Ethics

Is it OK for an eDiscovery Vendor to Work on Both Sides of a Case? – eDiscovery Best Practices

A few weeks ago, we covered a case where the plaintiffs’ motion to compel the defendant to meet and confer to establish an agreed protocol for implementing the use of predictive coding software was dismissed (without prejudice) after the defendants stated that they were prepared to meet and confer with the plaintiffs and their non-disqualified ESI consultants regarding the defendants’ predictive coding process.  The sticking point may be the ESI consultant in dispute.

As reported by Victor Li in Law Technology News (Judge Refuses to Disqualify EDD Vendor for Playing Both Sides), the defendant in Gordon v. Kaleida Health is taking its fight to the U.S. District Court to have eDiscovery vendor D4 Discovery disqualified from working on the case on behalf of the plaintiffs.  In their initial objection on June 5 and their July 12 filing, Kaleida Health claimed that New York Magistrate Judge Leslie Foschio erred and that D4 should have been disqualified.  As the article notes, “Kaleida’s attorneys at Nixon Peabody had decided to use predictive coding to go through its gigantic cache of 300,000 to 400,000 emails, and had hired D4 (in 2010) to provide scanning and coding services. In 2011, D4 entered into a contract to provide e-discovery consulting services to the plaintiffs. Despite D4’s representation that its consultants had not been involved in the project for Nixon Peabody, Kaleida and Nixon Peabody objected.”

In his ruling, Foschio ruled that there was no conflict of interest for reasons including:

  • D4’s involvement with Kaleida was limited to scanning and coding documents;
  • Kaleida failed to show that D4 had access to any confidential information;
  • D4’s duties to Kaleida were “a routine clerical function” (similar to photocopying documents) while services provided to the plaintiffs were “requiring expert knowledge or skills”;
  • D4 had only been hired to code objective information into assigned fields and was not asked to identify substantive case issues or make subjective decisions about the documents;
  • D4 had actually subcontracted its work for Kaleida to Infovision 21.

Conversely, Kaleida and its attorneys at Nixon Peabody argued that there was a confidential relationship with D4 and that D4 had access to sensitive information, arguing that the plaintiffs’ attorneys at Thomas & Solomon spoke directly to Amir Karahasanovic, the D4 employee who had handled the Kaleida job, violating that confidential relationship.

Li’s article also quotes Electronic Discovery Reference Model (EDRM) co-founder George Socha (a thought leader interviewee on this blog for the past three years), who referenced the EDRM’s Model Code of Conduct (our previous post about it here) as a means to encourage vendors to avoid these types of situations.  In Guideline 9 of Principle 3 (Conflicts of Interest) of the code, it states “Service Providers should not proceed with an engagement where one or more conflicts have been identified until those conflicts have been resolved and the resolution is adequately memorialized to the satisfaction of all parties involved.”

So, what do you think?  Are there some services or situations where it’s acceptable for an eDiscovery provider to work on both sides of a case?  Or should providers only do so if both parties agree?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

When Lawyers Get Sued, They Have Preservation Obligations Too – eDiscovery Case Law

In Distefano v. Law Offices of Barbara H. Katsos, PC., No. CV 11-2893 (JS) (AKT) (D. ED NY Mar. 29, 2013), New York Magistrate Judge A. Kathleen Tomlinson found that the defendant (an attorney who was being sued by the plaintiff she previously represented for breach of contract, negligence/legal malpractice, and breach of fiduciary duty/duty of care) had a duty to preserve information from a discarded computer and ordered a hearing for the defendant to address a number of questions to determine the potential relevance of the destroyed data and whether the defendant had a sufficiently culpable state of mind.

