the courts are sending you a message: are you...

Key cases in email management and what they can teach us

Barclay T. Blair

Sponsored by Open Text

The Courts are Sending You a Message: Are You Receiving It?

Executive Summary

Your approach to managing email has never been under more scrutiny. The business news is filled with stories that seem to hinge on damaging, missing, or smoking gun email messages. At the same time, the sophistication of judges, prosecutors, regulators, and other parties is only growing when it comes to investigating your email management practices. The days of drafting a policy and hoping for the best are over. Today, success in email management requires a commitment to proactively managing records in the email system, and also getting rid of unnecessary junk. This is essential to reducing complexity, cost, and risk.

But how do you get started, and where do you look for guidance? Every day the courts are grappling with email management issues, and we can learn from the experiences of others. This whitepaper briefly examines seven recent cases that are setting a critical new direction for email management. Crossing boundaries of industry, company size, and legal jurisdiction, these cases point the way to a new email management reality for everyone.

These cases show that:

1. The courts have little sympathy for organizations that suffer in litigation simply because they have been managing email poorly.

2. Auto-delete policies may not be the answer.

3. Litigation is not a good time to learn about your email system.

4. Formal Legal Hold policies for email are not optional.

5. Governments have unique email management requirements.

6. Email policies, and the ability to enforce them, are critical.

7. Email management does not end at the data center.

Information Governance, Illuminated.

“Less than 10 per cent of respondents claimed that they were ‘very confident’ that ‘emails relating to document commitments and obligations . . . are recorded, complete, and retrievable.”

AIIM Industry Watch: Email Management, The Good, The Bad and The Ugly 1

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http://vialumina.com/

Table of ContentsExecutive Summary 2

Table of Contents 3

Introduction 4

Producing email may be hard, but do the courts care? 6

Maybe the solution is to just get rid of all email as fast as possible? 8

How well do you understand your email system? Litigation is not the time to find out. 10

Formal Legal Hold policies and process are not optional—even for “informal” information 12

Governments have unique email management requirements 14

Do you have real email management policies, and can you enforce them? 16

Are you managing email every place it sits? You’d better be. 18

Endnotes 20

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Introduction2

Email has been a part of our business lives for a long time—at least thirty years. While the basic functionality of email hasn’t changed much since the early 1970s, the way we use it has. From the first tentative, “terse and imperfect” messages sent by Internet pioneers like J.C.R. Licklider,3 to email messages used for effectuating real estate transactions,4 executing contracts,5 firing employees,6 filing documents with regulators,7 and thousands of other business functions, email is an essential part of how do business.

And yet, we still haven’t figured it out.

For most of us, if the email stops, the work stops. However, many of us still treat email messages as the second-class citizen of our information governance program—ignored, tossed, unmanaged. Nowhere is this gap more obvious than in the courts. Here, our email failures become very real and very painful—laid out for the world to see in the harsh black and white of court opinions, media coverage, and the relentless and ruthless blogosphere. The courts are where our Friday afternoon meeting-room discussions and head shaking about the out-of-control email system; about how so-and-so has email messages going back to the 90s; about how we should really do something about all those email backup tapes; take on a new and painful dimension.

In the past few years there have been some blockbuster cases involving email—large enough, one hopes, to gain the attention of senior managers in every industry. These cases, such as Judge Scheindlin’s series of Zubulake decisions8 and her recent Pension Committee opinion,9 set new standards for the way we manage email and other information. Others, like Coleman Holdings v. Morgan Stanley,10 attracted attention for their eye-popping monetary sanctions.

But, the cases we have chosen to focus on here are not important because they are exceptional. Rather, they are important because they are commonplace. Today, looking for cases that speak to email management issues is like dipping your hand

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into a river. Every day you can find email management issues being considered by a court, regulator, auditor, or other “finder of fact” in jurisdictions across the globe. The cases selected here are designed to illustrate key points about email management, and to illustrate the intensity and depth to which email issues are considered by the court today.

The intention of discussing these cases is not to embarrass or single out a particular institution. In fact, given the plethora of email-related challenges occurring daily before the courts, it would be difficult to make the case that any particular organization’s failings are unique. Instead, the purpose of examining these cases is to glean important lessons for all of us about email management.



