Visualizing Hawaii: A GC’s Perspective or the Case of the Silent Wife


ABC Systems is a mid-size technology company based in the U.S. that designs and manufactures wireless routers…

Its 1:52 pm on the Friday before you leave on a much anticipated 2 week vacation in Hawaii. You’re having difficulty not thinking about what the next two weeks hold. You talk yourself into powering through the 176 emails you received since yesterday when you notice your administrative assistant has put an actual letter on your desk while you were daydreaming…

It’s a letter from the law offices of Lewis, Lewis & Tolson informing you that their client, ACME Systems, is suing your company for $225 million for conspiracy to harm ACME’s reputation and future sales by spreading false information about their newest product line. You’re told that the plaintiff has documentation (an email) from an ABC Systems employee outlining the conspiracy. You also receive a copy of the “smoking gun” email…

————
From: Ted                                                                                                                          

Date: June 2, 2012

To: Rick

Re: ACME Systems new solutions

“I would say we need to spread as much mis-information and lies about their solution’s capabilities as possible.  We need to throw up as much FUD as we can when we talk to the analyst community to give us time to get our new application to market.  Maybe we can make up a lie about them stealing their IP from a Chinese company.”

————

You’ve got to be kidding me! Once this news gets out the stock will be hit, the board will want an explanation and estimate of potential damage to the company reputation, our channel partners will want to have a legal opinion on the sales in the pipeline, the direct sales force will want a document to give to their potential customers, and the CEO will want estimates of merit etc. as soon as possible…There goes the vacation…and probably my marriage.

Scenario #1

Now what do I do now?

  1. Find out who this “Ted” guy is! (Don’t forget “Rick”)
  2. Find out who Ted and Rick reports to and what department they work in
  3. Call the VP of IT and give her a heads up on what you are going to be asking for
  4. Call your outside counsel and alert them as well
  5. Send an email to the VP of IT (and CC outside counsel) asking her to immediately secure Ted and Rick’s email accounts and any email backup tapes
  6. Send an email to Ted and Rick (and CC outside counsel) asking them to actively collect and secure under a litigation hold any documents and email that has anything to do with ABC Systems (strange thing is the email system has no one by the name of TED in it)
  7. Ask the VP of IT to find the original email from Ted to Rick and any other email messages involved in that conversation thread
  8. Get on the phone to the CEO and update him
  9. Call your wife and tell her to cancel the vacation plans

Five minutes after your wife hangs up on you in mid-sentence the VP of IT calls and informs you that the company has a 90 day email retention policy and recycles backup tapes every 6 months…the original emails don’t exist anymore. And by the way, after speaking to the VP of HR she discovered Ted had left the company 8 months ago. The only hope is that Rick kept local copies of his emails. By this time its 5:37 pm and Rick has gone home – with his laptop.

Monday morning Rick is surprised to find several people from legal and IT waiting at his desk when he arrives. It turns out Rick actually archives his email instead of letting the system delete it after 90 days into a PST file. Rick locates his 4.5 GB PST file on his share drive but for some reason it won’t open. Several members from the IT department spend two hours trying to get it open but determine its probably corrupted because its too big (PSTs have this nasty habit of letting the user keep stuffing files into it even though its already too big).

IT sends the PST off to a consultant to see if they can open it. After three weeks and $17,553 you are told it’s completely corrupted and can’t be opened!

During those three weeks you spend $4,300 tracking down Ted who doesn’t remember why he would have written an email like that. He does vaguely remember Jennifer may have been part of that conversation thread. 4.5 hours later combing through Jennifer’s PST, (why does everyone have a PST if we made a point to delete emails after 90 days?) you actually find a forwarded version of the email from Ted…It really does exist!

You determine it will be impossible to assemble the entire conversation thread so after several months of negotiating with ACME Systems Attorneys, you settle for $35 million and an apology printed on the front page of the Wall Street Journal…and your wife stopped talking to you.

