (Sep. 7, 2007) (Florida); Los Angeles Cty. Bar Ass’n Prof’l Responsibility and Ethics Comm., Op. No. 518 (Nov. 2006) (available at http://www.lacba.org/Files/LAL/Vol29No9/2317.pdf); San Diego County Bar Ass’n, Op. No. 2007-1 (2007) (available at http://www.sdcba.org/index.cfm?Pg= ethicsopinion 07-1); Virginia State Bar, Legal Ethics Opinion No. 1850 (available at http://www.vacle.org/opinions/1850.htm).

74. In re Seroquel Products Liability Litig., No. 6:06-md-1769-Orl-22DAB, 2007 WL 2412946 (M.D. Fla. Aug. 21, 2007), at *16 (noting that “a party is responsible for the errors of its vendors”).

75. The Association of the Bar of the City of New York Committee on Professional and Judicial Ethics Formal Opinion 2006-3 addresses an attorney’s duties with respect to each of these issues. See NYC Ethics Op. 2006-3, 2006 WL 2389364 (N.Y.C. Ass’n Bar Comm. Prof’l Judicial Ethics) (Aug. 2006).

75.1. See Model Rule 5.3. Courts also have addressed the lawyer’s requirement to supervise discovery efforts conducted by clients. See, e.g., National Day Laborer

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lawyers must ensure that they adequately supervise the vendor’s activities to: (1) avoid supporting the unauthorized practice of law and (2) ensure that the non-lawyer’s work assists the lawyer in providing competent representation.76

[a] Prevention of the Unauthorized Practice of Law

Model Rule 5.5 (a) states that “[a] lawyer shall not prac-tice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction or assist another in doing so.”77 Similarly, Disciplinary Rule 3-101 of the Lawyer’s Code prohibits a lawyer from aiding a non-lawyer in the unauthorized practice of law.78 “Prohibiting the unauthorized practice of law ‘aims to protect our citizens against the dan-gers of legal representation and advice given by persons not trained, examined and licensed for such work, whether they be laymen or lawyers from other jurisdictions.’”79

Organizing Network v. United States Immigration & Customs Enforcement Agency, No. 10 Civ. 3488 (SAS), 2012 WL 2878130, at *11 n.109 (S.D.N.Y. July 13, 2012) (noting that “not every employee will require hands-on supervision from an attorney,” but stating that “sufficient attorney oversight of the [discovery] process, including the ability to review, sample, or spot-check the collection efforts is important” (quoting Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456, 473 (S.D.N.Y.2010)).

76. NYC Ethics Op. 2006-3 (“New York lawyer may ethically outsource legal support services overseas to a non-lawyer, if the New York lawyer rigorously supervises the non-lawyer, so as to avoid aiding the non-lawyer in the unauthor-ized practice of law and to ensure that the non-lawyer’s work contributes to the lawyer’s competent representation of the client”).

77. MODEL RULES OF PROF’L CONDUCT R. 5.5. The comments to Model Rule 5.5 were revised in August 2012 to “make clear that lawyers cannot engage in outsourcing in a manner that would facilitate the unauthorized practice of law.” ABA Commission on Ethics 20/20 Report, Introduction and Overview at 13 (available online at http://www.americanbar.org/content/dam/aba/administrative/ ethics_2020/20120508_ethics_20_20_final_hod_introdution_and_overview_report.authcheckdam.pdf); see also ABA Commission on Ethics 20/20, Resolution 105C at 4-5 (available online at http://www.americanbar.org/content/dam/aba/ administrative/ethics_2020/2012_hod_annual_meeting_105c.authcheckdam.pdf).

78. LAWYER’S CODE OF PROF’L RESPONSIBILITY DR 3-101 (“A lawyer shall not aid a non-lawyer in the unauthorized practice of law”).

79. Id. (citing Spivak v. Sachs, 16 N.Y.2d 163, 168 (1965))

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As a general rule “an individual who is not admitted to practice law in a particular jurisdiction may work for a lawyer who is so admitted, provided that the lawyer remains respon-sible for the work being performed and that the individual is not held out as being a duly admitted lawyer.”80

In determining whether a particular outsourcing arrange-ment is permissible or amounts to the unauthorized practice of law, “[t]he key issue appears to be the amount of supervi-sion over the non-lawyer: the greater the independence of the non-lawyer in performing functions, the greater the likelihood that the non-lawyer is practicing law.”81 Thus, as long as the lawyer “retains supervisory control over and responsibility for those tasks constituting the practice of law,” he does not vio-late the prohibition against aiding the unauthorized practice of law.82 As explained in Formal Opinion 2006-3 of the New York City Bar’s Committee on Professional and Judicial Ethics, this means that the lawyer must “apply professional skill and judgment, [to] set the appropriate scope for the non-lawyer’s work and then vet the non-lawyer’s work and ensure its quality”83 and “must at every step shoulder complete responsibility for the non-lawyer’s work.”84

80. American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op.

No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services).

81. San Diego County Bar Ass’n, Op. No. 2007-1 (2007) (available at http://www. sdcba.org/index.cfm?Pg=ethicsopinion07-1)

82. Id. 83. As noted in the Opinion, New York is more permissive than some other states

with respect to the types of tasks that can be delegated, noting that “other ethics committees in New York have determined that non-lawyers may research questions of law and draft documents of all kinds, including process, affidavits, pleadings, briefs and other legal papers as long as the work is performed under the supervision of an admitted lawyer.” NYC Ethics Op. 2006-3, 2006 WL 2389364 (N.Y.C. Ass’n Bar Comm. Prof’l Judicial Ethics) (Aug. 2006).

84. AccordLos Angeles County Bar Ass’n Prof’l Responsibility and Ethics Com-mittee, Op. No. 518 (Nov. 2006) (available at http://www.lacba.org/Files/LAL/ Vol29No9/2317.pdf).

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[b] Duty of Competency

As discussed above,85 lawyers have an ethical duty to act competently in any representation. This duty is non-delegable and is not eliminated simply because a lawyer chooses to out-source a particular task. Not only must a lawyer review the work done by others to avoid aiding the unauthorized practice of law, the lawyer must have sufficient learning and skill to assess the quality and accuracy of the work product received in order to exercise independent professional judgment on behalf of the client.86

[2] Duty of Confidentiality

Outsourcing also raises ethical issues related to a lawyer’s duty to maintain client confidences. Client confidences are often shared with vendors working on behalf of the client. Thus, lawyers must take extra steps to maintain client confidentiality, including making appropriate disclosures87 to clients and entering into confidentiality agreements with vendors.88 This is especially true

85. See §�13.02[A], supra. 86. See, e.g., ABA Commission on Ethics 20/20 Report, Introduction and Overview at

12 (available online at http://www.americanbar.org/content/dam/aba/administrative/ ethics_2020/20120508_ethics_20_20_final_hod_introdution_and_overview_report.authcheckdam.pdf); see also ABA Commission on Ethics 20/20, Resolution 105C at 1-2 (available online at http://www.americanbar.org/content/dam/aba/ administrative/ethics_2020/2012_hod_annual_meeting_105c.authcheckdam.pdf); American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services) (noting that “[t]here is nothing unethical about a lawyer outsourcing legal and nonlegal services, provided the outsourcing lawyer renders legal services to the client with the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation”); see also NYC Ethics Op. 2006-3, 2006 WL 2389364 (N.Y.C. Ass’n Bar Comm. Prof’l Judicial Ethics) (Aug. 2006).

87. See, e.g., American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services) (explaining that “appropriate disclosures should be made to the client regarding the use of lawyers or nonlawyers outside of the lawyer’s firm, and client consent should be obtained if those lawyers or nonlawyers will be receiving information protected by Rule 1.6).

88. Id.; accord NYC Ethics Op. 2006-3, 2006 WL 2389364 (N.Y.C. Assn. Bar Comm. Prof’l Judicial Ethics) (Aug. 2006) (“Measures that New York lawyers may take to help preserve client confidences and secrets when outsourcing

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when the work is outsourced to a different jurisdiction or country as the “legal and ethical standards applicable to foreign lawyers may differ from those applicable to domestic lawyers, particularly with respect to client confidentiality, the attorney-client privilege, and conflicts of interests.”89 As observed by the Maine Board of Overseers of the Bar, “[a]t a minimum, the lawyer should take steps to ensure that the company providing transcription or confi-dential data storage has a legally enforceable obligation to maintain the confidentiality of the client data involved.”90

[3] Duty of Disclosure

Lawyers also may have an ethical duty to disclose the exist-ence and nature of a outsourcing relationship to his or her client and obtain the client’s informed consent.91 Disclosure has been deemed necessary: (1) when client confidences will be shared; (2) when the vendor works independently from the hiring lawyer; and (3) when the client reasonably expects the work to be performed in-house.

overseas include restricting access to confidences and secrets, contractual pro-visions addressing confidentiality and remedies in the event of breach, and periodic reminders regarding confidentiality”); Los Angeles County Bar Ass’n Prof’l Responsibility and Ethics Comm., Op. No. 518 (Nov. 2006) (available at http://www.lacba.org/Files/LAL/Vol29No9/2317.pdf) (“Confidential information can be disclosed to outside contractors so long as the outside contractors agree to keep the client confidences and secrets inviolate. It is incumbent upon the attorney to ensure that client confidences and secrets are protected, both by the attorney and by Company, throughout and subsequent to the attorney’s contract relationship with Company”).

89. San Diego County Bar Ass’n, Op. No. 2007-1 (2007) (available at http://www. sdcba.org/index.cfm?Pg=ethicsopinion07-1) (discussing an example of a confi-dentiality breach where minimum safeguards were not in place. An Indian subcontractor on a medical transcription project “threatened to post confidential patient records on the Internet unless the UC San Francisco Medical Center retrieved money owed to the subcontractor from a middleman”).

90. Client Confidences: Confidential firm data held electronically and handled by technicians for third-party vendors, Maine Professional Ethics Commission, Op. No. 194 (available online at http://www.maine.gov/tools/whatsnew/index.php? topic=mebar_overseers_ethics_opinions&id=86894&v=article).

