Electronic Discovery and Evidence

2.75 Million Dollar Fine - Spoliation of E-mail

United States v. Philip Morris, USA, Inc., No. CIV.A.99-2496, 2004 WL 1627252 (D.D.C. July 21 2004). The company failed to follow the preservation order and destroyed e-mail for over two years. A number of high ranking officers who were to be called as witnesses did not retain their e-mail under a "print and retain" policy. The Court ordered that the defendant was precluded from presenting any fact witness who had failed to preserve relevant records and was ordered to pay $2.75 million in fines for its spoliation of e-mail.

E-mail: Messages are evidence

Someone may be watching.

For lawyers, e-mail is the best thing since slippery banana peels. Instant messaging and employee e-mails have become an attorney's first legal line of offense - or, in some cases, defense - for workplace lawsuits, according to a new poll from the Columbus-based ePolicy Institute and the American Management association The survey earlier this year of 840 U.S. companies found that one in five firms have either received subpoenas for employee e-mail or have used e-mail to defend the firm against allegations of sexual, racial or other discrimination claims. That is a dramatic increase from two years before, when one in 10 companies faced a lawsuit because of e-mail practices, the poll found.

Comment: One must not forget the latest form of potential electronic discovery or electronic evidence - text messaging.

Zubulake V - Sanctions Imposed

OPINION AND ORDER. (Click here for the full opinion).

On July 20, 2004 the Honorable Shira A. Scheindlin, United States District Judge, issued her 5th electronic discovery opinion and imposed sanctions on the defendant for failure to preserve e-mail. The Court stated:

"UBS failed to preserve relevant e-mails, even after receiving adequate warnings from counsel, resulting in the production of some relevant e-mails almost two years after they were initially requested, and resulting in the complete destruction of others. For that reason, Zubulake’s motion is granted and sanctions are warranted. UBS is ordered to:
1. Pay for the re-deposition of relevant UBS personnel, limited to the subject of the newly-discovered e-mails;
2. Restore and produce relevant documents from Varsano’s August 2001 backup tape;
3. Pay for the re-deposition of Varsano and Tong, limited to the new material produced from Varsano’s August 2001 backup tape;118 and
4. Pay all “reasonable expenses, including attorney’s fees,”119incurred by Zubulake in connection with the making of this motion.

In addition, I will give the following instruction to the jury that hears this case:

You have heard that UBS failed to produce some of the e-mails sent or received by UBS personnel in August and September 2001. Plaintiff has argued that this evidence was in defendants’ control and would have proven facts material to the matter in controversy.

If you find that UBS could have produced this evidence, and that the evidence was within its control, and that the evidence would have been material in deciding facts in dispute in this case, you are permitted, but not required, to infer that the evidence would have been unfavorable to UBS.

In deciding whether to draw this inference, you should consider whether the evidence not produced would merely have duplicated other evidence already before you. You may also consider whether you are satisfied that UBS’s failure to produce this information was reasonable. Again, any inference you decide to draw should be based on all of the facts and circumstances in this case."

Electronic Discovery Survey Available

The 2004 Socha-Gelbmann Electronic Discovery Survey is now available.

"The 2004 Survey examines the state of electronic discovery in 2003. It also compares this year's results with last year's and makes projections for 2004 through 2006. Areas covered include:

* Market size & shares
* Market segmentation
* Projections for 2004 to 2006
* Top 20 providers
* Perceptions of market leaders
* Growth in number of providers
* Who decides what to buy
* Popular software
* Consumer & provider opinions

52 pages long with an additional 28 pages of appendices, the 2004 Survey contains over 50 tables and color charts to support and expand on the text of the report.

To provide a sound basis for our analyses, we gathered data from over 50 electronic discovery consumers and providers through interviews and an on-line survey. The consumers represent a cross-section of Am Law 200 law firms as well as some of the largest companies in America. The providers came from a robust cross-section of leading firms in this industry as well as some newcomers. We also collected information from websites of over 180 organizations purporting to offer electronic discovery services or software as well as data from a variety of business and information resources."

