Loose Clicks Sink Ships Posted By Daniel Kaiser, Esq. on August 31, 2009
Need Another Reason to Review your Information Management System? You don’t think so? Here’s one anyway provided on June 4, 2009 by the U.S. Court of Appeals (8th Cir.): American Boat Company, Inc. v. Unknown Sunken Barge.[1]
This case really should be subtitled “Are You Being Served?” – although it sadly lacks in ironic humor or the English accents.
In February a towboat company called American Boat lost one of its towboats, to the tune of $3 Million in damages, in a collision with a hidden submerged barge on the lower Mississippi River. American Boat brought an action against the United States alleging negligence for failure to maintain a navigable channel. Facing 
a district court summary judgment for the U.S., counsel for American Boat filed a Motion to Amend Judgment or in the Alternative for Reconsideration.
At this point someone somewhere seems to have dropped the ball.
The District Court issued an adverse final ruling on both of American Boat’s motions. The court notified local counsel of this ruling through email only, via their new electronic notification system, a common practice when attorneys have signed up for a court’s electronic notification system. In this case, American Boat’s local counsel (but not their trial counsel) had signed up for electronic notification. American Boat apparently never received this message which means they failed to appeal this final order within the allowable period. Four months later, too late to file an appeal, American Boat’s attorneys learned of the adverse final ruling through the court’s Public Access to Court Electronic Records (PACER) website. Counsel for American Boat cried foul.
First, it was of no importance that the court sent American Boat’s trial counsel neither electronic nor written notice. The court said it sent electronic notice to the party’s local counsel, thus the party was deemed to be on notice. American Boat’s counsel filed affidavits claiming that the office of local counsel never in fact received the court’s automatically generated email notification. The court kept the denials rolling; finding that counsel had received timely electronic notice as reflected by court docket, the court denied American Boat’s Motion to Reopen. Forced to contend with a presumption of delivery for email sent by the court’s electronic notification system,[2] only an appeal to the Eighth Circuit won American Boat an evidentiary hearing to determine whether the email in question was ever truly received. Following the hearing, once again, American Boat’s Motion to Amend Judgment or for Reconsideration was denied. Expert analysis of counsel’s computers brought the court to the conclusion that although no sign of the email notification could be found on counsel’s hard drives, the law firm had in fact received notice of the district court’s ruling as reflected in the court’s docket entry.
Digging deeper, it seems that a staff member working for local counsel had the job of checking both her own email account and that of American Boat’s attorney. Expert examination of this staff member’s office hard drive revealed no trace of the court’s email Notice. On the other hand, evidence was presented that the Notice was correctly addressed by the court and was successfully received by the law firm’s ISP server. The law firm used an email software program that would POP mail from their ISP’s server to their own local storage once that email is accessed. By default such programs then delete the original record from the ISP server, meaning the email then only exists in its final point of destination. The firm had not changed this default setting, and any item of email resided only on the hard drive of the computer used to access it. Oddly enough, although the staff member sometimes used the firm’s front-desk computer to check emails, nobody went to the trouble to examine that particular hard drive. If the staffer opened the court’s email Notice from the front desk, this Notice would have never made it to her own office computer. An expert witness testified “95 percent” certainty that this is what, in fact, happened.
Based on such evidence, the 8th Circuit upheld the district court’s determination that American Boat did receive the court’s Notice, thus the Motion to Reopen was correctly denied. The 8th Circuit held that “[o]nce the electronic notifications reached the ISP, they were available to local counsel for American Boat, in the same way that a letter that has reached a post office box becomes available to the owner of that box.”[3] The court placed the burden to rebut the presumption of delivery of Notice upon plaintiffs,[4] and providing proof that one computer used by the law firm held no trace of said Notice was not proof adequate to rebut the presumption. Failing to rebut the presumption, American Boat bore the consequences.
So just in case you needed another reason to review your Information Management System, do you know if you’re being served? What you don’t know can really hurt you. Modifying your email software program and tweaking your backup storage policy to ensure retention of your records are small ways to avoid big pain.
[1] No. 08-2166 (8th Cir. 2009).
[2] See Kennell v. Gates, 215 F.3d 825, 829 (8th Cir. 2000).
[3] American Boat Company, Inc. v. Unknown Sunken Barge, No. 08-2166 (8th Cir. 2009).
[4] Am. Boat Co., 418 F.3d at 914 (8th Cir. 2005).
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