Producing email may be hard, but do the courts care?

What happened?Key employees of a global engineering firm accepted employment offers from a competitor. When they left the firm, their employer alleged that they took proprietary software and other intellectual property with them, thereafter using it to help the competitor build a new product, resulting in $8 million in damages. In the ensuing litigation in Canadian courts, email messages formed a critical part of the evidence. However, the defendants argued that they should not have to produce their own email messages because it would be too “time consuming” and “expensive.”12 The court disagreed.

What went wrong?When it came time to search, find, and produce email messages responsive to the litigation, the defendants found their email system lacking. Not only did the system make it “inherently difficult to conduct email searches,” but searching archived email was not possible without physically accessing each archive location across the globe. As a result, the company stated that it, “may be difficult to ensure that all archives are searched.”

Furthermore, a company lawyer testified that she couldn’t explain why email messages sent to several employees were found in the mailboxes of some employees, but not all.

As a result of all this confusion and difficulty surrounding email, the defendants argued that they should not have to produce responsive email. The judge disagreed, writing that organizations shouldn’t expect special treatment around email discovery simply because information is in email form: “it does not appear to me that searching email archives . . . is inherently more onerous or expensive than conducting manual searches for hard copies of documents. In fact, it could be easier.”13 That is, if the email is well-managed, which the court apparently believed was not the case here.

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“It seems to me that a ‘costs, time and effort’ argument involving email is the same as when hard copy documents are in issue. For example, the cost, time and effort to produce hard copy documents which are disorganized or stored in various places could also be considerable.”

GRI Simulations Inc. v. Oceaneering International Inc.11

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What can we learn?Judging by surveys like AIIM International’s email management “Industry Watch,” which found that a majority of respondents have little confidence in their email program, most organizations have a long way to go when it comes to email management. Although the business cost of email mismanagement may be hidden, or accrue slowly, email management flaws quickly take center stage in litigation.

There are several lessons to be learned from this case, including:

• Local email archives. Don’t allow employees to create local archives of email (AIIM’s survey found that almost half of organizations have no policy on this topic). Turn off the ability to create .pst and .nsf files., and look for smart technology like content analytics to help you clean up the ones that you already have.

• Don’t expect mercy for bad email management. Don’t expect the court to take mercy on you because you have been doing a poor job of managing your information. Email has been around for over three decades. That’s a long time to get it figured out. Courts and regulators in all jurisdictions are demonstrating diminishing patience with organizations that do not take email management seriously.

• Is your email system e-discovery-ready? Is your approach to email management and archiving e-discovery ready? In other words, could you easily and quickly conduct searches across the entire system for all email messages generated by specific employees, or containing specific keywords? The AIIM survey found that 45% of organizations allow employees to keep email in personal folders—“unshared, possibly un-findable and at considerable risk of random deletion.”15 Remember, you may need to be able to do this for all email, even the stuff hanging around in decommissioned email systems, file servers, backup systems, and so on.



Maybe the solution is to just get rid of all email as fast as possible?

What happened?An employee of a large bank was fired, and she sued her employer. In the course of litigation, the employee produced an email message from her boss that was critical to her case. However, the bank failed to produce the same email message, “despite its obvious relevance to her claims and [the bank’s] duty to produce it.”17 This raised several questions about the bank’s email retention and preservation practices, including its practice of automatically deleting email after a relatively short period of time.

The court found that the bank failed to preserve responsive email messages in its email system, backup tapes, and in the local email archive maintained by the employee’s boss. The latter was not preserved, even though the boss had “a general practice of archiving her email messages . . . weekly,” and had been notified of her duty to preserve.18 As such, the court ruled that the bank had committed spoliation of evidence, and it imposed an adverse inference sanction.

Just how painful can email mismanagement be in court?

