Archive: September 2007

Morgan Stanley to Pay Millions for E-Mail Mismanagement
2007 Cohasset ARMA AIIM Electronic Records Management Survey Results Released
Court Denies Motion to Compel Production of Plaintiff’s Personal Computer
Court Denies Non-Party’s Motion to Quash Subpoena and Orders Production of Responsive ESI
Qualcomm Firms Seek to Pierce Privilege
DC Bar Releases Ethics Opinion on Metadata Mining
Court Orders Additional Efforts be Undertaken to Locate ESI, Denies Plaintiff’s Request for Access to Defendant’s Internal Databases
Sanctions Warranted for Defendant’s “Purposefully Sluggish” Discovery Efforts and Failure to Produce “Usable” or “Reasonably Accessible” Documents
Using “Special e-Discovery Counsel” to Gain a Litigation Edge

Morgan Stanley to Pay Millions for E-Mail Mismanagement

By Elena Malykhina from InformationWeek, September 28, 2007:

"The Financial Industry Regulatory Authority this week said Morgan Stanley has to pay $12.5 million in fines to resolve charges for mishandling e-mail dated before the Sept. 11, 2001, terrorist attacks.

Morgan Stanley on numerous occasions failed to provide e-mails requested by claimants in arbitration proceedings and regulators, FINRA said.

The financial company previously had stated that its e-mail servers were destroyed in the 9/11 attacks, resulting in the loss of e-mails archived prior to that date. Morgan Stanley presumably had lost millions of pre-9/11 e-mails, but it was later discovered that they had been restored to the company’s active e-mail system using backup tapes, which were stored in another location. "

Click here to read the entire story on InformationWeek.

2007 Cohasset ARMA AIIM Electronic Records Management Survey Results Released

From Cohasset:  "The survey’s conclusions are based on data compiled from more than 1600 respondents in 2007 and a total of more than 5500 in the survey’s four prior years – 1999, 2001, 2003 and 2005.

Five major conclusions :

1. Most organizations have serious operational shortfalls regarding the processes by which they manage electronic records, one of their most important assets. The findings of Cohasset’s earlier surveys continue to be verified in this regard.

2. This year’s results confirm that some core deficiencies in records management program components have begun to be addressed – but the overall effectiveness of the programs with regard to life cycle management of electronic records remains bleak.

3. Evidence of "silos" of expertise persists; much greater awareness of risks and opportunities from the "C Level" down is needed. Traditional communications barriers must be broken down between stakeholders and a new commitment to collaboration around recordkeeping requirements and retention management must take place.

4. The number and magnitude of organizational and operational problems reflected in the survey findings collectively represent stunning business risks. Senior management must consider these risks unacceptable to have and untenable to continue.

5. The integration of electronic records into the organization’s records management program should be a priority, and electronic records control gaps should be the focus of immediate corrective action. "

Click here to download the white paper.

Court Denies Motion to Compel Production of Plaintiff’s Personal Computer

Benton v. Dlorah, Inc., 2007 WL 2225946 (D. Kan. Aug. 1, 2007)

In this employment discrimination case, defendants moved to compel plaintiff to provide complete responses to requests for production, to produce the hard drive of her personal computer for inspection and copying, and to stop destroying emails and other relevant evidence.  Defendants had requested all communications between plaintiff and defendant National American University or its employees, agents, or students.  Plaintiff produced some documents as part of her initial disclosures and in response to defendants’ discovery requests.  In subsequent discussions regarding the sufficiency of plaintiff’s production, plaintiff’s counsel informed defense counsel that plaintiff had deleted email correspondence with her students and could not produce any additional emails beyond what she had already provided in her initial disclosures.  Prompted by concerns about recovering these emails, as well as the discovery responses, defendants requested that she produce the hard drive of her personal home computer to facilitate recovery of the deleted emails by a computer forensics specialist.  Plaintiff refused to produce her computer hard drive without an order of the court.  After further efforts to resolve the discovery dispute, defendants filed a motion to compel.

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Court Denies Non-Party’s Motion to Quash Subpoena and Orders Production of Responsive ESI

Auto Club Family Ins. Co. v Ahner, 2007 WL 2480322 (E.D. La., Aug. 29, 2007)

Non-parties Rimkus Consulting Group, Inc. and Rimkus Consulting Group, Inc. (collectively "Rimkus") filed a motion to quash the subpoena duces tecum served on them by defendants Christopher and Jennifer Ahner (“the Ahners”), and for a protective order.  Rimkus had, on behalf of plaintiff Auto Club Family Insurance Company, investigated the hurricane-related damage to the Ahners’ home that was the subject of the lawsuit.  Rimkus agreed to respond to the subpoena by producing a hard copy of its entire file concerning its investigation, but argued that it should not be required to produce its electronically stored information.

