Last week NY's most prominent state appellate level court formally fully adopted the Zubulake standard for e-discovery. The entire opinion is worth a careful read, as although the First Department noted that it previously "adopted the Zubulake standard when reviewing a motion for spoliation sanctions involving the destruction of electronic evidence" it had not previously addressed the issue of when a party reasonably anticipates litigation and the resulting duties and obligations that flow from this determination. Now it has.
My colleagues Dave Navetta, Tanya Forsheit and Scott Blackmer have framed a definition and outlined the essential legal implications of cloud computing. Tanya has started a discussion of the application of electronic discovery and electronic evidence issues in the cloud. This post extends Tanya's discussion of the intersection between electronic discovery and the cloud.
Nearly every day, businesses are entering into arrangements to save the enterprise what appear tobe significant sums on information technology infrastructure by placing corporate data ''in the cloud.'' Win-win, right? Not so fast. If it seems too good to be true, it probably is. Many of these deals are negotiated quickly, or not negotiated at all, due to the perceived cost savings. Indeed, many are closed not in a conference room with signature blocks, ceremony, and champagne, but in a basement office with the click of a mouse. Unfortunately, with that single click, organizations may be putting the security of their sensitive data (personal information, trade secrets, intellectual property, and more) at risk, and may be overlooking critical compliance requirements of privacy and data security law (not to mention additional regulations). My article "Contracting for Cloud Computing Services: Privacy and Data Security Considerations," published this week in BNA's Privacy & Security Law Report, explores a number of contractual provisions that organizations should consider in purchasing cloud services. You can read the full article here, reprinted with the permission of BNA.
What does workplace privacy have to do with the cloud? Everything. On Tuesday, the New Jersey Supreme Court issued its opinion in Stengart v. LovingCare Agency, Inc., --- A.2d ----, 2010 WL 1189458 (N.J. March 30, 2010), and came out on the side of protecting employee privacy and the attorney-client privilege in personal Yahoo! webmail (a cloud service) even though the employee used a company computer. While everyone has been busy writing about the implications of LovingCare for company policies governing employee expectations of privacy (and for good reason), few have stopped to note that LovingCare is a cloud case. LovingCare is one of only a few published opinions addressing the difficult issues surrounding employee use of webmail and other cloud services on company computers where the attorney-client privilege is at stake, and the impact of the LovingCare decision will undoubtedly be felt for years to come by nearly every employer across the country, both in crafting policies for employee use of company computer systems and in conducting discovery in nearly every employment-related litigation. The machine may be the employer's, but, in the post-LovingCare world, the data may be the employee's - at least where the cloud and the attorney-client privilege are involved. You can read my detailed case analysis in this post.
As many of our readers know, the International Association of Privacy Professionals (IAPP) will celebrate 10 years this Tuesday, March 16. In connection with that anniversary, the IAPP is releasing a whitepaper, "A Call For Agility: The Next-Generation Privacy Professional," tomorrow, March 15. I am honored that the IAPP has given me the opportunity to read and blog about the whitepaper in advance of its official release.
Data integrity is a potential challenge in cloud computing, with implications for both operational efficiency and legal evidence. Vendors should consider a standards-based approach to assuring data integrity, and customers should address the issue in due diligence and in contracting.
Back by popular demand, this is Part Four in our ongoing series, Legal Implications of Cloud Computing. This installment will focus on digital evidence and e-discovery, and follows up on Part One (the Basics), Part Two (Privacy), and Part Three (Relationships). After all, what better topic than the cloud to tackle on the day after Thanksgiving, recovering from tryptophan and wine? As with many other areas previously discussed in this series, the cloud does not necessarily change the legal analysis, it just highlights the need to think through and anticipate the many areas of legal concern that could/are likely to arise when using the cloud. As a litigator, when I think about the challenges posed by the cloud, the one that seems most intuitive is e-discovery/digital evidence. It is always difficult to fully appreciate and digest the scope and volume of information that may be called for in litigation or in an investigation. The presence of corporate data in the cloud multiplies those considerations. Some, but by no means all, of the digital evidence issues that should be considered in negotiating cloud arrangements and contracts (whether you are putting data in the cloud or designing and marketing a cloud offering), are as follows: 1. preservation/retention/disposal; 2. control/access/collection; 3. metadata; 4. admissibility; and, cutting across all of the foregoing 5. cost. As I will discuss below, like other forms of electronically stored information (ESI), one of the best ways for addressing data in the cloud in the discovery and evidentiary context is to plan ahead and discuss treatment of cloud data (a) in records retention policies well in advance of litigation; and (b) at the Rule 26 conference once litigation has commenced. And, if you read to the end, I will comment on the paucity of case law referencing the cloud (and describe the few references that have appeared in federal and state case law to date).