91. American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services).

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[a] Client Confidences Will Be Shared

As explained by the ABA in Formal Opinion 08-451, “where the relationship between the firm and the individuals performing the services is attenuated, as in a typical out-sourcing relationship, no information protected by Rule 1.6 may be revealed without the client’s informed consent.”92 Given that most outsourcing arrangements will involve shar-ing confidential information about the client, outsourcing will generally have to be disclosed.

[b] Temporary Lawyer Working Independently

A client’s informed consent also is required in situations where a temporary lawyer performs work for the client with-out the close supervision of a lawyer associated with the hir-ing law firm.93 According to the ABA, the duty to obtain informed consent in such situations is based on a combination of ethical rules, including Model Rule 1.2(a), which requires “lawyers to consult with clients as to the means by which the clients’ objectives are to be pursued,” Rule 1.4, which relates to client communication, and Rule 7.5(d), which prohibits lawyers from “implying that they practice in a partnership or other organization when that is not the fact.”94

92. Id. 93. American Bar Ass’n Comm. on Ethics and Prof’l Responsibility, Formal Op.

No. 88-356 (Dec. 16, 1988) (Temporary Lawyers). The opinion also held that where the temporary attorney is working under the direct supervision of a lawyer associated with the firm, disclosure ordinarily is not required.

94. Id. See also American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services) (approving outsourcing of legal or non-legal support, but holding that lawyer remains ultimately responsible for legal services, and referencing Rule 7.1, requiring truthfulness in commu-nications regarding lawyer services, and Rule 8.4(c), prohibiting dishonesty, fraud, deceit, or misrepresentation, as additional reasons for disclosing information regarding outsourcing to client).

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[c] Inconsistent with Client’s Reasonable Expectations

Disclosure also may be required where the client has a “reasonable expectation under the circumstances” that the work will be performed by their lawyer as opposed to being outsourced.95 This “reasonable expectation” standard is vague as a client’s “reasonable expectations” may vary with the sophistication of the party and may be unknown to their retained counsel. Thus, lawyers should err on the side of caution and disclose outsourcing relationships to their clients.

[4] Conflicts of Interest

Rule 7.2 of the Model Rules of Professional Conduct allows a lawyer to refer clients to “nonlawyer professional[s]” pursuant to an agreement that provides for the other person to refer clients or customers to the lawyer so long as “the client is informed of the existence and nature of the agreement.”96 The Comments to the Rule make clear that such reciprocal agreements “must not inter-fere with the lawyer’s professional judgment” in providing legal services.97 Additionally, Model Rule 1.7 prohibits a lawyer from representing a client where “there is a significant risk that the rep-resentation…will be limited by the lawyer’s responsibilities to…a third person or by a personal interest of the lawyer.”98

Prior to outsourcing work, “the attorney should satisfy himself that no conflicts exist that would preclude the representation. The attorney must also recognize that he or she could be held respon-sible for any conflict of interest that may be created by the hiring of [a] Company and which could arise from relationships that Com-pany develops with others during the attorney’s relationship with [the] Company.”99 To this end, the lawyer should seek information

95. San Diego County Bar Ass’n, Op. No. 2007-1 (2007) (available at

http://www.sdcba.org/index.cfm?Pg=ethicsopinion07-1). 96. MODEL RULES OF PROF’L CONDUCT R. 7.2(4). 97. MODEL RULES OF PROF’L CONDUCT R. 7.2, cmt. 8. 98. MODEL RULES OF PROF’L CONDUCT R. 1.4. 99. Los Angeles County Bar Ass’n Prof’l Responsibility and Ethics Committee, Op.

No. 518 (Nov. 2006) (available at http://www.lacba.org/Files/LAL/Vol29No9/ 2317.pdf); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 07-2 (Sept. 7, 2007) (Florida).

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about the existence and nature of the outsourcing entity’s conflicts checking system as well as information regarding whether the entity is currently performing or has previously performed services for any parties whose interests are adverse to the client.

Further, the lawyer should disclose any conflicts of interest that may arise by virtue of any relationship between the lawyer and the vendor. Failure to disclose the specifics of the relationship between the lawyer and the third party vendor can have dire con-sequences. This came to pass when Adelphia Communications Corp. asked the law firm of Boies, Schiller & Flexner LLP to withdraw as counsel after discovering that the document-management firm, Amici LLC, which was recommended by Boies Schiller, was partly owned by David Boies’s children, as well as family members of other lawyers at the firm. Boies Schiller did not disclose these connections to Adelphia. Prior to discovering the link, Adelphia had paid Amici between $5 million and $10 million for its services. The Boies Schiller partner leading the Adelphia representation claimed to have no knowledge of the connection when asked why he did not inform Adelphia of the potential conflict.

Although it was not determined that Amici’s performance was substandard, the appearance of impropriety that accompanied the failure to disclose the connection between the Boies Schiller firm and Amici was enough to raise questions. Disciplinary Rule 5-104 of the New York Code of Professional Responsibility requires a lawyer seeking to do non-legal business with a client to disclose any interest the lawyer has in the transaction, apprise the client of alternative arrangements, and obtain written consent from the cli-ent.100 By failing to disclose its interest in Amici, Boies Schiller arguably violated its ethical obligations to Adelphia. While the Adelphia matter was ultimately resolved, Boies Schiller faced the real risk of being forced to return not only the fees paid to Amici, but the legal fees it collected in its representation of Adelphia.101

100. MODEL RULES OF PROF’L CONDUCT R. 1.8(a) contains similar

requirements. 101. It does not appear that Boies Schiller was forced to return its legal fees to

Adelphia, but the firm suffered a blow to its reputation arising out of the use of Amici by its clients, including Adelphia. For a discussion of this dispute, see http://www.law.com/jsp/article.jsp?id=1126528530058.

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[5] Duty to Charge a Reasonable Fee

Outsourcing also implicates the duty to bill a client appropriately. Model Rule 1.5 states that “[a] lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.”102

Lawyers have many options for billing for outsourced work—the lawyer can decide not to pass these costs on to the client or the lawyer could decide to: “(a) pass the cost directly on to the client for payment, (b) charge the client a marked up cost, or (c) charge the client a flat fee.”103 However, the overall fee charged for such work must be “reasonable” in order to comply with Model Rule 1.5. But what constitutes a “reasonable” amount that a lawyer can charge for outsourced work? How much can lawyers mark-up the costs associated with outsourcing? Can lawyers ethically bill clients for the overhead costs associated with outsourcing? Can lawyers mark-up the cost of outsourcing to account for costs associated with overseeing the outsourced work? Must the client be advised that the bill has been marked-up?

Guidance from the ABA suggests that lawyers can ethically mark-up costs associated with outsourcing. In 2000, the ABA issued Formal Opinion No. 00-420,104 which held that a law firm that engaged a contract lawyer could “add a surcharge to the cost paid by the billing lawyer provided the total charge represented a reasonable fee for the services provided to the client.”105 In reach-ing this conclusion, the Committee noted that adding a surcharge to the fees charged for work performed by contract lawyers was “not substantively different from the manner in which a conven-tional law firm bills for the services of its lawyers” as firms do not

102. MODEL RULES OF PROF’L CONDUCT R. 1.5. 103. Los Angeles County Bar Ass’n Prof’l Responsibility and Ethics Committee, Op.

No. 518 (Nov. 2006) (available at http://www.lacba.org/Files/LAL/Vol29No9/ 2317.pdf).

104. See American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 00-420 (Nov. 29, 2000) (Surcharge to Client for use of a Contract Lawyer)

105. American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 08-451 (Aug. 5, 2008) (Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services) (discussing American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 00-420 (Nov. 29, 2000) (Surcharge to Client for use of a Contract Lawyer)).

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disclose the rates that they are paying their employees.106 “[T]he restraint is the overarching requirement that the fee charged for the services not be unreasonable,” not disclosure of the firm’s costs.107 However, if the outsourced work is billed as an expense or cost (as opposed to a fee), the ABA concluded that a more restrictive approach to marking-up the costs should apply. Specifically, “the lawyer may bill the client only its actual cost plus a rea-sonable allocation of associated overhead, such as the amount the lawyer spent on any office space, support staff, equipment, and supplies for the individuals under contract” or “a reasonable allocation of the cost of supervising those services if not otherwise covered by the fees being charged for legal services.”108

The ABA further held that the “addition of a surcharge above cost does not require disclosure to the client” when the services provided by the contract lawyer are billed as legal services.109 However, the ABA concluded that when billing the costs associ-ated with the contracting lawyer’s services as an expense; the amount charged “should not be greater than the actual costs incurred, plus those costs that are associated directly with the provision of services, unless there has been a specific agreement with the client otherwise,” which suggests that disclosure and informed consent is required only when costs exceed this amount.110

At least one state has taken a more stringent view of the need for lawyers to disclose marking-up the costs of outsourcing. According to the Supreme Court of Ohio Board of Commissioners on Grievance, disclosure and informed consent is necessary in all but one narrow exception (i.e., where the law firm engages a con-tract lawyer to function as a temporary replacement for a firm employee).111 “Outside this narrow circumstance, [in Ohio] disclo-sure, consultation, and consent are the required ethical practice.”112

106. Id. 107. Id. 108. Id. 109. See American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility,

Op. No. 00-420 (Nov. 29, 2000) (Surcharge to Client for use of a Contract Lawyer).

110. Id. 111. Ohio Adv. Op. No. 2009-6, 2009 WL 2581719 (Ohio Bd. Com. Griev. Disp.)

(Aug. 14, 2009). 112. Id.

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§ 13.03 A LAWYER’S DUTY TO OTHERS

A lawyer’s duties to his or her clients are not the only ethical restriction on the lawyer’s conduct. Lawyers also have a number of ethical obligations to the court, opposing counsel, third-parties and the system of justice more generally.

As with a lawyer’s duties to his or her clients, the advent and prolif-eration of technology has fundamentally altered how lawyers discharge their ethical responsibilities to these non-client constituencies. How does a lawyer fulfill his duty to diligently proceed in the litigation given the magnitude of data involved in many discovery disputes? Can a lawyer mine an adversary’s documents for meta-data?