Getting email management wrong can be very costly in the context of litigation. For example, in Starbucks v. ADT, it was estimated that producing email from an “old” archiving system would cost $834, 285.19 One recent industry study put the cost of e-discovery for a typical lawsuit at $3.5 million,20 and yet another found that some Fortune 200 companies “reported average per-case discovery costs ranging from $2,354,868 to $9,759,900.”21


“It raises a question of whether there were other relevant emails in existence at that time but which were also not produced, and there is no satisfactory answer because all emails not archived by the email users had since been automatically deleted from the server.”

Connor v. Sun Trust Bank16

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What went wrong?While the maturity of the bank’s information governance program is not clear from the court decision, it seems likely that the program suffered from several problems, including:

• Capturing email records. Failing to provide employees with an easy and routine way to capture email messages that require retention because they are records or preservation because they are responsive to litigation.

• Centralized management. Failing to retain or preserve email in a central, standardized way to enable consistent application of policy, ease of enterprise searching, and other critical capabilities.

• Enforcing the program. Failing to ensure that all employees understood their email preservation obligations, and to ensure that they were fulfilling those obligations through routine education, training, follow-up, and audits.

What can we learn?All organizations should strive to routinely rid themselves of unnecessary content—including email—that has neither a records retention or preservation requirement. There is nothing inherently wrong with email policies that automatically delete unwanted email—provided that there is a mechanism for required email to be retained or preserved. Relying on local email archives (such as .psts and .nsfs) is rarely an effective approach, as it complicates (or even makes impossible) the ongoing management of those messages. Failing to implement effective retention and preservation mechanisms—particularly in the face of email auto-delete policies—can result in claims that evidence was illegally destroyed (as was the case here).

It’s important to note that the court did not find any inherent fault in the company’s reliance on employees to identify and retain email; but rather in its failure to ensure that it was done properly. Organizations need to quickly issue and enforce Legal Holds so that email evidence is not disposed of as part of routine records management operations.



How well do you understand your email system? Litigation is not the time to find out.

What happened?Two companies agreed to a $41 million real estate transaction. However, before the transaction closed, the sellers refinanced the properties in such a way that the buyer would have to assume the seller’s loans. Litigation ensured, with the buyer claiming this maneuver violated the terms of the deal, and the seller claiming that the buyer knew about this upcoming change all along. As such, email messages between the parties during the transaction became critical. However, in the course of discovery, the buyer and their lawyer repeatedly failed to fully search and produce email evidence, and failed to do so in a timely manner. As such, the court fined the buyer—and its lawyers.23

What went wrong?The failure to promptly and comprehensively produce required email evidence in this case appeared to come down to a failure on the part of the buyer’s lawyer to fully understand how his client’s email system worked, i.e., where, how and for long email messages were stored, and the contents of his client’s email policies. Although responsive messages were eventually produced, final production took over 22 months, and was ultimately the basis for the court’s sanctions. In the court’s view, “while the delays in discovery were not caused by any intentional behavior, [the buyer and their lawyer’s] did not fulfill [their] obligation to find all sources of relevant documents in a timely manner,” and thus sanctions were warranted. In this case, it appears that the delays were exacerbated by a series of issues, including:

• Messages that employees moved to archive and deleted items folders were not initially searched, although such messages remained on the email system.

• The sellers questioned the efficacy of the buyer’s email production efforts, as the sellers had several messages in their possession from the buyer’s employees that the buyers had not produced.

• Even when a forensics expert was hired to conduct further investigation into responsive email, he was not told about the archive folders, and thus did not search them. Subsequent searches of the archive folders revealed thousands of additional responsive messages.

“Had [outside counsel] fulfilled his obligation to familiarize himself with GFI’s policies earlier, the forensic searches and subsequent motions would have been unnecessary.”

In re A & M Fla. Props.22


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What can we learn?The time to learn about the intricacies of your email system is not during litigation. The buyers in this case dodged a bullet of even more severe sanctions including the complete dismissal of the case. Their lack of knowledge about their own email system caused them to inadvertently flirt without outright spoliation, which would not have helped their cause in the face of a judge already tired of the frequent production delays.

We can draw an important lesson from this case. In this example, the sellers produced messages sent to them by the buyer, yet according to the court, the buyer failed to produce those same messages. This understandably raised serious questions about 1) the efficacy of the buyer’s information governance program, and 2) whether or not they were intentionally hiding these messages, as the seller claimed. This teaches us that even small failures in one area of our information governance program can cast all of our efforts in a bad light and reduce the persuasiveness of our case.