The plaintiff alleged professional negligence by the defendant related to her representation of his franchise business for Cold Stone Creamery stores.  During a Discovery Status Conference, it was revealed that the defendant had gotten rid of her computer before the litigation began, as she noted in her affidavit that she was advised by a third-party individual who fixed her office computers that they could not be repaired.  As she used AOL for email correspondence, she contacted AOL “to inquire if emails from several years ago could be recovered by AOL”, but was told that they “could not recover emails from several years ago for the stated email address”.  After receiving the defendant’s affidavit, the plaintiff filed a motion for spoliation.

With regard to the defendant’s duty to preserve information related to her representation of the plaintiff, Judge Tomlinson stated:

“The Court concludes that Katsos’ duty to preserve documents arose as early as late February 2009, when Michael DiStefano terminated the attorney-client relationship between Plaintiffs and Defendants.”  On February 24, 2009, the plaintiff send the defendant a letter terminating the representation “immediately” and stated that he would “communicate with you further, in writing, so as to explain the reasons why I am discharging you.”  Noting that the “language of Michael DiStefano’s letter gives the appearance that Distefano was not satisfied with Katsos’ work”, Judge Tomlinson also noted that “[i]n assessing whether litigation was reasonably foreseeable in these circumstances, the Court cannot ignore the fact that Katsos is an attorney and should have been attuned to the prospect of litigation.”

To determine the defendant’s culpable state of mind, Judge Tomlinson ordered a hearing on May 13 for the defendant to “be prepared to testify regarding, among other things, the following areas:

  1. Katsos’ normal document preservation/retention/deletion/destruction practices;
  2. the number of computers utilized in her office prior to 2009, when the computers were purchased, and the specific circumstances surrounding the breakdown of each of those computers;
  3. the service agreements for those computers and the vendor(s) used;
  4. whether Katsos maintained a network server;
  5. AOL’s automatic deletion policies to the extent they were explained to Katsos;
  6. a complete list of every email address used by Defendant Law Offices of Barbara H. Katsos, PC and Defendant Barbara Katsos or her staff to communicate with Plaintiffs;
  7. Katsos’ attempts to gain access to the email accounts used by her paralegals and interns referenced in Paragraph 5 of Katsos Aff. II and page 16 of Plaintiffs’ Memorandum;
  8. the document preservation steps undertaken by Katsos when Plaintiffs instituted an adversary proceeding against her in March of 2010;
  9. the retention and utilization of the services of Jan Sloboda.” (the third-party individual that advised her to replace her computers)

The plaintiffs were also ordered to identify “general categories of documents that have been adversely affected” to help determine the relevance of the data in question and were permitted to question the defendant at the hearing.

So, what do you think?  Was this an appropriate course of action to determine whether sanctions are appropriate?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Is it Time to Ditch the Per Hour Model for Document Review? – eDiscovery Trends

Some of the recent stories involving alleged overbilling by law firms for legal work – much of it for document review – begs the question whether it’s time to ditch the per hour model for document review in place of a per document rate for review?

As discussed by D. Casey Flaherty in Law Technology News (DLA Piper Is Not Alone: Why Law Firms Overbill), DLA Piper has been sued by its client – to the tune of over $22 million – for overbilling.  When DLA Piper produced some 250,000 documents in response to its client’s eDiscovery requests, some embarrassing internal emails were included in that production.  For example:

  • “I hear we are already 200K over our estimate – that’s Team DLA Piper!”
  • “DLA seems to love to low ball the bills and with the number of bodies being thrown at this thing, it’s going to stay stupidly high and with the absurd litigation POA has been in for years, it does have lots of wrinkles.”
  •  “It’s a Thomson project, he goes full time on whatever debtor case he has running. Full time, 2 days a week.”
  • “[N]ow Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode. That bill shall show no limits.”
  • “Didn’t you use three associates to prepare for a first day hearing where you filed three documents?”

