Preserve and Protect: Data Preservation and the Cloud
POSTED ON December 02

I recently surveyed a group of people and asked, ”When you hear the word ‘cloud’ do you think of something positive or negative?” Not surprisingly, respondents divided on the question.  They offered the pleasant definition of soft, white formations in the heavens or the gloomier alternative of a moisture-bearing object in the sky.  We technical folk tended toward the neutral response of software and services on the internet instead of their computer. The survey results made us wonder if we should opt for a positive, negative, or neutral view when we think about preserving data and the cloud. What do you think?

Every attorney knows that there is an affirmative duty to preserve potentially relevant evidence. It’s one of the basic ethical duties of litigation counsel (and one that keeps many counsel awake at nights!). Counsel can’t just tell clients not to destroy evidence; instead, they must actively work with the client to identify and preserve relevant information.

Back when preserving evidence meant maintaining banks of filing cabinets, the discharge of this duty was clear: don’t mess with anything in the cabinets until someone asks for it! Dealing with evidence that is stored in the cloud is a different matter. Data is not a physical item. But the duty to preserve evidence, and to produce relevant evidence when requested, is the same whether the evidence is stored in a cloud or in a box in a closet.

In the case of Brown v. Tellermate Holdings Ltd., 2014 U.S. Dist. LEXIS 90123 (S.D. Ohio 2014), the court discussed the need to preserve and produce information stored in the cloud. Brown was an employment discrimination case in which the plaintiffs alleged that they were terminated from their employment with Tellermate because of their age. They argued that claims that their performance was substandard were pretextual. The plaintiffs made discovery requests for various categories of data. In particular, the plaintiffs sought production of sales records to establish that they either met or exceeded their sales quotas as compared to younger employees of Tellermate. The sales records were maintained by cloud provider Salesforce.com. Tellermate did not produce the requested information, because

  • Tellermate did not maintain the salesforce.com information “in hard copy format.”
  • Tellermate could not print out accurate historical records from salesforce.com.
  • Tellermate argued that discovery of salesforce.com information “should be directed to salesforce.com, not Tellermate.”

The court disposed of the first and third reasons given by stating that those reasons did not, “as any competent practitioner would know,” justify non-production. The second claim—that Tellermate was unable to print out the records—was dismissed as untrue. The relevant information could be printed out by any Tellermate employee with the proper credentials. In fact, Tellermate had two employees designated as administrators, and they were always able to access the information. The data belonged to Tellermate, and “no cogent argument could have been made . . . that Tellermate was legally prohibited from accessing and producing its own information in discovery[.]”

The court in Brown held that Tellermate was obligated to provide “full, truthful, and appropriate discovery responses.” Tellermate did not meet this obligation. Further, the court held that Tellermate’s attorneys were obligated to make a reasonable inquiry before taking Tellermate “at its word” regarding the availability of the requested data. The court stated that this obligation was not met.

In short, although Tellermate gave false information, the blame did not rest entirely with Tellermate. Counsel also bore some responsibility for failing to make a reasonable inquiry into the truth of Tellermate’s representations. As the court put it, “counsel cannot simply take a client’s representations about such matters at face value.” The duty to preserve and produce evidence does not change just because that evidence is stored in the cloud.

A different court defined the attorney’s duty to protect data. In Quinby v. WestLB AG, 2005 U.S. Dist. LEXIS 35583 (S.D.N.Y. 2005), the court specified that an attorney must conduct a “reasonable investigation” to ensure that all responsive information and documents have been turned over. In Quinby, an employment discrimination case, the former employees claimed that the defendants improperly relied on back-up tapes as a source for requested data. The defendants claimed that the archaic tapes were the best they could do, and other versions of the data—potentially stored elsewhere—could not be produced. Interestingly, the court agreed with the defendants, leading me to wonder if the issue would be decided the same way today. But despite advances in technology, the “reasonable investigation” model still stands the test of time.

The definition of a reasonable investigation or inquiry depends on the circumstances of the case—ultimately, the court will decide if your inquiry was reasonable. Attorneys cannot forget that data retention and production are their responsibilities. It is not enough to assume that a client will comply with court directives or your advice. Making sure that a client is in compliance is also part of the litigator’s job.

And once that job is well done, we think it is fair to have a positive view toward data preservation and the cloud.


About the Author Chris

Author Avatar Christine Chalstrom is the Founder, CEO, and President of Shepherd Data Services, Trustee, Mitchell Hamline Law School and Adviser, Center for Law and Business. She has spoken widely on the Amendments to the Federal Rules of Civil Procedures, Digital Forensics, and eDiscovery best practices. Her credits include presentations to the American Bar Association, Association of Certified e-Discovery Specialists (ACEDS), Corporate Counsel Institute, MN Association of Corporate Counsel, MN Association of Litigation Support Professionals, MN CLE, Mitchell Hamline School of Law, Upper Midwest Employment Law Institute. She is an attorney, programmer, and forensic examiner.