Other lessons from this case include:

• Formalize and document. Ensure that the operation of your email system is fully and accurately documented. This includes practices related to the retention, preservation, and deletion of email from the system and related systems including those responsible for backup, archiving, and records management.

• Work with your email experts. Ensure that email administrators provide the information that senior IT management needs to understand the email system, and that this information is understood by counsel.



Formal Legal Hold policies and process are not optional—even for “informal” information

What happened?A partnership between two businesses failed, and litigation ensued. As the relationship unwound, a number of email messages, text messages, Skype® messages, and log files were created that became relevant to the case. However, the defendants failed to take any formal action to ensure that this evidence was properly preserved, and in fact attempted to hide evidence that they felt was unfairly damaging. As a result, the court fined them $10,000—a fine large enough, in the courts’ judgment, to ensure that the two founders of the small company felt its sting.25

What went wrong?The defendants in this case apparently did not have a formal process to ensure that email messages and other information responsive to litigation was properly identified, preserved, and produced. This process, called a “Legal Hold,” is essential to ensure that legal obligations are met.

In addition, the defendants specifically failed to preserve email messages that they thought made them look bad – something the courts have specifically addressed, stating “[t]he duty to preserve documents is meant to prevent these sorts of ‘judgment calls’ by litigants and, instead, requires parties to preserve all documents that may reasonably lead to the discovery of relevant evidence.”26

Finally, it appears as if the defendants believed that preservation obligations did not apply equally to information less formal or traditional than a paper document, and as a result did not preserve email messages, text messages, instant messages, or computer log files. The law is clear that the duty to preserve applies to all responsive information, regardless of its format.

“Here, a fine against [the company] serves the dual purposes of deterrence and punishment . . . Because [those responsible for spoliation] are the sole principals of [the company], a fine directed at [the company] will affect them directly.”

Passlogix, Inc. v. 2FA Tech24


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What can we learn?The requirement for formal Legal Hold policies and processes is well established. As the court notes, failing to issue a written legal hold notice is, on its face, gross negligence.27 In addition, the courts do not expect us to take our preservation obligation any less seriously just because the evidence is in a form we might think of as informal—such as email and text messages.

Other lessons we can learn from this case include:

• Use intelligent tools. Look for tools that can help you identify and preserve responsive email messages. Does your email management solution enable to you to easily find, flag, and preserve responsive messages? If not, you may fall short.

• Get smart about Legal Holds. Ensure that Legal Hold policies are up-to-date and consistently followed, and that you routinely create and keep records of who received Legal Hold notices, their acknowledgement of receipt, and other key details of the Legal Hold process. Also, ensure that employees have the tools and education they need to comply with Legal Hold notices in your email environment.

• Treat “informal” content the same. Treat email messages with the same formality as any other type of information when it comes to litigation. Email is always a target and as a result, must be treated with the utmost care.



Governments have unique email management requirements

What happened?There are many cases and stories that clearly illustrate the unique email challenges that government institutions face. For example:

• A top official in a governor’s office exchanges email messages about a controversial railway with subject lines that are alleged to be code words.28

• A county is fined six figures because it did not produce public records, including email, quickly enough.29

• A county official suggests that the way it will comply with public records requests for email is to have “residents sit at each official’s computer and manually check the email.”30

These are just a few of the cases that illustrate the daily email challenges that government entities face. In addition to dealing with the multitude of issues that they share with the private sector, the public sector must address several unique email issues that come from the requirements of public records laws, “sunshine laws,” open meetings laws, records retention statues, and other sources.

What went wrong?Governments at the national, state/provincial, and local levels face some common email management challenges, including:

• Doing more with less. Many governments across the globe have been forced to cut budgets for information governance—budgets that weren’t necessarily large in the first place. Consequently, in many cases government’s use of email and other technologies has outpaced their ability to manage it.

