When Does a Party Control ESI?

Courts have adopted three different tests that determine when a party controls electronically stored information.

The Legal Right Standard - adhered to by the 3d, 5th, 6th, 7th, 10th, & 11th Circuits - provides that a party will control ESI when a contract states that it owns it.

Under the Legal Right Plus Notification standard a party is obligated to disclose to a requesting party that the third party has possession of its electronic files, and if it is aware that a party has access to the data then it must disclose this as well.

The “Practical Ability” Standard states that a party must produce ESI it can readily obtain.

The Sedona Conference has rejected this last standard, and states that a party should have actual possession.

S.D.N.Y.: When linked to documents are not attachments

Earlier this year, Magistrate Judge Katharine Parker in, Nicolas v. Noom, Inc., No. 20-CV-3677 (LGS) (KHP), 2021 WL 948646 (S.D.N.Y. Mar. 11, 2021), ruled on the Plaintiffs’ motion to reconsider whether or not they should have access to documents linked to in Gmail messages and electronic files produced from Google Drive. The Plaintiffs contended that the links were attachments to the emails and other documents, and noted the lack of metadata allowing them to determine which linked documents went with which ‘parent’ documents.

The Plaintiffs’ e-discovery vendor estimates that Noom can collect the linked to documents in two weeks. Noom contested the idea that the links should be regarded as attachments and offered to assist the Plaintiffs in locating those which a search of the production did not uncover. It also rejected the request on the grounds that it was nor proportional to the needs of the case, submitting a statement from its expert that the cost of collecting the links would be $180K. It also asserted the the Plaintiffs’ tool, MetaSpike's Forensic Evidence Collector, would not do the job.

Magistrate Parker noted that the parties had previously agreed to the use of Google Vault to collect Noom’s files even though it would not collect the path for those files. But, the Plaintiffs objected to its use for collecting Gmail messages.

In deciding to deny the Plaintiffs’ motion, the Court cited Sedona Principle 6 that states a party is best situated to determine how to collect its own data, and also noted that the MetaSpike tool often stalled during collection. She also noted that the parties’ ESI protocol failed to describe links as document attachments, and concluded that, “It is clear to this Court that there was no meeting of the minds on whether hyperlinks were attachments and this Court, when entering the order, did not view hyperlinks to be attachments. While the protocol does reference ‘files with extracted embedded OLE documents, ‘ the Court understands this to refer to embedded, displayed documents such as a graph or a chart within a Word document or email—not hyperlinked documents. “ Id. at *3. In making her decision, she acknowledged that it may be necessary to re-balance proportionality considerations at some stage in litigation, and the requirement of Fed. R. Civ. P. 34 that ESI be produced in a reasonably usable format.

Magistrate Parker also faulted the Plaintiffs for failing to show how any of the linked documents were material to their cause of action. She noted that there was a process in place that will allow them to request missing linked documents, and that by asking for the linked documents they were unlikely to reveal their strategy. The parties already agreed that Vault was an acceptable collection tool and that some linked documents would have to be retrieved mulitple times. The failure of the Plaintiffs to specify how much and how long it would take to collect the linked to documents was crucial:

"Noom estimates the costs would be upwards of $180,000. Plaintiffs have not effectively countered these projected costs. Initially, Plaintiffs posited that what they requested would cost less than $5,000—a number that was not credibly supported by evidence. The recently submitted Declaration of Plaintiffs’ ESI expert Douglas Forrest also does not adequately address the issue of costs and delay. Forrest proposes that Noom could write a program to utilize Google's Application Programming Interface (“API”) to extract links to Google Drive documents from other Google Drive documents, emails, and Slack communications. (ECF No. 236.) He suggests that Noom's ediscovery programmers could create such a program within two weeks. While it may be true that creating such a program would cost far less than $180,000, the Forrest declaration does not address the time it would take to apply the program, load, and review the documents." Id. at *4.

New York State Court: Statute of Limitations Doesn't Run When Zoom Hearing Saved to the Cloud

Last week, Judge Mark G. Masler, issued a decision , Matter of Homer DG, LLC v. Planning Bd. of the Vil. of Homer, No. EF21-276, 2021 N.Y. Misc. LEXIS 4658 (N.Y. Sup. Ct. Sep. 1, 2021), ruling on the Respondents' motion to dismiss the Petitioner's request for a judgment annulling the decision of the Village of Homer Planning Board to deny his site plan application. The Respondents contended that statute of limitations barred the Petitioner's proceeding because it was not filed within 30 days of the filing of the Board's decision. The Board made its decision at a virtual Zoom hearing on April 12, 2021. The village clerk provided the Petitioner with a letter on April 19, 2021 that it stated was official notification that the plan application was denied. The Petitioners brought their proceeding for a judgment on May 17, 2021.

The Respondents contend that the statute of limitations began to run at the conclusion of the April 12, 2021 virtual meeting because a recording of the meeting, which included the Board's votes and resolution, was automatically saved to the cloud system used by the village, and was also streamed and remained posted on a YouTube page. The Petitioner noted that it contacted the clerk immediately after the hearing requesting an official notice of the decision, and was never notified that the video saved online was the official decision of the Board.

Judge Masler acknowledged that the statute of limitations does not specify that a decision be in writing, and that the Electronic Signatures and Records Act authorizes the electronic storage of records. However, the Court did not find that the automatic storage of the hearing recording in the cloud constituted a filing of the decision with the clerk. According to state law, a properly filed record can only be kept in an offi-site location, like the cloud, with the permission of the Commissioner of Education. "Although the recording of the April 12, 2021 meeting of the Planning Board may have been accessible to the Village Clerk or the public, it was not 'filed' with the Village Clerk. Notably, the Village Clerk did not provide any evidence demonstrating that the commissioner of education consented to the storage of such records by the Village of Homer on the Zoom cloud management system, or that Zoom storage meets the criteria established by the commissioner of education for storage of local government records in facilities which are not owned or maintained by the local government (see 8 NYCRR § 185.8). " Id. at *3-4.

Judge Masler also found that the Planning Board could be estopped from asserting the statute of limitations defense because they failed to notify the Petitioner of their novel argument that the video recording of the Board meeting constituted the record of its decision, despite repeated requests by the Petitioner for the official decision.

The Board's effort to get the Court to bar the Petitioner's proceeding seems to be particularly unwarranted in this case. But it's easy to see how the cloud storage of a video recording of a decision made at a hearing could provide a more persuasive argument that a statute of limitations had begun to run in other circumstances.