Category Archives: Sanctions

Report to the Principal’s Office!

j0316801 Here’s the tough part – you’d better be sure which Principal’s office is the correct one.  In my prior post, I discussed Principals and Agents from the perspective of both.  But this one is for attorneys; and again, I feel this is relevant in the arena of e-discovery because there will be corporations – and individual custodians – involved.

The Wall Street Journal posted this article about a case which serves as a cautionary tale of what may happen when attorneys endeavor to serve multiple masters (note: you may be required to register, but it’s free).  Ironically, it involves Broadcom (which we know has been at the hub of some very ground-breaking case law involving e-discovery sanctions).

The issue here is that executives were unsure of exactly who their attorneys were representing.  The attorneys represented the corporation, but apparently did not make it clear that they did not represent the executives as well; and I think most of you can understand the inherent conflict of interest that could potentially develop if the interests of both diverge.

This was a critical part of ethics (Professional Responsibility) class in law school and on the bar exam.  The graders wanted to make absolutely sure we knew at all times who our particular client was when representing a corporation.  As stated above, it’s the corporation, not you.  If you think you’re in jeopardy, there’s no middle ground; you must retain your own attorney to protect your interests.

Irell & Manella LLP failed to properly make this distinction clear – and the judge is making them stay after school.

Agent and Principal – Any Interest?

j0433130 Well, I’m back.  It was a fascinating week and as always, I learned something.  I didn’t have time to post, but this article about a case involving Principals and Agents caught my eye.  At first blush, it may seem like this is for lawyers only, but actually this is just as relevant to those who provide e-discovery services.

Agency and Partnership (as they call the subject in law school) covers the various representative relationships – legal and otherwise – that developed from common law and eventually formed the basis of the business structures we see today.  Even though this concept has existed for hundreds of years, California didn’t begin testing the subject until the July 2007 Bar Exam (I was one of the Guinea Pigs).

For our purposes, it’s a great review of the responsibilities between Principals and Agents.  The most obvious relationship is lawyer to client, but this also applies to those who provide e-discovery services to clients.  The reason I think it’s important is that, with sanctions being a very real possibility in these cases, it’s a good idea to be reminded that this is not a game.  What we do – and how we do it – has serious consequences.

Dancing ‘Geek to Geek’ – Judges’ Panel Weighs in on California AB 5, ‘Train Wrecks’ and the ‘Mayflower’

If this keeps up, I’m going to rename this site the ‘Hot Potato‘ blog…

 I’ve posted ad nauseam about how parties want to rid themselves of the e-discovery hot potato, but throwing it to the Judge?  Not so fast, says the Hon. Andrew J. Wistrich.  You can try, but he won’t play the game!  That was one of the morsels from the Judges’ Panel, which also included the Hon. Maureen Duffy-Lewis and the Hon. Carl J. West.

I like Judges.  They’re always more candid than I expect, and as some of you have probably figured out from my prior writing, I like candor.  Don’t beat around the bush, don’t use fancy language, just tell me what you mean!  I certainly got a lot of that from this panel.  It was the best 75 minutes a person interested/involved in e-discovery could spend, because it tells us where things are headed in the minds of the Judges – and ultimately, they’re the ones we are speaking to, not only our adversaries.

What was the most important concern to the panel?  Cost!

Judge West lead off the discussion and to my delight, he immediately weighed in on California AB 5, noting the pending March 3rd hearing and saying he expects the Bill to be adopted either by late this quarter or the next.  My take?  California finally reached a budget deal, so we’ll see if that development facilitates the passage of AB 5.

Judge West was concerned about two seemingly-contradictory provisions in the Bill; one, which discusses imposition of sanctions, and the other, which defines Safe Harbor.  He noted there were several exceptions to Safe Harbor that might incur sanctions.  That reminded me of law school.  As my professor used to constantly warn, “Everyone knows the rule, but they’ll test you on your knowledge of the exceptions to the rule”.

He also mentioned that more and more, he’s seeing each party provide a technology expert at hearings, and that many times it becomes an ‘expert versus expert’ issue.  That’s when he coined the phrase, credited to another Judge, that the parties should have their respective experts ‘dance geek to geek’.  I just want the Judge to know I haven’t worn horn-rim glasses since grade school…

Judge Duffy-Lewis spoke next…

She’s involved with what we refer to in California as ‘Fast Track’, but she came right out and said it; e-discovery hearings in her courtroom sometimes resemble “train wrecks”.  She said this occurs because she doesn’t see cases until they’re 90 days out and many of the lawyers wait to file motions until their case is about to be heard.

She would like to see attorneys dive right in as soon as possible and not wait.  They should begin submitting motions early related to issues of privilege, preservation and notice.