In his article, Flaherty provides two other examples of (at least) perceived overbilling:

  • In the Madoff case, the government “used 6,000 hours of attorney time to procure a $140 million settlement offer (more than $23,000 delivered per hour spent)”.  Your federal tax dollars hard at work!  However, the plaintiffs’ law firms “expended 118,000 additional attorney hours on the same matter to deliver the final version of that settlement at $219 million” and seek $40 million for delivering $39 million in incremental value (once you subtract their proposed $40 million in fees).  “It appears that most of the 110 lawyers are contract attorneys performing basic document review; the plaintiffs firms are just marking them up at many, many multiples of their actual cost.”
  • In the Citigroup derivatives class action settlement, plaintiffs firms “reached a $590 million settlement from which they now seek almost $100 million in fees for 87,000 hours of billable time (average, $1,150 per hour). The bulk of the hours were spent on low-level document review work” where contract attorneys were paid $40 to $60 per hour and “the plaintiffs firms are seeking $550 to $1,000 plus per hour for those services”.

While the DLA Piper example isn’t specifically about document review overbilling, it does reflect how cavalier some firms (or at least some attorneys at those firms) can be about the subject of overbilling.  For the other two examples above, document review overbilling appears to be at the core of those disputes.  There are admittedly different levels of document review, depending on whether the attorneys are performing a straightforward responsiveness review, a privilege review, or a more detailed subject matter/issue coding review.  Nonetheless, the number of documents in the collection is finite and the cost for review should be somewhat predictable, regardless of the level of review being conducted.

Why don’t more firms offer a per document rate for document review?  Or, perhaps a better question would be why don’t more organizations insist on a per document rate?  That seems like a better way to make document review costs more predictable and more consistent.  I’m not sure why, other than “that’s the way we’ve always done it”, that it hasn’t become more predominant.  Knowing the per document rate and the number of documents to be reviewed up front would seem to eliminate overbilling disputes for document review, at least.

So, what do you think?  Is it time to ditch the per hour model for document review?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

New eDiscovery Guidelines for Northern District of California – eDiscovery Trends

The U.S. District Court for the Northern District of California has announced new Guidelines for counsel and litigants regarding the discovery of electronically stored information (“ESI”) effective as of last Tuesday (November 27). The Guidelines were developed by a bench-bar committee chaired by Magistrate Judge Elizabeth D. Laporte in partnership with the Court’s Rules Committee and unanimously approved by the entire Court.

As stated in the announcement: “Counsel and litigants should familiarize themselves with the Guidelines and immediately begin using the revised Standing Order for All Judges of the Northern District of California when preparing case management statements and the Checklist as appropriate when meeting and conferring.”

As noted in the announcement, in addition to the Standing Order noted above, the package of new ESI-related documents is comprised of:

In the announcement, Judge Laporte stated: “These tools are designed to promote cooperative e-discovery planning as soon as practicable that is tailored and proportionate to the needs of the particular case to achieve its just, speedy and inexpensive resolution, consistent with Rule 1 of the Federal Rules of Civil Procedure… The Court requires counsel to be familiar with these tools and confirm in the initial case management statement that they have reviewed the Guidelines regarding preservation and decided whether to enter into a stipulated order governing e-discovery, in light of the Model Stipulated Order.”

To confirm that familiarity and understanding by counsel, paragraph 6 of the Standing Order requires that all Joint Case Management Statements include:

“A brief report certifying that the parties have reviewed the Guidelines Relating to the Discovery of Electronically Stored Information (“ESI Guidelines”), and confirming that the parties have met and conferred pursuant to Fed. R. Civ. P. 26(f) regarding reasonable and proportionate steps taken to preserve evidence relevant to the issues reasonably evident in this action.”

As noted in this blog previously, other courts, such as the Southern District of New York (pilot program) and the Eastern District of Texas (for patent cases) have implemented standards for handling ESI, at least in certain situations.

So, what do you think?  Should all District courts adopt similar standards and provide similar guidelines and checklists?  If not, why not?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

EDBP.com, A Lawyer Centric Work Flow Model for eDiscovery – eDiscovery Best Practices

Take a closer look – that’s not the EDRM model you see above.  It’s the new EDBP model.

