Electronic Discovery Proves Effective Legal Weapon

Article excerpt

They're hiding in hard drives and lurking in archival tapes by the billions -- a universe of e-mail, draft documents and phone-mail messages. Deleted or not, chances are good that if it ever was saved, it still exists in retrievable form, waiting for discovery by lawyers seeking anything they can use to support their clients' claims and defenses or to discredit adversaries' witnesses.

The fact that "deleted" documents are often preserved in computer hard drives and on back-up tapes came to public attention a decade ago during the Iran-Contra scandal when investigators recovered deleted communications among President Reagan's former national security advisers Robert McFarlane and John Poindexter and their subordinate, Oliver North.

But many companies have failed to integrate this knowledge into their document management policies. The result, according to lawyers and others who work on commercial cases, is that electronic discovery in legal cases has become a mini-industry, with the discovery process itself having increasing impact on the outcome of litigation. Among the cases that lawyers and others cite as examples -- with a minimum of identifying details, because of confidentiality pledges - - are the following: * A top executive defects from a company and a stream of key employees follow her to a rival concern. The jilted company sues, charging she violated her fiduciary duty, according to the plaintiff's lawyer, Michael A. Stiegel, managing partner of Arnstein & Lehr in Chicago. She denies soliciting co-workers during her tenure. But from the depths of her former hard drive, company systems experts, at no extra cost to the plaintiff company, retrieve the e- mail she meticulously deleted -- the "smoking guns" she sent to the employees who later joined her, Stiegel says. Result: a settlement last year strongly in the plaintiff company's favor. * A defendant in a continuing lawsuit, a manufacturer, archives thousands of gigabytes of back-up tapes over the course of more than 10 years. "They literally saved every back-up tape they ever made," said John Jessen, president and chief executive officer of Electronic Evidence Discovery Inc., a Seattle-based company that provides computer support to parties in litigations, including this defendant. Over the objection of the manufacturer's lawyers, a judge orders the company to review its warehoused tapes and to produce relevant information for the plaintiff. Cost to defendant: more than $3 million, Jessen estimates. * In a third commercial case, a court orders a defendant company to give the plaintiff company physical custody of its hard drives. The plaintiff company hires a computer expert to pick through these hard drives for anything that can prove the defendant company stole proprietary information. The case came to an abrupt halt early this year after copies of internal memorandums are presented as exhibits in depositions of the defendant's principals. According to Mike Abernathy, partner at Bell, Boyd & Lloyd in Chicago, "We basically broke from the deposition" and began settlement talks. These are not isolated occurrences, according to lawyers and experts in document retrieval. Commercial litigators have caught on to two computer-related facts with a vengeance. First, the delete function on a computer, whether mainframe, network computer or laptop, does not usually destroy documents. It moves them to undisclosed locations on a hard drive. Second, many companies periodically download and store all of the information on their systems, including deleted e-mail and document drafts. And with a trend toward integrating phone mail into companies' computer systems, phone-mail messages are increasingly being downloaded and stored, also in retrievable form. Recovered phone-mail messages are just beginning to become a factor in commercial cases, Abernathy said. E-mail messages can be particularly damaging, providing lawyers with disarming, personal and even embarrassing evidence. …

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