[A] Diligently Proceeding in Litigation

Several Model Rules directly deal with the issue of acting diligently in a litigation. Model Rule 1.3, which addresses a lawyer’s duty to clients, mandates that a lawyer “act with reasonable diligence and promptness in representing a client.” Lawyers also are prohibited from unnecessarily delaying the progress of a case by Rules 3.2, 3.4(e), and 4.4(a). Specifically, Rule 3.2 of the Model Rules provides that “[a] lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client.”113 Model Rule 3.4(d) explicitly prohibits a lawyer from “mak[ing] a frivolous discovery request or fail[ing] to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party.”114 Model Rule 4.4(a) further prohibits lawyers from “us[ing] means that have no substantial purpose other than to embarrass, delay, or burden a third person.”115

Courts can sanction lawyers for engaging in dilatory conduct with respect to electronic discovery.116 For example, some courts

113. MODEL RULES OF PROF’L CONDUCT R. 3.2. 114. MODEL RULES OF PROF’L CONDUCT R. 3.4(d). 115. MODEL RULES OF PROF’L CONDUCT R. 4.4(a). 116. See, e.g., Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354 (D. Md.

2008) (noting that discovery is to be a cooperative process and that sanctions are readily available for dilatory and vexatious discovery conduct); see also Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1540 (11th Cir. 1993) (sanctioning defense counsel for their many stall tactics, including the “deliberate cover up of damaging evidence”).

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have imposed spoliation sanctions, including adverse inference instructions, for failing to timely produce e-mails and other electronic documents in discovery.117 Lawyers also risk disciplinary action by violating their ethical duty to act diligently in litigation.

[B] Duty of Candor

Lawyers have an ethical obligation to be candid with the court. Specifically, Rule 8.4(c) and (d) of the Model Rules provides that it is professional misconduct for a lawyer to “engage in conduct involving dishonesty, fraud, deceit or misrepresentation,” or “engage in conduct that is prejudicial to the administration of justice.”118 Disciplinary Rule 7-102(B) of the Lawyer’s Code provides that a lawyer who receives information clearly establishing that “the client has, in the course of the representation, perpetrated a fraud upon a person or tri-bunal shall promptly call upon the client to rectify the same, and if the client refuses or is unable to do so, the lawyer shall reveal the fraud to the affected person or tribunal, except when the information is protected as a confidence or secret.”119 Failure to abide by the duty of candor, in addition to potentially violating these ethical canons, also can result in serious sanctions.

[1] Coleman (Parent) Holdings, Inc. v. Morgan Stanley

In Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., Inc.,120 Morgan Stanley continued its practice of overwriting e-mail after 12 months, despite instructions to its employees to pre-serve documents in connection with the litigation, and in violation of an SEC regulation requiring that e-mail be retained for two years. In addition, Morgan Stanley violated an Agreed Order that required it to search its oldest full backup tape and produce e-mail

117. See Chapter 3. 118. MODEL RULES OF PROF’L CONDUCT R. 8.4(c), (d). 119. LAWYER’S CODE OF PROF’L RESPONSIBILITY DR 7-102(B). Rule 3.3

(a)(1) of the Model Rules further provides that a lawyer shall not knowingly “make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer.” MODEL RULES OF PROF’L CONDUCT R. 3.3(a)(1).

120. No. 502003CA005045XXOCAI, 2005 WL 679071 (Fla. Cir. Ct. Mar. 1, 2005) (Coleman I); No. CA 30-5045 AI, 2005 WL 674885 (Fla. Cir. Ct. Mar. 23, 2005) (Coleman II). This case is discussed more fully in Chapter 3.

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for its employees involved in the Sunbeam transaction. After certi-fying compliance with the Order, Morgan Stanley uncovered thou-sands of backup tapes that had never been searched and uncovered numerous errors in its search techniques, which resulted in rele-vant e-mail not being produced. Despite its false certification to the court, Morgan Stanley failed to immediately notify the court or the plaintiff. As the court stated, “[t]hroughout this entire process, [Morgan Stanley] and its counsels’ lack of candor has frustrated the Court and opposing counsel’s ability to be fully and timely informed.”121 To remedy this misconduct, the court levied a num-ber of sanctions against Morgan Stanley, including shifting the burden of proof on fraud to Morgan Stanley, reading portions of the complaint to the jury and deeming those statements true for purposes of the trial, reading a statement to the jury about Morgan Stanley’s spoliation and instructing the jury that it may consider those facts in awarding punitive damages.122

[2] Qualcomm Inc. v. Broadcom Corp.

In Qualcomm Inc. v. Broadcom Corp.123 Qualcomm’s lawyers vehemently argued throughout discovery and trial that Qualcomm was not involved in the creation of the H.264 standard. Qual-comm’s lawyers continued to make these arguments despite uncovering 21 e-mails that cast considerable doubt on the validity of this argument. Further, after discovering the 21 e-mails, the Qualcomm trial team decided not to produce these e-mails to Broadcom or inform the court of their existence. Nonetheless, on cross-examination of the witness, Broadcom elicited testimony regarding the existence of these e-mails. After the trial (which Qualcomm lost), in response to court ordered discovery, Qual-comm’s lawyers subsequently uncovered hundreds of thousands of pages of relevant e-mails that were not produced which showed that Qualcomm had actively participated in the Joint Video Team and the development of the H.264 standard.

Based on this misconduct, the magistrate court sanctioned Qualcomm and its lawyers, specifically finding that:

121. Coleman I, 2005 WL 679071, at *5. 122. See 2005 WL 674885, at *9-10. 123. No. 05 cv 1958-B (BLM), 2008 WL 66932 (S.D. Cal. Jan. 7, 2008).

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one or more of the retained lawyers chose not to look in the correct locations for the correct documents, to accept the unsubstantiated assur-ances of an important client that its search was sufficient, to ignore the warning signs that the document search and production were inadequate, not to press Qualcomm employees for the truth, and/or to encourage employees to provide the information (or lack of information) that Qual-comm needed to assert its non-participation argument and to succeed in this lawsuit. These choices enabled Qualcomm to withhold hundreds of thousands of pages of relevant discovery and to assert numerous false and misleading arguments to the court and jury.124

The magistrate court thus opined that Qualcomm’s outside counsel may have violated their ethical obligations—specifically, Rule 5-200 of the State Bar of California Rules of Professional Conduct, which provides that “a lawyer shall not seek to mislead the judge or jury by a false statement of fact or law,” as well as Rule 5-220, which provides that “a lawyer shall not suppress evidence that the lawyer or the lawyer’s client has a legal obliga-tion to reveal or to produce.”125

Accordingly, the magistrate court referred the sanctioned law-yers to the State Bar of California for possible disciplinary pro-ceedings. The sanctions were ultimately overturned after an appeal and remand,126 but the litigation and reputational harm had already been done.

[3] Bray & Gillespie Management LLC v. Lexington Ins. Co.

Bray & Gillespie Management LLC v. Lexington Ins. Co.127 involved a series of protracted disputes concerning electronic dis-covery. Despite the defendants’ document requests, which specifi-cally requested that ESI be produced in native format with metadata, the plaintiffs produced documents in TIFF format, stripped of all metadata and “coding that would allow the docu-ments to be searched by fields, such as creation date, last modifi-cation date, author, or subject.”128 When the defendants objected to

124. Id. at *13. 125. Id. at *18. 126. Qualcomm Inc. v. Broadcom Corp., No. 05cv1958-B (BLM), 2010 WL 1336937,

at *7 (S.D. Cal. Apr. 2, 2010). 127. 259 F.R.D. 568 (M.D. Fla. 2009). 128. Id. at 575.

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the form of plaintiffs’ production, plaintiffs’ counsel “concocted a story about the process that B & G and [plaintiffs’ former counsel] used to gather the discoverable documents.”129

Defendants subsequently filed a motion for sanctions based on the plaintiffs’ failure to produce ESI in the form specified in its requests for production, and as ordered by the court. After an evidentiary hearing, at which plaintiffs submitted sworn affidavits and its lawyers testified, the magistrate court decided to sanction the lawyers, but not the client.130 The court held that—

When attorneys have engaged in a pattern of withholding and concealing information concerning discoverable material and misrepresenting to the court and opposing counsel material facts about numerous failures to comply with discovery requests and Court orders – including falsely blaming a lack of third-party cooperation and fabricating a false story about the form in which ESI was gathered and stored – courts in this circuit have not hesitated to impose significant sanctions against the law firms that employed the attorneys responsible for this sanctionable conduct.131

Accordingly, the magistrate court held the lawyers jointly and severally liable for the reasonable attorneys’ fees, costs and expenses Lexington incurred in filing its motion for sanctions and in the proceedings related thereto.132

[4] Rosenthal Collins Group, LLC v. Trading Technologies Int’l, Inc.

Rosenthal Collins Group, LLC v. Trading Technologies Int’l., Inc.,133 provides yet another example of the serious risks associated with failing to be candid with the court and one’s adversary. In that case, plaintiff retained an expert who turned

129. Id. at 576. 130. The magistrate court found that “outside counsel made the decision how to

produce ESI,” and that B&G had already spent considerable time and effort reproducing some ESI in native format, so that it would be inappropriate to make B&G pay Lexington’s costs and attorneys’ fees in filing the motion for sanctions. Id. at 588.

131. Id. at 589. 132. Id. at 590. The magistrate court also held that the lawyers had acted in bad faith.

Id. On appeal, the district court quashed the findings of bad faith. Bray & Gillespie Mgmt., LLC v. Lexington Ins. Co., No. 6:07-cv-0222-Orl-35KRS, 2009 WL 5606058, at *2 (M.D. Fla. Nov. 16, 2009).

133. No. 05C4088, 2011 WL 722467 (N.D. Ill. Feb. 23, 2011).

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back the clock on his computer to make it appear as if certain zip disks were last modified prior to the critical dates of the patents-in-suit. The expert also wiped the zip disks just prior to inspection by the defendant. Plaintiff sought to distance itself from the miscon-duct of its retained expert, arguing that neither it nor its counsel knew of the expert’s actions. The court rejected this argument.

