This document discusses lessons learned from recent court cases involving discovery issues: - Courts are holding both clients and counsel responsible for failing to properly preserve evidence and comply with discovery obligations. Sanctions like adverse inferences are being imposed. - All parties must make accurate representations and fully produce responsive information. Counsel must take responsibility for ensuring clients meet discovery duties, including implementing litigation holds and search/collection plans. - If unsure whether to produce information, parties should err on the side of production. Documentation of discovery efforts may help defend those efforts if issues arise. Counsel must follow any plans in place and modify them as needed.

1. ETHICAL ISSUES IN DISCOVERY:
WHAT YOU DO (OR DON’T DO) IN
DISCOVERY CAN HURT YOU AT TRIAL
BY:
KIRBY DRAKE

2. Overview
• Recent Discovery Decisions
• Pension Committee
• Rimkus v. Cammarata
• Qualcomm v. Broadcom
• Lessons to be Learned – All; Outside Counsel;
Clients; Courts and the State Bar

3. “Those who cannot remember the past
are condemned to repeat it.”

4. Pension Committee v. Bank of America
Securities (S.D.N.Y. 2010)
• Investor-related action
• Defendants sought sanctions against Plaintiffs
• Failure to preserve and produce documents
• Submission of false declarations regarding collection
and production efforts
• Court addressed conduct constituting
negligence, gross negligence and willfulness in
discovery matters

5. Pension Committee – Key Facts and
Conclusion
• Addressed discovery efforts – or lack thereof –
undertaken by Plaintiffs
• Concluded that “all of these plaintiffs were
either negligent or grossly negligent in meeting
their discovery obligations”
• Sanctions were imposed

6. Pension Committee – Key Facts
• Interplay between duty to preserve evidence
and spoliation
• Duty to preserve arises when party reasonably
anticipates litigation
• Breaching duty to may result in sanctions
• Who bears burden of proving that evidence has
been lost or destroyed? What are
consequences of loss?
• Relevance does not necessarily equal proof of
prejudice

7. Pension Committee – Burden Shifting Test
• Burden-shifting test addresses prejudice due to
spoliation
• If conduct sufficiently egregious, offending party
must rebut presumption of relevance and
prejudice
• Requesting party had access to allegedly destroyed
evidence
• Evidence would not support requesting party’s
claims/defenses
• If no showing of prejudice, no adverse inference
instruction

8. Pension Committee – Showing of Prejudice
• May support finding of prejudice due to
spoliation by showing:
• Offending party had control over evidence and an
obligation to preserve at time of destruction or
loss
• Offending party acted with culpable state of mind
upon destroying or losing evidence
• Missing evidence relevant to the innocent party’s
claim/defense

9. Pension Committee – Remedies
• Remedies for spoliation harm assessed on
case-by-case basis
• Grant sanctions to deter spoliation, place risk of
erroneous judgment on spoliating party, and
restore prejudiced party to same position had
spoliation not occurred
• Adverse inference sanction imposed – failed to
act diligently and search thoroughly at time they
reasonably anticipated litigation

10. Pension Committee – Litigation Hold Insufficient
• Counsel’s initial instructions to client did not
meet standard for a proper litigation hold
• Did not direct employees to preserve all relevant
records
• Did not create mechanism for collecting
preserved records
• Did not specifically instruct client not to destroy
records so that counsel could monitor collection
and production of documents

11. Rimkus Consulting v. Cammarata (S.D. Tex. Feb. 19,
2010)
• Competing lawsuits
• Non-competition and non-solicitation covenants in ex-
employees’ employment agreements
• Trade secret misappropriation in setting up new
business
• Allegations of “wholesale discovery abuse”
• Defendants alleged there was no prejudice in
failure to produce due to cumulative nature of
evidence

12. Rimkus Consulting - Overview
• Allegations of intentional destruction of
electronically stored evidence
• Court addressed issues using analytical
framework set forth in Pension Committee

13. Rimkus Consulting - Facts
• Rimkus issued document requests related to creation and
inception of new company (U.S. Forensic) and contacts
with Rimkus clients
• Cammarata produced two emails related to U.S. Forensic
formation
• Rimkus again requested all documents sent among those
setting up or working for U.S. Forensic before January 1,
2007
• Defendants objected to request as overbroad but stated
they “searched several times for any such responsive
emails and turned over any responsive emails in their
possession”

14. Rimkus Consulting - Facts
• Defendants did not produce any other emails until
June 2009 when they produced approximately 60
emails
• Rimkus noticed depositions of U.S. Forensic founders
(Bell, Janowsky, DeHarde) regarding U.S. Forensic
formation
• Bell testified he had “printed out the things that [he]
thought might be responsive, and sent it to [his attorney],
when [he] first received the first request” for the emails
• Janowsky admitted he deleted emails but did not recall
being instructed to preserve records related to U.S.
Forensic formation

15. Rimkus Consulting - Facts
• DeHarde testified he deleted emails because of
concern about storage capacity of his email account
• Court compelled DeHarde to produce responsive
documents and be re-deposed
• Defendants’ efforts to locate/retrieve emails was
superficial
• No information provided about whether deleted emails
could be recovered and time/expense required to do so
• Defendants ordered to conduct inquiry

