It is generally unwise to use private email accounts for company business. Clark v. Council of Unit Owners of the 100 Harborview Drive Condominium Association, 2024 WL 2155021 (D. Md. May 13, 2024)(Quereshi, J.), provides a good example.

The Clark Court did two relevant things:

• It ordered targeted searches of the private email accounts of officers of the defendant Condominium Association because those accounts had been used for condominium business; and,
• It explained when an officer’s private email is within the organization’s possession, custody, and control.^[1]

The plaintiffs, owners of a condo unit, alleged retaliation by the Condominium Association. They claimed that, in retaliation for exercising alleged rights under the Fair Housing Act: their personal possessions had been removed; they had been charged unauthorized administrative fees; and, a litigation update had been circulated informing all members that they had not paid assessments.

THE FIRST SKIRMISH

In the first skirmish, plaintiffs complained that the defendant had not produced any responsive email. However, plaintiffs had served what the Court deemed to be “plainly overbroad” requests.

In a discovery conference, the Court directed use of three search terms “as a starting point.” It explained:

If they revealed a significant degree of information, then further searches may not have been required. Conversely, if they produced limited information, other search terms may have been appropriate.

Clark v. Council of Unit Owners of the 100 Harborview Drive Condominium Association, 2024 WL 2155021 (D. Md. May 13, 2024)(Quereshi, J.).

The Court also added time limits and ordered that the parties confer. It wrote: “Importantly, for the purposes of the present dispute, the Court ordered Defendant to search Harborview’s server, as well as the server of its management company, Barkan Management.” The parties later agreed to additional search terms.

THE PRESENT DISPUTE: A REQUEST TO SEARCH PRIVATE EMAIL ACCOUNTS

That brings us up to the present dispute. “Plaintiffs requested that Defendant search the private email account of Dr. Janan Broadbent, the former President of the Council’s Board.” [emphasis added]. However, Dr. Broadbent stated: “I hereby confirm that I did not send or receive emails on my personal email account relating to activities of the Board.” Defendants echoed this in a later status report.

In a subsequent conference, search terms were refined. The Court wrote: “Although there was hope that this might have begun to resolve the matter, on November 1, 2023, the parties filed dueling Status Reports each accusing the other of bad faith, again asking the Court to impose sanctions on the other and raising various other issues regarding the sufficiency of Defendant’s production.”

THE COURT ORDERED TARGETED SEARCHES OF BOARD MEMBERS’ PRIVATE EMAIL ACCOUNTS

The Court directed further briefing and in the third discovery conference, plaintiffs asked for searches of the private email accounts of defendants board members. The Court explained:

In arguing for a search of the private emails of Defendant’s Board Members, Plaintiffs primarily relied on emails dating between May 2019 and January 2021 found on Harborview’s servers from John Cochran, a former President of the Board from 2010 to 2014, to members of the Board at their private email addresses, including Dr. Broadbent, regarding the Plaintiffs and their litigation. [emphasis added].

Clark v. Council of Unit Owners of the 100 Harborview Drive Condominium Association, 2024 WL 2155021 (D. Md. May 13, 2024)(Quereshi, J.).

In other words, the statements to the Court – that Dr. Broadbent did not send or receive emails on her personal email account relating to activities of the Board – were incorrect.

Defendant offered a series of explanations. One was that there was no evidence that any Board member responded. Another was that, when the present president received messages on her private account, she forwarded them to the Condominium Association account.

Plaintiffs then asserted that Mr. Cochran had a significant role in the “global” HOA. Additionally, Plaintiffs argued that because Board Members would have responded only to Mr. Cochran, it would be unlikely that any of these responses would be found on any of the servers that the Court had ordered Defendant to search.”

The Court considered several options. Id. at *3. It then ordered a search of present Board members private email accounts for any responses to Mr. Cochran regarding plaintiffs for a two-year period.

