Ediscovery providers' obligation to disclose potential conflicts

This is probably a good time to remind you that I am employed by Fios as Technology Counsel, and that the opinions expressed here are my own and not those of Fios, Inc.

The news is full of Amici's undisclosed connection to Boies Schiller around the Aldelphia case, surrounding the attorneys' duty to disclose a conflict. According to Law.com,

Amici is partly owned by four of Boies' children, three of whom are also lawyers at Boies Schiller. The family of another partner at the firm, Nicholas Gravante, also owns an interest....Both Rule 1.8(a) of the Model Rules of Professional Responsibility and New York's DR 5-104 require that lawyers seeking to do non-legal business with clients must disclose their interest, apprise their client of other alternatives and obtain written consent. Lawyers in bankruptcy proceedings must also submit statements attesting to their non-interest.

The Rocky Mountain News details the complicated relationship between the Boies family and Amici:

The Amici connection was raised in court July 26 by an attorney for the Bank of Montreal, an Adelphia creditor. In an Aug. 11 affidavit, Korologos said that Boies' son David Boies III has an investment in Legal and Scientific Systems LLC, which in turn owns half of Datamine LLC, which owns a 51 percent stake in Albany, N.Y.-based Amici. David III is not a member of the Boies Schiller firm.

Boies' children Christopher, Caryl and Jonathan Boies, who also have ownership interests in Legal and Scientific Systems, are lawyers at Boies Schiller, Korologos said in the filing.

In the ediscovery world, conflicts are handled differently from provider to provider and there are no clear standards except what is demanded by a particular client. In this case, Amici was being used as what is commonly described as a "neutral third party repository". Both the requesting parties and the producing parties needed a level of trust that their work product and strategies would not be compromised.

I believe that there should be conflicts standards for ediscovery providers and that Amici had a responsibility to disclose its connection to Boies Schiller.

>> Continue Reading Posted In Cases
Comments / Questions (0) | Permalink

$20 Million Bond for Failure to Produce Documents

The nursing home case is a potential class action where ediscovery sanctions could dwarf the actual damages. As in Florida's Morgan Stanley, another state court judge (this one from Arkansas) says "enough is enough". The judge considered jailing the executives for failure to produce and decided on the more humane $20 million bond. As reported by The Arkansas Democrat Gazette via ediscoverylaw.com.

Posted In Cases
Comments / Questions (0) | Permalink

Andersen reverses--proceed with care

Barely digesting the Morgan Stanley award, the electronic discovery community has another earth shattering opinion to reconcile. As usual, the opinion was quickly posted to the Preston Gates ediscovery law blog.

Even more quickly, Charlene Brownlee over at Fulbright, sent us a comprehensive analysis of what the darn thing actually means. Reading it is an eye-opener. While it would seem that preservation is not important anymore because the highest court in the land just ruled, this case concerns a very high criminal standard and not garden variety spoliation.

>> Continue Reading Posted In Cases
Comments / Questions (0) | Permalink

Morgan Stanley-Chernobyl or harbinger?

"Morgan Stanley is going to be a harbinger," said Bill Lyons, chief executive officer of AXS-One, a provider of records retention software systems.

"I think general counsels around the world are going to look at this as a legal Chernobyl," he said.

(from cnet).

The Morgan Stanley opinion (thanks to Monica over at the CommonScold for the full text) is inspiring sales of dictionaries as well as email retention systems while the multisyllabic salvo continues. First "contumacious" and now, harbinger and Chernobyl.

>> Continue Reading Posted In Cases
Comments / Questions (0) | Permalink

Morgan Stanley: damages dwarf litigation reserve

Morgan Stanley's $360 million reserve was blown to bits by the $604 million damage verdict handed down today. Punitive damages are still to be determined. While there are still opportunities for mediation and appeal, there is no doubt this case will be amplifying spoliation concerns for the near future.

Perelman started the trial with an advantage after the judge in the case punished Morgan Stanley for failing to turn over e- mails related to the 1998 Coleman deal. She ordered jurors to assume Morgan Stanley helped Sunbeam inflate its earnings. To recover damages, Perelman only had to prove that he relied on misstatements by Morgan Stanley or other parties to the transaction about Sunbeam's finances.
Posted In Cases
Comments / Questions (0) | Permalink

E-Discovery, Arbitration, Morgan Stanley

Inadequate production and/or spoliation claims are moving into the arbitration area via Morgan Stanley, in a different case.

In every NASD and New York Stock Exchange arbitration, both sides sign a stipulation that they have provided all relevant data and communications for the resolution of the dispute.

A class action has been filed alleging emails have not been provided.

Posted In Cases
Comments / Questions (0) | Permalink

Million$ for Zubulake

Bloomberg reports that the liability part of the Zubulake trial is complete with $9.1 million to be awarded to the plaintiff. Punitives to be determined next. Volumes have been written on this case around spoliation, adverse inferences and sanctions due to not producing emails. Many consider this case to be a catalyst in the current Federal Rules discussions.

Before jurors began deliberating, U.S. District Judge Shira Scheindlin instructed them to assume that e-mails UBS discarded after Zubulake filed her EEOC complaint would have hurt the bank's case. The EEOC, which enforces workplace anti-bias laws, didn't file a lawsuit on her behalf.

The case is Zubulake v. UBS, 02-CV-1243, U.S. District Court for the Southern District of New York.

Posted In Cases
Comments / Questions (0) | Permalink