Information Roundup – December 27, 2007

Here’s a new feature that I’ll resolve to keep with for the next while. Every one or two weeks I’ll post a handful of articles or blog posts that have caught my interest and are related to the subject matter of this blog. Here are some from my holiday readings (in no particular order):

Alan Taneja, Buying typical storage for video surveillance? Rethink that! A nice synopsis of new records management issues associated with video surveillance.

David Hecheler, Lockheed Employee’s YouTube Video Sounds Ethics Alarm. A thorough account of the story of whistleblower Michael DeKort.

Ron Ashkenas, Simplicity-Minded Management from the December 2007 Harvard Business Review. About simplifying business structures, products and business processes. The processes part has a bit about information management, which reminded me of a comment that came up in a recent conversation with a friend of mine who’s a GC. It went something like, “The mass of available information and the pace of business is leading to a crises of quality decision making.” I like this topic.

Kelly D. Talcott, Cutting out Privacy in the Office. Locking down work e-mail systems, the subject of this article, is a hugely important issue. I’d like to thank my managing partner, Stephen Shamie, for passing this one on.

Joe Bartling, Post-Termination Employment Forensics. Very prescriptive blog post on an important topic.

Ralph Losey, Best Buy Wins Key e-Discovery Ruling in Fraud Case. Here’s Mr. Losey’s summary of the much-discussed Best Buy Stores L.P. v. Developers Diversified Realty Corp. e-discovery award, a case on the duty to preserve a litigation database that is likely to be useful in subsequent litigation.

Enjoy!

Case Report – Court comments on competing burdens in disputes over litigation privilege

On December 14th, the Ontario Superior Court of Justice issued a principled judgement on litigation privilege, commenting on both the nature of the evidentiary burden on a party claiming the privilege and the burden on a party seeking disclosure notwithstanding the privilege on the basis that the records would be arguably relevant to the misconduct alleged.

The Court held that the party claiming litigation privilege has either a one or two-step evidentiary burden. Where the court can infer from the circumstances that all documents prepared after litigation is reasonably anticipated were prepared for the dominant purpose of the anticipated litigation, it will do so, meaning that the claimant need only prove that litigation is reasonably anticipated. Where such an inference cannot reasonably be drawn (where there are numerous issues between the parties, only some of which being the subject of reasonably anticipated litigation, for example), the party claiming privilege must prove that litigation is reasonably anticipated and must also prove, on a record-by-record basis, that the records were prepared for the dominant purpose of the anticipated litigation.

On the burden facing a party who seeks disclosure notwithstanding litigation privilege, it held that relevance alone will not overcome the privilege. This case involved a bad faith claim against an insurer. The plaintiff had argued the insurer’s claim file was highly relevant and that the it would be constrained in proving bad faith without it. The Court disagreed, holding that a party seeking records subject to privilege must prove a prima facie case of misconduct first.

I noticed this case after reading a very good and far more detailed entry on Cavanaugh Williams’ blog, an excellent blog on civil litigation and insurance law. Please see its summary here.

Mamaca v. Coseco Insurance Company, 2007 CanLII 54963 (Ont. S.C.J.).

Case Report – E-mails from employee hotmail account admissible

On December 11th, Alberta labour arbitrator Allen Ponak issued an award ruling that e-mails produced from a forensic analysis of an employee’s work computer were admissible in evidence.

The employer retained a forensic IT specialist to conduct the analysis after terminating the grievor (a college professor) for engaging in inappropriate relationships with at least three students. When it conducted the search, the college already had received a complaint from one student, had found corroborative evidence in the grievor’s e-mails sent and received on its own e-mail system (the admissibility of which was not challenged) and had received a corroborative report from another individual. The college claimed that conducting word searches by the names of the grievor’s former students was the most effective way of determining whether he had engaged in additional inappropriate relationships.

Arbitrator Ponak admitted the evidence on a rather unremarkable application of the Doman Forest Products three-part test. At the outset, however, he did comment on the expectation of privacy the grievor had in information sent and received through a hotmail account but on a computer owned by the college.

We start from the premise that employees have some expectation of privacy in the receipt and transmission of emails from an internet provider that is not their employer’s (Weir; McIsaac et al.). Thus, it was reasonable for the Grievor to believe that emails on his hotmail account were beyond the reach of the College. In the Board’s view, if the Grievor’s hotmail was exclusively located on the Grievor’s own private computer it would be inadmissible without the Grievor’s consent. The Grievor, however, used the computer provided to him from the College for some of his hotmail email, changing the circumstances. The College computer was intended primarily for College work and it belongs to the College, factors which give the College some rights to access that computer. The Grievor’s right to privacy for the contents of the College computer is not absolute. At the same time, recognizing that the policy against using the College computer for non-College matters has not been rigidly enforced (if enforced at all), the Employer’s access to the contents of the computers it provides its employees is not unfettered either. The Employer’s right to search the contents of an employee’s computer must be balanced against an employees expectation of privacy and is subject to a test of reasonableness.

