IN IPI RAID LAST NOVEMBER
San Nicolas says FBI returned devices in jumble last Jan. 23, refuses to return paper records
The Federal Bureau of Investigation and other U.S. government law enforcement officials seized a total of 160 data storage devices and more than 50 boxes of paper records during their raid on the Imperial Pacific International (CNMI) LLC’s central offices in Puerto Rico in early November 2019, according to IPI general counsel Joey P. San Nicolas.
In his declaration in federal court, San Nicolas, who is a former CNMI attorney general, disclosed that federal agents seized in the raid almost all of IPI’s then existing central office data storage devices, or flash drives.
San Nicolas filed his declaration last Monday in support of IPI’s opposition to seven former workers’ motion for sanctions against IPI.
The former workers, who are suing IPI and its contractor and subcontractor over the alleged injuries they suffered during accidents at the worksite of IPI’s casino/resort project in Garapan, have asked the federal court to sanction IPI for allegedly violating the court’s order.
The seven plaintiffs, through counsel Aaron Halegua and Bruce Berline, said IPI has violated the U.S. District Court for the NMI’s initial order to produce all discovery materials by Jan. 13, 2020.
Halegua and Berline said IPI has also now violated the stipulation ordered by the court requiring it to produce all discovery materials by Feb. 24, 2020.
The FBI was reportedly looking into possible violations of federal laws that involve Gov. Ralph DLG Torres, his family, IPI, and other persons, resulting in the execution of search warrants on several sites last Nov. 7 and 8.
In his declaration, San Nicolas said the devices seized were nine “All in Ones,” 92 mini CPUs, 21 laptops, 34 computer hard drives, a USB drive, two external hard drives, and a thumb drive.
When the FBI returned the devices to IPI last Jan. 23, 2020, but they were in a jumble, San Nicolas said. He said many of the devices were already unidentifiable as to their original source without time-consuming data analysis being performed by a competent IT professional.
San Nicolas said the raid and seizure of the devices was apparently performed as part of a still pending federal law enforcement investigation, the overall scope of which IPI is not aware.
San Nicolas said because of the potential for the seized devices and the data which they stored being used in a federal law enforcement investigation and possible prosecution, and the attendant chain of custody concerns, IPI has not been able to simply put the devices back to work or download all of data onto a central server for analysis.
“Nor does the manner in which the devices were used lead to easy analysis,” said the lawyer, citing that none of the seized mini CPUs were assigned to a particular employee. Instead, San Nicolas said, the devices were set up in a pool within the IPI central office and were made available to employees on a first-come first-served basis, with the employees logging in using an employee number, not a name, and then using the CPU for the day or perhaps only for a few minutes, depending on need.
He said the data on the CPUs is currently being analyzed but that their understanding is that some of IPI CPU’s have a user list exceeding 30 current or former IPI employee numbers.
San Nicolas said their preliminary analysis indicates that the 160 devices hold a colossal amount of data, precisely how much is as yet unknown.
“Precisely what types of information this data is comprised of and how much of it is potentially relevant to this lawsuit is not yet clear,” he said.
With respect to the seizure of more than 50 boxes of paper records, San Nicolas said the U.S. government refuses to return such records to IPI despite IPI’s requests.
He said because of the broad nature of the warrant that the federal agents were operating under and the general nature of the receipts that the FBI issued to IPI after the seizure, precisely what records were seized remains unclear to IPI.
In IPI’s opposition to the motion for sanctions, IPI counsel Sean E. Frink said none of IPI’s delayed production of requested documents or materials were due to willfulness, bad faith, or its fault. “This is an extremely complicated and unique discovery matter,” Frink said.
He said IPI has proceeded diligently and in good faith, assigning 11employees and a contractor, in order to comply with its discovery obligations in this case, and has made significant progress.
Frink said IPI, for the first time in its existence, faces a very complicated and unique e-discovery universe. He said the FBI raids and the related issues, the extremely complicated issues involved with IPI’s ESI storage and access issues, the Chinese language overlay to the entire operation, prior lack of counsel experience with e-discovery, prior IPI counsel Kelley Butcher’s unexpected family demands, and high IPI personnel turnover, has made the production a uniquely complicated one.
Despite these issues, IPI has made strides in meeting its discovery obligations, Frink said, admittedly at times past the court-ordered deadlines.
Second, Frink said, no one can seriously dispute that the discovery path is fraught with uncertainty because of the COVID-19 pandemic cloud. “If it comes down to having to choose between IPI personnel and contractor (including counsel) personal health or safety versus meeting plaintiffs’ mandated discovery deadlines, the choice will be an obvious one,” Frink said.
He said the plaintiffs’ request that the court impose a prospective $5,000 a day fine under such a circumstances “is draconian.” The lawyer said the economic and related very real human repercussions from a complete shutdown of the CNMI’s only significant industry, tourism, are only now starting to reverberate through the Commonwealth and its people and businesses, and cannot yet be reasonably predicted.