New England Biz Law Update
A discovery order in a recent federal case in California could mean companies will have to produce an even deeper level of electronically stored information.
A federal magistrate made a controversial interpretation of the new federal e-discovery rules by ordering a defendant to preserve and produce electronic data stored as random access memory, or RAM, which are temporary data files written over after just a few hours. (Columbia Pictures v. Bunnell, No. 06-1093 (C.D. Calif. 2007).)
Some attorneys cautioned that the facts of the case – the defendants allegedly used the RAM storage system to deliberately conceal what their website was being used for – make the discovery order unique. But others expressed concern about the order’s broader ramifications.
The ruling shows how “the new e-discovery rules have the potential to open up a landslide of new discovery obligations,” said Corynne McSherry, a staff attorney at the Electronic Frontier Foundation in San Francisco. “The implications are pretty scary. All kinds of data exist temporarily in RAM, and I don’t think anyone imagined there would be an obligation to retain that data in reasonable anticipation of litigation, as required by the [federal rules].”
Ira Rothken, who represented the defendant in the case, said the order was the first ruling to discuss whether RAM is electronically stored information. Rothken’s client is appealing the order.
“Whether it’s a personal injury case or a complex dot.com case like the one we’re in, lawyers are going to face similar production requests,” said Rothken, who is based in San Rafael, Calif.
But Elizabeth Kaltman, communications director for the Motion Picture Association of America, downplayed concerns about the impact of the order: “This judge’s order was completely tailored to this case and it doesn’t mean other companies will face similar preservation orders. [The information requested in the discovery order] is directly relevant to demonstrate how the system was used to facilitate massive copyright infringement.”
Vicarious copyright infringement
Movie studios sued the founder of TorrentSpy, a website used for finding videos, including movies. Users enter a search term and then download the requested files using “dot-torrent” files.
Although the “dot-torrent” files themselves did not contain copyrighted material, the movie studios alleged TorrentSpy nonetheless infringed their copyrights because the files were used to obtain copyrighted movies.
In discovery, the studios asked that the website preserve and produce certain data, such as IP addresses of website users who request “dot-torrent” files, the requests for such files and the dates and times of the requests.
TorrentSpy objected, arguing it did not maintain server log data of such information, in part to protect its users’ privacy. The requested information was only maintained in the system as random access memory – or RAM – and was written over after a few hours. TorrentSpy also said producing such information would be time-consuming and expensive.
But U.S. Magistrate Judge Jacqueline Chooljian disagreed, saying the information requested was “extremely relevant” to the plaintiff’s claims.
Rule 34(a) of the Federal Rules of Civil Procedure permits discovery of documents or electronic information that “is fixed in tangible form and … information that is stored in a medium from which it can be retrieved.”
Despite the defendant’s argument that information saved in RAM form was only temporarily fixed, the judge said data in RAM is electronically stored information.
Although the defendant had never kept a server log, the judge said it wasn’t requiring the defendant to create new documents for production because its server had the capacity for a logging function, which means “the server log data already exists.”
Activating the logging function to record the data was not unduly burdensome or costly, the judge said, and she tailored the order to permit TorrentSpy to mask users’ IP addresses before the server log was produced to alleviate its privacy concerns.
However, the order is currently stayed pending appeal, with the next hearing scheduled for Aug. 13.
Rothken said U.S. District Court Judge Florence-Marie Cooper could either rule that day without hearing oral argument, or hear argument that day and subsequently issue a written order.
Privacy concerns
Internet law specialist John Ottaviani of Edwards Angell Palmer & Dodge in Providence, R.I., said the decision is not particularly troubling because few cases would raise the issue of RAM discovery.
Given that the defendant had the capability to generate a server log, the order “doesn’t seem totally burdensome,” and despite privacy concerns, Ottaviani said a court order could trump a company’s privacy policy.
But McSherry, who filed an amicus brief on behalf of the defendant in its appeal, said the privacy concerns are significant.
“The defendant didn’t log their users IP address to respect their privacy,” in accordance with TorrentSpy’s privacy policy, she said. “If this situation was repeated, plaintiffs could force defendants to go to court and effectively re-write their privacy policies.”
Read broadly, the discovery order could “open the door to a whole lot of discovery requests and orders and fear on the part of clients that they will have to start retaining information temporarily stored in RAM.”
However, Kaltman called privacy concerns a “red herring” because the judge said users’ IP addresses had to be redacted before information was turned over to the plaintiffs.
Best practices for new discovery rules
The actions of the defendant demonstrate the lengths some parties will go to under the new civil procedure rules to avoid discovery orders, said Michele Lange, a staff attorney at Kroll OnTrack, a computer forensics and electronic evidence company in Eden Prairie, Minn.
“We have seen defendants try to get around the new rules by taking server data that is fairly accessible, saving it to backup tapes and then shipping the tapes across the ocean to some remote location,” she said. Their goal is to make an argument that it would be unreasonable for them to have to produce that data, she explained.
“Parties are being very creative with what we refer to as ‘data downgrading,’ where they structure their systems in a certain way to get out of the new obligations of the [discovery rules].”
But federal judges are getting savvier about sniffing out such business models, Lange said, and the Bunnell case is “raising great discussions about how to deal with electronically stored information. The best practice is to sit down with the IT people, be up front with opposing parties and the judge at the early meet and confer point, and really be reasonable when dealing with [electronic information] issues.”
Rothken agreed.
“It’s important for lawyers to resolve these issues early on, especially if the other side is requesting the preservation of RAM data,” he said. “If there is any possibility that this would be an issue, the prudent lawyer would get a protective order early on to protect the client.”
