It reads like a vintage John Grisham page-turner: In Mississippi, high-stakes allegations of skullduggery, bribery and secret meetings cost two seasoned attorneys their jobs and, ultimately, their lives.
OK, not their lives. That part is made up. But the rest of the story is true. The attorneys do lose their jobs — and e-discovery is central to the reason why.
Here’s the plot in broad strokes. Eaton Corporation was engaged in Mississippi-based litigation with a rival firm and six former Eaton engineers. As we know from Grisham, crazy things happen in Mississippi courthouses (see, c.f., The Appeal). They certainly did in this case. The lawsuit was dismissed because certain Eaton representatives saw fit to hire a “secret lawyer” who allegedly met with — and attempted to influence — the judge originally presiding over the case.
Sounds like a great airplane read, you’re probably thinking, but where does e-discovery come in?
This is where the plot thickens. During subsequent proceedings, the court ordered Eaton and its general counsel to produce emails related to Eaton’s alleged “judge influencing” activities. Eaton failed to do so. Moreover, Eaton’s GC stated that he did not recall seeing any emails discussing the activities in question. However, certain emails now have come to light that allegedly show several Eaton staff attorneys engaging in online discussions and exchanging emails discussing these questionable activities. The court then demanded that Eaton explain why it had not produced these emails when ordered to do so.
In response, Eaton’s GC filed an affidavit suggesting that Eaton did not deliberately withhold the emails, but instead did not produce them because their original efforts to identify and collect the emails were inadequate. According to Eaton, the emails in question constituted correspondence between its vice president of litigation and a senior lawyer directly involved in the discovery process. The documents resided on the senior attorney’s hard drive, but had not been collected because of shortcomings in Eaton’s collection protocol. Specifically, the vice president of litigation instructed the collections personnel not to search for email files, and the senior attorney did not self-identify the emails during a manual search of her computer. Based on these revelations, Eaton fired both the vice president and the senior lawyer.
So what are the takeaways from this (other than a pretty good judge-bribing story)? Well, first and foremost, the alleged misconduct at issue could not have occurred within the confines of an established, documented preservation and collection process. Such a process should have included a formal litigation-hold notice documenting each employee’s obligation to preserve data for collection. More importantly given the circumstances of the case, the process also should include documented protocols for identifying and collecting potentially relevant data. In this instance, the custodians manually reviewed their emails and selected data for collection. Not surprisingly, an independent audit of the collections process by Eaton’s counsel concluded that individual custodians manually checking their own email files “was not a reliable method for identifying all responsive emails.”
Such processes work best when clients take the time and effort to conduct and document custodian interviews prior to collecting data. These interviews serve two purposes:
- First, they often provide valuable information that limits both the cost and scope of discovery as a matter moves forward by providing information regarding the custodian’s role in the litigation.
- More importantly, they provide an important record of the data collected from each custodian and preclude the self-selection at issue in this case.
Conducting custodian interviews is not a revolutionary or cutting-edge process. However, we frequently are surprised at the number of companies that collect data from custodians without conducting interviews or otherwise confirming the custodian’s connection to the litigation. In most circumstances, the failure to conduct custodian interviews results in over-collection, over-processing, over-review, and in many cases, over-production of data as companies simply collect all available data from its potential custodians.
On the other end of the spectrum, companies may under-collect data in circumstances similar to the Eaton case, where the custodians play an active role in selecting specific data without the assistance of counsel. Many companies justify not conducting custodian interviews by citing the time and cost associated with this process. However, in the Eaton cases, the total cost of not following a collections protocol likely will include, at a minimum:
- the $1.5 million sanction already levied against Eaton for failing to disclose the emails;
- defendant’s legal fees associated with the newly found emails;
- the cost of a court-appointed discovery supervisor who will be appointed at Eaton’s suggestion;
- the cost for all Eaton in-house attorneys to attend an e-discovery training seminar in 2012, again at Eaton’s suggestion;
- the cost for Eaton to sponsor e-discovery courses, stressing ethical responsibilities, at several law schools in Ohio and Mississippi;
- for two attorneys – their jobs
In short, not a very happy ending — but one that could have been prevented in the first few chapters.
Matt Miller leads the Intellectual Property Practice Group and manages the Charlotte office. He develops innovative discovery solutions and partners with clients and outside counsel.