Specifically, the court noted that the “record reveals a pattern of blurring of facts, the presenting of misleading and false statements to the Court, failure to comply with discovery orders, failure to preserve evidence, and, finally, destruction of material evidence.”134 The court further found that plaintiff’s denial of any wrongdoing was problematic because simply questioning its own consultant would have revealed that the expert changed the last modified dates on the disks.135 The court also faulted plaintiff and its counsel for failing to promptly comply with its order to produce the materials at issue. As the court found, “[i]t appears that RCG took no steps after the first order to collect the evidence to ensure its preservation.”136 Accordingly, the court held that plaintiff and its counsel acted willfully and in bad faith by engaging in conduct that was deceptive to opposing counsel and the court. As a result, the court entered a default judgment in favor of the defendant, imposed on plaintiff a $1.0 million sanction, and ordered plaintiff’s counsel to pay the costs and attorneys’ fees incurred in litigating the motion.137

[C] Fairness to Opposing Counsel

[1] Duty to Preserve and Produce

Many companies have implemented document retention and e-mail policies that automatically purge electronic documents after a set period of time. Courts have found such document retention policies to be perfectly permissible.138 However, once litigation is

134. Id. at *8. 135. Id. at *9. 136. Id. at *12. 137. Id. at *13-14. 138. Arthur Andersen LLP v. United States, 544 U.S. 696, 704 (2005) (“Document

retention policies, which are created in part to keep certain information from getting into the hands of others, including the Government are common in

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reasonably anticipated, prospective litigants have a duty to pre-serve documents that may be relevant to the case.139 Failure to preserve and produce relevant information can have serious reper-cussions.139.1 Courts have imposed a range of sanctions for such failings, including monetary sanctions, preclusion of witnesses, adverse inferences and, in particular serious cases, default judg-ments or dismissals.140

Rule 3.4(a) of the Model Rules states that a lawyer shall not “unlawfully obstruct another party’s access to evidence or unlaw-fully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do such an act.”141 Similarly, Ethical Consider-ation 7-27 of the Lawyer’s Code states that, “[b]ecause it interferes with the proper administration of justice, a lawyer should not sup-press evidence that the lawyer or the client has a legal obligation to reveal or produce.”142 Proper use of document retention, collection

business…It is, of course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances”).

139. See, e.g., In re NTL, Inc. Sec. Litig., No. 244 F.R.D. 179, 193 (S.D.N.Y. 2007) (“Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents”).

139.1. In Calvert v. Red Robin Int’l, Inc., No. C 11-03026 WHA, 2012 WL 1668980 (N.D. Cal. May 11, 2012), for example, defendants moved for sanctions as well as to disqualify class counsel for failing to produce communications between plaintiff and putative class members, including Facebook messages, after the court issued an order compelling such production. Class action counsel sought to defend himself by arguing that “he was unfamiliar with Facebook technology, and that he had no choice but to rely on [his client’s] word [that a complete search, collection, and review of Facebook content had been performed by plaintiff and that relevant Facebook messages had not been deleted].” Id. at *6. The court ultimately decided not to sanction or disqualify class counsel, but cautioned that the court would “wait to see if similar lapses occur in the continuing conduct of the case.” Id. at *7. However, the court disqualified the class representative based on his inappropriate communications with putative class members, which were harassing, inappropriate and bordering on suborning perjury, and imposed sanctions for the representative’s failure to comply with his discovery obligations. Id. at *5, *7.

140. For a fuller discussion of the issues of spoliation and the duty to preserve see Chapter 3.

141. MODEL RULES OF PROF’L CONDUCT R. 3.4(a). 142. LAWYER’S CODE OF PROF’L RESPONSIBILITY E-C 7-27.

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and production policies are thus key to fulfilling the duty to preserve and produce.

[2] Use of Inadvertently Produced Privileged Documents

In addition to the ethical duty to protect against disclosing a client’s confidences, there is an ethical duty placed on a party who receives inadvertently produced privileged information. For exam-ple, Rule 4.4(b) of the Model Rules states that “[a] lawyer who receives a document or electronically stored information relating to the representation of the lawyer’s client and knows or reason-ably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender.”143 Comment [2] to Model Rule 4.4 provides additional guidance on the meaning of the phrase “inadvertently sent,” explaining that “[a] document or electronically stored information is inadvertently sent when it is accidentally transmitted, such as when an email or letter is misaddressed or a document or elec-tronically stored information is accidentally included with infor-mation that was intentionally transmitted.”143.1 Comment [2] also makes clear that the notification obligations in Rule 4.4(b) are applicable to metadata that is inadvertently transmitted.143.2

What use can the lawyer make of the privileged information inadvertently received? Should the attorney who reviewed the

143. MODEL RULES OF PROF’L CONDUCT R. 4.4(b) (reference to

“electronically stored information” was explicitly incorporated in Aug. 2012). 143.1. See id., Cmt. 2. 143.2. Id. (“For purposes of this Rule, ‘document or electronically stored information’

includes, in addition to paper documents, email and other forms of electronically stored information, including embedded data (commonly referred to as ‘metadata’), that is subject to being read or put into readable form. Metadata in electronic documents creates an obligation under this Rule only if the receiving lawyer knows or reasonably should know that the metadata was inadvertently sent to the receiving lawyer.”); see also New York City Bar Ass’n, Formal Op. No. 2012-1 (2012) (available online at http://www.nycbar. org/ethics/ethics-opinions-local/2012opinions/1441-formal-opinion-2012-01) (“A lawyer who receives a letter, fax, e-mail or other communication that the lawyer knows or reasonably should know was transmitted by mistake must promptly notify the sender, pursuant to Rule 4.4(b) of the New York Rules of Professional Conduct, and follow any other applicable law”).

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document be disqualified?143.3 When is the lawyer required to stop reading the document? These questions are not answered by Rule 4.4(b) of the Model Rules, which only requires the receiving party to notify the sender. Various jurisdictions take different views on the ethical duties placed upon the recipient of inadvert-ently produced privileged information.144

[a] Courts Requiring Disclosure and Refraining from Further Review

In Rico v. Mitsubishi Motor Corp.,145 the California Supreme Court affirmed the trial court’s disqualification of a lawyer who received inadvertently produced privileged doc-uments and then used those documents to try and discredit the opposing parties’ expert witnesses. In Rico, the plaintiffs’ lawyer obtained a document detailing a strategy session between the defendants’ lawyer and its experts. The docu-ment also included handwritten notes from the lawyer.146 The plaintiffs’ lawyer made copies of the document and distrib-uted it to his co-counsel and experts, and also specifically discussed the document with his experts. Subsequently, he used the document to cross-examine one of the defendants’ experts at a deposition.

143.3. See Moriber v. Dreiling, No. 3D12-300, 2012 WL 3586750, at *3 (Fla. Ct.

App. 3 Dist. Aug. 22, 2012) (declining to disqualify counsel for reviewing inadvertently transmitted confidential mediation statement where document contained no admonition in bold or italics that it was confidential and “nothing in the Confidential Mediation Statement…hint[ed] of any weakness in the Plaintiff’s case or which, in the hands of Defendants, would afford any tactical, strategic or legal advantage”).

144. See infra. 145. 42 Cal. 4th 807 (2007). 146. The court questioned the circumstances regarding how the plaintiffs’ attorney

actually obtained the document—specifically questioning whether he obtained the privileged document inadvertently or whether he removed it from the defense attorney’s briefcase during a deposition while he was out of the room. Ultimately, the court determined that the facts did not establish that plaintiffs’ counsel took the privileged document intentionally. However, the court ruled that disqualification was appropriate, even if the disclosure was inadvertent, because plaintiffs’ counsel violated his ethical duties by reading, copying, and using the document.

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Following the deposition, defendants’ counsel demanded the return of all copies of the document and moved to dis-qualify the plaintiffs’ lawyers and experts based on the uneth-ical retention and use of privileged materials. The trial court held that the document was privileged and that the plaintiffs’ lawyer had acted unethically in reviewing the document more closely than necessary to determine if it was privileged, by failing to notify defendants’ counsel that he had obtained a copy of the document, and by using the document “to gain maximum adversarial value from it.”147

On appeal, the California Supreme Court affirmed the lower court’s order disqualifying the plaintiffs’ lawyer, rely-ing on State Com. Ins. Fund v. WPS, Inc.,148 which articulated the standard in California for what a lawyer must do when he or she receives privileged materials inadvertently produced by the opposing party:

When a lawyer who receives materials that obviously appear to be confidential and privileged and where it is reasonably apparent that the materials were provided or made available through inad-vertence, the lawyer receiving such materials should refrain from examining the materials any more than is essential to ascertain if the materials are privileged, and shall immediately notify the sender that he or she possesses material that appears to be privi-leged. The parties may then resort to the court for guidance with the benefit of protective orders and other judicial intervention as may be justified.149

The California Supreme Court noted that this rule “addresses the practical problem of inadvertent disclosure in the context of today’s reality that document production may involve massive numbers of documents.”150 Also, the Court noted that a lawyer owes an ethical obligation to “respect the legitimate interests of fellow members of the bar, the judi-ciary, and the administration of justice” in addition to the duties owed to his or her client.151 The Court held that, by retaining and using the privileged document, the plaintiffs’

147. Id. at 813. 148. 70 Cal. App. 4th 644 (1999). 149. Rico, 42 Cal. 4th at 817 (quoting State Fund, 70 Cal. App. 4th at 656-57). 150. Id. at 818. 151. Id. (quoting Kirsch v. Duryea, 21 Cal. 3d 303, 309 (1978)).

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lawyers had violated California’s ethical rules, and upheld their disqualification.

Similarly, in Stengart v. Loving Care Agency,152 the plaintiff used her company issued laptop to communicate with her lawyer through her personal, password-protected, web-based, e-mail account. After she filed an employment dis-crimination lawsuit against her employer, the employer hired a computer forensic expert to recover all files stored on the laptop including her e-mails, which had been automatically saved to the hard drive.153 Defendant’s lawyers reviewed the e-mails and used them in the course of discovery, but did not inform plaintiff’s counsel about the e-mails until months later. Once informed, the plaintiff’s lawyer demanded that the defendant return all of the privileged e-mails. Defendant’s lawyers rejected the demand, claiming that the company had the right to review them.

