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Thursday, September 27, 2007

If You Think E-Discovery Does Not Matter, Think Again

In my experience, e-discovery does not make the radar screen of most corporate General Counsels (GCs). Typically, it is one many issues left to others (e.g., Chief of Litigation, Director of Litigation Support) within the GC’s group. That may change after the recent verdict in the case of Broadcom vs. Qualcomm.

See below for the story, as told by Corporate Counsel in their October issue, with additional commentary from me [added in brackets]:

Collateral Damage

After a string of punishing legal defeats, Qualcomm Incorporated has switched general counsel. On August 13 the company announced that Carol Lam would replace Louis Lupin as its legal chief [Sounds like he got fired]. The move came a week after a federal judge issued a scorching order accusing Qualcomm and its outside lawyers of “gross litigation misconduct.” [Sounds like a pretty good reason why he got fired]

Emily Kilpatrick, Qualcomm’s director of corporate communications, says Lupin is leaving for personal reasons [Isn’t that what they always say?]. “He has been an outstanding leader and contributor to Qualcomm’s success over the past 12 years,” according to Kilpatrick. “However, he has decided to step down as general counsel and take a personal leave.” [a decision most likely made at the request of his boss]

Lam, who was hired in February to supervise Qualcomm’s worldwide litigation, will take over as interim GC, according to a company statement. Lam is one of the U.S. Attorneys fired by the U.S. Department of Justice this past winter. [oh, the irony…]

Based in San Diego, Qualcomm licenses semiconductor technology and system software to cell phone makers. For several years it’s been engaged in a pitched battle with rival Broadcom Corporation over who has infringed whose patents.

Qualcomm’s biggest problems have come in a case in San Diego federal district court. In January a jury ruled that the company had violated Broadcom’s patents. But even before the verdict, Qualcomm suffered a major setback as the trial drew to a close. One of the company’s witnesses revealed the existence of email that Broadcom said should have been produced during discovery. [Yet again, email is the smoking gun]

In April general counsel Lupin and one of Qualcomm’s outside attorneys sent letters of apology to the court, saying they failed to do a detailed enough keyword search of the company’s email. [No big deal, right? After all, we are saying sorry]

But that wasn’t enough for Judge Rudi Brewster, who has been hearing the San Diego case. On August 6 he issued a blistering 54-page ruling. He accused Qualcomm not only of failing to turn over more than 200,000 pages of relevant email and electronic documents during discovery, [i.e., this is a case of a deeply flawed e-discovery process, not of a simple missing email] but of engaging in a years-long campaign to deliberately mislead a technological standards body. Brewster ordered Qualcomm to pay Broadcomm’s litigation costs, and voided two of its patents. (David Rosmann, vice president of intellectual property litigation at Broadcom, estimates that its fees could be around $10 million). [The legal costs alone are several times what it would have cost Qualcomm to purchase an e-discovery solution and avoid this whole situation in the first place]

In a statement, Qualcomm said it “respectfully disagrees” with Brewster’s ruling and intends to appeal. “Qualcomm acknowledges the seriousness of the court’s findings and reiterates its previous apology to the court for the errors made during discovery and for the inaccurate testimony of certain of its witnesses,” the statement read. [We said sorry, isn’t that enough for you guys?]

The company’s problems aren’t over, however. Federal magistrate judge Barbara Major is now considering whether to levy sanctions against Qualcomm’s attorneys. [Don’t think you can hide behind your deep-pocketed employer. If you screw up e-discovery, it will be your neck on the line] Major has given “any and all…attorneys who signed discovery responses, signed pleadings and pretrial motions, and/or appeared at trial on behalf of Qualcomm” until September 21 to file a statement explaining why they shouldn’t be penalized. [For the lawyers in question, it’s guilty unless their arguments convince the judge they are innocent]

Tuesday, September 11, 2007

Data Retention Policies For E-Discovery: More Of A “Red Herring” Than A “Hot Potato”

For those in regulated industries like financial services, where data retention policies are mandated, every keystroke is tracked and every phone call recorded, the question of how long you should keep data is moot: you keep it for as long as regulations demand.

But for the rest of us in manufacturing, media, technology, government, and elsewhere, it remains an open question. The answer to “what should our email and document retention policy be?” is often a political hot potato, pitting legal and IT’s goal of lower costs against the broader population’s desire to hang on to all their email, just in case they need it later. In fact, the only thing harder than agreeing a retention policy is enforcing it afterwards, as corporate users habitually keep more data than allowed, unless physically prevented from doing so.

The reason this matters is that many people believe creating a data retention policy is a key part of implementing an e-discovery solution. I too used to think this way, viewing retention-policy-creation as a necessary rite of passage for legal, IT, and information security people who want to lower e-discovery costs. After all, if the #1 cause of higher e-discovery costs is too much data, then a policy reducing the amount of data looks like a low cost, no-brainer solution.

But life just does not work that way. Outside of the command-and-control environment of regulated industries, retention policies simply do not work. You cannot fight human nature and force people to delete information they want to keep – especially when Gmail, Yahoo Mail, Hotmail and others are training them to do precisely the opposite (i.e., never delete, keep everything) in their personal email accounts.

So, I have changed my mind: to anyone engaged in implementing an e-discovery solution in a non-regulated industry, I say: forget data retention policies, it is a red herring. Too much data is a fact of life that will only get worse. You can no more get people to delete email and documents than you can stop someone writing them in the first place. Instead, focus on the battle you can win by putting in an e-discovery solution that enables you to do two things:

1. Collect data efficiently, so that you have a reliable (defensible) way of getting the data you need. Implementing an email archive from HP, Symantec or others is a great way of approaching this, as is leveraging forensics tools from Guidance or Access Data.

2. Analyze the data up front, so that you can cull it down to only those documents relevant to the case before a human being has to review them. Clearwell’s e-discovery solution is one approach which has worked for a large number of enterprises.

If your experiences, or conclusions, differ from mine, then feel free to post a comment. I am particularly interested to hear about successful examples of data retention policies at non-regulated companies, since I have yet to see one.

Friday, September 7, 2007

Now, That's Customer Feedback

To the long list of reasons why e-discovery companies should be good to their customers, we can now add one more: because if you don't, they might blog about you and say nasty things. That's what has happened to Metalincs on this blog which carries the intriguing description of "legal software whistle-blower" in its web page address.

I have no idea who this person is, but their comments about
Clearwell's e-discovery solution are well-informed and accurate.