• Adjusting management practices to email. Many jurisdictions require officials to have meetings in public. However, when politicians email each other about an issue is that considered a “meeting” under public meetings laws, and as such, does it violate the requirement that such a meeting be held in public? What about text messages, or Twitter® and FaceBook® messages?

• Transparent yet private. Governments have an obligation to act in a transparent way, while maintaining the privacy of their citizens, employees, contractors, and other parties. Addressing these often mutually exclusive goals in an email system is challenging.


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What can we learn?Governments should look for email management tools that can address their unique needs. Although they share the same general requirements for efficient email retention and preservation with the private sector, the public sector have unique requirements that should be met by the tools they choose, including:

• Easy and efficient redaction of email records to be provided to the public.

• Consistent identification of email messages that must be retained pursuant to statutory requirements.

• The ability to batch print and export email messages for the purposes of fulfilling Freedom of Information or public records requests.

• The ability to clearly identify and properly manage private information in email.



Do you have real email management policies, and can you enforce them?

What happened?A computer scientist sued a group of hardware manufacturers, alleging that they infringed on his patents. Several incidents of email evidence spoliation were alleged. The defendants were forced to explain why the “universe of materials . . . missing is very large.”32 The defendants described an email management program that appeared to largely rely on employees just figuring it out for themselves. The court took issue with this approach and found that the company violated its legal requirement to preserve evidence.

What went wrong?According to the court, the defendant’s email management program had a number of problems, including:

• No “information management policy.”

• No “statement from management-level persons explaining its practices, or existence of any policies.”

• The email system overwrote “old data regardless of its significance.”

• The company relied “on employees for all email and data archiving,” while providing them with little to no guidance about how to fulfill those responsibilities.33

What can we learn?Today, courts, regulators, and other outside parties have grown in sophistication and expertise when it comes to email management. Dead policies on dead trees don’t work. Today, your email management program needs to be reasonable, comprehensive, funded, and enforced.

We can also learn important lessons from this case about the role employees should play in managing email. Some have concluded, incorrectly, that this case tells us not to rely on employees to do email management. However, the real lesson of this case is that we should not be so foolish to expect employees to “get it and do it” if we have not even given them the foundational tools, such as policies and the tools to implement those policies.

“It is clear that [the] lack of a retention policy and irresponsible data retention practices are responsible for the loss of significant data . . . Information management policies are not a dark or novel art. Numerous authoritative organizations have long promulgated policy guidelines for document retention and destruction.”

Philip M. Adams & Associates, LLC v. Dell, Inc.31


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In addition, this case helps to illustrate the critical difference between:

• Leaving employees in a virtual vacuum of guidance and expecting them to get it right (nearly impossible), and;

• Asking employees to help the organization retain email records by choosing from a small number of relevant categories - thereafter leaving determination of the retention period and its enforcement (including physical retention) to the system itself.

The latter approach is realistic, defensible, and used by organizations across the globe every day.

Finally, this case teaches us that an email management program is not merely an internal, private affair. Rather, it is a statement to the world about how seriously you take your information governance obligations. Expect it to be closely examined.



Are you managing email every place it sits? You’d better be.

What happened?Key employees of a firm left to work for a competitor. Litigation ensued, and email messages sent and received by those employees were central to the case. The employees used BlackBerry® devices extensively, and were required to produce those devices to the opposing side’s forensic expert for recovery of email and other data. However, the expert found that the devices had been wiped clean. The court considered a variety of possible explanations for the missing data, but ultimately concluded that the defendants had “intentionally wip[ed] the BlackBerries.”35 The court thus imposed the sanction of an adverse inference, meaning that jury in the case would be informed that the defendants failed to preserve data, and that it can be presumed that such data would likely have been harmful to them.

What went wrong?The defendants claimed that the lack of data found on the BlackBerry devices was not a significant issue, for a variety of reasons that the court ultimately rejected. For example, despite the claim that anything on the devices would have been synchronized to the server, and produced from there, the court found that the synchronization did not begin for “six or seven” days after the employees began using the devices, and during the timeframe relevant to the litigation.