The court noted that Rules 26(c) and 45 governed the proceeding, and that, having sought a protective order, Rimkus had a burden to make “’a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements,’ in support of its motion.”  Considering each of Rimkus’s arguments in turn, the court denied the motion to quash the subpoena. Read More

Qualcomm Firms Seek to Pierce Privilege

From The Recorder by Jessie Seyfer via

"Attorneys who once represented Qualcomm Inc. in its ill-fated federal patent case against Broadcom Corp. have asked a judge to pierce their client’s privileged communications.

With the threat of formal sanctions bearing down on them, lawyers at Heller Ehrman and Day Casebeer Madrid & Batchelder — Qualcomm’s former litigation counsel — are asking for a rare exception to privilege so they can explain to the judge how their side failed to produce hundreds of thousands of relevant documents during discovery in the San Diego case. "

Click here to read the rest of the article on

DC Bar Releases Ethics Opinion on Metadata Mining

This month, the Legal Ethics Committee of the District of Columbia Bar issued Ethics Opinion 341 on the review and use of metadata in electronic records. Attempting to create a compromise position on the issue of metadata mining, the committee found that a lawyer receiving electronic records from an adversary is prohibited from reviewing the records’ metadata only when he has actual knowledge that the metadata was inadvertently sent. In such cases, the receiving lawyer should not review the metadata before consulting with the sending lawyer to determine whether the metadata includes work product of the sending lawyer or confidences or secrets of that lawyer’s client. The full text of the ethics opinion can be found here.

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Court Orders Additional Efforts be Undertaken to Locate ESI, Denies Plaintiff’s Request for Access to Defendant’s Internal Databases

Butler v. Kmart Corp., 2007 WL 2406982 (N.D. Miss. Aug. 20, 2007)

In this order, the court considered plaintiff’s motion to compel Kmart to respond to several discovery requests.  The court granted the motion in part, and denied it in part.

Two of the issues considered by the court touched directly on the discovery of electronically stored information (“ESI”).  One of plaintiff’s complaints in the motion was the dearth information produced by Kmart in response to a particular set of RFPs.  The court observed that while counsel must make a reasonable effort to ensure their client has produced all the documents responsive to a discovery request, “a party cannot be expected to produce information that no longer exists.”  The court found that the affidavits submitted by Kmart describing their unsuccessful efforts to locate tangible items at various store locations indicated “no evidence that Kmart has failed to make a diligent search,” and declined to order additional searches for tangible items.  However, after noting that Kmart was also obligated to produce ESI relevant to the requests at issue, the court found that Kmart’s efforts in that regard were less clear, and ordered additional steps be undertaken:

It is less clear whether Kmart acted with similar diligence in search its electronically stored information.  In fact, Kmart mentions very little about whether it conducted searches in its various computer systems for documents responsive to the various discovery requests.  Absent some valid objection, it is clear that Kmart must produce electronically stored information, if it exists, responsive to the plaintiff’s discovery request.

At this point, without nothing more from Kmart on this matter, the court will compel its production of electronically stored information responsive to plaintiff’s various requests.  Once again, Kmart will conduct a thorough search of its computer systems and will provide the plaintiff with any electronically stored information responsive to the request or, alternatively, with responses (and accompanying affidavits, if necessary) demonstrating its diligent search of its computer systems.

(Italics in original.)

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Sanctions Warranted for Defendant’s “Purposefully Sluggish” Discovery Efforts and Failure to Produce “Usable” or “Reasonably Accessible” Documents

In re Seroquel Prods. Liab. Litig., 244 F.R.D. 650 (M.D. Fla. 2007)

In this opinion, United States Magistrate Judge David A. Barker considered Plaintiffs’ motion for sanctions based on the failure of defendant AstraZeneca (“AZ”) to timely comply with various discovery obligations.

In April 2007, Plaintiffs had filed a motion to compel completed production of various items listed in the case management order (“CMO”) entered January 2007.  (For a summary of the related opinion discussing the CMO, click here).  The motion was denied without prejudice by the court, to allow the parties to confer “in good faith and in extenso” on the issues raised in the motion to compel.   At the same time, the court scheduled an evidentiary hearing on the motion, warning the parties:


(Capitals and bold in original.)

The evidentiary hearing was ultimately canceled after the parties filed a Joint Statement of Resolved Issues and Notice that a Hearing is Not Required.  Plaintiffs agreed to the Joint Statement and Notice based on AZ’s representations that it would correct the faults described by Plaintiffs in their original motion to compel.  When the corrections were not made, Plaintiffs filed this motion for sanctions.

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