Purposeful Email Deletion Results In Sanctions and Scolding

Posted by Gregg Mayer on Friday, April 11th, 2008   

When email is subpoenaed under the Federal Rules of Civil Procedure, the last thing an individual should do is delete the email and hope the whole mess goes away.

Nevertheless, that’s apparently what a former Texas district attorney did when he was subpoenaed for email from his office. As a result, the court on March 28 held the former DA in contempt, fining him and calling all of his excuses “implausible.”

The case, In re Rosenthal, stems from a civil rights lawsuit in Texas. As part of the case, the plaintiffs sought email communications from Harris County District Attorney Charles Rosenthal to the Harris County Sheriff, among other officials.

At first, the county officials said they “fully complied” with the email request, noting of the 12,785 email messages retrieved during a search, only 61 were relevant to the case.

After more wrangling over what should be disclosed, the plaintiffs argued that not only did the county delay in producing email, but that Rosenthal purposely deleted 2,500 email messages that could no longer be recovered. Astonishingly, Rosenthal acknowledged he did delete the email after he was on notice to preserve the messages:

The respondents admit that Rosenthal deleted e-mails that were the subject of the October 31 subpoena. However, they argue that he did not delete or attempt to delete all e-mails responsive to that subpoena. Rosenthal also asserts that he did not act in concert with the other respondents or seek help from anyone in deleting his e-mails. He contends that at the time that he deleted his e-mails, he believed them to be available for an indefinite period of time on back-up tapes maintained by Harris County Information Systems personnel. Further, Rosenthal contends that he committed error by deleting the e-mails only because he assumed that his counsel…had also printed a hard copy of each email.

The court almost seemed baffled by the blatant disregard of court rules.

At the outset, it is important to note that Rosenthal was familiar with the rules governing the discovery process…Indeed, during the relevant period, he was the District Attorney of Harris County, Texas with more than 40 years of legal experience.

Rosenthal offered a host of hollow excuses: (1) thought there were existing hard copies, (2) thought they were permanently stored in the network’s back-up tapes, (3) wanted to reduce the “large volume of email visible” on his desktop, (4) wanted to be more efficient at work, and (5) wanted to free up memory space.

The court responded:

There is no evidence that Rosenthal’s computer memory space was threatened by additional e-mails or that, in fact, it was short of space. Hence, these reasons – all implausible inconsistencies – defy the law of common sense…This conduct reveals a man confident in his status, entrenched in his brand of law. He would not or could not acknowledge an authority beyond himself. And, like the County Attorneys who appeared earlier in this case, Rosenthal reposes in the idolatry of their own perverted wisdom.

Ultimately, the court held Rosenthal in contempt and monetarily sanctioned him. The court also sanctioned Rosenthal’s attorney representing him in the lawsuit, describing the attorney’s conduct “unprincipled and dilatory, at best, constituting a deliberate indifference” to the court’s orders.

Time and again on CIOLaw.org, we’ve highlighted the dumb ways individuals try to outsmart the court system by deleting – or similarly throwing away – ESI. It never works.

CIOs should ensure they have an archiving system that reliably and effectively stores email and other ESI. Moreover, the system has to preclude rogue activity by end-users who may think it is better to delete email messages that they should preserve. It always backfires, even against former district attorneys.

Read another short post about this case and the court order itself at the terrific “ride the lightning” blog.

DaimlerChrysler Faces Claims Of Spoliation Of ESI

Posted by Gregg Mayer on Tuesday, April 1st, 2008   

A federal judge ruled in March that a plaintiff may bring spoliation claims against DaimlerChrysler Motors Company since the giant automobile manufacturer failed to implement a legal hold.

The case, Schmidt Pontiac-GMC Truck, Inc. v. DaimlerChrysler Motors Company, involves a breach of contract case. Essentially, Schmidt claims DaimlerChrysler breached a settlement agreement to let Schmidt open a Chrysler franchise.