If there were no responses, this would confirm Defendant’s assertions regarding the limited role that Mr. Cochran played in Board affairs during the time period most relevant to this case. Conversely, if the search elicited any responses, it would substantiate Plaintiffs’ concerns and perhaps open the door for additional searches along the lines of those conducted of the Harborview and Barkan servers. Given the limited scope of the search, this would limit to the maximum extent possible any burden on Defendant, while respecting the legitimate concerns raised by Plaintiffs’ presentation of emails to Board Members at their private emails regarding the Clarks and their litigation. [emphasis added].

Clark v. Council of Unit Owners of the 100 Harborview Drive Condominium Association, 2024 WL 2155021 (D. Md. May 13, 2024)(Quereshi, J.).

Defendant continued to press the question: “Defendant again sought clarification as to whether it was required to search the personal emails of their Board Members… The court was definitive in its response that it did.”

DEFENDANT’S “POSSESSION, CUSTODY, OR CONTROL” LIMITATION

Defendant, in the Court’s words, “asserted that it had no ability to search the private emails of its Board Members.” As a first step, the Court ordered the defendant to search any accounts over which it admitted having control, for responses to Mr. Cochran regarding plaintiffs. Defendant searched the Condominium Association and management company servers and reported no responsive communications.

The Court squarely rejected defendant’s possession, custody, and control argument:

Given the failure of Defendant’s search of the Harborview and Barkan servers to uncover any communications responsive to Mr. Cochran from Defendant’s Board Members, the Court must determine whether a search of their private emails is appropriate. As explained during the January 2024 discovery hearing, a limited search of the private emails for any communications responding to John Cochran from 2019-21 regarding the Clarks or Ms. Delorme appropriately balances the need for further discovery while limiting the burden on Defendant. Defendant, at the end of the hearing and in their Opposition, oppose this request on the grounds that it does not have custody or control over the private emails of its Board Members…. As Plaintiffs highlight and as discussed below, this position is incorrect. [emphasis added].

Id. at *4.

The Court wrote that it is well-established that a company’s officer cannot avoid discovery by using personal email for work purposes. Id. at *5. It wrote that use of private email for business purposes “does not lower the threshold for reasonable inquiries, and, if anything, increases it.” Id.

“[D]ocuments 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.” Goodman v. Praxair Servs., Inc., 632 F. Supp. 2d 494, 515 (D. Md. 2009) (internal citations omitted). This is well established in the District of Maryland. Please see also The “Practical Ability” Standard for “Control” in Maryland (Dec. 11, 2020); Isn’t It Time for a Uniform National Standard on “Possession, Custody, or Control”? (Sep. 7, 2022).

The Clark Court added: “Documents are not discoverable under Rule 34 if the party that holds them could legally – and without breaching any contract – continue to refuse to turn over such documents….” Id. at *5 (citation omitted).

It then enunciated the appropriate test:

To determine whether documents belonging to a non-party are in the possession, custody, or control of a party, courts examine the degree of authority the responding party possesses over the non-party…. As part of this analysis, the Court may consider whether Plaintiffs’ proffered example documents show that Board Members were conducting official Board business on personal accounts, using personal accounts for professional work, or otherwise communicating about Board affairs on personal accounts.

Id. at *6 (emphasis added; cleaned up).

Interestingly, it added that: “While Defendant correctly asserts that it is not its responsibility to personally review the emails in its Board Members’ private inboxes, it is not absolved of all responsibility to attempt to obtain the emails. Defendant, at a minimum, has an obligation to ask its current Board Members for emails that may be relevant to the case, as the Court ordered.” Id. at *6 (emphasis added). It wrote:

Several courts have rejected Defendant’s position that it has no control over the private email accounts of its Board Members even if they may have been using them to discuss Board-related matters. As one court has stated, “[s]uch an approach would gut Rule 34 and make it way too easy for high-level executives to hide evidence.”

Id. at *7 (emphasis added; cleaned up).