Arbitrator Ponak did find that the search was conducted in a reasonable manner, but in doing so did not specifically endorse the narrow search protocol used by the college as preferable to a broader search protocol or manual review. This demonstrates a more “hands off” approach to scrutinizing a reasonable grounds investigation than demonstrated in the recent and well-known University of British Columbia case, which I discussed here and here.

Re Lethbridge College and Lethbridge College Faculty Assn. (Bird Grievance), [2007] A.G.A.A. No. 67 (Ponak) (QL).

Case Report – Court stresses burden on party challenging keyword search protocol

On December 3rd, the Alberta Court of Queen’s Bench dismissed a motion for more fulsome production, finding the applicant failed to discredit the respondents’ keyword search protocol.

The dispute centered on a set of 50,000 records that were identified and collected in a related action. The respondents reviewed 15,000 of the records manually and conducted a keyword search on the remaining 35,000. This process resulted in a set of 110 records that were produced.

The Court cited the “Ontario e-Discovery Guidelines” and its Principle 10, which endorses the use of electronic tools to identify information and records of arguable relevance. It held that the applicant had the burden of proving the inadequacy of the search protocol, held that it would be improper to draw an inference about the quality of the search from the number of records produced and held that the applicant did not otherwise prove inadequacy. In reaching this conclusion, the Court suggested that the applicant ought to have challenged the protocol more vigorously in its cross examination or ought to have called expert evidence with the same intent.

Shell Canada Limited v. Superior Plus Inc., 2007 ABQB 739 (CanLII).

Regulation permitting issuance of electronic pay statements proposed

On December 15th, the federal Minister of Labour proposed a regulation that will permit federally-regulated employers to issue electronic pay statements. Currently, employers without seeking a ministerial exemption.

The government is relying on the provision in Part 2 of the Personal Information Protection and Electronic Documents Act that deems a legal requirement that a document be in writing to be satisfied by an electronic document where (among other things) a regulation establishing the conditions for use of an electronic document is put in place.

The proposed regulation establishes the following conditions for use:

the employer must inform each employee where electronic pay statements are stored
the pay statement must be readable and printable only by the employee
the pay statement must remain accessible by the employee through electronic means for a period of at least three years from the first date it is made available
the pay statement must be readable and printable on a computer and printer to which the employer shall provide the employee with private access

The Regulatory Impact Analysis Statement and the proposed regulation can be found here.

Case Report – Facts gathered by legal counsel not privileged

On December 3rd, the Northwest Territories Supreme Court held that facts gathered by Department of Justice lawyers on behalf of the Commissioner of the Northwest Territories and a government department were not subject to litigation privilege.

The plaintiff, a government doctor, brought an action for wrongful dismissal. He was terminated for other reasons, but argued that the termination decision was tainted in part by allegations that he was a known pedophile in the United States. Department of Justice lawyers made inquires of the R.C.M.P. about these allegations, and the timing of these inquires and the facts gathered by the Department of Justice were relevant to the plaintiff’s bad faith claim. The government claimed that information related to the inquiries was subject to solicitor-client and litigation privilege.

The Court rejected both claims. It rejected the litigation privilege claim, in part, because the information was gathered by counsel. It said:

As I have already stated, the purpose of litigation privilege is to create a “zone of privacy” to facilitate investigation and preparation for trial in the context of an adversarial process. Bearing this context in mind, I think there is merit to the argument that a distinction should be drawn between information generated by investigations conducted on behalf of one’s client, or documents created by counsel in the context of imminent or existing litigation, as opposed to pre-existing information or documents that are simply copied or gathered by counsel.

This reasoning has been accepted by the Ontario Court of Appeal in Chrusz, but was left open in Blank, the Supreme Court of Canada’s leading litigation privilege judgement.

Bargen v. Canadian Broadcasting Corp., [2007] N.W.T.J. No. 101 (QL).

Government ordered to return electronic records seized under warrant

On December 11th, the Ontario Superior Court of Justice found the Ministry of Labour violated Booth Centennial Healthcare Linen Services’ section 8 Charter rights and ordered it to return electronic records seized under an extremely broad search warrant. Mr. Justice Corbett’s order states, “The search and seizure of electronic records in this case was grossly overbroad, in the circumstances. There was no evidence before me of the practicality of an on-site search for electronic records, an approach that, as a matter of common sense, ought to be possible in a case like this.” We expect supplementary reasons to be issued in January.

Case Report – Preservation order substituted for Anton Piller in e-docs case

On November 23rd, the Ontario Superior Court of Justice set aside an Anton Piller order in favour of a preservation order.

The Court held that the plaintiff had failed to prove a real possibility that the defendant would destroy incriminating documents or things and, alternatively, that the scope and quality of the electronic records seized weighed against the order. There are significant parts to both findings.

On the possibility of destruction finding, the Court rejected the plaintiff’s argument that the impermanent nature of arguably relevant electronic evidence justified the Anton Piller. Although not entirely clear from the award, the plaintiff appears to have argued that records of web-browsing were relevant and that the search was necessary because web pages and IP log files stored in memory and swap files would be subject to loss in the ordinary course. The Court said:

This evidence does not support an allegation of intentional destruction of evidence, to justify the court’s interference. It does not tell the court when evidence may be lost by use of computers in the ordinary course of business. Inadvertent over-writing of files by on-going use of computers could be addressed by a demand to preserve evidence.