Schmidt filed a lawsuit in 2004. At that time, DaimlerChrysler would have been under a duty to preserve all relevant electronically stored information (“ESI”).

During discovery of the litigation, Schmidt learned DaimlerChrysler had not preserved ESI. Schmidt filed a motion with the court to add a claim of spoliation against DaimlerChrysler. This is called a Motion To Amend. Schmidt alleged:

DaimlerChrysler (1) failed to implement a litigation hold to prevent the destruction of evidence after the complaint was filed…and (2) intentionally destroyed evidence, including replacing employee hard drives.

The court agreed with Schmidt, explaining that if DaimlerChrysler altered or replaced hard drives, then that would impact Schmidt’s ability to prove its case. Consequently, Schmidt is permitted to amend the initial complaint to add a claim for spoliation of evidence.

There has been, and probably will continue to be, discovery as to the destruction of evidence for the purposes of the adverse inference instruction. Any evidence developed in that regard might become known to the jury as a predicate for an adverse inference instruction.

Legal holds are crucial to avoid spoliation claims. CIOs must consult with legal counsel if ever any issues arise that might require preservation of ESI.

‘Safe Harbor’ Protection Gives Way To ‘Legal Hold’

Posted by Gregg Mayer on Monday, March 24th, 2008   

One of the more interesting e-Discovery rules to the Federal Rules of Civil Procedure is Rule 37(e). 

This rule provides that as long as a company follows in good faith its regular document retention policy, then it cannot be sanctioned if electronically stored information (“ESI”) is destroyed, even if that ESI may have been useful in subsequent litigation.  This rule is often called the “safe harbor” rule.

Importantly, however, the “safe harbor” offers no protection if a company allows ESI to be deleted subsequent to a “duty to preserve” – or “litigation hold.” A duty to preserve kicks in when a company reasonably anticipates litigation.

An illustrative way to understand how these two concepts work together is through the case of Doe v. Norwalk Community College.

In Doe, the plaintiff (who was referred to as “Jane Doe” in the lawsuit) sued the college in 2004 after a professor sexually assaulted her. As part of the litigation, the plaintiff wanted to inspect the professor’s computer hard drive.

Before her inspection, the college “wiped” the professor’s hard drive.  Consequently, the plaintiff asked the court to sanction the college.  Specifically, the plaintiff wanted an “adverse inference instruction” in which the court told the jury it could consider the lost ESI in the worst possible light against the college.

In its defense, the college argued the “safe harbor” provision precluded sanctions.  The college argued that the hard drive was wiped as part of the college’s routine deletion practices and it could not be sanctioned for failing to have it on hand.

The court disagreed with the college for two reasons.

First, the college never implemented a legal hold.  The college wiped the hard drive after the plaintiff’s lawyer had sent a demand letter in September 2004.  The demand letter had put the college on notice of the impending lawsuit.  The college should have preserved relevant ESI, including the professor’s hard drive.  As a result, even if the college had a routine deletion practice, a legal hold would have taken priority.

Second, the college failed to routinely follow its own retention policy.  Some email had been backed up for a year, some six months.  The dean acknowledged the college did not follow its retention policy as it relates to hard drives.  Since the college did not have a consistent policy, it could not rely on the safe harbor as a defense.

Litigation holds trump the safe harbor provision.  When a duty to preserve relevant ESI attaches, a company must modify its retention policy to accommodate the change.  Blindly allowing ESI to be deleted after a duty to preserve kicks in is an unacceptable practice.  As the college learned, courts will find spoliation and enter sanctions.

Moreover, once a company has a policy, follow it. It does no good to have a retention policy in writing but actually delete on a different schedule. There is no “safe harbor” protection if a company does not follow in good faith a routine policy.

AMD v. Intel Part Two: The Mistakes Made And The Data Lost

Posted by Gregg Mayer on Friday, March 21st, 2008   

In Part I, we explored the obstacles Intel faced in implementing a massive legal hold.  In this part, we discuss the mistakes made and the data lost as a result of failing to implement a 100-percent effect legal hold across the company.