The Clark Court cited contrary precedent. Id. at *7. However, “[n]onetheless, the combination of the emails, which were directed to the private accounts of several Board Members, and the inconsistency with Dr. Broadbent’s prior representation provide cause for a limited search.” Id.

“TEETH” AND LIMITS

The Clark Court’s order had teeth: “If any of the current Board Members refuse to provide any responsive emails to Plaintiffs, the Court will consider Plaintiffs’ request for a third-party subpoena for such information.” Id. at *7.

The Court’s order was limited “to current Board Members; it does not apply to individuals who may have received emails from Mr. Cochran but are no longer on the Board,” or to those who were not members during the relevant time frame.

THE NEED FOR INFORMATION GOVERNANCE

Information is frequently an organization’s most valuable asset. Businesses routinely control, for example, how company automobiles are used, but neglect to develop policies governing how information is created and stored.

Thoughtful information governance, prior to litigation, is critically important. I have had several instances where the use of personal email accounts for business purposes caused markedly increased costs.

Here, in Clark, that cost escalation likely also occurred. How were the personal accounts collected and searched, for example? How many additional gigabytes of information were involved?

The Condominium Association would have been well-advised to have an information governance policy prohibiting the use of personal email accounts for condominium business.

It is not costly to avoid the problem. For example, Google Workspace advertises business accounts at $6 to $18 per user per month.

Most frequently, an issue arises where an employee uses business email accounts or hardware for personal use in violation of a “no personal use” policy.^[2] That is, of course, the “flip side” of Clark.

As such, businesses need to carefully consider whether they will permit employees to use business information technology systems for private work. For example, while allowing an employee to use company resources for charitable work may be commendable, it can impose substantial costs if the non-business work leads to litigation. Information Governance Decisions Can Carry a Big Price Tag (Feb. 23, 2022). A recent article about a professor who used his university email system for non-university work provides an example of the costs that an information governance policy may impose on an unwary employer. S. Francis Ward, “Chapman University says it didn’t authorize law prof’s representation of Trump, yet work was on server” (ABA Journal Feb. 7, 2022). According to the article Professor Eastman used Chapman University email to represent former President Trump. The House Select Committee issued a subpoena to the university. Please see also Recent Decision Shows the Need for Information Governance, Computer Usage Policies, and Employee Training (Nov. 19, 2021).

The Hon. Andrew J. Peck (ret.) pointed to the value of information governance in William A. Gross Const. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134 (S.D.N.Y. 2009).

In Clark, the Court carefully protected privacy interests in personal email accounts that were used for Condominium Association business. Nevertheless, it is safe to assume that defendant’s costs were increased due to its permissive information governance.

The Clark Court’s careful and thorough analysis of “possession, custody, and control” emphasizes the need for prudent information governance.

Notes

^[1] The Court’s discussion of privilege logging issues is not addressed in this blog.

^[2] E.g., Scott v. Beth Israel Hosp., 17 Misc. 3d 934, 847 N.Y.S. 2d 436 (2007); Stengart v. Loving Care Agency, Inc., 201 N.J. 300, 321, 990 A.2d 650 (2010); Banks v. Mario Indust. of Va., 274 Va. 438, 650 S.E.2d 687 (2007); In re Asia Global Crossing Ltd., 322 B.R. 247 (Bankr. S.D.N.Y. 2005); Curto v. Medical World Communications, Inc., 2006 WL 1318387 (E.D.N.Y. May 15, 2006); P. Rice, “Attorney-Client Privilege in the United States,” § 6:8. Employees’ personal expectation of confidentiality in e-mail and digital communications (Dec. 2023 update); J. Gergacz, “Employees’ Use of Employer Computers to Communicate With Their Own Attorneys and the Attorney-Client Privilege,” 10 Comp. L. Rev. & Tech. J.269 (2006); S. Carnathan, “Attorney-Client Privilege Trumps Workplace Regulations,” ABA Litigation, Vol. 35, No. 1 (Fall 2009).