16. Rimkus Consulting - Facts
• DeHarde admitted in deposition that “[w]e deleted
them [the emails]. We had a policy that we would
delete e-mails during the start-up after two weeks.”
DeHarde testified that U.S. Forensic founders all
agreed on e-mail deletion policy.
• Over 100 belatedly produced emails showed that
Cammarata contacted individuals he had dealt with
while working at Rimkus
• Belatedly produced documents showed Cammarata
used personal email address to send Rimkus
engineering data and reports to his U.S. Forensic email
address

17. Rimkus Consulting - Facts
• On September 13, 2009, Cammarata finally
produced 15 disks of ESI and numerous boxes of
paper documents containing Rimkus
correspondence, client contact information and
Rimkus power point presentations
• Analysis of Bell’s Rimkus laptop – included
Rimkus financial information downloaded to laptop
on day of resignation
• Bell concealed personal email account he used to
download and take confidential Rimkus financial
information

18. Rimkus Consulting - Allegations
• Violation of legal duty to preserve evidence when
litigation was anticipated
• Scheme to destroy evidence showing extent to
which Defendants took confidential information
from Rimkus to set up, operate, and solicit
business for U.S. Forensic

19. Rimkus Consulting - Conclusions
• Affirmative steps taken to delete potentially
relevant documents
• Selective implementation of document destruction
policy at best
• Defendants’ reasons and explanations for
deleting or destroying emails inconsistent and
lacked support
• Space concerns
• Fear of retaliation

20. Rimkus Consulting - Conclusions
• Defendants knew of litigation when emails were
deleted
• Defendants did not disclose personal email
accounts used to take information from Rimkus
• Sufficient evidence for reasonable jury to find that
Defendants intentionally and in bad faith deleted
emails relevant to issues in case to prevent use of
those emails in litigation
• Judge agreed to issue adverse inference
instruction with respect to deleted emails but did
not strike pleadings

21. Rimkus Consulting - Conclusions
• Jury can hear about email deletion and
concealment/delay that occurred in discovery, consider
Defendants’ conduct in deleting emails, and infer that
content of deleted emails would be unfavorable to
Defendants
• Jury instruction to be issued on duty to preserve
information
• Defendants to pay reasonable costs and attorneys’
fees required to identify and respond to the spoliation
issues
• Permanent injunction issued based on settlement in
November 2010

22. Qualcomm v. Broadcom - Timeline
• Qualcomm sues Broadcom for patent infringement
• Broadcom defense – waiver by participation in the JVT
• Broadcom requests discovery on Qualcomm’s participation
in JVT
• Qualcomm repeatedly denies involvement in JVT during
relevant time frame
• Qualcomm files motion for summary judgment on waiver
defense
• Trial begins

23. Qualcomm v. Broadcom - Timeline
• Qualcomm attorney discovers email showing trial
witness communicated with JVT
• Trial witness forced to admit existence of emails on
cross-exam
• Judge orders production of documents and jury finds in
favor of Broadcom on waiver
• Broadcom sought discovery on scope of discovery
abuses
• Judge initially sanctions Qualcomm and 6 outside
counsel for discovery abuses

24. Qualcomm v. Broadcom - Sanctions
• Qualcomm ordered to pay over $8.5 million
• Six outside counsel initially referred to State Bar of
California for investigation of possible ethical
violations
• Qualcomm and outside counsel ordered to
participate in Case Review and Enforcement of
Discovery Obligations (“CREDO”) program

25. Qualcomm v. Broadcom – Sanctions for Most But Not
All
• Several outside counsel never sanctioned
because of steps taken to confirm accuracy of
facts
• Reviewed deposition transcripts and discovery
responses
• Circulated drafts of pleadings to more senior in-
house and outside counsel
• Investigated facts surrounding the JVT

26. Harbkabi v. Sandisk Corp. (S.D.N.Y. Aug. 23, 2010)
• Breach of contract due to firing
• Plaintiff sent preservation letter to Defendants before
filing lawsuit
• Defendants issued “Do-Not-Destroy” instructions but
did not appear to carry out instructions
• Negligence in failing to preserve laptops issued to
Plaintiffs while working for Defendant
• Adverse inference instruction appropriate because
Plaintiffs “lost access to relevant evidence”

27. U.S. v. Suarez (D.N.J. Oct. 21, 2010)
• Failure to preserve text messages sent between
investigating agents and cooperating witness in
corruption investigation
• Agents never instructed to preserve messages;
deleted messages allegedly “to save memory
space”
• Failure to issue timely litigation hold
• Ordered that jury would receive a “spoliation
charge” allowing (but not requiring) it to infer that
deleted messages were favorable to Defendants

28. Medcorp Inc. v. Pinpoint Techs. Inc. (D. Colo. June
2010)
• 43 hard drives destroyed during ordinary recycling
cycle but Plaintiff later produced some information
replacing what was lost
• Upheld sanctions against Plaintiff for “willful”
destruction of hard drives on which relevant
discovery resided
• Adverse inference sanction appropriate