In this Part II, we explore the mistakes Intel made in trying to implement its legal hold.  Intel blames various mistakes made by individuals - such as failing to notify specific employees about the hold.  

Humans – not the policy – were the problem when Intel discovered it lost thousands of email messages, according to Intel.

These human errors were “misunderstandings or errors by individual employees, with ongoing day to day business responsibilities, working diligently to carry out the complex and unprecedented scope of preservation obligations in this case,” according to the company. It was not an intentional effort to delete email to prevent AMD from seeing them, according to Intel.

Of course, human errors or not, failing to preserve email when a litigation hold is in place will be costly. The party will either wind up paying to restore backup tapes – as Intel is having to do – or worse, the judge will order an adverse inference instruction, possibly even ordering a default judgment. An adverse instruction or other court-ordered sanction is still possible here.

So how much and what email was lost in Intel’s case?

Here’s a breakdown of what Intel acknowledges:

The first problem: Several custodians identified by Intel failed to properly save email messages as they were supposed to do. Some of those individuals failed to archive “sent” items from their email. Others failed to archive email for the period of time required. Still others failed to archive all of the proper email messages. Adding to the troubles, some of the custodians had computer crashes or other technical problems that caused a loss of data.
Consequently, these individual losses resulted in lost email.

The second problem: Some of the “custodians” were not told about the litigation hold by the company’s in-house counsel. This occurred for “newly selected” custodians as the list of custodians evolved. As a result, about 378 employees did not get word of the notice until February and March of 2007.

The third problem: Departed employees. According to Intel, 73 employees left and Intel only captured the hard drives for 60 of them. Thirteen were missed.

Backup sources exist for some of these lost email messages, but it will cost Intel millions to retrieve. Moreover, it appears at least some of the data may be lost forever.

AMD summarizes Intel’s losses as:

(C)ombined with the reckless decision to leave its auto-delete system running after this litigation began, one of Intel’s most fundamental ‘lapses’ was its failure to notify hundreds of its Custodians of their obligation to preserve evidence. All told, 378 of Intel’s Custodians, or 37% of the individuals on its Custodian List, received no evidence preservation instructions until late February or early March 2007 – twenty-one months after AMD and the Class commenced suit – or, in the case of employees who left Intel in the interim, not at all.

Intel has started taking steps to retrieve the data that it can. Without question, it will be expensive.

NEXT FRIDAY: Part Three - Intel’s proposed remedial measures and its cost

CIOs Should Bring IT and Legal Together

Posted by Gregg Mayer on Wednesday, March 19th, 2008   

Lawyers seldom speak the techno-wiz language of a company’s IT staff.  The IT staff seldom speak the stuffy legalese of lawyers.  However, both IT and legal are critically important to comply with today’s e-Discovery obligations under the Federal Rules of Civil Procedure.

That is why a CIO must ensure that the IT staff and legal department work together as an e-Discovery team in order to be prepared for the increasing burdens of disclosing electronically stored information (“ESI”).

As a recent article explained, when litigation looms, the legal and IT department must work together to resolve a series of issues, beginning with what ESI needs to be saved.  Once a company reasonably anticipates litigation, then a duty to preserve relevant ESI is triggered.  The lawyers will need to work with IT to understand what and how ESI is stored.      

Given the requirements of e-discovery and the conversation needed between legal and IT, what’s the bottom line? Each team has expertise required by the other. And each team needs to focus on its core subject matter. Issues of case strategy, negotiation among claimants, and the details of e-discovery rules should lie with the legal time. Issues of information retention policies, appropriate use of automation, and how best to preserve information should lie with IT and security groups. The key steps will be to ask, listen, and continuously work together to ensure proper and cost-effective e-discovery management.

Read the entire article from SearchSecurity.Com here.

How Does A Legal Hold Impact A Document Retention Policy?

