Electronic Data Records Law | How to Win E-Discovery

Cloud Computing Police Raid

Seizure of Servers; Co-mingled Data

What happens when police seize servers belonging to a cloud computing service provider?

Spring 2009, a federal district court granted the FBI a search warrant to seize control of computer servers and related equipment in facilities run by Core IP Networks.  Apparently Core leased its facilities to the owners of servers, including a cloud computing service provider named Liquid Motors. Liquid Motors was not accused of wrongdoing, but the FBI had information suggesting that a criminal enterprise (including apparently Core) had used LM’s servers or some of the data stored in them.

LM helps large, national auto dealers manage their inventory and Internet marketing.  The seizure shut LM down, and debilitated the operations of its innocent customers.  The data of all LM users and customers were co-mingled in a cloud-computing style.

Request Relief from Court

LM promptly requested that the court cause the FBI to release the servers.  It claimed that it and its innocent customers were suffering great economic hard. 

The court denied the request. The court was satisfied that the FBI had adequate justification to hold the servers.

Court Appearance Gives FBI Sense of Urgency

However, the court hearing put FBI under the spotlight.  FBI did not want to appear unreasonable in court.  Recognizing the economic impact of its action, the FBI said it was working urgently (over a weekend) to copy data from the hard drives of the servers, with a view to returning the servers to LM as quickly as possible. Liquid Motors, Inc. v. Lynd, No. 3:09-cv-0611-N (N.D. Tex. April 3, 2009).

As cloud computing becomes more common, I suspect courts will come to expect police like FBI to refine their methods so that targeted data can be secured without damaging all the innocent people whose data and services are coincidently housed with it. Refined methods might include, for example, allowing servers to continue functioning normally while target records are copied.

Backup Data

The customers of cloud services face more than just the risk that police will confiscate a provider's servers. The provider may go into bankruptcy or suffer sabotage at the hands of a disgruntled employee. To address these risks, customers might spread or duplicate their data and services across multiple service providers, located in multiple jurisdictions. 

–Benjamin Wright, Legal Issues Instructor at the SANS Institute

Update:  The risk that police raids will damage innocent cloud customers needs to be seen in context.  Similar risk applies in many sectors of the economy.  It is not uncommon that the seizure of assets by police affects innocent bystanders.  For example, FBI confiscated $392,000 of cash belonging to an innocent New York check-cashing company when it seized assets from an armored car company under investigation.  John Emshwiller and Gary Fields, "Federal Asset Seizures Rise, Netting Innocent with Guilty," Wall Street Journal, August 22, 2011.

New Ideas: Post banner to promote confidentiality at data center.

Related:  Opinion regarding Megaupload Takedown and

Theories of Relief for Legitimate Megaupload Users

Electronic Mail Storage In-House or In the Cloud

E-mail Archive Economics

How expensive is it to store many terabytes of enterprise email so they are available for survey, eDiscovery, investigations, internal control and purposes of institutional memory?  The raw cost of data storage is dropping, so is it not cheap to retain lots of email?

I explored this topic in an email exchange with Dennis Vlasich, Director of the IT Department at the municipality of Fontana, California.  Following is our conversation.  

I started by pointing Dennis to my earlier post suggesting "content addressable storage" for inexpensive retention of large volumes of e-mail.  

DENNIS replied: “It [the earlier post] is basically a standard storage vendor's sales pitch and we have a SAN that can accommodate terabytes of ‘cheap’ storage.  You have to factor in the rack space, power and HVAC requirements to keep the storage system running and I can assure you that because such technology [content addressable storage] is less expensive, its MTBF [mean time between failures] will be much shorter than other forms of storage, so what happens when it crashes?  The bottom line is cost versus benefit versus risk.”  [Update:  Greg Smith of Messaging Architects responds to Dennis' comment.]

To which BEN said: “As a lawyer, here's what I don't understand.  I use Yahoo as my business email provider.  I pay Yahoo a paltry $20 a year for this email service, and Yahoo provides me unlimited storage.  Unlimited.  And since I pay for my service, Yahoo does not attach ads to my email. I store on Yahoo all my business e-mail (including attachments) dating back to 2004.  (I also back it up in zip files I download onto a local hard drive.)  The economics suggest that storage costs -- including all the infrastructure and management -- are just not a big deal to Yahoo.  Why can't an in-house IT department at a mid-sized enterprise get anywhere close to the same economics that Yahoo (or AOL or Hotmail) gets?”

Then DENNIS said: “Yahoo probably restricts the size of your attachments to 1MB and your mail client (probably not Outlook) does not have the search and archiving capabilities of an Exchange/Outlook environment.  I don't know what your SLA [service level agreement] is with them, but I would guess they aren't guaranteeing that all your email will be available forever.

"The City of Los Angeles just switched from an in-house mail system (using Groupwise) to Google's gmail for 30,000 users.  Google charges $50 per year per user for up to 250 gigabyte of disk space, however they do not have any archiving capabilities yet.  

“Google, Yahoo, and other large providers are using data center technologies on a massive scale that brings the cost per MB down below what those of us in smaller shops can come even close to. The big problem they have is security.  Google had to guarantee LA to use dedicated servers and storage for all their email so it wouldn't co-mingle with their other customers, and for $7.5MM Google said OK.  Most of the rest of us cannot negotiate on that scale.

“The administration overhead for managed disk space is quite high because it requires routine backups with take time and resources which all cost money.”

BEN responded: “My attachments, both incoming and outgoing, are limited to 20MB, which is reasonably large.  The mail client I use is Yahoo's web mail page.  It provides quite a few search capabilities.  I have my 'archives' arranged as large chronological zip folders on my local hard drive. Still, Yahoo stores a full copy of all my emails back to 2004.”

DENNIS: “[Regarding the 1MB attachment limit] I guess I was thinking of the free version [of Yahoo mail].  It's been a while since I looked at those kinds of mail services. We're looking seriously at Google Apps with gmail (waiting to see how things work for LA).  The 250GB limit might be a problem for some of our users, but I figure by the time we're ready to move, there will be more space available or they will have an archiving feature.”

Update July 2010:  The General Services Administration has certified Google Apps as qualified for use by government agencies.  Typically, a US government implementation of Google Apps would keep data on servers in the continental US.

–-Benjamin Wright.    A senior instructor at the SANS Institute, Mr. Wright regularly serves as a public speaker at lunch and dinner meetings for local professional groups, such as IIA and ARMA.

How to store e-mail long term?

Is Archival Affordable?

As a mere lawyer, I struggle to understand from a technical perspective how to implement e-mail retention policy in a larger organization across many years.  Legally, the organization may – due to litigation hold or other factors – have incentive to store some (maybe a lot) of email a long time, more than five or seven years.

Legally speaking, the biggest mistake with e-mail records is to destroy them too early.  That could be spoliation.  So why not delay destruction a long time?

In theory long-term storage of much e-mail should not be expensive because the cost of raw storage is dropping.  However, IT folks in my SANS courses argue that the cost of storage media is not the key issue.  They argue the overhead associated with massive storage is high (they bring up things like expensive disk arrays).