eDiscovery Daily Blog
eDiscovery Case Law: KPMG Loses Another Round to Pippins
As discussed previously in eDiscovery Daily, KPMG sought a protective order in Pippins v. KPMG LLP, No. 11 Civ. 0377 (CM)(JLC), 2011 WL 4701849 (S.D.N.Y. Oct. 7, 2011) to require the preservation of only a random sample of 100 hard drives from among those it had already preserved for this and other litigation or shift the cost of any preservation beyond that requested scope. Lawyers for Pippins won a ruling last November by Magistrate Judge James Cott to use all available drives and Judge Cott encouraged the parties to continue to meet and confer to reach agreement on sampling. However, the parties were unable to agree and KPMG appealed to the District Court.
Last Friday, District Court Judge Colleen McMahon upheld the lower court ruling, noting:
"It smacks of chutzpah (no definition required) to argue that the Magistrate failed to balance the costs and benefits of preservation when KPMG refused to cooperate with that analysis by providing the very item that would, if examined, demonstrate whether there was any benefit at all to preservation.”
“KPMG could have established [that producing all the drives was unnecessary] by producing several hard drives to Plaintiffs and Magistrate Judge Cott. … But KPMG has established nothing of the sort,” McMahon added.
“Even assuming that KPMG’s preservation costs are both accurate and wholly attributable to this litigation — which I cannot verify — I cannot possibly balance the costs and benefits of preservations when I’m missing one side of the scale (the benefits).”
“I gather that KPMG takes the position that the only Audit Associates who are presently ‘parties’ are the named plaintiffs, and so only the named plaintiffs’ hard drives really need to be preserved. But that is nonsense,” she continued. “Under Zubulake IV, the duty to preserve all relevant information for ‘key players’ is triggered when a party ‘reasonably anticipates litigation.’ … At the present moment, KPMG should ‘reasonably anticipate’ that every Audit Associate who will be receiving opt-in notice is a potential plaintiff in this action,” McMahon concluded.
Outten & Golden partner Justin Swartz, representing Pippins, commented after the ruling: "All we're asking for is the chance to look at a few hard drives, find out what's on them, and negotiate a resolution." Steven Catlett, representing Sidley Austin for KPMG, did not provide a comment.
So, what do you think? Was this a ruling against proportionality in eDiscovery or is KPMG’s refusal to provide any hard drives defeating their proportionality argument? Please share any comments you might have or if you’d like to know more about a particular topic.
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