Posted by Gregg Mayer on Wednesday, March 19th, 2008   

Companies implement document retention policies to determine how long information should be stored. These policies must include electronically stored information. For example, a company may decide it wants to purge emails after 21 days, like the Maryland company Echostar’s policy. Of course, simply executing the policy is not always enough.

A key caveat to normal retention policies is to make sure they are modified to accommodate “legal holds” – a duty placed on the company to preserve relevant information once litigation is reasonably anticipated. Echostar learned that lesson the hard way.

According the Maryland federal court in Broccoli v. Echostar Communications, Echostar’s email archiving system worked like this:

Under Echostar’s extraordinary email/document retention policy, the email system automatically sends all items in a user’s “sent items” folder over seven days old to the user’s “deleted items” folder, and all items in a user’s “deleted items” folder over 14 days old are then automatically purged from the user’s “deleted items” folder. The user’s purged emails are not recorded or stored in any back up files. Thus, when 21-day-old emails are purged, they are forever unretrievable.

In January 2001, the plaintiff in Broccoli v. Echostar Communications told Echostar about his potential sexual harassment and Title VII claims. More letters and emails additionally notified Echostar of the litigation.

The plaintiff was fired in November 2001. Another letter came in December 2001 threatening litigation, and a lawsuit was filed in February 2002. Echostar did not adjust its retention policy until December 2001. This, it turned out, was wrong.

The judge explained Echostar had actual notice of the claims as early as January 2001. Echostar should have started preserving emails nearly 11 months before it did. As a result, the judge sanctioned Echostar by offering an “adverse spoliation of evidence instruction” – whatever was destroyed may be considered in the worst possible light against Echostar.

Needless to say, Echostar lost the case.

Retention policies are a necessary part of business.  Just as necessary is a company’s ability to modify a retention policy whenever litigation is reasonably anticipated.

Read more about the Echostar case in this news article.

Temporary ESI Automatically Deleted From Cache Files Did Not Result In Spoliation

Posted by Gregg Mayer on Tuesday, March 18th, 2008   

When a law firm was sued and later accused of spoliation of electronically stored information (“ESI”), the question arose as to whether parties had to a duty to preserve  locally stored cache files on recently used Web pages when litigation is reasonably anticipated?

In this case, Healthcare Advocates, Inc. v. Harding, Farley, Follmer & Frailey, the answer was no: the images temporarily stored in the cache files did not have to be preserved.

It helps to have a brief background of the complicated fact scenario to understand how this lawsuit came about.

Initially, Healthcare Advocates, a patient advocacy organization, sued a competitor for trademark infringement. The Harding law firm represented that competitor.

During the discovery of that lawsuit, lawyers with the Harding firm viewed archived screenshots of the Healthcare Advocates Website using an internet tool that allowed them to see prior versions of the Website.

The Harding firm printed copies of the screenshots and used those images in the litigation between Healthcare Advocates and its competitor.

Healthcare Advocates then sued the Harding law firm alleging the firm hacked into the Healthcare Advocates Website to view protected material. Consequently, by allegedly hacking into the Website and printing screenshots, Healthcare Advocates argued the law firm committed copyright infringement.

In response, the law firm claimed it used a publicly available Website that permitted users to search screenshots of archived Websites. In short, there was no copyright infringement.

Specific to e-Discovery, Healthcare Advocates argued for a spoliation sanction against the law firm for failing to save the internet data temporarily stored in cache files. Generally, cache files are a temporary storage area for frequently accessed data. When a computer accesses a web page, it sometimes stores a copy of the page in its cache.

Healthcare Advocates argues that the images were involuntarily saved in temporary files on the Harding firm’s computers. Thus, the firm’s duty to preserve extended to these temporary files. Since the files are lost, [Healthcare Advocates] alleges that the Harding firm failed to fulfill their duty to preserve. Healthcare Advocates believes that if these temporary cache files had been preserved, they would have been able to determine if the Harding firm used the archived images for any purpose other than what has been alleged or admitted.