Tune in tomorrow to catch up on the further adventures of Ted, Rick, Jennifer, ABC Systems, and the strangely silent wife…

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Litigation Hold in Exchange 2010


Litigation hold (also known as a preservation order and legal hold) all have the same legal meaning; a stipulation requiring an individual or organization to preserve all data that could relate to a anticipated or pending legal action involving the individual or organization. The litigation hold responsibility is one of the biggest liabilities individuals and organizations have in the civil litigation process. If a litigation hold is ignored or insufficiently applied, the Judge will not tolerate excuses and the outcome can be a spoliation or destruction of evidence ruling which in turn can cause an adverse inference order be issued and loss of the case. Several third party eDiscovery applications provide for litigation hold placement on individual items to reduce over saving of non-responsive ESI.

In Exchange 2010, Microsoft suggests placing a custodian’s entire mailbox on litigation hold. In other words specifically putting a custodian’s mailbox on litigation hold ensures an indefinite retention on all content, even the content not relevant to the case at hand, in the user’s mailbox until the mailbox is removed from Legal Hold. This shotgun tactic does ensure all potentially responsive ESI is retained at the time of placement but many attorneys are leery of blindly placing a litigation hold on all content due to the possibility of over retaining ESI that is not responsive to the current case but could be in a future case.

To put a custodian’s mailbox on litigation hold in Exchange 2010, the person making that decision needs to be part of the “Discovery Management” Role in Exchange.  By default there are no approved auditors in the organization, including the Exchange Administrator, which has the right to put a user’s mailbox on litigation hold.  The Exchange Administrator can go into the Exchange Control Panel and give themselves (and others) the right to enable litigation hold for mailboxes.

Another caveat for Exchange 2010 litigation hold is that it could take upwards of 1 hour before a litigation hold takes effect on a given custodian’s mailbox. This is because the policy needs to be enacted on all messages and folders in the mailbox and be replicated through Active Directory. With litigation hold enabled, all messages, regardless of the organization’s retention policy will be retained until released.

Another aspect of placing effective litigation holds in Exchange 2010 is the question of PST files. PSTs are a long running problem area for corporate legal as well as the IT department. The problem is this; PSTs include email, attachments and metadata no longer preset within the Exchange email system. So when an auditor searches a custodian’s mailbox from Exchange 2010 for relevant emails and attachments, they aren’t able to search for any PSTs the custodian has on their local workstation.

Golf and Early Case Assessments – A Drama


Effective early case assessment is dependent on a complete data set.

On the average 97% of data generated within businesses is electronic. The average employee generates and receives up to 20 MB of email and potentially hundreds of MBs of office work files per day. Litigation is a huge problem these days for businesses. A huge amount of the cost of litigation is the cost of finding and reviewing electronically stored information (ESI) for both early case assessment as well as eDiscovery request response. ESI can hide anywhere in the corporate infrastructure; custodian workstations, network share drives, USB thumb drives, CD/DVDs, iPods etc. A centrally managed and fully indexed archive can speed the collection and review of potentially responsive records for early case assessment as well as more fully control and insure the placement of litigation holds.

No matter the case, the first question when you’re faced with litigation is whether the case has merit. If you haven’t prepared a case assessment strategy ahead of time, it will be difficult to quickly and effectively determine your strategy going forward; should you settle or fight…

An early case assessment capability provides you with four obvious benefits:

  • Provides an early indication of the merits of the case – do you have any actual liability.
  • Can suggest the proper strategy going forward.
  • Can provide you an estimate of the cost of defending the case and the time required.
  • Will help you plan for the discovery process and prepare for the “meet and confer” meeting.

Let’s look at some scenarios.

Scenario #1

You’re the General Counsel of a publicly traded software company in the state of California.

It’s a Friday near the end of summer and you’re sitting in your office thinking about your Hawaiian golf vacation which begins tomorrow.

You’re checking the last of your mail before you leave for 3 weeks.

You open a letter from an outside law firm addressed to you…

(Your secretary hears a string of profanities emanating from your office)

You immediately think to yourself; once this news gets out, your company’s stock will be hammered, your board of directors will want an update yesterday, your channel partners will want to be advised on their potential liability, sales that are in process will stop, your CEO will want to know if the case has merit…and your wife will want to know why you just cancelled the Hawaiian vacation she was looking forward to (she was staying home).

What to do first?

You call the plaintiff’s law firm of Tolson & Yonamine to determine what this case is based on…what’s driving it. The Partner managing the case can’t be reached but 2 hours later you receive a fax (a fax, really?) of a printed email that looks like it came from within your company…

What the…? Who, in their right mind would seriously consider something like this much less put it in writing?