EDBP stands for Electronic Discovery Best Practices and is the brainchild of Ralph Losey, whose e-Discovery Team® blog is one of the must-read blogs (and one of the most in-depth) in the industry.  Ralph is also National e-Discovery Counsel with the law firm of Jackson Lewis, LLP, an Adjunct Professor at the University of Florida College of Law teaching eDiscovery and advanced eDiscovery and has also previously been a thought leader interviewee on this blog.  Other than all that, he’s not very busy.

As Ralph describes on his blog, “EDBP is a new reference of legal best practices for practicing attorneys and paralegals.  It is also an open project where other specialists in the field are invited to make contributions.”  He also notes that “The ten-step diagram…serves as the basic structure of the tasks performed by attorneys in electronic discovery practice. This structure may also change with time to keep up with evolving attorney practices.”

According to the EDBP site (ironically at EDBP.com), the stated mission is as follows:

The purpose of EDBP is to provide a model of best practices for use by law firms and corporate law departments. EDBP is designed to be an educational resource for all lawyers striving to stay current with the latest thinking on excellence in legal services in electronic discovery law.”

Other notable aspects about EDBP:

  • It’s lawyer-centric, designed to address legal services, not the work of vendors.  As a result, it’s different in scope from EDRM, which covers non-legal service activities as well.  “The EDBP chart will focus solely on legal practice and legal services. It will be by and for lawyers only and the paralegals who assist their legal services”.
  • It does not address minimum standards for legal services, but instead “embodies an evolving understanding of excellence in legal services”.  In other words, if it were a final exam, you’re expected to ace the exam, not just get a passing grade.

The EDBP site also provides linked detailed write ups of each of the color coded sections, entitled Pre-Suit (gray), Preservation (blue), Cooperation (red), C.A.R. (green), Productions (yellow) and Evidence (turquoise?).  The sections include links to resources of information, such as The Sedona Conference® (including flowcharts) and case cites, as well as references to Federal Rules.

On his blog, Losey says “I am writing the beginning statements of best practices (about half-way through) and will serve as the first editor and gate-keeper for future contributions from others.”  The site also provides a place to provide your email address to subscribe to updates and a comments section to leave a comment for suggestions on how to improve EDBP.  It will be interesting to see how this site evolves – it promises to be an invaluable resource for eDiscovery best practices for lawyers and other legal services personnel.

So, what do you think?  Do you think EDBP will be a useful resource?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Case Law: Citing Rule 26(g), Court Orders Plaintiff’s Counsel to Disclose Search Strategy

 

Our 501st post on the blog addresses S2 Automation LLC v. Micron Technology, No. CIV 11-0884 JB/WDS, 2012 U.S. Dist. (D. New Mexico, Aug 9, 2012), where New Mexico District Judge James Browning ordered the plaintiff’s attorneys to disclose the search strategy their client used to identify responsive documents, based on Federal Rule 26(g) that requires attorneys to sign discovery responses and certify that they are “complete and correct.”

Motion to Compel

Last October, S2 Automation filed a Complaint against Micron Technology for breach of contract, conversion, misrepresentation and unjust enrichment.  After various objections to Micron’s requests for production by S2, Micron filed a Motion to Compel, indicating that S2 Automation “has utterly failed to meet its obligation to meaningfully respond to discovery in this matter” and requested, among other things that the court order S2 Automation to identify the search strategy it used to provide responsive documents to its requests for production.

A sworn declaration from one of Micron’s attorneys indicated that, during a discovery conference, it became apparent that S2′s counsel may not have worked with their client sufficiently during the discovery process and, as a result, may have failed to provide a number of responsive documents:

“During that call, we discussed the April 25 deficiency letter and Micron’s request that S2 supplement its production. Counsel for S2 stated that he had not yet reviewed the letter in detail. We then discussed the format for production of S2′s documents. Counsel stated that he was not aware that S2 had separated attachments from e-mails, that he had delegated the process of gathering documents to S2, and that he was generally unaware of the manner in which S2 had provided the documents. Counsel also stated that he was unsure what protocol S2 followed to locate responsive documents.”