Without dispute, the law firm made no effort to preserve the temporary ESI in the cache files. However, the court rejected Healthcare Advocates’ argument:

What the Harding firm should have anticipated was that the images they copied would be relevant, which they did and saved accordingly…The Harding firm had no reason to anticipate that using a public website to view images of another public website would subject them to a civil lawsuit containing allegations of hacking.

Moreover, even though Healthcare Advocates’ attorney had sent a letter to the law firm demanding that nothing be deleted or altered on the firm’s computers, the letter “said nothing about preserving the temporary cache files on these computers,” the court wrote.

Ultimately, the cache files were deleted from the Harding firm’s computers. However, no evidence has been presented showing that the Harding firm was responsible for erasing them. The files were deleted automatically…The cache files may have been emptied dozens of times before the request for production was made…The most important fact regarding the lost evidence is that the Harding firm did not affirmatively destroy the evidence…Very little fault can be attributed to the Harding firm for the loss of these temporary cache files.

Consequently, the court refused to impose sanctions, and ultimately dismissed the lawsuit against the law firm.

Although the facts in this case favored the law firm, as technology changes, and as opinions about what should be preserved change with it, then whether temporary cache files may also be included in litigation holds remains open for debate.

Companies Planning To Sue Have Duty To Preserve ESI

Posted by Gregg Mayer on Monday, March 17th, 2008   

Litigation holds , or the duty to preserve, are often discussed in the context of a company that has been sued, triggering a duty to preserve relevant evidence.

However, the duty to preserve evidence applies to both sides of litigation. When a company reasonably anticipates it is about to sue another party, then that company has a duty to preserve relevant electronically stored information (“ESI”) and other evidence. This duty is illustrated by the case of Samsung Electronics Co. v. Rambus Inc., one of several lawsuits involving Rambus.

In this case, Rambus filed a patent infringement lawsuit against Samsung. Samsung quickly filed its own declaratory judgment action against Rambus in a different court. Basically, a declaratory judgment action asks a court to declare a party’s legal rights.  Samsung asked the court to rule that Samsung did not infringe on Rambus’ patents.

As part of the declaratory judgment litigation, Samsung requested the court enter spoliation sanctions against Rambus for destroying ESI and other evidence.

Samsung argued that Rambus’ document retention policy – including so-called “shred days” – destroyed relevant evidence in 1998, 1999 and 2000. Samsung argued that Rambus should have modified its retention policy by 1998 since Rambus reasonably anticipated a lawsuit with Samsung at that time. The court noted Rambus destroyed millions of pages of documents.

The court explained:

[T]he record clearly establishes that Rambus’ document retention policy actually targeted discoverable documents, including email messages, files on individual computers, network servers or floppy disks, corporate databases, backup tapes, system records and logs, and computers and disks.…

A number of Rambus’ witnesses testified that the reason for adopting the document retention policy was to get rid of discoverable documents. Of particular concern were emails which were described as potentially quite harmful in litigation. Accordingly, email backup tapes were eliminated and employees were told to purge their own individual email files unless it was necessary to keep an email for some purpose and then it should be saved to a particular file or reduced to hard copy.

Rambus countered that it destroyed the documents as part of its routine retention policy. As a result, even if the ESI would have been relevant to future litigation with Samsung, at the time it was destroyed there was no pending lawsuit with Samsung.

The court rejected Rambus’ argument. Since Rambus did reasonably anticipate litigation with Samsung, the court said Rambus had a duty to preserve the ESI.

[A] company can modify its policy to preserve documents reasonably thought relevant to the actual or anticipated litigation. To accomplish that, however, the company must inform its officers and employees of the actual or anticipated litigation, and identify for them the kinds of documents that are thought to be relevant to it. Other mechanisms, such as collecting the relevant documents and segregating them, may accomplish the same result.

Consequently, Rambus was found to be a spoliator, generally the worst thing that can happy to a party in a lawsuit. (In this case, Rambus had already dropped its claims against Samsung by the time the spoliation hearing before the court, so all that Samsung could seek were attorney fees, which were denied for reasons unrelated to the spoliation.)