E-mail Subpoenas Survey

(7-16-04). AMA 2004 Workplace E-Mail and Instant Messaging Survey. "One in five U.S. companies (20%) has had employee e-mail subpoenaed in the course of a lawsuit or regulatory investigation, up from 14% in 2003. Another 13% have battled workplace lawsuits triggered by employee e-mail. That’s according to the 2004 Workplace E-Mail and Instant Messaging Survey of 840 companies conducted by American Management Association (AMA) and The ePolicy Institute."

RFID Chips are Tracking Kids

(7-12-04) Japanese schoolkids to get RFID chips . "The rights and wrongs of RFID-chipping human beings have been debated since the tracking tags reached the technological mainstream. Now, school authorities in the Japanese city of Osaka have decided the benefits outweigh the disadvantages and will now be chipping children in one primary school. The tags will be read by readers installed in school gates and other key locations to track the kids' movements. The chips will be put onto kids' schoolbags, name tags or clothing in one Wakayama prefecture school. Denmark's Legoland introduced a similar scheme last month to stop young children going astray. RFID is more commonly found in supermarket and other retailers' supply chains, however, companies are now seeking more innovative ways to derive value from the tracking technology. US airline Delta recently announced it would be using RFID to track travellers' luggage."

USPS Postmark & Depository

(7-11-04) activePDF, Inc. Enables Digital PDF Signing With United States Postal Service Electronic Postmark .. "Backed by the integrity of the United States Postal Service, the USPS EPM can detect unauthorized document tampering. Application of the USPS EPM also automatically creates an electronic "fingerprint" as evidence of electronic file content, which is stored for a period of seven years in a third-party repository. During this seven-year time period the original electronically postmarked document can be verified to detect content tampering. As such, the USPS EPM serves as an invaluable non-repudiation tool."

Car Black Boxes

(7-10-04) Little-known auto data boxes present legal quandary. Getting recorded information from your car is no easy task. "WEST PALM BEACH — First seat belts. Then air bags. Now the black box. Although seat belts and air bags are standard in American automobiles, most car owners have no idea that a "black box" is recording their every traffic move. But police, insurance companies and attorneys are realizing that the black boxes — sometimes called event data recorders — are more valuable in the courtroom than in a car."

Judge Imposes Sanctions for Failure to Retain E-Mail

(7-9-04) Mosaid's stock skyrockets on Samsung sanctions . "The stock of Mosaid Technologies surged as much as 44 per cent Friday morning after the market reacted to the news that it had gained some ground in its landmark patent case against South Korean electronics giant Samsung. . . . On Thursday, the judge overseeing the case in a New Jersey court, Ronald Hedges, granted Mosaid a number of sanctions against Samsung. . . . Mosaid had requested sanctions against Samsung on the grounds that it has failed to provide certain documents during the discovery phase of the case and destroyed e-mail evidence related to the case. . . "Part of Samsung's strategy seems to have been to unfairly delay and bias the case outcome by either withholding or destroying critical documents. The court obviously agreed with Mosaid in granting these significant sanctions since in Judge Hedges Order he writes, when referring to Samsung's destruction of e-mails: 'The prejudice resulting from complete and total e- mail spoliation seems particularly obvious... the fact that no technical e-mails were preserved... demonstrates, at the least, extremely reckless behaviour'."

Read the order - click here!

Comment: Once again the judiciary is taking the lead in understanding and applying electronic discovery technical and legal issues to cases.

County Officials E-mail Undeleted

(7-8-04) Gravel-pit lawsuit triggers e-mail hunt . "King County officials, responding to a lawsuit from the owner of a Maury Island gravel pit, hired a consulting firm to help search for deleted e-mails on the computers of County Executive Ron Sims and other officials. That search of more than 20 officials' personal computers and computer servers has turned up previously undisclosed e-mails whose significance is disputed by the two sides. Attorneys for the county last week delivered copies of e-mails discovered after consultant Electronic Evidence Discovery provided step-by-step instructions to county staffers on how to recover deleted e-mails from their personal computers' hard drives."