Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Digital Age Expands Communication but Creates Discovery, Litigation Pitfalls

Digital Age Expands Communication but Creates Discovery, Litigation Pitfalls | Socially Aware

Carrie H. Cohen

E-mails. Text messages. Instant messages. Social media. The digital age has given birth to powerful new ways to communicate that have transformed how we live and conduct business. But the proliferation of communication options has come with increased exposure to claims in litigation of withholding, hiding, destroying and losing evidence.A reminder of the increasing danger of the digital age in discovery recently arose in the New York state attorney general’s investigation of ExxonMobil’s research into the causes and effects of climate change.After receiving documents from Exxon pursuant to a subpoena, the state attorney general informed a New York court that it had discovered that former Exxon CEO and Chairman Rex Wayne Tillerson had <a href="http://www.newsweek.com/rex-tillerson-climate-change-email-alias-exxon-mobile-567435" target="_blank" rel="noopener noreferrer">used an alias email address on the Exxon system under the pseudonym “Wayne Tracker”</a> from at least 2008 through 2015.In the Exxon matter, the state attorney general claimed that emails from the Tracker email address contained information responsive to its subpoena, but that neither Exxon nor its outside law firm had disclosed to the state attorney general that the Tracker email address belonged to Tillerson and that it appeared that some of the arguably responsive Tracker emails had not been properly saved and produced.Exxon, in its reply to the court, claimed that there was nothing improper with Tillerson’s use of the Tracker email address, which it <a href="http://www.reuters.com/article/us-usa-tillerson-email-idUSKBN16O04O" target="_blank" rel="noopener noreferrer">said</a> “allowed a limited group of senior executives to send time-sensitive messages to Tillerson that received priority over the normal daily traffic that crossed the desk of a busy CEO. The purpose was efficiency, not secrecy.”Exxon’s lawyers also <a href="https://www.bloomberg.com/news/articles/2017-03-17/exxon-says-some-wayne-tracker-emails-may-have-been-lost" target="_blank" rel="noopener noreferrer">suggested</a> that a technical glitch may have prevented automatically preserving emails from the Tracker account.Tillerson is hardly the first or only CEO who has used more than one email address. As The Wall Street Journal recently <a href="https://www.wsj.com/articles/many-executives-use-numerous-email-addresses-but-few-adopt-alter-egos-1489612668" target="_blank" rel="noopener noreferrer">reported</a>, high-profile CEOs whose email inboxes can be overwhelmed often use another email address that allows a more select group of people to reach them without their email message perhaps getting lost in the CEO’s inbox.While use of an alias email is an understandable and perhaps necessary inbox management tool, the Exxon matter should serve as a reminder of how the expanding array of communication tools can cause issues in litigation. Even if a secondary email address serves a legitimate purpose, if it is not searched and preserved during discovery and sufficiently disclosed and produced, it can, at minimum, allow the opposing party to try to bias the judge and create advantageous press.Indeed, shortly after the New York state attorney general raised the Tracker email issue with the court, it was widely covered in the press. Of course, much more serious consequences can result from mishandling of electronically stored information (ESI).<h4>Severe Consequences</h4>In a criminal investigation, mishandling of ESI can influence charging decisions by prosecutors or expose defendants to further probes and charges of obstruction of justice.In civil litigation, a judge can impose sanctions or give an adverse inference charge to a jury, which essentially instructs the jury that it would be proper for them to infer that the missing evidence would have been harmful to the party who failed to preserve it.To be sure, it is not easy to obtain an adverse inference. Effective December 2015, the Federal Rules of Civil Procedure (FRCP) were amended to address the failure to preserve ESI. The changes were made, <a href="http://www.jdsupra.com/legalnews/court-says-rule-37-e-doesn-t-apply-when-78082/" target="_blank" rel="noopener noreferrer">according to the Advisory Committee</a>, to take account for the “serious problems resulting from the continued exponential growth” of ESI and the differing standards among circuit courts for imposing sanctions. “These developments have caused litigants to expend excessive effort and money on preservation in order to avoid the risk of severe sanctions if a court finds they did not do enough,” the Advisory Committee <a href="https://www.law.cornell.edu/rules/frcp/rule_37">wrote</a> in its notes to the 2015 amendments to Fed. R. Civ. P. 37(e).Under <a href="https://www.law.cornell.edu/rules/frcp/rule_37" target="_blank" rel="noopener noreferrer">the new Rule 37(e) of the FRCP</a>, it first must be established that the ESI “should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery.” As the Advisory Committee <a