CIOs and their e-Discovery teams need to know that if a company is planning a lawsuit, then the same duty to preserve ESI applies. It is improper to destroy relevant ESI once a company reasonably anticipates litigation, regardless of whether the company is being sued or is planning to sue.

AMD v. Intel Part One: A Look At The ‘Largest Electronic Production In History’

Posted by Gregg Mayer on Friday, March 14th, 2008   

Introduction 

AMD v. Intel is one of the best known e-Discovery cases currently underway. Here is a quick summary of the case so far: AMD sued Intel in 2005 for antitrust violations, Intel destroyed or lost email that it was supposed to save under a litigation hold, Intel is going through a remediation plan to restore the email (although it could still face sanctions from the court), and now the New York Attorney General is exploring antitrust violations against Intel.

It’s a nasty case.

From an e-Discovery perspective, AMD v. Intel illustrates how costly it can be for big companies to implement massive legal holds across hundreds – if not thousands – of employees. Millions of email messages pass through large companies every day. Sorting through the email during litigation, preserving email that should be preserved, is a monumental task. The breadth of the ESI is simply staggering.

One of the lawyers involved in the AMD v. Intel litigation in Delaware said the case could involve “the largest electronic production in history or maybe this will be the case that proves you can’t do it,” according to the Remediation Plan filed by Intel in 2007.

In a three-part series of posts, CIOLaw.org, using court filings in this case, will look at the efforts made by Intel to preserve its millions of email messages, what mistakes were made, and how Intel has proposed to remediate the problem.

The court approved Intel’s Remediation Plan on October 22, 2007. However, AMD may still move for sanctions – including a spoliation finding – after the remediation is complete. AMD has already said Intel has not been forthright about the amount of data lost.

It is unlikely Intel can restore every lost message. A spoliation finding – such as an adverse inference instruction to the jury – could be terrible for Intel. Recall Zubulake v. UBS Warburg, a landmark e-Discovery case in which a spoliation finding propelled the jury to award $29 million in damages against UBS. The case forewarns that millions – if not billions – could be lost for spoliation.

Trial in AMD v. Intel is set for April 2009.

Part One: Intel’s Implementation Of Its Litigation Hold

AMD filed its lawsuit June 27, 2005. Intel says it began implementation of its legal hold on June 28.

A litigation hold is a duty placed upon a company to preserve all relevant information, including the all of the email passing in and out of the company.

In 2005, Intel had 100,000 employees working at 124 Intel facilities. They were spread over 57 countries. For IT, Intel maintained 79 IT sites in 27 different countries. Intel employed 9,500 IT professionals.

Intel estimated the company generated as many as 4.6 million email messages per day.

Once a litigation hold was in place, Intel was tasked with retaining all of the email and other ESI related to the litigation.

AMD argues all Intel had to do was turn off its auto-delete policy and the emails would have been retained. On the other hand, Intel argues that it did have a workable retention policy, and the policy was not the problem. Fully implemented, the policy would have worked, according to Intel. The problem was “human error,” according to Intel.

Here’s a list of what the company did to preserve email after the complaint was filed June 27, 2005:

The day after the complaint was filed, Intel began to preserve a company-wide snapshot of email and other electronic documents stored on Intel’s servers as of the week the complaint was filed (“Complaint Freeze Tapes”).

Two days after the complaint was filed, Intel sent a hold notice bulletin to 4,000 Sales and Marketing Group employees with instructions to retain documents related to competition with AMD and competition concerning the sale of CPUs generally.

Four days after the complaint was filed, Intel distributed a more detailed litigation hold notice to 629 employees, and has now provided such notices to approximately 1,500 employees.

Within days of the filing of the complaint, Intel began collecting the electronic and hard copy documents from certain employees – and has now collected materials from hundreds of its employees.

