Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In divorce litigation, when your client’s husband or wife has stored financial information electronically, discovery must be aimed at obtaining e-mail and data stored on Internet accounts and computer data files to locate hidden assets and to attempt to prove cash income. The start of the new millennium will forever be identified with cutting-edge technology, home computers and the Internet. In 2000, 65.8 percent of all households owned at least one computer, an increase from only 11.5 percent in 1990. See “Annual Report of Current Consumption Survey,” Department of Business Statistics, Economic and Social Research Institute (April 23, 2001). Computers and the Internet have forever changed how business is conducted, how stocks are traded, how information is obtained and even how litigation is approached and handled. For example, Web sites exist that coach litigants on how to give the right answers to the psychological testing administered in the context of custody litigation and how to hide assets in anticipation of divorce. More important, technology has given litigants the ability to conduct their financial affairs in an easier, more manageable and sometimes secretive manner. E-mail and the Internet have cut down on and, in many instances, eliminated, the need for documents. RELEVANCY AND PRIVACY Rule 4:10-2 provides that a party may obtain discovery about any matter that is relevant to the subject matter of the litigation so long as that information is not privileged. Relevancy, for the purpose of the rule, was defined in K.S. v. ABC Prof’l Corp., 330 N.J. Super. 288 (App. Div. 2000), as a “tendency in reason to prove or disprove any fact of consequence to the determination of the action.” Although subpoenaes can be issued to Internet companies to obtain e-mail and other information, there are no reported decisions specifically addressing the right of a litigant to seek the production of information or electronically-stored documents from a computer hard drive. Unfortunately, the case law and the court rules also offer little assistance to an attorney charged with finding hidden assets and proving cash income in a divorce case. Because of the difficult nature of proving such claims (which has always been a difficult and expensive problem in divorce cases), matrimonial law attorneys often use asset searches, private investigators and forensic accountants. However, even the ability of a forensic accountant to find hidden income and assets is limited. While it may be easy for such an expert to represent that assets are unaccounted for or that income has not been accurately reported, finding the assets and quantifying the unreported income is difficult and sometimes impossible without the appropriate paper trail. Recent changes in the law have not helped resolve the dilemma. The federal Freedom of Information Act and New Jersey Right-to-Know Statute were amended in January 2002 to afford greater protection of privacy to individuals when it comes to the disclosure of financial information. The new Gramm-Leach-Bliley, Federal Fair Credit Reporting and Fair Debt Collection acts have also made it more difficult to obtain an individual’s banking information without a subpoena. In addition, credit information is now only obtainable with the consent of the individual. In the recent past, this information was obtainable by anyone who knew how to use public records. In at least two reported decisions involving the Right-to-Know Statute, the New Jersey Supreme Court allowed litigants discovery of data stored in computer files. In Higg-A-Rella, Inc. v. County of Essex, 141 N.J. 35 (1995), the court ruled that a seller of municipal tax-assessment data — commercial real estate appraiser — was entitled to access to the computer files of the county for the purpose of obtaining tax information. In Board of Educ. of Newark v. N.J. Dept. of Treasury, 145 N.J. 269 (1996), the supreme court ruled that a litigant was entitled to discovery relating to various financial statistics kept by the state on its computer databases. The information was extracted from the databases by an independent private administrator. Unfortunately, these cases relate to the ability of the public to obtain public information under the Right-To-Know Statute and not the ability of private citizens to obtain such discovery in civil litigation. Nevertheless, analogies can be drawn. One of the premises in these two cases is that information, regardless of the manner in which it is stored, is subject to discovery. The court in Higg-A-Rella, Inc., stated, “we find that in view of rapidly advancing technological changes in storing information electronically, computer tapes also can be public records.” INTERPRETING DISCOVERY RULES Although not explicitly stated in the case law, obtaining electronically-stored information through discovery is more commonplace in some areas of the law than in others. For example, in cases involving patent infringement or employment litigation where technology has long been the subject of the litigation itself, courts have been forced to interpret the discovery rules to keep up with technology. In Alk Assoc. v. Multimodal App. Sys., 276 N.J. Super. 310 (App. Div. 1994), the court entered a protective order to ensure that trade secrets would not be disclosed during the review of the computer programs of a litigant by the attorneys and experts involved in discovery. In McGuire v. Acufex Microsurgical, Inc., 175 F.R.D. 149 (Mass. Dist. Ct. 1997), the court ordered discovery relating to the circumstances surrounding the generation and editing of a memorandum in a sexual harassment lawsuit. To defend the request of the plaintiff for sanctions based on the theory of spoliation of evidence, the defendants recreated from their computer files and backup tapes an original, unedited version of the memorandum. The defendants were able to determine its history, when it was edited and on whose terminal it was edited. In Commodity Futures Trading Commission v. American Metals Exchange Corp., No. 87-2591, 1991 U.S. Dist. LEXIS 20484 (N.J. Aug. 31, 1991), the computer files of the defendant were seized to determine customer transactions, to create a client list and to obtain financial information for the purpose of assessing damages. E-DISCOVERY Recently, there has been some recognition by the courts that the manner in which information is transmitted and stored today is having an impact on the manner in which discovery is conducted in divorce litigation. In the recent matrimonial case White v. White, 344 N.J. Super. 