The court first analyzed the issue of whether plaintiff had an expectation of privacy in the e-mails she exchanged with her lawyers, and concluded that they were privileged. Among other things, the court relied on the fact that the plaintiff took steps to protect the privacy of her e-mails, including by using a personal password-protected e-mail account, rather than her company e-mail account, to communicate with her lawyer, and that the e-mails warned readers that the communications were privileged.154 In addition, the court noted that the com-pany’s electronic communications policy acknowledged that occasional personal use of e-mail was permitted and failed to provide employees with express notice that such e-mails were subject to monitoring if company equipment is used to access the account.155

152. 990 A.2d 650 (N.J. 2010). 153. Unbeknownst to the plaintiff, certain browser software included on her computer

automatically made a copy of each web page she reviewed and stored them on the computer’s hard drive in a cache folder of temporary Internet files. Thus, when the plaintiff communicated with her attorney via her Yahoo account, temporary Internet files containing the contents of seven or eight e-mails she exchanged with her attorney were saved. Id. at 655-56.

154. Id. at 663. 155. Id. at 659.

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The court then turned to the issue of whether the defend-ant’s lawyers’ review of the e-mails violated Rule 4.4(b) of the New Jersey Rules of Professional Conduct, and concluded that it had.156 The court held that this was not a case of law-yers “maliciously seek[ing] out documents in a clandestine way,” but legitimate efforts to preserve evidence to defend against a lawsuit.157 Nonetheless, the court held that the law-yers had violated ethics rules by failing to set aside the docu-ments once they realized the e-mails were privileged and failing to timely notify plaintiff’s counsel or seek court per-mission before reviewing the e-mails further. Accordingly, the court remanded the case back to the trial court to deter-mine the appropriate sanction, including deciding whether to disqualify the law firm.

Similarly, in Jeanes-Kemp, LLC v. Johnson Controls, Inc,158 plaintiff inadvertently included two privileged docu-ments in its document production. Defendant’s counsel notified plaintiff of the production and initially agreed to segregate the documents in response to plaintiff’s request that the documents be returned. However, two days later, defend-ant’s counsel threatened to use the documents at the upcom-ing depositions unless plaintiff agreed to dismiss all claims against defendant with prejudice. Although the court ulti-mately denied plaintiff’s motion to disqualify defendant’s counsel, in part because the documents were not used in questioning the deponents, the court nonetheless criticized counsel for his actions. Specifically, the court held that “defense counsel’s apparent use of the communication as leverage to convince Plaintiff to dismiss its lawsuit and defense counsel’s threat to use the document at an upcoming

156. RPC 4.4(b) was modeled after the Model Rules and provides: “A lawyer who

receives a document and has a reasonable cause to believe that the document was inadvertently sent shall not read the document or, if he or she has begun to do so, shall stop reading the document, promptly notify the sender, and return the document to the sender.” Id. at 665.

157. Id. at 666. 158. No. 1:09CV723-LG-RHW, 2010 WL 3522028 (S.D. Miss. Sept. 1, 2010).

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deposition flirted with, even if it did not in fact cross, the line of defense counsel’s ethical obligations.”159

[b] Courts Permitting Continued Use

Contrary to the decisions discussed above, in Mira Inc. v. O’Brien,160 the Massachusetts Superior Court ruled that the recipient of an inadvertently produced privileged document could retain and use the document under certain circum-stances, even though the privilege was not deemed waived. In Mira, the defendant’s lawyer received a letter from the opposing party’s CEO addressed to the corporation’s lawyer. Upon receipt of the letter, the lawyer informed the opposing party’s counsel of the inadvertent production but took the position that the attorney-client privilege had been waived. The lawyer also sought the production of all other privileged documents. The court refused to hold that the privilege was waived, but was receptive to defendant’s position that the letter was inconsistent with plaintiff’s interrogatory responses. This inconsistency raised the possibility that plaintiff’s counsel violated their ethical obligation under the Massachusetts Rules of Professional Conduct, which prohibits a lawyer from failing to disclose a material fact to a tribunal to avoid assisting a fraudulent act by the client.161 Accordingly, the court allowed the lawyer to retain the privileged letter, to use the letter at the

159. Id. at *2. See also Terraphase Eng’g, Inc. v. Arcadis, U.S., Inc., No. C 10-04647

JSW (Order regarding Application For Temporary Restraining Order) (Dec. 17, 2010) (disqualifying outside and inside counsel, and ordering that general coun-sel be removed from day-to-day management of case, as sanction for filing counterclaim based, in part, on privileged documents inadvertently sent to former Arcadis e-mail account). But see Moriber v. Dreiling, No. 3D12-300, 2012 WL 3586750, at *1 (Fl. CT. App. 3 Dist. Aug. 22, 2012) (declining to disqualify attor-ney who reviewed inadvertently transmitted confidential mediation statement sent over e-mail based on reviewing attorney’s good faith representation that she was unaware of the confidentiality of the document at the time of the review, and stating that the issue served to “illustrate some of the adverse consequences resulting from the injection of technology into today’s modern and busy law practice”).

160. No. 02-5545-H, 2003 WL 2283384 (Mass. Super. Ct. Nov. 3, 2003). 161. Id. at *2 (citing Rule 3.3(a)(2) of Supreme Judicial Court Rule 3.07, the

Massachusetts Rules of Professional Conduct).

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CEO’s deposition, and to impeach witnesses at trial to the extent their testimony was inconsistent with the letter.162

[c] Ethics Committee Guidance

Various ethics committees have weighed in on these issues as well. For example, the New York County Lawyer’s Association Committee on Professional Ethics has found that “a lawyer has an ethical obligation to refrain from reviewing inadvertently disclosed privileged information.”163 Specifi-cally, the Committee concluded that a lawyer who receives inadvertently produced materials shall, “without further review or other use thereof, notify the sender and…abide by sender’s instructions regarding return or destruction of the information.”164

Not all states have followed the approach advocated by the New York County Lawyer’s Association Committee on Professional Ethics. Florida, for example, only requires that the receiver of inadvertently produced privileged information notify the sender.165

162. Id. at *2. The court further held that, before the letter could be used at trial,

defendant’s attorney would need to approach the court at sidebar and seek permission to use the letter to impeach any purported false testimony. Id.

163. See, e.g., NYCLA Ethics Op. 730, 2002 WL 31962702 (N.Y. Cty. Law. Assn. Comm. Prof’l Ethics) (July 19, 2002). In reaching this decision, the New York County Lawyers Association relied on the American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Op. No. 92-368 (Nov. 10, 1992) (Inadvertent Disclosure of Confidential Materials).

164. Id. The Association of the Bar of the City of New York Committee on Profes-sional and Judicial Ethics reached a similar conclusion in its Formal Opinion 2003-04. See NYC Ethics Op. No. 2003-04, 2003 WL 23789274 (N.Y.C. Assn. Bar Comm. Prof’l Jud. Ethics) (Dec. 2003). The Committee, however, also found that where the receiving attorney has reviewed the communication prior to knowing or having reason to know that the communication was inadvertently produced the attorney is not precluded, at least ethically, from using the infor-mation he or she has reviewed. Id.; see also Forward v. Foschi, No. 9002/08, 2010 WL 1980838 (N.Y. Sup. Ct. Westchester Co. May 18, 2010), at *14 (hold-ing attorney violated “spirit and intent of relevant ethics principles” by receiving a sizable number of privileged e-mails and failing to immediately notify oppos-ing counsel or seek in camera review of e-mails based on good faith belief that privilege was waived).

165. See, e.g., FL Ethics Op. No. 93-3, 1994 WL 719213 (Fla. St. Bar Assn.) (Feb. 7, 1994).

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[3] Metadata Mining

Another closely related issue that arises specifically in con-nection with electronic documents is the extent to which it is permissible for a party to “mine” another party’s electronic documents for hidden data.166 As discussed above, electronic doc-uments contain data about a document (referred to as metadata or embedded data) that is not apparent to the person viewing the document. Technology now exists that can allow a party to obtain this information from the electronic documents produced by an opposing party without the opposing party’s knowledge or intent to turn over such data. Currently, there is a split among the ethics opinions regarding whether receiving lawyers are ethically per-mitted to use technology to uncover this data when the producing party did not intend to produce such data with its documents.

[a] Metadata Mining Is Unethical

The New York Committee on Professional Ethics, for example, held that use of available technology “to surrepti-tiously examine and trace e-mail and other electronic docu-ments” would “constitute[] an impermissible intrusion on the attorney-client relationship in violation of the Code.”167 Accordingly, the Committee held that, “in light of the strong public policy in favor of preserving confidentiality as the foundation of the lawyer-client relationship, use of technology to surreptitiously obtain information that may be protected by the attorney-client privilege, the work product doctrine or that may otherwise constitute a ‘secret’ of another lawyer’s client would violate the letter and spirit of these Disciplinary Rules.”168 Other states have similarly taken a restrictive

166. See generally ABA Legal Technology Resource Center, Metadata Ethics

Opinions Around the U.S. (available at http://www.abanet.org/tech/ltrc/fyidocs/ metadatachart.html).

167. Use of Computer Software to Surreptitiously Examine and Trace E-mail and Other Electronic Documents, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 749 (Dec. 14, 2001) (New York).

168. Id.

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approach, prohibiting the review or use of inadvertently produced metadata.169

[b] Metadata Mining Is Not Per Se Unethical

The American Bar Association Standing Committee on Ethics and Professional Responsibility found that the Model Rules of Professional Conduct generally permit a lawyer to review and use embedded information contained in electronic documents.170 The ABA Committee relied on the fact that the Model Rules do not contain any specific prohibition against such use—instead, as noted above, Model Rule 4.4(b) simply requires a lawyer who receives an inadvertently produced privileged document to notify the sender. The ABA Commit-tee also noted that sending lawyers have the ability to avoid the inadvertent production of metadata or embedded data either by scrubbing electronic documents to remove metadata or entering into clawback agreements with their adversary.171

Similarly, the Maryland Bar Association held that a lawyer does not violate ethical rules by reviewing or using metadata included with electronic documents “without first ascertaining whether the sender intended to include such

169. See, e.g., Ethical Propriety of Mining Metadata, Nat’l Rep. Legal Ethics (Univ.

Pub. Am.), Op. No. 2007-02 (Mar. 14, 2007) (Alabama) (“Absent express authorization from a court, it is ethically impermissible for an attorney to mine metadata from an electronic document he or she inadvertently receives from another party.”); Arizona State Bar Ethics Op. 07-03, Confidentiality; Electronic Communications; Inadvertent Disclosure (Nov. 2007) (available online at http:// www.myazbar.org/Ethics/opinionview.cfm?id=695) (concluding that “a lawyer who receives an electronic communication may not examine it for the purpose of discovering the metadata embedded in it” unless “he or she has the consent of the sender, or if such conduct is allowed by a rule, order, or procedure of a court or other applicable provision of law”); Opinion, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 06-2 (Sept. 15, 2006) (Florida) (“A lawyer receiving an electronic document should not try to obtain information from metadata that the lawyer knows or should know is not intended for the receiving lawyer. A lawyer who inadvertently receives information via metadata in an electronic document should notify the sender of the information’s receipt”).

