In Episode 114, our CEO, Kelly Twigger discusses whether a corporation had “control” over an employee and member of the Board of Directors’ personal email account when that employee lives and works outside the US.


Introduction

Welcome to this week’s episode of our Case of the Week series brought to you by eDiscovery Assistant in partnership with ACEDS. eDiscovery Assistant is a SaaS based platform that helps lawyers and legal professionals manage the power of ESI as evidence by reimagining the way we conduct legal research and training for ediscovery.

My name is Kelly Twigger. I am the CEO and founder at eDiscovery Assistant, as well as the principal at ESI Attorneys. Each week on our Case of the Week series, I choose a recent decision in ediscovery and talk to you about the practical implications of that judge’s ruling, what it means for you, your practice, and for your clients, and how to do the discovery of ESI better.

Unlike any other substantive area in the law, the constantly evolving landscape of technology means that trial courts on both the federal and state level are regularly issuing new opinions on parties’ obligations around ESI. Because the bulk of our learning in ediscovery comes through case law, diving into the details of those decisions and what our practical takeaways are is one of the best ways to understand the issues and details we need to focus on in planning and executing any discovery.

Doug Austin of eDiscovery Today, is one of our partners. Here is a link to Doug’s post regarding the decision we cover in this blog.

Before we dive in, if you haven’t yet had a chance to grab our 2022 Case Law Report, you can download a copy of that to see the landscape of decisions. Each of the decisions in eDiscovery Assistant is a public link, meaning that you can link to those decisions in your writing. You can also review the full text of the decision without having a subscription to log in.

Background

This week’s decision comes to us from the Owen v. Elastos Foundation case. This is a decision from March 16, 2023 issued by United States Judge Barbara Moses. She’s in the Southern District of New York, and this is the 71st decision from Judge Moses in our database. She’s one of the more prolific judges in terms of discovery decisions. A lot to take in, lots of thoughtful deliberation from Judge Moses.

As always, we tag each of the decisions in our case law database with our proprietary issue tagging structure, and this week’s issues include possession, custody and control, and cloud computing.

Facts

We are before the Court here on a motion to compel the review, collection, and production of responsive data from the personal email account of Director Ben Li of Elastos in discovery. Director Li lives and works in China, and he is an Elastos employee — he is Director of Operations — and one of three members of its Board of Directors, but he is not a named defendant in the case.

During discovery, Mr. Li provided his laptop, phone, and personal WeChat account, which he conceded he uses for Elastos business and which he permitted the defendant’s lawyers to collect and search. Elastos also searched and provided 13,000 documents from Mr. Li’s work email account, which is a Gmail based account. Elastos asked Mr. Li multiple times to allow them to search his personal Gmail account, but Mr. Li refused. And the question before the Court is whether Elastos has the requisite possession, custody, or control over Mr. Li’s personal Gmail account to require it to be searched for responsive materials.

Evidence indicating that Mr. Li has responsive information in his personal Gmail account is pretty scant here, and that’s the crux of why we’re looking at this decision today.

What is that evidence? On two occasions, Mr. Li received emails concerning a personal investment at his elastos.org email address, and he forwarded them to his personal gmail.com email address. On one separate occasion, he received an email concerning Elastos business at his gmail.com email address, which he forwarded to his elastos.org email address. And on two occasions, Mr. Li participated in editing Elastos documents — one of which was a team budget, and one of which was a white paper — using email addresses that were apparently generated by google sheets and google docs, respectively. That’s the language from the Court. (That’s not actually how google sheets and google docs work, by “generating email addresses”, someone has to physically input an email address for one of those to be shared with.) That’s all of the evidence that exists with regard to tying Mr. Li’s personal account to responsive information in discovery here.

When the plaintiffs realized that they did not have access to the spreadsheet from google sheets that was apparently “generated by google sheets”, they came to the Court and argued that because those documents weren’t produced, that they must be stored in his personal Gmail account. There’s no other reason to suspect that other than the fact that they just don’t have them. And that’s the only account that they know of that Mr. Li hasn’t produced. There’s no discussion of whether that information was available from another source, whether the other members of the board of directors had it, or whether it was provided to any other employees.

The defendants, on the other hand, argued that the responding emails to both of those documents were in Mr. Li’s Elastos email account, and so there was no link to tie his personal Gmail account to those particular documents. That means that the only piece of evidence that the plaintiffs had to create some sort of facade of responsiveness in his personal email account really does not exist.

And that’s all of the evidence that implicates Mr. Li’s personal email account.

Analysis

How does the Court look at this set of facts? There are two issues before the Court on this motion. First, whether Mr. Li’s personal email account is within the control of Elastos, as that term is used in Federal Rule of Civil Procedure 34, such that Elastos can be ordered to search and produce information from that account that might be responsive to discovery. The second issue is if that possession, custody, or control exists, whether the discovery sought would be proportional to the needs of the case under Rule 26 of the Federal Rules of Civil Procedure.

The Court starts with the issue of control under Rule 34’s requirement that a party may obtain discovery of documents in the responding party’s possession, custody or control. And the Second Circuit, where the Southern District of New York sits, follows the practical ability test, which states that documents are considered to be, “under a party’s control when that party has the right, authority or practical ability to obtain the documents from a non-party to the action.”