29. “He who must search a haystack for a
needle is likely to end up with the attitude
that the needle is not worth the search.”
Brown v. Allen, 344 U.S. 443,537 (1953)

30. Lessons to be Learned from
Recent Discovery-Related Decisions
Lessons for All
Lessons for Courts and State Bar
Lessons for Outside Counsel
Lessons for Clients

31. Lessons for All:
1. The Truth Matters
• Often see failure to fully
adhere to the principle of
telling the truth
• Failure to admit when
wrong when it comes to
discovery issues
• Party and its outside
counsel often suffer the
consequences - sanctions

32. Lessons for All:
1. The Truth Matters
• Know the whole truth
• Make accurate representations to the other side as
well as to the judge and to the jury
• How?
• Find responsive information and produce it
• Make the team aware of responsive information early
• Allow witnesses/counsel to be prepared to face truth
about existence and contents of responsive information
before trial

33. Lessons for All:
2. Err in Favor of Production
• If you have to consider whether to produce,
probably should go ahead and produce it
• Often less harmful to produce
• Information may be responsive and discoverable
but not necessarily admissible
• Courts tending toward requiring production if
responsive to a party’s claims or defenses

34. Lessons for All:
2. Err in Favor of Production
Almost never incur wrath of
Court by producing (except
if it looks like a “document
dump”)
But feet can be held to the
fire for failure to produce
responsive information

35. Inside and Outside Counsel Responsible
• Swofford v. Eslinger, No. 6:08-cv-00066, 2009 WL
3818593 (M.D. Fla. Sept. 28, 2009)
• Inside counsel failed to issue litigation hold notice
and failed to undertake meaningful actions to
preserve relevant information
• Awarded adverse inference sanctions and ordered
defendants and inside counsel to pay fees and
costs (inside counsel was not attorney of record)

36. Inside and Outside Counsel Responsible
• Green v. McClendon, No. 08 Civ. 8496, 2009 WL
2496275 (S.D.N.Y. Aug. 13, 2009)
• Counsel failed to provide enough detail to client
regarding duty to preserve data and did not
explicitly issue litigation hold notice
• Awarded costs
• “The preservation obligation runs first to counsel,
who has a duty to advise his client of the type of
information potentially relevant to the lawsuit and of
the necessity of preventing its destruction.”

37. Lessons for Outside Counsel:
3. Taking Responsibility for Ensuring Client Compliance with
Discovery
• Cannots
• Musts

38. Lessons for Outside Counsel:
3. Taking Responsibility for Ensuring Client Compliance with
Discovery
• CANNOT blindly rely on client’s collection and
production
• CANNOT blindly trust what client describes as
“standard” procedures for approaching discovery
issues
• CANNOT shield eyes from seeing certain
documents – must challenge clients regarding
search and collection strategies

39. Lessons for Outside Counsel:
3. Taking Responsibility for Ensuring Client Compliance with
Discovery
• MUST reach agreement as to how to engage in
discovery process
• MUST have sufficient control over discovery
process
• MUST gain access to locations where responsive
data may be maintained
• MUST take steps to confirm compliance by key
custodians – interviews, written questionnaires,
etc.

40. Lessons for Outside Counsel:
4. Document Your Discovery Efforts
• Keep a record of efforts with regard to document
search and collection
• Can potentially use record to defend discovery
efforts should a discovery dispute arise
• May need to seek agreement from client that
documentation of actions taken may be disclosed
if issues arise as to sufficiency of discovery efforts

41. Lessons for Outside Counsel:
5. If You Don’t Have a Plan, Make One
• MUST define who is responsible for ensuring discovery
duties are carried out
• MUST get IT personnel involved
• MUST issue document hold or preservation notice at
outset of litigation
• MUST inform employees that they have a duty to
manage information in accordance with written policies
– litigation or not
• MUST consider investing in management
technology/search tools

42. Lessons for Outside Counsel:
6. If You Have a Plan, Adhere to It
• Qualcomm allegedly had a plan in place for
collecting documents in response to discovery
requests
• Despite having plan, Qualcomm apparently did not
fully follow the plan
• MUST follow your plan – plan is only as effective
as care given in executing plan

43. Lessons for Outside Counsel:
7. Compliance Programs/Modify Rules
• CREDO Program: Identify facts that contributed to
discovery violation; create and evaluate procedures to
correct deficiencies; develop and finalize protocol to
prevent future violations
• Modifications to State Discovery Rules
• Consider state-promulgated electronic discovery
rules (i.e., California)
• Balance burdens/needs of requesting party and
producing party

44. Electronic Discovery Act - California
• Signed into law on June 29, 2009
• Largely follows 2006 electronic discovery amendments
to FRCP
• Requires parties in written discovery responses to
object to production of inaccessible information to
preserve objections
• Assumes all ESI is accessible and shifts balance by not
requiring requesting party to bring motion to compel
• Counsel must know difference between forms in which
information can be produced and
advantages/disadvantages to client

45. Lessons Learned