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Alextronic Discovery
An Electronic Discovery Blog covering News, Articles
and Thoughts for the Legal and Corporate Community Author: Alexander H. Lubarsky, LL.M., Esq. - alubarsky@enterusa.com - Tel. (415) 533-4166 OR 800-375-4222 THIS BLAWG IS NOT AFFILIATED WITH THE WEB SITES WWW.DISCOVERYRESOURCES.ORG OR WWW.DISCOVERYRESOURCES.COM


Thursday, March 11, 2004

The Attorney-Client Privilege - Is it Airtight?  

The Attorney-Client Privilege - Is it Airtight?

Law students doing their Summer internships as well as young associates are trained to do two things well: minimize the Ms. Pac-Man screen when the Senior Partner pops into the office and claim that anything between a client and counsel that may be part of a discovery population is privileged.

As with every rule, there are exceptions. In certain types of litigation, the exception may become the rule.

Take attorney malpractice matters for instance. Not that I can speak from experience on this topic (thankfully) but imagine what disadvantage the client would find herself in if the attorney was able to simply exclude the damning documents and communications evidencing her malfeasance simply by playing the attorney-client (hereinafter "A/C" privilege card). Not surprisingly, nearly all states have refused to allow the exclusion of evidence based on A/C in attorney malpractice suits. California embodies this A/C exception in Section 958 of its Evidence Code.

"There is not AC Privilege ... as to a communication relevant to an issue of breach by the lawyer or the client, of a duty arising out of the lawyer-client relationship."

A large law firm, tried to argue that key incriminating communications should be excluded due to A/C as they struggled to defend a large attorney malpractice claim. With full knowledge of the language and intent behind Section 958, the firm relentlessly claimed A/C. The result? Get this, a whopping 27.7 million dollar sanction for abusing the claim of privilege where it clearly is inapplicable by operation of law. That's right, twenty-seven million buckaroos... enough cheeseburgers to circle the earth forty-six times... the GDP of Benin. As my mentor, Rob Lekowski, would undoubtedly comment... Whoooooa Nelly!

Does this exception to the rule complicate ED processing? Well, what new evidentiary issue does NOT tend to throw a wrench into the ED process?

Be cautioned, don't rely on standard pre-processing query filters to automatically exclude data such as e-mail messages where the attorneys name and a client's name appear in either the to or from Outlook fields. Although this is often an ingenious strategy when it comes to legitimate A/C privilege retention, it will work against involved in a dispute in which the attorney-client relationship itself is in dispute.

Sometimes thing that appear so certain and time-tested such as the trusty old A/C privilege can be turned on their heads. The sun may not always rise in the East.

posted by Alexander | 1:38 AM


Sunday, March 07, 2004

Last Year's House of Horrors...  

Last Year's House of Horrors...

Reviewing many of the key e-discovery decisions of 2003, was not unlike the summer of 1978 - the golden era of horror filsms - Halloween, Attack of the Killer Tomatoes, Omen II and Magic. I don't think I slept in 1978. At the very least, I avoided puppet shows, trick-or-treating and ordered my BLT sandwhiches without the T's.

What 1978 was to a frightened fifth grader, 2003 was to corporate counsel. The E-discovery decisions that came down last year were enough to make Michael Meyers himself have nightmares. These rulings didn't even need Jamie Lee Curtis to deliver ghastly gore....

The 2003 thriller decisions center around a common theme - the horrors of a lack of a electronic document discovery response scheme. This was to 2003 what hockey masks and large kitchen knives were to 1978. Few sources chronicle last year's haunted house of horrors as well as recent judicial opinions spanning the Federal, State and Administrative judiciaries.

In Metropolitan Opera Assn. V. Local 100, 2003 U.S. Dist. Lexis 1077(SDNY, 2003), the court held that a party that fails to timely produce reasonably requested electronic evidence may be subject to punitive damages and also liable for attorney’s fees incurred by the requesting party in efforts to move the court to compel production.

Similarly, the court in Medtronic Sofamor Danek, Inc. v. Sofamor Danek Holding Co., No. 01-2373-MIV, 2003 U.S. Dist. Lexis 8587 (WD Tenn. 2003) the court mandated the restoration and production of backup media from a corporate defendant where it was clear that the archival media contained data relevant to the litigation. The court can fashion sanctions for a failure to produce such data including monetary sanctions and adverse inference instructions to a jury. The corporation charged with production in Residential Funding Corp. v. Degeorge Financial Corp., 306 F.3d 1999 (2003) a creditor’s rights dispute, was hit with both sanctions largely due to the absence of a responsive process in place instead of a reactive one.

Other frightening decisions have resulted in penalties levied against producing parties who are unable to respond effectively to electronic document discovery requests because the producing organization fails to adhere to a sufficient document retention policy resulting in a judicial finding of spoliation with attendant sanctions .

The corporation that insists that its potentially responsive documentation exists in paper format and therefore tends to shun a request for electronic records, will find that the courts are routinely compelling the electronic version of documents rather than their paper counterparts even after the paper based discovery has been produced.

In that spine tingling year, the Southern District of New York ruled that a requesting party who had duly received the paper version of the documents they had requested was correct in its assertion that the paper production was insufficient and the producing party must reproduce the documents in their electronic formats. In re Honeywell Int’l Sec. Litig., 2003 WL 22722961 (SDNY Nov. 18th, 2003). The rationale for the required repeat production of electronic documents centers around the fact that paper production alone makes it nearly impossible for counsel to determine which documents belong with which e-mail attachments.

The doors to the corporate hall of horrors (and shame) remain wide open for litigants who fail to implement and maintain consistent processes, policies, communications and technologies that enable adequate responsiveness to the new breed of discovery requests. The modern corporate counsel is charged with implementing a working policy which empowers the producing corporation to effectively and quickly respond to requests for digital documentation with ease, structure and precision.

Will 2004 unearth a tombo of similar horrors? The courts don't seem to be shying away from imposing liability towards corporate counsel who are simply ill prepared to respond to an electrnoic discovery request. Can we expect the horrors to continue this year? History has a way of repeating itself. Just when moviegoers though that the worst was over as 1978 turned into 1979... along came a little flick called Phantasm...

posted by Alexander | 10:18 PM

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