E-mails can have 'explosive' impact in court cases

[R.A. Hettinga]

<http://www.montereyherald.com/mld/montereyherald/business/10385104.htm?template=contentModules/printstory.jsp>

Posted on Fri, Dec. 10, 2004

E-mails can have 'explosive' impact in court cases

By TRICIA BISHOP
The Baltimore Sun

Brian L. Moffet said he saw the writing on the wall about three years ago.
The attorney was arguing a national class-action suit with 50,000 pieces of
paper entered into evidence when the judge asked, ''Where are the e-mails?''

That sent Moffet into scramble mode.

''It was the first time I realized it was something that was going to have
to be addressed,'' he said.

More than 90 percent of all new information is created and stored in
electronic form, according to the University of California at Berkeley. And
more than two-thirds of that is never printed. Not since the adoption of
the Xerox machine 45 years ago has the centuries-old legal profession been
so affected by new technology.

A handful of law firms, including Moffet's -- Gordon, Feinblatt, Rothman,
Hoffberger & Hollander LLC -- have created units specifically to mine for
electronic information and help clients manage it. But experts say many
lawyers aren't yet comfortable with hunting for electronic data and may be
setting themselves up for claims of malpractice because of it.

''Think about it,'' said Ken Withers, an attorney at the Federal Judicial
Center, the Washington-based research and education arm of the national
court system. ''If 92 percent of the information is in electronic form,
then they're only asking for 8 percent of the information. Obviously,
they're not getting a full picture of what's going on.''

Recent court decisions have put attorneys and companies on notice by posing
hefty fines against businesses and public institutions that don't properly
handle -- or hand over -- electronic records.

In July, Phillip Morris USA Inc. was sanctioned $2.75 million for failing
to keep and produce such data in a case that claimed the company marketed
cigarettes to minors. That same month, a New York court instructed a jury
to infer that the absence of electronic records could be considered
intentional and damaging to the defendants. And a year ago, Baltimore City
defendants in a housing discrimination case produced 80,000 e-mails too
late, causing U.S. District Court Judge Paul W. Grimm to refuse their
admittance into evidence and preclude some witnesses from testifying.

Electronic evidence ''is absolutely explosive in terms of the impact,''
Grimm said in a recent telephone interview. ''At first it was somewhat
unusual. But in the late '90s and early 2000, we started seeing a drumbeat
of cases'' submitting e-mail evidence in particular, which is often more
salacious because of its casual nature.

''Discovery'' -- the technical term for the lawyer's process of collecting
evidence and information to try a case -- once meant pawing through file
cabinets in search of a paper trail. But the explosion of e-mail and other
electronic data has turned the procedure on its head, making it more costly
and cumbersome, but also critical. E-mail and data can be found on laptops,
network servers, disks, hard drives, backup tapes, cell phones, and
portable digital assistants -- making them all fair game when mining for
dirt that could make or break a case.

''Now, we not only have to sweep files for relevant information. We have to
sweep the computers that are relevant, too,'' said Thomas P. Vartanian, a
Washington attorney and a member of the American Bar Association's
technology committee. Without in-house electronic discovery teams, lawyers
and companies typically turned to outside businesses for help. The first
such companies began on the West Coast in the late 1980s. But it wasn't
until a decade later that the new market began taking off, said George J.
Socha, Jr., an attorney, market analyst and consultant in St. Paul, Minn.

Today, about 160 companies concentrate on electronic discovery, whose total
revenues grew to $430 million in 2003 from $40 million in 1999.

Cases involving records mismanagement and accounting fraud -- such as those
of Arthur Andersen LLP and Enron Corp. -- have heightened mistrust of
corporations by juries, said Lori Ann Wagner, a partner at Faegre & Benson
LLC in Minneapolis. Her firm, whose electronic discovery task force in 1999
is considered one of the pioneers among law firms, helps clients put
policies in order to avoid the appearance of misconduct. But many companies
still don't have well-defined or well-reasoned processes.

Recently, a California software company filed a motion in U.S. District
Court in Baltimore that claimed Microsoft Corp. purposely created policies
to destroy evidence. The plaintiffs, Burst.Com Inc., contend Microsoft
stole its intellectual property and destroyed the e-mails that would prove
it. They've requested that the judge issue an ''adverse inference''
instruction to the jury, which permits members to infer that the destroyed
evidence was harmful to Microsoft.

Dealing with data is not easy for companies or their attorneys. The
information is enormous in scope and costly to maintain and search. Word
documents have multiple versions, e-mails have replaced telephone calls and
they are sent to multiple recipients, embedded data are attached to files,
and deleted data are not truly gone until it's overwritten, which could
take years. All of it is discoverable, meaning millions of pieces of
information might come into play.

And right now, there are no universal rules governing the electronic
discovery process, though various groups have offered guidelines. Some
states -- Delaware, Wyoming, New Jersey, Kansas and Arkansas -- have
implemented their own rules, but some experts complain of a lack of
uniformity.

''The volume of electronic information is much higher than anything we ever
imagined in the paper world,'' said Withers of the Federal Judicial Center.
''Computers generate far more than humans are capable of comprehending.''

The Judicial Conference of the United States -- the policy-making body for
the country's court system -- has proposed amendments to the federal Rules
of Civil Procedure that specifically address electronic discovery. The
proposals have been presented for comment, which ends in February, and
would not take effect until December 2006 at the earliest.

The current proposals would require attorneys to lay ground rules for
electronic discovery early on, help decide who pays for what, add options
to pull back privileged communication mistakenly handed over, and ease the
burden of production on some defendants by only asking for easily
accessible documents. Among the possible changes is a new definition of
what a ''document'' is: It could include an entire computer and everything
on it.

Law schools are trying to train the next generation of lawyers to think in
such terms. But while most students are already familiar with the Internet
and tech toys, ''trying to harness all of that recreational knowledge and
turn it into professional expertise is a challenge for all law schools,''
said Theresa K. LaMaster, assistant dean for technology affairs at the
University of Maryland School of Law.

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R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
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