The Court was also not impressed with the plaintiff’s execution of the order. For one, it seized a home computer belonging to a personal defendant without authorization. More fundamentally, the Court took issue with scope of the order itself (citing Celanese for the proposition that the scope of the order should be as narrow as possible) and the fact that it enabled the plaintiff to seize virtually all of the defendant’s records. It said:

The scope of documents seized under the order is breathtaking. It includes documents that are personal in nature, such as private e-mails unrelated to the Wasaya workplace, individual banking records, income tax returns, personnel files, patient’s medical records, and other materials that have no relevance whatever to the allegations NAC makes in this litigation. It also includes confidential business records such as financial statements for Wasaya, marketing plans, restructuring plans and other documents bearing on Wasaya’s market position as NAC’s competitor. Documents related to other litigation involving Wasaya, and protected by solicitor-client privilege, were also caught in the net.

In the result, the Court substituted a non-specific order to, “preserve documents relevant to the issues in this litigation and to produce such documents as may be required in accordance with the Rules of Civil Procedure.”

NAC Air, LP v. Wasaya Airways Limited, 2007 CanLII 51168 (Ont. S.C.J.).

Case Report – Anton Piller order affirmed by Ontairo court

On November 21st, the Ontario Superior Court of Justice dismissed a motion to set aside an Anton Piller order granted to the plaintiff on evidence that the defendants had been involved in the sale and acquisition of satellite piracy hardware.

Motions to set aside Anton Piller orders are often granted for failure to meet the very high standard of disclosure (“full and frank”) or the equally high standard of conduct in execution. In this case, the defendant raised ten bases for setting aside the order, all of which were rejected by Madam Justice Pepall. Of greatest significance:

Pepall J. refused to set aside the order because it was not executed by a peace officer. She stated that an Anton Piller need not be executed by a police officer despite the Court’s earlier statement in Ridgewood v. Robbie. She noted that the Supreme Court of Canada’s subsequent decision in Celanese did not endorse such a requirement.
Pepall J. followed Ferenczy to excuse the fact that the computer forensics specialist whose evidence was adduced in support of the Anton Piller ought to have been licensed under the now-repealed Private Investigators and Security Guards Act.

In one sense, this award demonstrates effective use of an important and powerful civil remedy. In another, it may highlight how a defendant’s response to an Anton Piller can work to its prejudice. The defendant initially denied entry to his premises and, though he permitted entry later the same day, two computers subject to the search were missing hard drives. One wonders whether this misconduct (found earlier to be done in contempt) tempered Pepall J.’s inclination to apply the extremely unforgiving approach typically applied when persons who have executed Anton Piller orders are brought back before the court.

Bell ExpressVu Limited Partnership v. Rodgers (Tomico Industries), 2007 CanLII 50595 (Ont. S.C.J.).

Case Report – Privacy interest in personal e-mails outweighed by need for openness

On November 19th, a Kentucky court judge ordered the state to disclose personal e-mails exchanged between a requestor’s wife and another former state employee, requested because he suspected the two individuals were having an affair.

The request was for all “Personal non-work related emails between Bobbie Malmer and David Moss dated between 11-01-05 thru 6-01-06.”

In weighing the privacy interest of the affected individuals against the interest in open government, the Court stressed that the individuals had a reduced expectation of privacy because the state had reserved a right of inspection in its acceptable use policy, because it had prohibited personal use on its computer system and because the extent of a state employee’s personal use is itself a matter of public interest. It said:

The privacy exception does not protect public employees from the disclosure of improper or embarrassing personal communications that were made during working hours through the use of the state electronic mail system. See KRS 61.871. It is not an “unwarranted invasion of personal privacy” to disclose such non-work related communications made during working hours on the state computer system. This principle applies with even greater force when the state employees have been informed that all information conveyed through the state email system is the property of the state, and is subject to public oversight and control. In these circumstances, no privacy interest can be legitimately claimed.

Moreover, the Court agrees with the observation of Justice Brandeis that “Sunlight is said to be the best of disinfectants.” The best deterrent for improper use of the state email system for nonwork related activity is to apply the plain language of the Open Records Act to ensure the enforcement of the principle that public employees are accountable for their use of public time and public resources. The public has a right to know the contents of non-work related emails transmitted through the state email system by state employees being paid with tax dollars during working hours. If the subject matter of the email is truly private, it should not be communicated through the state email system.

Personal e-mails sent and received on Ontario public sector e-mail systems are presumptively subject to public access, but will often fall within our own “unjustified invasion of personal privacy” exemption. Although Kentucky’s open records regime appears to have a different emphasis than our own, this is an issue that is clearly relevant here at home, and a similar balancing test will often apply.

An article from the Globe and Mail says the state will appeal.

Justice and Public Safety Cabinet v. Malmer (19 November 2007, Ky.).