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From "Friend Request" to Discovery Request: Issues Raised by Business Use of Social Media

From "Friend Request" to Discovery Request: Issues Raised by Business Use of Social Media 
By Matthew A. Cordell and Barry P. Harris, IV
(first published March 2011)   

Your marketing team has been pushing for a presence on the "social web."  The potential, they've explained, is tremendous.  A Nielsen Report released in August 2010 reveals that two-thirds of internet users are active on social media websites.  Businesses are catching on:  a reported 65% of Fortune Global 100 companies have active Twitter accounts, 54% have Facebook pages, 50% have YouTube channels, and 33% have a weblog ("blog") of some kind.  "Social media" may indeed be the next frontier in marketing, customer relations, investor relations, recruiting, and even vendor relations.  While these emerging communication platforms create new opportunities, they also create corresponding risks and obligations.  This article briefly highlights a few of the most salient information management and litigation issues raised by a business's use of social media.

Warning – Social Media Content is Discoverable 

Discovery is a process whereby a party to litigation accesses information of the other parties that is relevant to the claims and defenses.  A primary tool used in discovery is "Requests for Production of Documents and Things" whereby one party demands access to documents and categories of data from another party.  State and federal laws and court rules govern the discovery process.  The Federal Rules of Civil Procedure (applicable to litigation in the federal courts) were amended in 2006 to expressly include electronically stored information ("ESI") in discovery.  The Advisory Committee drafting the amendment explained that the term ESI was "intended to be read expansively to include all current and future electronic storage mediums."  Accordingly, courts have ruled that the content of social media is generally discoverable.  Objections based on privacy, even by individuals, are usually unsuccessful.

One of the key factors in the discoverability of ESI is whether a party has custody or control of the data.  If a party to litigation is found to possess or control requested ESI, it is likely the party will be required to preserve and produce it.  Third-party social media providers who are not parties to the litigation may not be required to turn over content in response to a subpoena.  While still unsettled, some courts have ruled that social media providers may be able to withhold private messages that are akin to email under the Stored Communications Act.  Parties to litigation may be required, however, to request their data from the third-party provider and to produce what the provider delivers.

A Duty to Preserve Social Media Content 

Under state and federal court rules, parties must preserve relevant and potentially relevant information within their custody or control once litigation is pending or claims are reasonably anticipated.  In fulfilling these duties, parties employ "litigation holds" halting the destruction of potentially relevant documents.  For the party filing the suit (the plaintiff), the litigation hold is triggered before the complaint is filed; for the party being sued (the defendant), the hold is triggered when it becomes aware of a potential suit or claim.  The duty to preserve may include requesting third-party providers, such as social media providers, to segregate and save relevant data.  These duties are in addition to the recordkeeping requirements imposed on some regulated businesses.

A study published in the Duke Law Journal in 2010 found that failure to preserve electronic data has resulted in severe sanctions against offending parties, including adverse jury instructions; monetary awards which, in some cases, have exceeded $5 million; and even dismissals of claims and entire cases. 

ESI generally presents more challenges in discovery and litigation holds than information kept in hard copy, and the use of social media only increases those challenges.  For example: 
  • Social media is usually stored outside the user's firewall, either with the social media company or a third party (in the "cloud").  This lack of custody makes it more difficult to identify and preserve information.
  • Social media websites are generally dynamic rather than static, making it difficult to capture and preserve content.  What appears on a social media webpage one day may be gone, or changed, the next. 
  • The decentralized, collaborative nature of social media can make it difficult to monitor and enforce compliance with social media policies.
  • Resources available to manage and manipulate social media data have been scarce.  While several vendors now offer tools to manage off-site data issues with solutions ranging from capturing regular images of identified pages (a static record) to more sophisticated approaches capturing dynamic content, they are relatively new to the market.

Every Business with a Social Media Presence Should Have a Social Media Policy

The increasing role of social media in business and business litigation emphasizes the importance for a business to have, and regularly review and update, a comprehensive social media policy.  The policy should address, among other topics, the following:
  • Which officers and employees are authorized to control and/or use the business's social media accounts and represent the business?  Authorized personnel should be well trained in the business's other policies and applicable laws and should have access to counsel in the event questions arise.
  • What limits will be placed on the topics to be addressed through the business's social media accounts? 
  • Will review by compliance personnel or legal counsel be required prior to the communication of certain categories of information?  Examples include mergers, acquisitions, and stock offerings; changes in personnel; representations regarding new products; and comparisons to competitors.
  • Will employees be permitted to refer to the business or business's issues when using their personal social media accounts?
  • Will employees' personal accounts be monitored for compliance with the policies and, if so, how?
  • How will the business's existing document retention policy be applied to, or modified because of, the use of social media?
  • How will litigation holds and other recordkeeping requirements be satisfied?
  • In creating social media policies, businesses must understand what can be implemented and enforced; the policies will form a baseline in an opponent's or court's analysis of what can or should be produced in discovery.

Social media can open new doors, but it also presents new challenges.  All businesses participating in social media should adopt and implement policies governing its use by employees, and must be prepared to preserve relevant social media data as soon as it becomes reasonably apparent that litigation or an investigation is on the horizon. 

sho fia

sho fia

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