YourABA December 2011 Masthead

Cloud risks: Technology use tests the attorney-client privilege

Maintaining attorney-client privilege has become increasingly complicated with the rise in cloud computing, social media and the use of mobile devices, according to panelists at an American Bar Association Midyear Meeting session Feb. 3 on “Attorney-Client Privilege and ESI: How to Maintain Privilege ‘In the Cloud.’”

While the technologies offer new ways for lawyers and their clients to communicate, they also pose unique problems for preserving confidentiality.

“The way that we communicate is changing, but the privilege rules are the same as they have always been.” said John D. Rue

“The way that we communicate is changing, but the privilege rules are the same as they have always been.” said John D. Rue, an attorney at White & Case in New York and co-chair of the e-discovery subcommittee within the Section of Litigation.

Case law within the last few years has established that privilege is not lost simply because communication is sent via cloud-based email. In Stengart v. Loving Care Agency, an employee discussed with her lawyer a possible lawsuit against her employer, using a cloud-based email account. Even though the employee used a work computer and the company had a policy that stated that employees have no expectation of privacy on work computers, the New Jersey Supreme Court held that the attorney-client privilege protected that communication.

The court explained that the employee had taken measures to protect the communication’s confidentiality through her use of a password-protected email account, and that the personal use section of the company’s computer policy was ambiguous, giving the employee a reasonable expectation of privacy.

However—“There are a lot of cases that go in the other direction,” said Carla Walworth, partner at Paul Hastings.

For instance, in a similar case involving an employee’s use of a work computer, Holmes v. Petrovich Development Co., the California Court of Appeal found that the employee’s communication with her lawyer was not privileged.

Again, the court considered the employee’s reasonable expectation of privacy. However, unlike the situation in Stengart, the employee did not use a personal email account and was under a policy that expressly stated that emails from work accounts would be sometimes monitored.   

“So if you’re representing plaintiffs, right up front, you should talk about where and how you’re going to communicate,” advised Walworth, noting how password protection and use of personal accounts can make a difference.

Use of social media to communicate with lawyers also has implications on privilege. Recent decisions underscore that communications on social sites are not privileged because posts are made in a public forum.

In McMillen v. Hummingbird Speedway, a Pennsylvania court held that nothing posted on social networking websites MySpace or Facebook could reasonably be considered confidential.

“[The case] holds that Facebook materials are discoverable, not only because the privacy settings permit forwarding and access by others, but also because Facebook itself has access to the materials,” Walworth said. “If that’s the rule, then nothing is privileged. It’s worth looking at [McMillen] to see what the issues are.”

The line between privileged and non-privileged communication is somewhat more complicated to determine when clients and their lawyers communicate via smartphones and other mobile devices.

In Ngai v. Old Navy, a lawyer and client were texting during a deposition. The court ruled that the text messages during the depositions were not privileged. The reason had nothing to do with the parties’ use of SMS technology. Rather, it was the time that the exchange took place.

According to the court, “once a deposition begins, the right to counsel is somewhat tempered by the underlying goal of our discovery rules: getting to the truth.”

“People have had these scenarios, where they’re having administrative hearings over the telephone and they’re emailing their client simultaneously or communicating simultaneously behind the scenes, which is sort of a third-party communication,” said Patricia Eastwood, of Caterpillar Financial Services, emphasizing the need for more awareness when communicating. “We don’t even think about how we’re communicating anymore and we’re creating documents and it has all kinds of implications.”

“Attorney-Client Privilege and ESI: How to Maintain Privilege ‘In the Cloud’” was sponsored by the Young Lawyers Division.

Session materials, “Privilege Law, its Global Application and the Impact of New Technologies,” provide further background on the topics.

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