S2’s Obligations under Federal Rule 26(g)

Micron asserted in its motion to compel that S2′s counsel violated their obligations under Federal Rule 26(g), stating “it is not proper for counsel to sit back and allow the client to search for documents without active direction and participation by counsel; to the contrary, counsel must be actively involved in the search to ensure that all responsive documents have been located, preserved, and produced.”  In response, S2′s attorneys denied that they had failed to supervise the discovery process, indicating that they had “met with the client on multiple occasions during the discovery process in order to organize and respond to discovery.”

Judge Browning’s Ruling

Noting that Rule 26(g) imposes an obligation on the attorney who signs the discovery response to conduct “a reasonable inquiry into the facts and law supporting the pleading”, Judge Browning stated:

“Accordingly, it can become necessary to evaluate whether an attorney complied with his rule 26(g) obligations and to evaluate the strategy an attorney used to provide responsive discovery, with relevant circumstances including: (i) “[t]he number and complexity of the issues”; (ii) “[t]he location, nature, number and availability of potentially relevant witnesses or documents”; (iii) “[t]he extent of past working relationships between the attorney and the client, particularly in related or similar litigation”; and (iv) “[t]he time available to conduct an investigation.” 6 J. Moore, Moore’s Federal Practice, § 26.154[2][a], at 26-615 (3d ed. 2012). Consequently, the analysis in which courts must engage to evaluate whether a party’s discovery responses were adequate is often a fact-intensive inquiry that requires evaluation of the procedures the producing party adopted during discovery.”

As a result, Judge Browning ruled that S2 Automation would have to provide to Micron “its search strategy for identifying pertinent documents, including the procedures it used and how it interacted with its counsel to facilitate the production process.”

So, what do you think?  Was the ruling appropriate?  Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Daily will return with a new post on Tuesday after the Labor Day holiday.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Case Law: More Sanctions for Fry’s Electronics

 

In E.E.O.C. v Fry’s Electronics, Inc., No. C10-1562RSL, 2012 U.S. Dist. (W.D. Wash. July 3, 2012), Washington District Judge Robert S. Lasnik ordered several sanctions against the defendant in this sexual harassment case (including ordering the defendant to pay $100,000 in monetary sanctions and ordering that certain evidence be considered presumptively admissible at trial), but stopped short of entering a default judgment against the defendant.  This ruling came after having previously ordered sanctions against the defendant less than two months earlier.

Prior Sanctions

On May 10, Judge Lasnik granted in part plaintiffs' motion for sanctions in this case, finding that the defendant had spoliated evidence, including data and computer hard drives. In that ruling, Judge Lasnik believed that the prejudicial effect of the spoliation could be counteracted by “(a) instructing the jury that one of the justifications for firing [one of the plaintiffs] was pretextual and (b) allowing plaintiff considerable leeway in arguing what information might have been gleaned from the computer hard drives had they not been destroyed by defendant”. At the time, Judge Lasnik also indicated “some concern regarding the efficacy and thoroughness of defendant's searches” which led to more information being discovered after he ordered a second search.

Additional Spoliation and Misconduct

During a Rule 30(b)(6) deposition held on May 30, the plaintiffs learned for the first time that the accused individual had previously been accused of sexual harassment in 2001 and that an investigation had been conducted. According to Judge Lasnik, the defendant “intentionally withheld this information and the related documents from discovery by raising unfounded objections and ‘negotiating’ a narrowing of the discovery requests” and found the defendant's conduct to be “unfair, unwarranted, unprincipled, and unacceptable”.

Misconduct by the defendants noted by Judge Lasnik also included the redaction of responsive information, “[e]ven after defendant's objections to certain discovery requests were overruled”, as well as production of hundreds of pages of information with the “fallacious argument” that they were relevant to the claims.

