e-Lessons Learned

Authored By: K.K.

Citation: In re Gary E. Krause, 367 B.R. 740 (Bankr. D. Kan. 2007)

Employee/Employer Implicated: Chapter 7 Debtor seeking to avoid paying taxes on income from hidden trusts and off-shore accounts.

e-Lesson Learned: Computer programs that offer to eliminate evidence are a terrible idea. Instead, comply with discovery requests and don’t attempt to wipe your computer with special software.

Authored By: Shannon P. Hennessy

Citation: Ball v. Versar Inc., 2005 U.S. Dist. LEXIS 24351 (S.D. Ind. Sept. 23, 2005)

Employee/Employer Implicated: Counsel, Trustees of a Superfund Remediation Trust

e-Lesson Learned: If there is the potential for litigation on the horizon, be wise, and do not delete relevant e-mails. Realize that you can face sanctions for deleting e-mails regardless of whether counsel advised you to retain documents. When in doubt, ask before you delete.

Authored By: Evan Harris

Citation: Broccoli v. Echostar Communications Corp., 229 F.R.D. 506 (D. Md. 2005)

Employee/Employer Implicated: In-house counsel and Owner/Executives

e-Lesson Learned: A corporation must issue a litigation hold that suspends routine document destruction as soon as it becomes aware of litigation, or can reasonably anticipate litigation. A corporation’s failure to comply with this obligation can result in sanctions including an adverse jury instruction, especially when that corporation is a large public enterprise.

Authored By: Courtney C. Ray

Citation: Arista Records, Inc. v. Sakfield Holding Co., 314 F. Supp. 2d 27 (D.D.C. 2004)

Employee/Employer Implicated: The entire Sakfield Holding Company

e-Lesson Learned: When litigation is imminent, deleting files for the purpose of “preventing further transfer of music files” is ridiculous, while taking the servers off-line to preserve evidence would be one of many intelligent responses. Also, while a court may not impose monetary sanctions in response to a party’s inept actions, most courts will inevitably find a way to punish the party for its actions.

Authored By: Sheetal Patel

Citation: Mosaid Technologies Inc. v. Samsung Electronics Co., Ltd. 348 F.Supp.2d 332 (D.N.J., 2004)

Employee/Employer Implicated: Owner, In-house and Outside Counsel

e-Lesson Learned: A reasonable litigant is obligated to preserve potentially relevant digital information. Parties who fail to comply with that obligation do so at the risk of facing spoliation sanctions. Thus, when in doubt, be a reasonable litigant!

Authored By: Courtney C. Ray

Citation: United States v. O’Keefe, 2008 WL 449729 (D.D.C. Feb. 18, 2008)

Employee/Employer Implicated: Visa Unit Chief at the United States Consulate General

e-Lesson Learned: Failure to provide a method of production means requesting parties receive the documents in their reasonably used state, regardless of their ability to search and the lack of metadata. Furthermore, inadequate search terms will not be disciplined without proof that a broader basis of terms would have resulted in more hits.

Authored By: Evan Harris

Citation: Treppel v. Biovail Corp., No. 03 Civ. 3002 (PKL)(JCF), 2008 WL 866594 (S.D.N.Y. Apr. 2, 2008)

Employee/Employer Implicated: In-House Council

e-Lesson Learned: A corporation has an obligation to preserve any information that is potentially relevant to a litigation as soon as that litigation becomes known or can reasonably be anticipated. Once the threat of a pending litigation becomes real, a corporation must issue a clear litigation hold to all employees and then taken the necessary steps to ensure that everyone actually complies with that hold. Failure to comply with these obligations can result in sanctions ranging from having to foot the bill for additional discovery to an adverse inference instruction to a jury.

Authored By: Bradford Muller

Citation: Metrokane, Inc. v. Built NY, Inc., Nos. 06 Civ. 14447 (LAK) (MHD), 07 Civ. 2084 (LAK) (MHD), 2008 WL 4185865 (S.D.N.Y. Sept. 3, 2008)

Employee/Employer Implicated: Upper Management

e-Lesson Learned: Metrokane’s problems derived from their negligence in either failing to produce available e-mails or in failing to maintain e-mails that it had a duty to preserve, and in their “deliberate and inexcusable” decision to improperly redact produced e-mails. Metrokane’s problems began with their upper management failing to create a written policy on document retention. Had such a policy been in effect, perhaps Metrokane would have preserved the e-mails in question and properly produced them during discovery, avoiding sanctions. Therefore, every business must have a document retention policy in place that states that if the company is anticipating litigation, it will suspend its routine document destruction activities and put in place a litigation hold to ensure the preservation of all relevant documents, including e-mails. The company must also be honest players in discovery, and should not redact discoverable information from properly produced documents. Finally, business people must be aware of the fact that unlike a casual phone conversation, e-mail creates a discoverable document trail, and thus must be careful when making potentially damaging comments through e-mail exchanges.