170. American Bar Ass’n, Standing Comm. on Ethics and Prof’l Responsibility, Formal Op. 06-442 (Aug. 5, 2006) (Review and Use of Metadata).

171. Id.

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metadata.”172 The Maryland Bar did note, however, that the Federal Rules were recently amended to require the return of inadvertently produced documents, and stated that the lack of any ethical requirement is “superseded” by the legal require-ments set forth in the new rules.173

[c] Metadata Mining Can Be Unethical

The DC Bar has taken an intermediate approach to this issue and concluded that a receiving lawyer is ethically prohibited from reviewing metadata only when he or she has actual knowledge that the metadata was inadvertently sent.174 As the DC Bar explained, “[g]iven the ubiquitous exchange of electronic documents and the sending lawyers’ obligation to avoid inadvertent productions of metadata, we believe that mere uncertainty by the receiving lawyer as to the inadvert-ence of the sender does not trigger an ethical obligation by the receiving lawyer to refrain from reviewing the metadata.”175 However, the DC Bar Opinion further states that when the receiving party has actual knowledge of the inadvertence, the receiving lawyer’s duty of honesty requires that he or she refrain from reviewing the metadata until he or she has consulted with the producing lawyer to determine whether the metadata contains privileged or confidential information.176 Other jurisdictions have similarly adopted an actual knowledge requirement.176.1

172. Ethics of Viewing and/or Using Metadata, Nat’l Rep. Legal Ethics (Univ. Pub.

Am.), Op. No. 2007-09 (2007) (Maryland). 173. Id. See also Minnesota Lawyers Prof’l Resp. Bd., Op. No. 22 (available online

at http://lprb.mncourts.gov/Documents/Opinion22.pdf) (Mar. 26, 2010) (noting that “[w]hether and when a lawyer may be advised to look or not to look for such metadata is a fact specific question beyond the scope of this Opinion”); Pennsylvania Bar Ass’n Comm. on Legal Ethics and Prof’l Resp. Formal Op. 2009-100, Ethical Obligations on the Transmission and Receipt of Metadata (June 17, 2009) (available online at http://www.padisciplinaryboard.org/newsletters/ 2009/pdfs/f2009-100.pdf).

174. Review and Use of Metadata in Electronic Documents, Nat’l Rep. Legal Ethics (Univ. Pub. Am.), Op. No. 341 (Sept. 2007) (D.C.).

175. Id. 176. Id. 176.1. See Colorado Bar Ass’n, Ethics Op. No. 119 (May 17, 2008) (available at

http://www.cobar.org/index.cfm/ID/386/subID/23789/CETH//); West Virginia

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[d] Metadata Mining May Be Ethically Required

At least one bar association has determined that the review of metadata may be ethically required.176.2 As explained by the Vermont Bar Association:

A rule prohibiting a search for metadata in the context of elec-tronically transmitted documents would, in essence, represent a limit on the ability of a lawyer diligently and thoroughly to analyze material received from opposing counsel. None of the Rules in effect in Vermont either state or imply that lawyers must refrain from thoroughly reviewing documents and infor-mation received from opposing counsel, regardless of the medium in which the document is transmitted. The Rule where such an obligation would most likely be found—VRPC 3.4 Fairness to Opposing Party and Counsel—is wholly silent on this issue. Neither does VRPC 4.4 Respect for Rights of Third Persons, or VRPC 8.4 Misconduct, directly address this issue. On the other hand, there is a clear basis for an inference that thorough review of documents received from opposing counsel, including a search for and review of metadata included in electronically transmitted documents, is required by VRPC 1.1 Competence, and VRPC 1.3 Diligence.

[4] Duty to Cooperate

[a] The Sedona Conference Cooperation Proclamation

The Sedona Conference(SM) “is a nonprofit 501(c)(3) research and educational institute, dedicated to the advanced study of law and policy in the areas of antitrust, intellectual property, and complex litigation.”177 The Sedona Conference has taken a vocal role in trying to reform electronic discovery practices. As part of its reform efforts, the Sedona Conference issued a Cooperation Proclamation which lauds cooperative approaches to discovery as being not only necessary to stem

State Bar Ethics Opinion LEO 200-01, What is Metadata and Why Should Lawyers Be Cautious? (June 10, 2009); West Virginia State Bar Ethics Opinion L.E.O. 2009-01 (June 10, 2009).

176.2. See Vermont Bar Ass’n Prof’l Responsibility Section Op. 2009-1 (Aug. 27, 2009) (http://lawyersusaonline.com/wp-files/pdfs/ethics-opinion-2009-1.pdf ).

177. http://www.thesedonaconference.org/.

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the rising costs of discovery178 but actually required by both the federal rules of discovery and ethics. Specifically, the Cooperation Proclamation explains that:

Lawyers have twin duties of loyalty: While they are retained to be zealous advocates for their clients, they bear a professional obligation to conduct discovery in a diligent and candid manner. Their combined duty is to strive in the best interests of their clients to achieve the best results at a reasonable cost, with integrity and candor as officers of the court. Cooperation does not conflict with the advancement of their clients’ interests—it enhances it. Only when lawyers confuse advocacy with adver-sarial conduct are these twin duties in conflict.179

Although the Cooperation Proclamation is not binding, several courts have signed onto the proclamation or reached similar conclusions regarding a lawyer’s duty to cooperate with respect to electronic discovery.180

As judges become increasingly tired with electronic dis-covery disputes, courts may begin referring counsel to the bar for their obstructionist discovery conduct.181 Even in the absence of court referrals, it may only be a matter of time before ethics committees start to officially weigh in on the ethical bounds of zealous representation in electronic discovery disputes.

[b] Mancia v. Mayflower Textile Servs. Co.

Mancia v. Mayflower Textile Servs. Co.,182 addresses the failure of parties to cooperate in discovery. In that case, the court held that the rules of procedure, ethics and even statutes make clear that litigants need to act responsibly in discovery.183 The court highlighted Rule 26(g) of the Federal Rules of Civil Procedure, which imposes an affirmative duty on litigants to

178. Sedona Conference Cooperation Proclamation, at 1. 179. Id. 180. See, e.g., Mancia v. Mayflower Textile Servs. Co., No. 08-CV-00273-CCB, 2008

WL 4595175 (D. Md. Oct. 15, 2008). 181. Bernal v. All American Investment Realty, Inc., 479 F. Supp. 2d 1291 (S.D. Fla.

2007) (imposing monetary sanctions and referring defense counsel to bar where defense counsel engaged in baseless, dilatory and obstructionist discovery tactics).

182. No. 08-CV-00273-CCB, 2008 WL 4595175 (D. Md. Oct. 15, 2008). 183. Id. at 362-63.

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engage in pretrial discovery “in a responsible manner that is consistent with the spirit and purposes of Rules 26 through 37.”184 Among other things, the court held that Rule 26(g) requires “cooperation by counsel” to seek only legitimate discovery, “yet avoid seeking discovery the cost and burden of which is disproportionally large to what is at stake in the litigation.”185 The court also held that the rule was designed to end the “equally abusive practice of objecting to discovery requests reflexively and without a factual basis.”186

In further support of its view that litigants are required to cooperate in litigation, the court relied on Model Rule 3.4(d), which the court noted prohibits lawyers from making frivo-lous discovery requests, refusing to comply with legitimate discovery requests or engaging in “obstructive tactics in discovery.”187

Accordingly, the court ordered the parties to cooperate and “discuss the amount and type of discovery already pro-vided, and then discuss the additional discovery sought by Plaintiffs, in order to evaluate the Rule 26(b)(2)(C) [benefit/ burden] factors, to determine whether Plaintiffs’ legitimate additional discovery needs could be fulfilled by non-duplicative, more convenient, less burdensome, or less expen-sive sources than those currently sought by the Plaintiffs.”188 As the court explained, cooperation is ultimately in the inter-est of both sides—for the defendants, it will result in less discovery at a lower cost, and for the plaintiffs, it will result in getting helpful information more quickly.189

184. Id. at 357 (quoting Fed. R. Civ. P. 26(g), Advisory Committee Notes). 185. Id. at 358. 186. Id.; see also Poole v. Textron, Inc., 192 F.R.D. 494, 507 (D. Md. 2000)

(imposing monetary sanction jointly and severally on attorneys and client for discovery misconduct and noting that sanctions were being imposed “as a reminder to counsel (both inside and outside) that their duty to the integrity of the judicial process in their discovery conduct trumps their desire to achieve some short run advantage for their clients through sharp practices and close readings of the rules”).