In addition, hard copy messages produced showed that the employees routinely used personal email accounts for work, and sent such messages from their mobile devices. However, no email messages from those accounts were found on the devices. No text messages, calendar entries, or call logs were found on the devices, nor were these synchronized to the corporate server.

Furthermore, the court noted a suspicious time gap between: 1) the defendant’s employer receiving the letter requesting preservation of content on the BlackBerry devices, 2) notification to employees, and 3) the employees turning over the devices to their CIO.

“In this case, the circumstances surrounding the destruction of data from Individual BlackBerries indicate bad faith. The Individual Defendants had both the motive and the opportunity to wipe the BlackBerries of data. Despite the denials by Individual Defendants that they deleted any information, e-mails, text messages, call logs, or memory from their BlackBerries, their assertions are not credible.”

Southeastern Mechanical Services, Inc. v. Brody34


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What can we learn?Our email management responsibilities do not end with the email systems and servers tucked neatly inside our data centers. Today, email is created, sent, received, and managed by a variety of devices and software that neither look nor act like traditional email systems. We have to understand and manage them.

• Address mobile devices. Ensure that email policies, and the tools used to enforce those policies, apply equally to mobile devices.

• Ensure Legal Holds are timely. Act swiftly with Legal Holds notices to employees and system administrators. Ensure that they address more than just email that resides inside of traditional corporate email servers.

• Train employees. Ensure that employees understand their email preservation responsibilities, and that they will not “help the company” by trying to hide or delete information they believe to be damaging.



Endnotes

1 “AIIM Industry Watch-Email Management: The Good, the Bad and the Ugly,” AIIM International, May 2, 2009. On-line at, http://www.aiim.org/Research/Email-Management.aspx2 This paper is for informational purposes only and does not contain or provide legal advice.3 “One could write tersely and type imperfectly, even to an older person in a superior position . . . and the recipient took no offense. The formality and perfection that most people expect in a typed letter did not become associated with network messages [e-mail], probably because the network was so much faster, so much more like the telephone.” J.C.R. Licklider, Albert Vezza, Applications of Information Networks, Proc of the IEEE, 66(11), Nov 1978.4 For example, in the case of Shattuck v. Klotzbach, 2001 WL 1839720 (Mass. Super., Dec. 11, 2001), where a $2 million real estate sale was negotiated via email. The seller sued the buyer to enforce the contract, and the court found that the email messages satisfied the legal requirement for “a writing” and the typed names at the bottom of the email messages constituted a signature. 5 See, for example, Stevens v Publicis S.A., 2008 NY Slip Op 02880 [50 AD3d 253], where a New York appellate court ruled that “emails were signed writings that modify contract.” Coverage at, Kelly O’Connell, “U.S. Court Decides Email Equal a Signature for Contracts,” IBLS, May 2, 2101. Online at, http://www.ibls.com/internet_law_news_portal_view.aspx?s=latestnews&id=2032 See also, Stevens v. Publicis, S.A. and JSO Assocs. Inc. v. Price.6 See, for example, “Radio Shack Lays off Employees Via E-Mail,” Associated Press, March 2, 2007. Online at, http://www.usatoday.com/tech/news/2006-08-30-radioshack-email-layoffs_x.htm7 See, for example, the process for submitting files to Australia’s energy regulator: http://www.orer.gov.au/forms/agent-stat-decs.html8 The most recent of the five decisions being, Zubulake v. UBS Warburg, 2004 WL 1620866 (S.D.N.Y. July 20, 2004).9 Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, (S.D.N.Y. Jan. 15, 2010).10 Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co. Inc., 2005 Extra LEXIS 94 (Fla. Cir. Ct. Mar. 23, 2005). 11 GRI Simulations Inc. v. Oceaneering International Inc., 2010 NLTD 85 (CanLII).12 GRI Simulations Inc. v. Oceaneering International Inc., 2010 NLTD 85 (CanLII).13 GRI Simulations Inc. v. Oceaneering International Inc., 2010 NLTD 85 (CanLII).14 “Over half of respondents are ‘not confident’ or only ‘slightly confident’ that emails related to document commit-ments and obligations made by staff are recorded, complete, and retrievable. “AIIM Industry Watch-Email Management: The Good, the Bad and the Ugly,” AIIM International, May 2, 2009. Online at, http://www.aiim.org/Research/Email-Management.aspx15 “AIIM Industry Watch-Email Management: The Good, the Bad and the Ugly,” AIIM International, May 2, 2009. Online at, http://www.aiim.org/Research/Email-Management.aspx16 Connor v. Sun Trust Bank, 546 F. Supp. 2d 1360 - Dist. Court, ND Georgia, Atlanta Div. 200817 Connor v. Sun Trust Bank, 546 F. Supp. 2d 1360 - Dist. Court, ND Georgia, Atlanta Div. 200818 Connor v. Sun Trust Bank, 546 F. Supp. 2d 1360 - Dist. Court, ND Georgia, Atlanta Div. 200819 Starbucks Corp. v. ADT Sec. Servs., Inc., 2009 WL 4730798 (W.D. Wash. Apr. 30, 2009).20 Institute for the Advancement of the American Legal System at the University of Denver, “Electronic Discovery: A View from the Front Lines,” 2008.21 Statement Submitted by: Lawyers for Civil Justice; Civil Justice Reform Group; U.S. Chamber Institte for Legal Reform, “Litigation Cost Survey of Major Companies,” submitted to the Committee on Rules of Practice and Procedure, Judicial Conference of the United Stats, at the 2010 Conference on Civil Litigation, Duke Law School, May 10-11, 2010.22 In re A & M Fla. Props. II, LLC, 2010 WL 1418861 (Bankr. S.D.N.Y. Apr. 7, 2010)23 At time of writing, the amount of the fine had not been agreed upon nor published, but it would be based upon the cost of forensice search, costs for bringing various motions, etc.24 Passlogix, Inc. v. 2FA Tech., LLC, 2010 WL 1702216 (S.D.N.Y. Apr. 27, 2010). Note that this case addresses many other issues, including a lengthy investigation into how the genuine authorship of an anonymous email message may be ascertained – it is a fascinating read.