href="https://www.law.cornell.edu/rules/frcp/rule_37" target="_blank" rel="noopener noreferrer">noted</a>, since “electronically stored information often exists in multiple locations, loss from one source may be harmless when substitute information can be found elsewhere.” If that first requirement is satisfied, then a court may impose measures “no greater than necessary to cure the prejudice.”For more serious sanctions, the rule provides that a court must find that a “party acted with intent to deprive another party of the information’s use in the litigation.” If that intent is established, then a court may “(A) presume that the lost information was unfavorable to the party; (B) instruct the jury that it may or must presume the information was unfavorable to the party; or (C) dismiss the action or enter a default judgment.” Previously, some courts had imposed severe sanctions for negligence and gross negligence. The new rule seeks to end that practice.<h4>New Rule in Practice</h4>The new rule already has had a significant impact.Take, for instance, the July 2016 opinion in GN Netcom v. Plantronics, a case alleging violations of the Sherman Act, the Clayton Act, as well as tortious interference with business relations against Plantronics over its program for distributing its headsets. At issue in GN Netcom were thousands of emails intentionally deleted by a senior-level Plantronics executive who had responsibility for a Plantronics’ headset distribution program that was central to the underlying claims in the case. Such executive also encouraged other employees to delete emails as well.As recounted in the court’s opinion, Plantronics argued sanctions for the deleted emails were unwarranted, noting that the company “went to great lengths to ensure that its employees were aware of and understood their preservation obligations,” including issuing multiple litigation holds and conducting training sessions to ensure compliance.Plantronics also claimed that upon learning of the deleted emails, it “immediately took steps to preserve documents and prevent any further loss of data, and to recover whatever missing data it could.”These efforts, Plantronics asserted, were proof that it took the requisite responsible steps to preserve ESI and that it did not intend to deprive GN Netcom of evidence.But in his opinion, U.S. District Judge Leonard P. Stark disagreed and found “Plantronics’ extensive document preservation efforts do not absolve it of all responsibility for the failure of a member of its senior management to comply with his document preservation obligations.” Judge Stark also wrote that he was “not convinced that Plantronics took all the reasonable steps it could have taken to recover deleted emails.”The court in Plantronics ordered a $3 million punitive monetary sanction against Plantronics as well “instructions to the jury it may draw an adverse inference that emails destroyed by Plantronics would have been favorable to GN’s case and/or unfavorable to Plantronics’ defense.”Under the new rule, a showing of bad intent is not required to obtain less severe remedies. For instance, in <a href="http://www.leagle.com/decision/In%20FDCO%2020161207686/SECURITY%20ALARM%20FINANCING%20ENTERPRISES,%20L.P.%20v.%20ALARM%20PROTECTION%20TECHNOLOGY,%20LLC" target="_blank" rel="noopener noreferrer">Security Alarm Financing v. Alarm Protection Technology</a>, a lawsuit between home security competitors about the alleged poaching of customers, a district court judge in Alaska considered a motion for sanctions for customer call recordings that had been lost by the plaintiff.The court concluded that the evidence prejudiced the defendant and that the plaintiff had failed to take steps to preserve the recordings. But based on a “murky” record involving discussions between the parties over what they agreed needed to be produced, the court wrote it was “not persuaded that the failure to preserve the recordings . . . was done with the intent to deprive APT of the recordings.” Accordingly, instead of ordering an adverse inference, the court allowed the jury to hear about the spoliation of evidence and precluded the plaintiff from using 150 saved call recordings that were favorable to its case.<h4>Clear Protocols Needed</h4>These recent cases demonstrate how the digital age exposes litigants to potentially serious setbacks in litigation. Adverse inference jury instructions—among the most severe sanctions—have been made tougher to obtain by recent amendments to the Federal Rules of Civil Procedure, which now require a showing of intent to deprive a party of information. But, it is important for companies to recognize that a showing of bad intent by just one of its employees can be attributed to the organization.Even if bad intent is not established, mishandling ESI still negatively can affect the outcome of a case in less severe but crucial ways.The bottom line: As new communications technologies continue to expand, it is important for companies to establish clear protocols for preserving and disclosing relevant content and using those protocols to avoid costly court setbacks.<h4 style="text-align: center;">*    *    *</h4>Reprinted with permission from the June 6th, 2017 issue of the New York Law Journal. © 2017 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.