A major issue is how to handle privileged documents.  For example, I don’t want to turn over to the other side a document that contains information I’m going to use to impeach my adversary.  That’s easier when you’re talking about a paper document, but not so easy when the particular statement you need is buried in a 20-page email thread between multiple custodians that contains other relevant statements.

Judge Duffy-Lewis’ solution was to create something called an Impeachment Log.  The attorneys submit the documents to her, then she makes the determination, preserving the privilege.  Brilliant!

What does she see in the future?  Recommending a status conference will become virtually mandatory for e-discovery issues, and she predicts the appointment of special masters will become more prevalent.

Judge Wistrich completed the trifecta.  Talk about candor!  He’s a Magistrate Judge of the U.S. District Court for the Central District of California (I’m a member also) so his was the Federal view.

Judge Wistrich didn’t mince words.  He said the “rules have helped, but haven’t solved the problem.”

What problem?  The adversarial system and the natural tension created by asking parties – that by virtue are required to keep things close to the vest – to break that habit to cooperate on e-discovery issues.  He said the parties are going to have to get around that problem because in many cases, the experts are going to ask for – and be granted – access to their adversaries’ data.

He also said he’s “uncomfortable” because, “I’m not sure I know enough”, and is “concerned” that e-discovery is going to end up adding another layer – experts – to the front-end of the process, further bogging it down.

Still, like Duffy-Lewis, he says attorneys had better be prepared to take the pro-active approach.  He clearly understands his role and will not let the parties try to shift decisions to the bench that don’t belong there.

He also discussed Mancia v. Mayflower Textile Servs. Co.,
2008 WL 4595175 (D.Md. Oct. 15, 2008) and its effect on Rule 26(g).  I wasn’t surprised that Chief
Magistrate Judge Paul W. Grimm would be cited at the conference, since he’s one of the pioneers in this area.  Wistrich said that, when faced with issues of good faith, he orders the parties to videotape all further meet & confer discussions.  Strangely, he noted, their behavior improves immediately.


Judges to e-Discovery Attorneys: ‘Too Bad, So Sad!’

j0386224“Courts Unsympathetic to Electronic Discovery Ignorance or

Those were the words glaring back at me from my January 2009 issue of Kroll Ontrack’s Case Law Update and E-Discovery News Practice Points section.  It goes on to state (emphasis added):

“This past year highlighted a major trend in cases concerning issues involving the exchange of electronically stored data: an increase in judicial unwillingness to display compassion or tolerance for negligent e-discovery blunders. Courts are increasingly imposing sanctions for discovery misconduct and for the failure to properly preserve and produce electronically stored information (ESI). In fact, of the approximately 138 reported electronic discovery opinions issued from Jan. 1, 2008 to Oct. 31, 2008, over half addressed court-ordered sanctions, data production, and preservation and spoliation issues. A rough breakdown of the issues involved in these cases is as follows:

–  25% of cases
addressed sanctions.

–  20% of cases
addressed various production considerations.

–  13% of cases
addressed preservation and spoliation issues.

–  12% of cases
addressed computer forensics protocols and experts.

–  11% of cases
addressed discoverability and admissibility issues.

–  7% of cases
addressed privilege considerations and waivers.

–  7% of cases
addressed various procedural issues.

–  6% of cases
addressed cost considerations.”

Roughly one in four cases involving e-discovery resulted in sanctions?  Stunning!  I’m going to assume that my readers don’t intend to commit misconduct, so let’s talk about ‘ignorance’.

j0386152Based on the conversations I’ve been having lately, a lot of attorneys don’t even know there’s a standard, yet.  Well, if you don’t, here it is:

Courts presume (expect) a level of competence in e-discovery.  Great.  How do they determine the level?  Unfortunately, that’s the slippery slope.  It’s being determined every day in courts throughout the nation.  The Court expects that if you don’t possess the knowledge, you’ll find someone who does, and if you fail to do so, you’re going to be liable.

Cases?  Where do I start?  “…willfulness is relevant to the severity of
sanctions imposed, but not to whether sanctions should be imposed.” (Italics added)  Barnett v. Simmons, 2008 WL 4853360 (Okla. Nov. 10, 2008)

This goes to the heart of why I created e-Discovery Insights in the first place.  Any reasonable person understands that when you have new rules, there’ll always be latitude for a time until everyone comes up to speed.  That time is over.  Long over.  The Judiciary is telling us that they’ve had enough and are starting to lose patience with parties who flout the rules, and – like it or not – in many cases they’re completely justified.

You do not want to be in front of a judge who has lost their patience.  Been there, done that.  We’ve already seen the monetary sanctions, but one of these days, an attorney is going to either be suspended or disbarred over an e-discovery foul-up.  Don’t be the first.

I Can’t Really go to Jail over this…Can I?