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25 “The Court holds that a monetary fine of $10,000 against 2FA best suits “the facts and evidentiary posture of [this] case.” . . . 2FA is a small company founded only in 2006, and [the founders] -who the Court both finds responsible for the spoliation of evidence in this case-are 2FA’s sole principals and co-founders. Here, a fine against 2FA serves the dual purposes of deterrence and punishment . . . . a fine directed at 2FA will affect them directly. In concluding that a fine of $10,000 is the most appropriate sanction, the Court balances 2FA’s litigation conduct with its status as a small corpora-tion.” 26 Passlogix, Inc. v. 2FA Tech., LLC, 2010 WL 1702216 (S.D.N.Y. Apr. 27, 2010), citing, Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, (S.D.N.Y. Jan. 15, 2010).

27 “Once on notice of litigation, “the failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.” Passlogix, Inc. v. 2FA Tech., LLC, 2010 WL 1702216 (S.D.N.Y. Apr. 27, 2010), once again citing, Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC,F.Supp.2d, 2010 WL 184312,(S.D.N.Y. Jan. 15, 2010).28 Open-records allegations taint Charlie Crist’s rail bill-signings,” Miami Herald, December 17, 2009.29 Wash. high court: $124K fine for withholding records is too low, Associated Press, January 17, 2009.30 “County can’t deliver email to public,” St. Petersburg Times, September 1999.31 Philip M. Adams & Associates, LLC v. Dell, Inc., 2009 WL 910801 (D. Utah Mar. 30, 2009).32 Philip M. Adams & Associates, LLC v. Dell, Inc., 2009 WL 910801 (D. Utah Mar. 30, 2009).33 Philip M. Adams & Associates, LLC v. Dell, Inc., 2009 WL 910801 (D. Utah Mar. 30, 2009).34 Southeastern Mechanical Services, Inc. v. Brody, 2009 WL 2883057 (M.D. Fla. Aug. 31, 2009).35 Southeastern Mechanical Services, Inc. v. Brody, 2009 WL 2883057 (M.D. Fla. Aug. 31, 2009).

© ViaLumina Group, Ltd, 2010

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Information Governance, Illuminated

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