211 (Ch. Div. 2001), the court collaterally addressed the issue of electronically-stored discovery. In White, the husband sought to suppress e-mail that he had stored on the hard drive of the family computer. His wife had obtained these e-mails through the use of a computer investigation and research firm that, unbeknownst to the husband, copied and analyzed the computer hard drive. The case focused on the claims of the husband for civil damages from his spouse under the New Jersey Wiretap Act and also on the tort of intrusion on seclusion. The information obtained from the hard drive was not disclosed or disseminated and a protective order was entered. The wife maintained that the information discovered was “highly relevant and material to the custody determination yet to be made.” The court ultimately found that the wife had not violated the New Jersey Wiretap Act and had not invaded the privacy of her spouse. Although Whiteis only a trial court decision and is really a wiretapping case, precedent has arguably been set that sanctions discovery of electronically stored information in a matrimonial law case. The home or business computer of a litigant may prove to be a treasure trove of information in divorce cases. In some cases, the only way to properly investigate the claims of a spouse of undisclosed or hidden income and assets may be an analysis of the home or business computer of the other spouse. A false sense of security exists when information is saved on a computer. The hard drive of any computer can be searched to discover stored information and computer programs can be purchased to aid in the search process. For those litigants who are less computer literate, computer analysis firms, such as that used by the wife in White,although costly, can be retained to copy and search an entire hard drive. There is also a mistaken belief that, once information is deleted from the computer hard drive, it is gone forever. Unless the computer hard drive itself is destroyed, deleted information and even e-mail can be retrieved by a computer analyst. Programs that guarantee to wipe a hard drive clean may make it more difficult to retrieve the deleted information, but the only way permanently to delete information from a computer is to destroy its hard drive. NUTS AND BOLTS Some cases financially justify the expense of retaining a computer-analysis firm. In a nut shell, the computer hard drive is copied by a technician who then returns to his office to search the copied hard drive for specific information. No damage is done to the original hard drive or the information stored on it. Word searches are generally the first means of conducting the data retrieval. For example, if the litigant operates a limousine service, some words and phrases that may be searched include client lists, automobile repairs, automobile expenses, chauffeurs, calendars, payroll and tips. If the litigant is believed to have overseas bank accounts, the word search may include the names of banks and countries that are known to cater to such discrete investing. The purpose of the search is to locate files on the hard drive that contain the words being searched. The files are then opened and inspected by the technician in hopes of finding evidence. If the word search does not bear any fruit, the other option is to pay for a complete analysis of the entire hard drive which will involve the technician’s inspecting each file, saved or deleted. Gaining access to the computer hard drive is the first step. Although this may not be difficult in the case of a home computer, privacy issues do exist. IN THE COURSE OF TRANSMISSION It is well-settled law that the New Jersey Wiretapping Act applies when one spouse illegally records the communications of the other spouse. See Scott v. Scott, 277 N.J. Super 601 (Ch. Div. 1994) and M.G. v. J.C., 254 N.J. Super 470 (Ch. Div. 1991). The New Jersey Wiretapping and Electronic Surveillance Control Act, N.J.S.A. 2A:156A-1 et seq., which is identical to the Federal Wiretap Act, 18 U.S.C. 2510 et seq., was enacted in 1968 and has been amended numerous times over the years in an attempt to keep up with changing technology. In 1993, New Jersey amended its act to regulate access of stored electronic communications. N.J.S.A 2A:156A-27(a) provides that a person is guilty of a crime of the fourth degree if he or she knowingly accesses, without authorization, a facility through which an electronic communication service is provided. The same applies if someone exceeds an authorization to access that facility and obtains, alters or prevents authorized access to a wire or electronic communication while the communication is in electronic storage. N.J.S.A. 2A:156A-1(q) defines electronic storage as any temporary, immediate storage of a wire or electronic communication incidental to the electronic transmission thereof and any storage of such communication by an electronic service for purpose of backup protection of the communication. Because of the manner in which e-mail (for example) is transmitted and ultimately stored, two trial court decisions have held that the state and federal wiretapping acts do not extend to e-mail retrieved by the recipient and then stored, but protects only those electronic