As sanctions mount for those who have run afoul of the new e-discovery rules, debate is raging about criminal liability.  To some, the threat is very real.  They recommend extreme caution.  To others, it’s nothing more than a scare tactic.  They say the threat of incurring criminal liability over an e-discovery issue is slim to none.

Who is right?

I’ve neglected to link articles from both sides of the debate.  The reason; it’s not my place to criticize the writers – they make very strong arguments, for and against.  It just so happens that, in my opinion, the answer is somewhere in between.  Perhaps the reason many people think that criminal liability
is unlikely to attach flows from the possibility that they’re not thinking broadly enough.  In other words, they’re not taking into account who might be ensnared in the e-discovery net.

ca. 1990s --- Cat Staring at Goldfish --- Image by © Aaron Horowitz/CORBIS

The logic works in reverse.  The higher up in the e-discovery food chain you are, the more likely you’ll be eaten.  The small fry aren’t likely to get themselves in trouble, barring egregious conduct of some sort.  The standard of what would rise to the level of a criminal act may be high – but the liability exists.  So, who should be looking over their shoulder?

The White House (possibly violating the Federal Records Act), A former Broadcom Corporation executive (accused of obstruction of justice) and former Credit Suisse First Boston investment banker Frank Quattrone (also accused of obstruction and witness tampering) who endured a four-year ordeal for encouraging his employees to essentially ‘clean up those files’.

And the lawyers?  Six of them were referred to the State Bar of California for possible ethical violations in the Qualcomm v. Broadcom case.  A crime?  No, but facing various penalties up to and including disbarment, my guess is it feels like a crime to them.

If you reviewed the links, you’ll note that I’m not necessarily
concerned with whether the principal was convicted of – or plead guilty to –
committing a crime.  It’s scary enough just reading what actually happened – or could happen.

We’ve all heard the term, “Ignorance of the law is no excuse.”  That rule-of-thumb applies to e-discovery also.  One can commit a crime without realizing it.

j0387725If you’re a tech, and the boss tells you to delete data – and you simply follow his orders – if he instructed you in order to hide wrongdoing, he’s likely to be in trouble, but what about you?  If the facts are as stated, probably not.  But what if your company has an ESI policy, your boss’ instruction violates that policy, you know this, but you do it anyway?  Did you just become an accomplice to a crime?  Will the common explanation, “I was just following orders” get you off the hook?

Obviously, we’re not taking a crash-course on criminal law today.  There are so many hypothetical scenarios that could occur, with so many different facts that it would be impossible – and irresponsible on my part – to attempt to tackle all of them in a blawg post.

What I endeavor to do is to impress upon you that a snap decision that didn’t make you think twice in the past could burn you in the future.  ESI for it’s own sake doesn’t normally make one think of crimes.  But now, we’ve entered a new arena.  The law is involved, and if data “goes missing” in this context, your adversary – or the court – may infer that something fishy is going on.

Is it worth the time, expense, stress, loss of reputation and threat of incarceration?  The outcome is beside the point.  Even if you’re exonerated, where do you go to get your lost time, money and reputation back?

Attorneys – Get with the ‘Program’

An interesting survey appeared in the September 2008 issue of the American Bar Association Journal.  The subheading states, “Lawyers Slow to Adopt Cutting-Edge Technology“.

I took solace in the statistic that only 2% of lawyers maintain a law blog (assuming readers consider this a blawg then I’m certainly ahead of the pack) and only 8% of law firms follow suit, but as a general trend, the data is somewhat troubling.  It’s a symptom of a larger illness.

The number-one complaint against attorneys is lack of communication.  I’m not just speaking in terms of what their employees or clients say – it’s also the number-one complaint lodged against them with bar associations.


It’s bad enough when the subject is one in which an attorney feels comfortable discussing.  But add complex technology to the mix and that’s a recipe for disaster.  In the “wild west” days of e-discovery – before it even had a name – one could get away with mistakes.  Now that the rules have been formalized, the path is littered with attorneys – and their clients – who have suffered greatly for their mistakes.

There’s an old saying, attributed to Confucius, which states; “He who does not know, and does not know that he does not know, is a fool”.  In the e-discovery world, the new saying is, “He who does not know, and does not know that he does not know, will be sanctioned”.


Core competency in this area is no longer hoped for; it is expected j0439531and presumed, both by clients and the courts.  It’s not enough for attorneys to rely on IT personnel; they must also be able to understand what their IT professionals are telling them so they can communicate this information effectively to their clients, the courts and even their adversaries. Otherwise, it’s the attorneys and their clients who will bear the consequences of mistakes.

Further hampering this process is the fact that very few IT personnel speak “English”.  Many a layman has become glassy-eyed while listening to a “techie” explain a process in “techno-speak” while not understanding a word of what was said.

Like it or not, the onus is on the legal professional to be competent and understand this process.  If something goes wrong, blaming the incident on a lack of technical knowledge and expertise is not going to fly.