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

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