187. Id. at 362 n.6 (citing MODEL RULES OF PROF’L CONDUCT R. 3.4(d), 3.4(d) cmt 1).

188. Id. at 364. 189. Id. at 365.

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[D] Use of Social Media in Discovery

A lawyer’s use of social media to gather evidence has the potential to implicate a number of ethical rules, including Rule 4.1 (prohibiting a lawyer, in the course of representing a client, from knowingly “mak[ing] a false statement of material fact or law to a third person”) and Rule 8.4 (maintaining the integrity of the profes-sion), as well as rules that prohibit lawyers or their agents from contacting a represented non-client.189.1 The available case law and state ethics opinions on the subject suggest that lawyers may access and review the portions of an opposing party’s social-networking pages and profiles that are publicly available without facing ethical repercussions.189.2

There is a split in authority regarding whether a lawyer may contact a non-client to gain access to the non-client’s private social media (i.e., information that is not open to the general public). The New York City Bar Committee on Professional Ethics concluded that, in light of the New York Court of Appeals’ “oft-cited policy in favor of informal discovery,” a lawyer “or her agent may use her real name and profile to send a ‘friend request’ to obtain information from an unrepresented person’s social networking website without also disclosing the reasons for making the request.”189.3 The New

189.1. Restatement (Third) of Lawyers § 99(2). 189.2. See New York State Bar Ass’n, Op. No. 843 (Sept. 10, 2010) (available online

at http://www.nysba.org/AM/Template.cfm?Section=Home&TEMPLATE=/CM/ ContentDisplay.cfm&CONTENTID=43208) (concluding that a lawyer may access and review information about another party for use in a lawsuit, including impeachment material, if the lawyer does not “friend” the party and instead relies on public pages posted by the party that are accessible to all members in the network). See also State ex rel. State Farm Fire & Cas. Co. v. Madden. 451 S.E.2d 721, 730 (W. Va. 1994) (holding that, because individuals do not have a reasonable expectation of privacy when in public, observing a represented party’s activities that occur in full view of the general public is not an ethical violation).

189.3. New York City Bar Ass’n, Formal Ethics Op. No. 2010-2 (available online at http://www2.nycbar.org/Ethics/eth2010.htm); see also New York County Lawyer’s Ass’n., Op. No. 743 (May 18, 2011) (available online at http://www. nycla.org/siteFiles/Publications/Publications1450_0.pdf) (concluding that it is ethical under RPC 3.5 for a lawyer to undertake a pretrial search of a prospective juror’s social networking site, provided that there is no contact or communication with the prospective juror and the lawyer does not seek to ‘friend’ the juror, subscribe to the juror’s Twitter accounts, send tweets to the juror or otherwise contact the juror).

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York City Bar Association categorized such conduct as “truthful friending.”189.4 The Committee also approved of the use of “formal discovery devices such as subpoenas directed to non-parties in pos-session of information maintained on an individual’s social net-working page.”189.5 The Committee, however, noted that lawyers should not resort to trickery or deception in gaining access to infor-mation maintained on an individual’s social networking page.189.6

The Philadelphia Bar Association Guidance Committee and the San Diego County Bar Legal Ethics Committee have gone further, however, and concluded that both deception and material omissions by an attorney engaged in social networking involving non-clients are unethical. The Philadelphia Bar explained that the conduct the New York City Bar categorized as “truthful friending” would violate the ethical proscription against deception.189.7 The San Diego County Bar Legal Ethics Committee reached a similar conclusion, explaining that a lawyer “should not send a [friend] request to someone involved in the matter for which he has been retained without disclosing his affiliation and the purpose for the request” and clarified that “high-ranking employees” of a represented corporate adversary are consid-ered “parties” for purposes of the rule prohibiting a lawyer from communicating with a represented party.189.8

§ 13.04 CONFLICT BETWEEN DUTIES TO CLIENT AND THE LAWYER’S SELF-INTEREST

When a party fails to preserve or produce relevant documents in a litiga-tion, courts are often left to figure out who is at fault in seeking to fashion

189.4. Id. 189.5. Id. 189.6. Id. (“[R]ather than engage in ‘trickery,’ lawyers can—and should—seek

information maintained on social networking sites, such as Facebook, by availing themselves of informal discovery, such as the truthful “friending” of unrepresented parties, or by using formal discovery devices such as subpoenas directed to non-parties in possession of information maintained on an individual’s social networking page. Given the availability of these legitimate discovery methods, there is and can be no justification for permitting the use of deception to obtain the information from a witness on-line.”).

189.7. Philadelphia Bar Ass’n Prof’l Guidance Committee, Op. 2009-02, p. 6 189.8. San Diego Cty. Bar Ass’n Ethics Op. 2011-2 (available online at http://www.

sdcba.org/index.cfm?pg=LEC2011-2).

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an appropriate sanction against the offending party.190 A growing and unfortunate trend by courts is pitting lawyers against their clients when determining who is to blame for these mistakes in discovery. This trend raises a number of ethical concerns. When ordered to file an affidavit or appear at a hearing to explain discovery failures, how far can a lawyer go to defend himself or herself while at the same time preserve any ethical obligations of confidentiality still owed to the client? And when each side, seeking to protect itself, casts blame on the other, conflicts of interest can arise that may ethically prohibit the lawyer from continuing to represent the client.

[A] Ethical Rules Implicated by the Conflict Between Lawyer and Client

[1] Duty of Loyalty

Rule 1.7(a)(2) of the Model Rules states that a lawyer shall not represent a client where “there is a significant risk that the repre-sentation of one or more clients will be materially limited…by a personal interest of the lawyer.”191 When a court orders an lawyer and client to apportion monetary sanctions between themselves, or orders a lawyer to file an affidavit explaining his or her discovery conduct or defend himself or herself at a hearing on discovery fail-ures, the lawyer’s self-interest is invoked. These situations raise ethical questions about whether the lawyer is acting to protect his or her own self-interest above that of the client.

[2] Duty of Confidentiality

Rule 1.6(b) of the Model Rules allows a lawyer to reveal confidential information relating to the representation of a client “to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client…or to respond to allegations in any proceeding concerning the lawyer’s repre-sentation of the client.”192 Similarly, Disciplinary Rule 4-101(C)

190. See Chapter 3 for a detailed discussion of the duty to preserve and the different

sanctions imposed by courts for failing to preserve relevant information. 191. MODEL RULES OF PROF’L CONDUCT R. 1.7(a)(2). 192. MODEL RULES OF PROF’L CONDUCT R. 1.6(b). The Rule also allows an

attorney to disclose confidential information to comply with a court order. Id.

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(4) of the Lawyer’s Code provides that a lawyer may reveal client confidences “to defend the lawyer or his or her employees or associates against an accusation of wrongful conduct.”193

However, not all state ethical rules are so flexible. For exam-ple, under Rule 3-100 of the California Rules of Professional Con-duct, a lawyer is only permitted to reveal confidential information in order to prevent the client from committing a criminal act likely to result in death or serious bodily harm to another.194

Lawyers are increasingly required to file affidavits or give tes-timony explaining discovery failures. Whether a lawyer can ethi-cally pierce the attorney-client privilege in order to defend himself or herself in these situations will depend upon the rules existing in the jurisdiction in which they practice.

[3] Lawyer-Witness Prohibition

Model Rule 3.7(a) states that, with limited exceptions, “[a] lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness.”195 The prohibition against a law-yer serving as both an advocate196 and a witness, recognizes that the best interest of the client may be sacrificed in the absence of such a rule. As explained by one court:

193. LAWYER’S CODE OF PROF’L RESPONSIBILITY DR 4-101(C)(4). 194. See California Rule Professional Conduct 3-100. Even under circumstances

where an attorney is allowed to disclose confidential information, the California ethical rules require the attorney to make an effort to dissuade the client from committing the crime, and dictate that the attorney is under no obligation to disclose and does not violate the ethical rules by deciding not to disclose. See California Rule Professional Conduct 3-100(C)-(E).

195. MODEL RULES OF PROF’L CONDUCT R. 3.7(a). 196. A lawyer who is likely to be a necessary witness may accept or continue to

represent a client provided he obtains his client’s informed consent and stops short of trial advocacy. See, e.g., United States v. Castellano, 610 F. Supp. 1151, 1167 (S.D.N.Y. 1985) (lawyer may fully participate in pretrial stage even though the lawyer will probably be called as a witness); see also American Bar Ass’n, Standing Comm. on Ethics and Professional Responsibility, Informal Opinion 89-1529 (Oct. 20, 1989) (Witness-Lawyer Participating in Pre-Trial Proceedings) (explaining that a lawyer who is expected to testify at trial may represent client in pretrial proceedings, provided client consents after consultation, and lawyer reasonably believes representation will not be adversely affected by the client’s interest in the expected testimony).

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A lawyer’s ability to exercise independent judgment is obviously placed in a compromising position if the lawyer’s duty as an advocate becomes intermingled with his role as a witness in the same pro-ceeding. The duty of the lawyer as an advocate is to represent his client ‘zealously within the bounds of the law.’ The responsibility of a wit-ness, on the other hand, is to testify objectively to facts within the wit-ness’ knowledge. A lawyer who intermingles the functions of advocate and witness diminishes his effectiveness in both roles. The client’s case is subject to the criticism that it is being presented through the testi-mony of an obviously interested witness who on that account is subject to impeachment, and, of equal importance, the lawyer is placed in the unseemly position of arguing his own credibility to the jury. Obviously, a lawyer’s duty to exercise independent judgment on behalf of his cli-ent will be even more seriously jeopardized when the lawyer is called as a witness to give testimony adverse to his client.197

[4] Duty to Withdraw

Model Rule 1.16 states that a lawyer “shall withdraw from the representation of a client if the representation will result in viola-tion of the rules of professional conduct or other law.”198 The duty to withdraw is implicated when the lawyer is unable to get his cli-ent to comply with legitimate discovery requests to produce responsive ESI.199

[B] Recent Cases Pitting Lawyer Against Client

[1] Qualcomm Inc. v. Broadcom Corp.

Qualcomm Inc. v. Broadcom Corp.200 presents a classic example of a court pitting lawyers against their clients. As dis-cussed above, after Qualcomm lost its patent trial, during which Qualcomm’s discovery misconduct first came to light, Broadcom

197. Williams v. The District Court for the County of El Paso, Colorado, 700 P.2d

549, 553 (Colo. 1985). 198. MODEL RULES OF PROF’L CONDUCT R. 1.16(a). 199. See, e.g., Qualcomm Inc. v. Broadcom Corp., No. 05cv1958-B (BLM), 2010 WL

1336937 (S.D. Cal. Apr. 2, 2010) (observing that California ethical rules, which provide that “a lawyer shall withdraw from employment if the lawyer knows or should know that the continued employment will result in a violation of these rules or the client insists that the lawyer pursue a course of conduct prohibited under these rules”).