Consideration of Default Judgment Sanction

Judge Lasnik noted that it is “once again left to determine whether to strike defendant's answer and enter default judgment against it”, but noted that dismissal is a “harsh sanction” and the following factors must be considered when determining “whether a dispositive sanction is appropriate under either its inherent powers or Rule 37(b): (1) the public's interest in the expeditious resolution of litigation; (2) the Court's need to manage its docket efficiently and effectively; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy in favor of considering cases on the merits; and (5) the availability of less drastic sanctions.”  While finding that the first three factors supported a dispositive sanction, Judge Lasnik ruled against a dispositive sanction in factor 4, indicating that “[t]he public has an interest in a determination of those issues based on the facts, rather than by judicial fiat”.

Lesser Sanctions Ordered

Instead, Judge Lasnik ordered lesser sanctions, indicating that “Defendant's affirmative defenses related to (i) its efforts to prevent and correct harassment in the workplace, (ii) plaintiffs' failure to utilize protective and corrective opportunities provided by defendant, (iii) its good faith and/or privilege to act as it did in this case are STRICKEN.” He also stated that certain documents and testimony related to “other complaints or reports of sexual harassment” at the company were “presumptively admissible at trial”. He also ordered sanctions of $100,000 “to offset the excess costs caused by defendant’s discovery violations, to punish unacceptable behavior, and as a deterrent to future bad conduct” to be split evenly between the two individual plaintiffs, the EEOC and the Court Clerk.

So, what do you think?  Are you surprised that the defendant didn’t receive a default judgment sanction?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Case Law: Major Bank and Law Firm Sanctioned for “Pattern of Discovery Abuses”

 

As noted in ABA Journal, Greenberg Traurig and its client, TD Bank, have received sanctions in Coquina Investments v. Rothstein, 10-cv-60786, U.S. District Court, Southern District of Florida for a “pattern of discovery abuses before, during, and after trial”.  As U.S. District Judge Marcia Cooke noted, “it often times appears that this litigation was conducted in an Inspector Clouseau-like fashion.  However, unlike a Pink Panther film, there was nothing amusing about this conduct and it did not conclude neatly.”

While Judge Cooke sanctioned Greenberg Traurig, she determined that sanctions were not warranted against the individual attorneys, despite the fact that their “handling of this case left much to be desired.”  However, she noted that while “they certainly acted with negligence”, “[t]he evidence does not support a finding that any of them acted willfully or in bad faith.”

Texas-based Coquina Investors won a $67 million verdict in January for aiding and abetting fraud by then-attorney Scott Rothstein in a civil damages suit brought by investors.  It’s the first civil jury verdict in this country against a bank for aiding and abetting fraud.  Judge Cooke did find that TD Bank "willfully concealed relevant evidence from its trial counsel” and “that TD Bank "had actual knowledge of Rothstein’s fraud”.  Both parties were required to pay plaintiff’s legal fees and pursuing the sanctions.  Rothstein has been disbarred and is serving a 50-year prison sentence in a secret location under the federal witness protection program.

According to the Miami Herald, two documents were primarily at issue in the sanctions motion:

  • “Customer Due Diligence” form: This document was redacted by the bank to conceal that the bank had put a "high risk" label on Rothstein's law firm concerning its potential for money laundering. That information was not blacked out when the same document was subsequently produced in a related case against the bank, however, alerting the plaintiffs' legal team to the alteration.  The bank contended at trial it had not considered Rothstein's firm high-risk, and hence was not required to monitor his accounts closely.
  • “Standard Investigative Protocol”: This document detailed the bank's policy on knowing its customers and preventing money laundering.  TD Bank claimed prior to trial that the document didn’t exist.  It was produced months later and the delay was apparently was due to a mistake on the part of a Greenberg lawyer who is no longer with the firm.

A spokeswoman for the law firm said it will comply with the judge's decision. “We regret the deficiencies that gave rise to this order,” she wrote in an email.  However, TD Bank plans to appeal both the sanctions ruling and the underlying $67 million jury award, a spokeswoman wrote in an email.