Among the factors that the courts consider are: whether the corporation could discharge the individual for failure to cooperate in discovery, whether the individual has a duty under local law (which is going to be important) to turn over the documents on request, whether the corporate party previously secured the individual’s cooperation in discovery, and whether the party has asked the non-party to turn over the documents at issue and if so, whether the non-party is willing to do so. The Court also notes that the burden of showing control rests with the party that is seeking the discovery. And in this case here that’s the plaintiffs.

After discussing with you what the scant amount of evidence is that we have here, it’s not really a surprise to find that the Court says that the plaintiffs did not meet their burden here to show that Elastos has possession, custody or control. The Court hangs its analysis, really, on the fact that Mr. Li works for Elastos in China. This court is not willing to assume that Elastos has the same practical ability to coerce compliance for Mr. Li that a US corporation would have with respect to documents in the physical or electronic possession of its officers, directors or employees. Defendants, for their part, advised the Court that “Elastos has no policies that would give it control over data on the personal devices of its personnel.”  

The location of Mr. Li is first and foremost is primary, because the law that governs Mr. Li is not in the United States, it’s actually in Singapore and China, where he resides.

The Court then looks at what Mr. Li has done to cooperate in discovery, and thus far, Mr. Li has provided his laptop, he’s provided his phone, he’s provided access to his WeChat account, he sat for a deposition, and he prepared a declaration to the Court when asked detailing Elasto’s efforts to search the company’s Google Dropbox and Zoom accounts, as well as its dissemination of legal hold memos. Mr. Li just really refused to allow Elastos to search his personal Gmail account, despite multiple requests from Elastos. And as the plaintiffs provided no evidence as to the contrary, the Court found that Elastos did not have the requisite control.

The Court then goes on to state that even if Elastos had had control, there is little to no evidence that Mr. Li used his personal email for business. The Court distinguishes a case because he notes that where Mr. Li used his work email for all work, including as a member of the Board of Directors. In other situations, Board members often use their personal email accounts for corporate business. The plaintiff cited a case in which other Boards of Directors are required to search their personal email accounts, and the courts in those cases have required those Boards of Directors to do so. But often in those cases, those Boards of Directors do not have a business email account, or they simply don’t use it. It’s a very different situation here, because Mr. Li, as an employee, but also as a member of the Board of Directors, did use his Elasto’s email for all of his Boards of Directors related communications. So not the same situation, and really no additional attempt by the plaintiffs to draw any other correlations as to why Mr. Li should be able to provide his personal Gmail account.

The Court does note in the footnote that if discovery reveals a valid justification for a search of the personal Gmail account, that the plaintiffs can renew their request. They just don’t have enough evidence yet here, and I think that’s pretty clear from the facts as we see them. There must be more that the plaintiffs had in bringing this motion, but it’s not articulated in this decision, so it’s difficult for us to know. With that reasoning, the Court denied the plaintiff’s request to have the defendant search Mr. Li’s personal email account.

Takeaways

This is not the first time that we’ve discussed possession, custody, or control in ediscovery issues on the Case of the Week, and it continues to be a crucial analysis in access to ESI. Here, the determining factor really appears to be that Mr. Li resides and works in China, and the plaintiffs did not provide any basis under Singaporean or Chinese law on the control question, and the Court was not willing to assume that Elastos has the same practical ability to coerce compliance from Mr. Li that a US. Corporation would have had with respect to the documents in the physical possession of its officers, directors, or employees.

That’s an important distinction from a fact perspective. That’s very interesting because even though Elastos is subject to the discovery rules in the US. Its employee overseas appears not to be. I do wonder if this ruling will be used to prevent access to other personal sources of data from employees outside the US.

Keep in mind, however, that the real reason for not requiring a search is that the evidence of whether Mr. Li used his personal Gmail account was very thin. You need more to be able to get to personal sources of ESI. Where a party utilizes an email account that very clearly shows up in discovery as a method of communication of responsive information, you’ll have to produce it. But the burden rests with the requesting party, and the plaintiffs here were not able to meet their burden with only a scant couple of references to the personal email account and the potential of this missing spreadsheet that was not provided in discovery.

Make sure that you have the evidence you need to have under the existing court you’re in to establish control under Rule 34 and links to the personal sources of ESI to allow for them to be searched. We’ll keep an eye on this case to see whether any new evidence arises that requires the court to revisit this decision.

Conclusion

That’s our Case of the Week for this week. Thank you so much for joining me. We’re back again next week with another decision from our eDiscovery Assistant database. As always, if you have a suggestion for a case to be covered on Case of the Week, drop me a line. If you’d like to receive the Case of the Week delivered directly to your inbox via our weekly newsletter, you can sign up on our blog. If you’re interested in doing a free trial of our case law and resource database, you can sign up to get started.

Thanks so much, and have a great week.

The post Episode 114: Does an Employer Have Custody or Control over an Employee’s Personal Email Account? first appeared on eDiscovery Assistant.