Ok, first things first. Your next steps are:

  • Find out who “Jennifer” is, who she reports to and what department she work in. Also find out if she is even still with the company
  • Call the VP of IT and let her know what’s going on and verbally tell her to secure any infrastructure data from Jennifer or Bob
  • Follow that up by sending an email to the VP of IT asking her to secure Jennifer and Bob’s email boxes, and any backup tapes for their respective email servers
  • Send an email to Jennifer informing her of the litigation hold, her duties under it and the consequences if the directions are not followed
  • Send an email to Bob informing him of the litigation hold, his duties under it and the consequences if the directions are not followed
  • Instruct  the VP of IT via email to find the original of the email in question on the email servers or backup tapes

To complicate matters, the VP of IT calls back immediately to tell you that the company only keeps backup tapes of the email servers for 30 days and are then recycled. She also informs you that the company has a 90 day email retention policy meaning that employees must clear emails older than 90 days out of their mailbox or the company will do it automatically. Copies of those emails, if they exist, will only be available on the employee’s local workstations. You think to yourself; if that’s the case, how did the outside law firm get them?

You send one of your staff attorneys and an IT person to both Bob and Jennifer’s offices to look for a copy of the email on their local computers etc.

Later, you find that Bob has a 3 GB PST, local personal email archive, on his laptop where the email might exist but for some reason the IT guy can’t open it. IT calls Microsoft support and is told that the PST is too big and is no doubt irrevocably corrupted.

In the mean time, one of your staff attorneys spends 4.5 hours at Jennifer’s office and eventually finds a copy of the email in her local PST… the email really does exist…%$#@!!. She has no idea why she would have written something like that and there are no records of any other emails associated with that particular smoking gun email. Because the email in question is older than the company’s oldest email server backup tapes, your early case assessment is stopped dead for lack of data.

Now what?

After several months of negotiating with ABC Systems and their law firm, you settle for damages of $35 million and an apology published in the business section of the San Jose Mercury News.

In the preceding scenario, the available early case assessment process suggested that the case might have merit and should be settled before more resources were expended. In this case, the early case assessment was negatively impacted by a shortage of data due to retention policies that were put into place mainly for storage management reasons.

Having access to all relevant information early on can mean the difference between fighting a winnable case and settling the case early for hopefully much less then is being asked for. An early case assessment strategy with the right tools can improve the odds of a favorable outcome.

Early Case Assessment with Proactive ESI Archiving

Let’s look at the preceding scenario with one difference… the defendant has an ESI archiving system and a more common sense retention policy which in this case includes a 3 year retention policy for email.

You are the General Counsel of a publicly traded software company in California

It’s a Friday near the end of summer and you are sitting in your office thinking about your Hawaiian golf vacation which begins tomorrow

You open the last of your mail before you leave for 3 weeks

You open a letter from an outside law firm…

This can’t be real. This must be a joke from your $*@$!! Brother-in-law. After calling him and determining it’s not a joke you think to yourself; NOW WHAT?

You call the opposing counsel to determine what this case is based on. The partner managing the case can’t be reached but 2 hours later you receive a fax showing a printed email that looks like it came from within your company…

Next, you must place a litigation hold on all potentially responsive records

  • Find out who “Jennifer” is, who she reports to and what department she work in. Also, is she even still with the company
  • Call the VP of IT and let her know what’s going on
  • Instruct one of your staff attorneys to query the email archive to determine if that specific email exists, and to provide the entire conversation thread around that email so you can review it for intent.

Your staff attorney quickly queries the archive and pulls up a copy of the email message with the entire conversation thread, puts the entire conversation thread on litigation hold and sends you the following email…

“Boss, the email in question was based on the following conversation thread starting with the CEO:”

“Based on the early case assessment using the email archive and the conversation thread capability, I found that the “smoking gun” email was taken out of context and can prove the case has no merit…We should talk to opposing counsel as soon as possible to end this now.”

You think to yourself; whatever person’s idea it was to get that email archiving system in place should be given a load of stock options…

You spend the next morning talking to the opposing counsel…the action is withdrawn a month later…

You continue with your golf vacation having only missed two days and your wife is especially happy you were able to go on your vacation (alone).

An important aspect of an early case assessment is to tell you if the case has merit. It’s difficult to make an informed assessment about a case without all the data…