So, what do you think?  Are you surprised that the individual attorneys weren’t sanctioned, as well?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Trends: Conduct Yourself Ethically with EDRM’s Model Code of Conduct

 

The Electronic Discovery Reference Model (EDRM) has made numerous contributions to the eDiscovery industry since it was founded in 2005, with the EDRM diagram (above) having become a universally accepted standard – rare in our industry – to reflect the eDiscovery life cycle.  Last year, we noted the introduction of the EDRM Model Code of Conduct (MCoC), which focuses on the ethical duties of service providers associated with these five key principles and also provides a corollary for each principle to illustrate ethical duties of their clients.  Now, your organization can subscribe to the MCoC to demonstrate its commitment to conducting itself in an ethical manner.

As the invitation email (to subscribe) from EDRM notes, “The MCoC was drafted by members of the EDRM MCoC Project and reflects years of exhaustive dialogue and a wide array of viewpoints representative of the interests of corporations, law firms and service providers…[It] is designed to promote predictability and stability in the legal industry for both providers and consumers of electronic discovery products and services.”

You can read the code online here, or download it as a 22 page PDF file here.  To voluntarily subscribe to the MCoC, you can register on the EDRM website here.  Identify your organization, provide information for an authorized representative and answer four verification questions (truthfully, of course) to affirm your organization’s commitment to the spirit of the MCoC, and your organization is in!  You can also provide a logo for EDRM to include when adding you to the list of subscribing organizations.  As of this writing, there are 39 subscribing organizations listed here, including CloudNine Discovery, the company I work for (and sponsor of this blog, in case you haven’t noticed).

So, what do you think?  Is your organization subscribed?  If not, what’s stopping you?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Best Practices: Judge Facciola Discusses Competency and Ethics

 

The American Bar Association (ABA) Model Rules of Professional Conduct (Model Rules) require that an attorney possess and demonstrate a certain requisite level of knowledge in order to be considered competent to handle a given matter.  Specifically, Model Rule 1.1 states that, "[a] lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation."

As noted in Law Technology News, eDiscovery vendor iConect hosted a free webinar last week entitled "Duty of Competency and E-Discovery", in which Joshua Gilliland, author of Bow Tie Law's Blog and founder of legal iPad app developer Majority Opinion, discussed ethics and eDiscovery with Magistrate Judge John M. Facciola of the United States District Court for the District of Columbia.  The “sheriff” speaks!

The LTN article notes that, according to Judge Facciola, the requirement for competency now requires "a fundamental understanding of the way information is produced." This entails: 1) some understanding of the information systems you and your client are relying upon; 2) knowing your own limitations; and 3) if you don't understand, have someone at your side, i.e. an expert, who does, he declared.

With regard to ethics and eDiscovery, Judge Facciola gave an example of what might occur in a 26(f) meet and confer, which he called "the linchpin" of the 2006 amendments to the Federal Rules of Civil Procedure. Two lawyers are meeting in discovery in a case involving pharmaceuticals. One lawyer knows that the drug Pharmadine is spelled with an "e" not an "a" but doesn't correct the opposing party even though he knows it will disrupt his opponent's search, prolonging the discovery period by six months. Labeling this the difference between a material fact and not speaking to correct a mistake, Facciola says there's "no ethical rule" for this, but, ultimately that lawyer is going to have to go before a judge and account for those extra six months. Model rules regulate a profession's ethics, they don't influence a judge's decision. "Ethics rules are not a safe harbor," Facciola warned.

For more observations from Judge Facciola topics such as cooperation, preservation and search methodology, click on this link to access the article from Law Technology News.  And, for more on the subject of competency and ethics as it relates to eDiscovery, check out this post and this post from our archives.

So, what do you think?  Are you addressing ethics and competency requirements in your firm as it relates to eDiscovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.