Despite lawyer charges of client betrayal, Facebook case sheds light on e-discovery best practices

Facebook is seeking sanctions against Ceglia’s lawyers in a US district court in Buffalo, accusing them of railroading their own client and enabling and facilitating his misdeeds.

 

Ceglia, who has resisted turning over his personal emails alleging they are private, was ordered by US magistrate Judge Leslie Foschio last month to show cause for why sanctions should not be imposed. Under Rule 37 of the Federal Rules of Civil Procedure, a judge may levy sanctions for failing to cooperate in discovery on a disobedient party, the attorney of that party, or both. Thus far, the behavior of Ceglia and his counsel has prompted the defendants to successfully compel electronic evidence on three occasions. For three months, Facebook has aggressively pursued documents that it says are false, and has undertaken aggressive discovery through forensic investigation. 

 

Ceglia, a businessman from Wellsville, New York, who moved to Ireland in mid-case, sued Facebook and its founder, Mark Zuckerberg, in June 2010 for allegedly not honoring a 2003 contract he says entitles him to a 50 percent stake in the social media behemoth. In August, Facebook produced a document its lawyers described as a “smoking gun” from Ceglia’s computers they say disproves most of the suit and renders the "contract" a fraud.

 

This week, Ceglia moved for a three-week stay so he could replace current co-counsel, Jeffrey Lake, the San Diego lawyer who replaced a team from DLA Piper in June. Lake was Ceglia’s third lead counsel to withdraw since April. He filed a signed affidavit on October 7, saying his client instructed him not to comply with a court e-discovery order.

 

“Ceglia’s lawyers Jeffrey A. Lake and Nathan A. Shaman have accused their client of instructing them to defy the orders of this court….,” wrote Facebook and Zuckerberg attorneys in an October 14 filing. “But in their haste to pin the blame on their client, Ceglia’s lawyers ignore their duties as officers of the court. Attorneys have an ethical duty to resist a client’s entreaties to break the law… their proper course is to withdraw, not to assist their client’s obstruction by stonewalling discovery….”

 

“The decision by Ceglia’s lawyers to turn on their client and publicly accuse him of wrongdoing by disclosing their confidential communications with him – as part of an effort to protect themselves and shift the blame to their client – raises serious question as to whether they have violated their professional duties…,” they conclude.

 

Facebook says Ceglia’s lawyers violated New York Rule of Professional Conduct 1.6, which says a lawyer should not knowingly reveal confidential information or use confidential information to disadvantage a client, and Rule 1.8 which prohibits a lawyer from using information about the representation of a client to the client’s disadvantage.

 

Gibson Dunn attorneys did not respond to requests for comment. Nor did Ceglia attorneys Jeffrey Lake, Paul Argentieri, of Paul Argentieri & Associaties, respond to a call or email seeking comment.  

 

Much of the high-profile case has been waged on the battlefield of electronically stored information, primarily over emails Ceglia allegedly exchanged with then-Harvard freshman Zuckerberg and the contracts each party has produced.

 

The battles showcase the interplay of electronic discovery and computer forensics, as Zuckerberg and Facebook attorneys have repeatedly accused Ceglia of concealing hardware they believe contains documents chronicling his contract’s forgery.

 

Joseph Caruso, founder and forensic investigator at Global Digital Forensics, in New York, told ACEDS the two fields of electronic discovery and computer forensics significantly overlap in the case.

 

“E-discovery is a gentleman’s game. Computer forensics comes into play when someone is suspected of foul play or spoliation,” he says.

 

The parties have also squabbled over production format amid allegations by Facebook that Ceglia has used PhotoShop to doctor copies of the purported contract. His actions, say Facebook attorneys, are “the digital equivalent of throwing critical evidence into Lake Erie.”

 

Caruso says parties usually don’t produce business documents as PhotoShop files because they are easily modified and do not include electronic signatures. Facebook attorneys call the format “highly suspicious and indicative of fraud.”

 

Caruso says investigators trying to determine a document’s authenticity should typically analyze:

 

1. Metadata because many electronic files are stamped with unique identifiers showing when they were created, opened and modified,

 

2. The creating machine because it often contains an activity log,

 

3. Data anomalies, such as time stamps that don’t correspond to the time a document is represented to have been created.

 

In July, the court in the case deployed forensic investigators to retrieve files from Ceglia’s various email accounts, some of which are defunct. Facebook says Ceglia used an Adelphia.net account to send an authentic version of the contract in 2004. They say it proves Ceglia never discussed Facebook with Zuckerberg, whom he contacted to work on a company called Street Fax.   

 

Forensic investigator Mark Lanterman, CEO and chief technology officer at Computer Forensic Services, Inc., in Minnetonka, Minnesota, likened email recovery in the case to trying to locate library books without a Dewey Decimal System.

 

“Mail archives are also database files, so the data in each email is saved in a large database,” Lanterman explains. “So when you ‘delete’ an email, you’re really just deleting the reference to the data. Think of a public library. The books are still there. The Dewey Decimal card is just gone.”

 

Ceglia, in refusing access to his personal email accounts, says his adversaries are “blatantly violating” his privacy by publishing in court sensitive information, including passwords, that he says should have been redacted.

 

“No award of damages to Ceglia or any other sanctions against Defendants will ever be able to undo this irreparable harm,” his attorneys wrote in their opposition to sanctions on October 7.

“Ceglia will ask this court to repair some of the integrity lost… by preventing Defendants from relying on any of the emails.”

 

Facebook attorneys call Ceglia “lawless” and say their publishing of sensitive material stems from his attorneys’ failure to mark certain electronic documents as confidential, despite the fact that an earlier protective order permitted this. They say they warned Ceglia’s attorneys about the sensitivity of the documents they produced.

 

“To the extent Ceglia claims the filing violated his ‘privacy,’ he has only himself and his own lawyers to blame for failing to designate the forms as ‘confidential’.,” Facebook says.

 

Similar charges of lawyer misconduct in an e-discovery setting have resulted in clients suing their lawyers for malpractice. Most notably, J-M Manufacturing Co., of California, sued McDermott Will & Emery in June for wrongfully producing privileged documents to adverse parties in an allegedly mishandled document review. The case is pending in California Superior Court, in Los Angeles.  

 

For all the e-discovery gyrations, haggling over technical specifications and computer forensics it represents, the Facebook case boils down to common sense, says one investigator.

 

“Facebook didn’t exactly pop up yesterday,” Caruso says. “If I owned half of it, I would’ve known a lot sooner.