communications that were made in the course of transmission or made as backup to that course of transmission. See White and Fraser v. Nationwide Mutual Ins. Co., 135 F. Supp.2d 623 (E.D. Pa. 2001). In short, an illegal interception of an electronic communication can only occur during its transmission process. In Steve Jackson Games, Inc. v. United States Secret Service, et al., 36 F.3d 457 (5th Cir. 1994), the court noted the distinctions Congress intended to draw between communications being transmitted and communications in electronic storage. And in United States v. Reyes, 922 F.Supp. 8186 (S.D.N.Y. 1996), the court stated that the acquisition of the data must be simultaneous with the original transmission of the data. WRONGFUL ACCESS Nonetheless, when determining if accessing a computer hard drive to obtain stored e-mail or other information amounts to a violation of the New Jersey Wiretap Act, the operative question to be answered is whether the access was wrongful and without authorization. The court in Whiteheld that the wife did not act without authorization, reasoning that the wife, albeit infrequently, had use of the family computer and did not access the information by use of her husband’s password. The actions of the wife were also not deemed to be an interception of an electronic communication because a post-transmission stored electronic communication by definition cannot be intercepted. The court found that the wife’s actions were not actionable because the intrusion occurred on the family computer, to which the husband had no expectation or, at most, only a limited expectation, of privacy. BUSINESS COMPUTERS If obtaining access to stored e-mail was deemed not to be an illegal wiretap or an invasion of privacy, it is within reason to extend that same legal rationale to obtaining other information or documents stored on the hard drive of a family computer. Obtaining stored information from a family computer hard drive can be analogous to gaining access to a home safe or a box of documents kept in a home office. The only difference is the manner in which the information is stored. The more difficult task is to seek information stored on a business computer hard drive. More likely than not, the most useful information would be stored on the computer used by the litigant at his or her place of business, where that person spends the majority of the day. Although the husband in Whitewas unsuccessful in his argument that the retrieval of information should be permissible only if a warrant or court order had been entered before the computer hard drive was accessed, gaining access and copying the computer hard drive of a computer used at one’s place of employment is much more problematic and will require a court order in order to enter the place of business. Rule 4:10-2(c) provides that a party may obtain discovery of documents and tangible things otherwise discoverable under R. 4:10-2(a) upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the case and is unable, without undue hardship, to obtain the substantial equivalent of the materials by other means. And R. 4:18-1(a) permits the entry of a litigant’s premises for the purposes of inspecting discovery. Therefore, a means of obtaining access to a business computer of a litigant exists under the substantial-need and undue-hardship standard. Arguably, this rule would not apply to obtaining information stored electronically on a computer if the information stored thereon could not otherwise be obtained by any other means. The application seeking access to the business computer must be made by ex parte Order to Show Cause in order to avoid the possible spoliation of evidence. Since the application is being requested without any advance notice, cause must be presented to the court for the need to enter the business to copy the computer hard drive. Such proof is often located after the hard drive of the home computer is analyzed. A strong argument justifying the need for such discovery could be made if evidence from the home computer demonstrates that the litigant is not being forthright about his or her finances. Attempting to convince a court to allow access to a business computer based on mere allegations and without any corroboration relating to hidden income or assets is otherwise very difficult. Obtaining information in the manner described herein may be viewed as extraordinary. But for the person who believes that such an entry into one’s business to copy a computer hard drive is little more than a novel theory that would never work in the real world of litigation, you are wrong. Very recently, in a pending case in which the author is involved, what began as a creative argument ended in the entry of an Order to Show Cause granting entry into the businesses of a litigant in two states in order to copy the hard drives of four different computers. Cases involving genuine issues of unreported income and undisclosed or hidden assets warrant aggressive measures and remedies. Without obtaining discovery in the manner described, it is possible that the truth may never be learned in some cases. If a party is not being forthright, such nontraditional discovery methods should be available. Perhaps 10 or 20 years ago, some might have thought that filing an Order to Show Cause seeking permission to freeze access to a safe deposit box or seeking permission to retain a locksmith to open a home safe was an aggressive solution to a potential spoliation of evidence problem. The use of computer technicians to locate financial information regarding cash and hidden assets is no different. It is the same problem and remedy but in a different form. Technology has changed the form, not the substance, of the problem — and hence the need for new and creative solutions. Angelo Sarno is an associate at Weinstein Snyder Lindemann, www.familylawnj.com, of Roseland, N.J.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.