200. Qualcomm Inc. v. Broadcom Corp., No. 05cv1958-B (BLM), 2010 WL 1336937 (S.D. Cal. Apr. 2, 2010).

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filed a motion seeking discovery to determine the scope of the misconduct. Qualcomm uncovered more than 46,000 responsive documents (totaling more than 300,000 pages) that went to a key issue in the case that had not previously been produced.

Qualcomm’s outside counsel argued that the discovery mis-conduct was caused by their client’s obstructionist conduct. For example, one associate argued that he requested a more thorough document search but Qualcomm refused. The court explained that, if the associate could not get Qualcomm to conduct a more thor-ough review, he should have obtained the assistance of more senior lawyers. And, if Qualcomm still refused to conduct the more thorough search, the court stated that the lawyers should have withdrawn from the case, citing Rule 3-700, which provides “a lawyer shall withdraw from employment if the lawyer knows or should know that the continued employment will result in a violation of these rules or the client insists that the lawyer pursue a course of conduct prohibited under these rules.”201

Qualcomm, on the other hand, filed affidavits blaming its out-side counsel. However, at the same time, Qualcomm asserted the attorney-client privilege, thereby limiting its counsels’ ability to defend themselves. Although the magistrate court recognized the due process issues associated with this situation, and claimed to disregard the self-serving affidavits filed by Qualcomm, it still sanctioned the outside counsel and referred them to the California bar for disciplinary proceedings.202

On appeal, the district court held that, by filing affidavits seeking to blame their lawyers, Qualcomm introduced “accusatory adversity” between Qualcomm and its counsel.203 Accordingly, the district court found that the self-defense exception to the attorney-client privilege applied and vacated the sanctions order and remanded the case back to the magistrate court for further proceedings.204

201. Id. at *13 n.10. 202. Id. at *18. 203. Qualcomm, Inc. v. Broadcom Corp., No. 05CV1958-RMB-BLM, 2008 WL

638108, at *3 (S.D. Cal. Mar. 5, 2008). 204. In a subsequent hearing, the magistrate judge granted in part a motion to compel

Qualcomm to produce documents that would support its attorneys’ contention that Qualcomm affirmatively misled them, that there were no “red flags,” and that the attorneys had made reasonable inquiries. The court rejected Qualcomm’s

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On remand the magistrate court allowed the parties, including the lawyers, to engage in what it described as “a massive discovery effort.”205 During the remand proceedings, the lawyers submitted lengthy declarations and testified about their discovery efforts, unbridled by the attorney-client privilege. Based on its review of all of the evidence, the magistrate court concluded that, although some of the lawyers had made “significant errors,” there was “insufficient evidence” to prove that any of the responding lawyers had acted in bad faith. Accordingly, the magistrate court declined to impose sanctions on the lawyers, ending one of the most pro-tracted and talked about electronic discovery disputes to date.206

[2] Wachtel v. Guardian Life Ins. Co.

Wachtel v. Guardian Life Ins. Co.207 presents another example of a client and its lawyers being at odds over discovery issues. In Wachtel, following the failure of a company to comply with the court’s discovery orders, the magistrate court ordered the com-pany, including its counsel, to appear for an evidentiary hearing to discuss the company’s non-compliance with the court’s order. At an eight-hour hearing, the judge took testimony from the com-pany’s in-house and outside counsel.208 In sanctioning the com-pany for failing to comply with the court’s discovery orders, the court relied in part on a certification from the company’s outside counsel, which indicated that the company was not prepared to produce the required discovery in compliance with the court’s order.209

objections because it would ‘‘frustrate the fundamental purpose of applying the self-defense exception to the attorney-client privilege—to allow the lawyer access to privileged material the lawyer believes is reasonably necessary to vindicate himself.’’ Qualcomm Inc. v. Broadcom Corp., No. 05cv1958-RMB-BLM, 2008 WL 4858685, at *4 (S.D. Cal. Nov. 7, 2008).

205. Qualcomm Inc. v. Broadcom Corp., No. 05cv1958-B (BLM), 2010 WL 1336937, at *1 (S.D. Cal. Apr. 2, 2010).

206. Id. at *7. 207. 232 F.R.D. 213 (D.N.J. 2005). 208. Id. at 216. 209. Id. at 218.

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[3] Other Recent Cases

Other courts have noted the potential conflicts between lawyers and their clients when addressing spoliation disputes. These types of situations raise a host of ethical considerations, including questions regarding who the lawyer is representing (his or her own interest or the client’s interest), as well as the possible disclosure of client confidences. For example, in Board of Regents of the University of Nebraska v. BASF Corp.,210 counsel had failed to place a litigation hold on all relevant documents and ESI. In response, the court ordered that a litigation hold be issued and also ordered counsel to file an affidavit “setting forth all of the actions he has taken in respect to ensuring compliance with th[e] [court’s order]. Such affidavits may be filed under seal, that is accessible by only the court, if they reveal privileged information or pro-tected work product.”211

Similarly, in Suntrust Mortgage, Inc. v. AIG United Guaranty Corp.,212 the court held an evidentiary hearing regarding a fraudu-lently created e-mail cited in the complaint. At the hearing, both plaintiff and its outside counsel were separately represented because outside counsel were called by defendant as witnesses.213 Ultimately, the court sanctioned plaintiff and its in-house counsel for making minimal and ineffectual efforts to determine the extent of the e-mail alterations. As the court explained, plaintiff’s in-house counsel as well as its senior management “were willfully blind as to the truth.”214 Accordingly, the court ordered plaintiff to pay defendant’s attorney’s fees and costs associated with the motion. As for outside counsel, although the court found that they did not “handle[] the…situation with an exceptional level of dili-gence, care or skill,” and “walked a fine line,” the court concluded

210. No. 4:04CV3356, 2007 WL 3342423 (D. Neb. Nov. 5, 2007). 211. Id. at *7. 212. No. 3:09cv529, 2011 WL 1225989 (E.D. Va. Mar. 29, 2011). 213. Id. at *13. The court found that the positions of plaintiff and its counsel were not,

in fact, adversarial since both opposed sanctions for essentially the same reasons. Id.

214. Id. at *21.

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that they should not be sanctioned because they did not inten-tionally seek to deceive the court or engage in willful deception.215

In Ed Schmidt Pontiac-GMC Truck, Inc. v. DaimlerChrysler Motors Co.216 the plaintiff sought to amend its complaint to add a claim for spoliation of evidence due to the defendant’s alleged replacement or alteration of hard drives before they were imaged during discovery. The defendant opposed this amendment, in part, because of its concern that defending against the claim would require it to call its lawyers as fact witnesses, thus requiring them to withdraw as counsel. The court rejected this concern, finding that it was simply speculation as to whether the defendant would need to call its counsel to testify.217

Other courts, in sanctioning parties, have directly pitted the lawyers against their clients.218 For example, in Green v. McLendon,219 the court awarded costs and attorneys’ fees as a sanction for defendant’s failure to implement a litigation hold, which led to the loss of the electronic record of a spreadsheet pro-duced to the plaintiff in hard-copy form. The court concluded that both the client and her counsel were negligent in their handling of discovery and that the failure to implement a litigation hold was grossly negligent.220 The court ordered plaintiff’s counsel to submit

215. Id. at *23. The court did fault outside counsel for failing to exercise the proper

degree of diligence and care in citing the e-mail in the complaint. Id. at *25. 216. 538 F. Supp. 2d 1032 (N.D. Ohio 2008). 217. Id. at 1036. 218. There is a growing trend among courts to sanction both the client and its lawyers

for electronic discovery failures. See, e.g., Play Vision, Inc. v. Dollar Tree Stores, Inc., No. C09-1769 MJP, 2011 WL 2292326, at *10 (W.D. Wash. June 8, 2011) (imposing sanction of $137,000 to be split evenly between plaintiff and counsel where counsel failed to familiarize himself with client’s stored documents and did not assist client in making document productions); Greene v. Netsmart Techs., Inc., No. CV 08-4971(TCP) (AKT), 2011 WL 2225004, at *8-9 (E.D.N.Y. Feb. 28, 2011) (recommending sanction of costs and attorneys’ fees to be split 50:50 between plaintiff and counsel for failure to timely produce relevant documents caused by “breakdown in communication between Plaintiff and his counsel” and “counsel’s failure to sufficiently oversee the document retention and collection”); Rosenthal Collins Group, LLC v. Trading Techs. Intern., Inc., No. 05C4088, 2011 WL 722467 (N.D. Ill. Feb. 23, 2011) (entering default judgment, sanctioning client $1,000,000, and ordering counsel to pay costs and fees associated with litigating the discovery dispute).

219. 262 F.R.D. 284 (S.D.N.Y. 2009). 220. Id. at 290.

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a fee application to determine the amount of the award, but left open the manner in which the liability should be allocated between the defendant and her lawyer because the “respective blamewor-thiness of Mrs. McLendon and her counsel cannot presently be ascertained.…”221 Accordingly, the court held that, after the amount of the sanction is determined, it would give the defendant and her lawyer the opportunity to agree on an allocation or to pre-sent the issue to the court for apportionment.222 However, even asking lawyers to try to apportion damages with their client introduces adversity into the attorney-client relationship.

§ 13.05 CONCLUSION

As shown above, today’s litigator faces many ethical issues when dealing with electronic discovery. Ultimately, good lawyering and open and frank discussions with clients will help circumvent most, if not all, of the ethical conundrums implicated by these rules.

221. Id. at 292. 222. Id. See also In re A&M Florida Props. II, LLC, No. 09-01162AJG, 2010 WL

1418861, at *7 (S.D.N.Y. Apr. 7, 2010) (imposing monetary sanctions against client and lawyer where lawyer failed to fulfill obligation to find all sources of relevant documents in a timely manner, and ordering hearing to determine amount of sanction and allocation between attorney and client); Merck Eprova AG v. Gnosis S.P.A., 2010 WL 1631519, at *6 (S.D.N.Y. Apr. 20, 2010) (awarding costs and attorneys’ fees plus a fine of $25,000 as sanction for spoliation and electing not to apportion liability between defendants and counsel, “under the belief that they are best suited to make that decision, and out of concern that requiring them to disclose information sufficient to determine apportionment could compromise attorney-client confidentiality,” and further noting that court would resolve issue if defendants and their counsel are unable to agree).

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