In the Fall of 2005, Intel began a process of preserving, on a weekly basis, the backup tapes containing emails of employees identified as having potential relevance to the lawsuit (“Weekly Backup Tapes”). These tapes were not the primary preservation method, but as a mechanism to fall back on in the event documents could not be obtained directly from the individual employees who originally generated or received the emails.

More recently, as an additional layer of backup, Intel purchased and implemented a new email archive system designed to capture and preserve automatically all incoming and outgoing email messages of currently employed custodians who have been identified on Intel’s Custodian List.

As noted in Intel’s court filing, the company sent a “detailed litigation hold notice” on July 1, 2005 to 629 employees. These employees were determined to have specific information that could be relevant to the litigation.

By August 2005, approximately 848 individuals had received retention notices. Over the next two years, Intel continued to send more retention notices and the list grew to approximately 1,500 employees. Paralegals were dispatched to offices in foreign countries to help retain email.

As a result, Intel claimed its efforts preserved “hundreds of millions of pages of e-mails and other electronic materials.”

On the flip side, Intel’s “lapse” in its retention policy, as the company calls it, resulted in Intel’s acknowledgment in March 2007 that email messages were lost. AMD called it a “stunning public admission.” AMD argues:

By any measure, Intel has allowed an immense loss of relevant evidence to occur during the course of this litigation…These were not the common accidental and inconsequential losses of electronic evidence that often occur in litigation…Rather, they are losses of a nature and scope as to call into question Intel’s entire document preservation scheme.”

No dispute exists that Intel’s efforts failed to preserve all of the email. According to Intel, here are some of the hurdles they faced from the outset:

Intel not only had to save relevant historical information relating to AMD’s allegations (which it did with the Complaint Freeze Tapes and the prompt hard drive harvesting), but it had to retain an enormous volume of electronic material generated by hundreds of Intel employees on a forward-going basis;

The number of custodians required to retain documents on a going forward basis was enormous, the relevant document requests numbered in the hundreds, and it was clear from the outset that most of the those custodians would never have to produce documents for the case;

Intel had to keep documents for custodians spread across six different continents;

Shortly after this litigation began, Intel, in an effort to cut costs as a result of the fierce competition in the semiconductor market, carried out a significant reduction in work force; many of its layoffs hit sales, marketing and information technology, and that made the job of document retention more complex;

This was a case of unprecedented proportions, for which Intel had to develop practical solutions as it went along; and

This effort had to be made in the context of rapidly evolving legal and technical standards and solutions

Intel was unable to implement a 100-percent effective litigation hold. Significant email was destroyed or lost.

Although nothing is certain, spoliation sanctions are still possible at a future point in the litigation.

NEXT FRIDAY: Part Two - What Mistakes Were Made And How Much Was Lost

System-focused Approach Avoids Faux e-Discovery

Posted by Gregg Mayer on Wednesday, March 12th, 2008   

A recent article by attorneys James Shook and Andrew Cohen thoroughly discusses the problems of companies relying solely on employees to implement a legal hold when litigation is imminent.

Companies reviewing their electronic discovery options are frequently faced with a difficult choice on how to implement litigation holds and collect relevant electronic information. At first glance, the choice seems to be a “Catch-22”: should they: (a) quickly and inexpensively implement an employee self-service approach, and accept the inherent risks of such an approach; or (b) spend time and effort up-front to deploy tools that will systematically allow an investigator or legal team member to identify and collect the information?…[T] here is a significant amount of risk and difficulty hidden in the self-service approach, which can lead to “faux eDiscovery”– where a company incorrectly believes that it is meeting its electronic discovery obligations.

As discussed in the article, it is difficult for companies to rely on employees to preserve the relevant email and other electronically stored information (“ESI”) because an employee’s self interest – such as wanting to avoid revealing an embarrassing email – comes into play. Instead, companies should implement email archiving tools to allow for a system-focused, comprehensive, and cost-effective way to identify and retrieve email in the context of e-Discovery. Read the full article here.

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