Catagory:Market Announcements

By K&L Gates attorneys Thomas J. Smith and Michael J. Crossey, Jr.

It is now black-letter law that electronically stored information (“ESI” for short) is discoverable if relevant or likely to lead to relevant evidence.  Indeed, the revisions to the Federal Rules of Civil Procedure (“FRCP”) that went into effect on December 1, 2006 addressing the discovery of ESI confirm that the 21st Century is witnessing the transformation of traditional trial practice to accommodate ESI in all phases of litigation, from initial discovery and production through trial.  Given the vast amount of electronic information retained by most companies, the complex task of preserving, retrieving, and producing discoverable ESI and the prospect of extremely harsh sanctions for discovery missteps, the discovery of electronically stored information, or “e-discovery,” has become a major concern and potential liability for all companies.

Click here to read the entire article.

Written by Pamela A. MacLean and posted on The National Law Journal, April 18, 2007:

"A major fight over alleged spoliation of evidence and the potential for sanctions over electronic discovery may be shaping up in San Francisco federal court for the Oracle Corp. securities class action.

The dispute centers on a British author’s audio files of interviews with Oracle CEO Larry Ellison for "Softwar: An Intimate Portrait of Larry Ellison and Oracle" that now seem to have vanished. The digital recordings were made during the very period of class claims in In re Oracle Corp. Securities Litigation, No. C01-988MJJ."

Click here to read the entire story on the NLJ website.

K&L Gates partner Todd Reuter penned the following article on document retention for the March 2007 issue of Spokane Business Catalyst magazine:

"Developments in communications technologies promised to free us from the printed word, but the paperless office never materialized. In fact, both paper and electronic records have increased, creating backlogged inboxes both on your computer and on your desk. And, if you’re like most people, that current set of documents likely grows exponentially every day

From a legal perspective, this might be a problem. The more documents you have, the more you will need to produce in “discovery” should you find yourself in the middle of a lawsuit."

Click here to read the entire article.

The Richmond Journal of Law & Technology (JOLT) released its third Annual Survey of Electronic Discovery this week.  The issue features articles on a number of important issues relating to the new Federal Rules of Civil Procedure, including managing preservation obligations, accessible vs. inaccessable data, and creative approaches to cost-shifting.  Thanks to Jon Player, editor-in-chief, for bringing this to our attention. 

Morgan Stanley & Co., Inc. v. Coleman (Parent) Holdings, Inc., No. 4D05-2606 (Fla. Dist. Ct. App. Mar. 21, 2007)

In a 2-1 decision, a Florida state appellate court today reversed the $1.58 billion judgment against Morgan Stanley in the litigation brought by Coleman (Parent) Holdings, Inc.  Judgment was reversed on the grounds that plaintiff failed to prove compensatory damages by not establishing the fraud-free value of the Sunbeam stock on the date of the merger transaction.  Since the decision on that issue was dispositive, the court did not reach the other issues on appeal, including whether the trial court improperly entered a partial default against Morgan Stanley as a sanction for discovery misconduct, and whether the trial court erred in denying Morgan Stanley a fair opportunity to contest and mitigate evidence of litigation misconduct presented during the punitive damages phase of the trial.

Accordingly, the appellate court reversed both the compensatory and punitive damage awards and remanded the case with directions to enter judgment for Morgan Stanley.  Note, the decision is not final until the disposition of a timely filed motion for rehearing.

A copy of the decision is available here.

From the March 7 archives of eWeek.com:

"Updated: News Analysis: A judge gives the company 30 days to find missing e-mails; meanwhile, Intel’s foibles reveal a prime example of what businesses of all sizes now face since the institution of new federal e-discovery court rules.

Intel is facing some big-time legal problems in its 2-year-old legal tussle with a major competitor, AMD—largely because its own internal e-mail archiving system apparently isn’t doing the job.

A U.S. federal judge on March 7 gave the world’s largest microprocessor maker 30 days to try to recover about 1,000 lost e-mails that it was required to keep for an antitrust lawsuit filed by its biggest competitor, AMD, in 2005.

Judge Joseph Farnan of the U.S. District Court in Delaware referred the lost e-mail matter to the so-called special master—a court official who follows up such orders for the judge. The judge also ordered Intel to file a detailed report on how it will try to recover the e-mail evidence."

To learn more about the "document retention lapses" that occurred at Intel, read Intel’s counsel’s letter to the court dated March 5, 2007, here.

K&L Gates partner Todd Nunn, together with DATG & Records Management practice attorneys Ted Webber, Mike Goodfried and Trudy Tessaro, co-authored a chapter on the preservation of electronically stored information in DRI’s recently published treatise, Understanding the New E-Discovery Rules.  This chapter examines the duty to preserve documents and other information, particularly electronically stored information, that is potentially relevant to litigation. It also examines the effect of the recent Amendments to the Federal Rules of Civil Procedure on the preservation of information, and gives practical instruction on methods of meeting the preservation obligation for electronic information. The treatise was published in December 2006 by DRI as part of the DRI Defense Library Series.

A .pdf copy of the chapter is available here.

By Carolyn M. Branthoover and Karen I. Marryshow

Electronic communications and devices have changed the way we live and work. As those changes have occurred, litigants and courts have struggled with the application of traditional discovery rules to ever-evolving forms of electronically stored information. On December 1, 2006, several important amendments to the Federal Rules of Civil Procedure took effect. These amendments explicitly modify discovery procedures to address electronically stored information or “ESI.” In particular, the changes impose express obligations on parties to preserve, disclose and produce ESI. While much already has been written about the direct impact of these changes on the discovery process, lawyers must also consider thoughtfully how the recent amendments affect their ethical obligations.

Click here to view the complete story.

From Brad Stone at the New York Times:

"SAN FRANCISCO, Jan. 10 — Companies spend millions on systems to keep corporate e-mail safe. If only their employees were as paranoid.

A growing number of Internet-literate workers are forwarding their office e-mail to free Web-accessible personal accounts offered by Google, Yahoo and other companies. Their employers, who envision corporate secrets leaking through the back door of otherwise well-protected computer networks, are not pleased.

“It’s a hole you can drive an 18-wheeler through,” said Paul D. Myer, president of the security firm 8E6 Technologies in Orange, Calif.

It is a battle of best intentions: productivity and convenience pitted against security and more than a little anxiety.

Corporate techies — who, after all, are paid to worry — want strict control over internal company communications and fear that forwarding e-mail might expose proprietary secrets to prying eyes. Employees just want to get to their mail quickly, wherever they are, without leaping through too many security hoops.

Corporate networks, which typically have several layers of defenses against hackers, can require special software and multiple passwords for access. Some companies use systems that give employees a security code that changes every 60 seconds; this must be read from the display screen of a small card and typed quickly.

That is too much for some employees, especially when their computers can store the passwords for their Web-based mail, allowing them to get right down to business. "

Read the entire article here.

From the December 20, 2006 issue of the NY Times:

"A federal court in Brooklyn overseeing product liability lawsuits against Eli Lilly’s best-selling drug Zyprexa has ordered the lawyer who provided company documents to The New York Times and other organizations and individuals to return the documents.

The internal Eli Lilly documents and e-mail messages detailed efforts by the drug maker to play down the health risks of Zyprexa, a medication to treat schizophrenia and bipolar disorder, as well as to encourage primary care physicians to use it in patients who did not have the disorder. "

Click here to read the entire article [subscription required].