Imagine that your competitor or a former employee steals some propriety information of your business, such as its customer list, trade secrets, or computer code. Now imagine that in the ensuing lawsuit, your business is able to obtain an instruction from the Judge directing the Jury to make an adverse inference from the fact that the thief failed to properly maintain e-mails, didn't produce them, lost, or even destroyed them. What if the roles were reversed and the Judge made your business pay the thief's costs to get your e-mails because you didn’t have a plan to keep them.
Can’t happen? Think again. This scenario is playing out right now across the nation in, for example, the case against TD Bank in Miami flowing from the Rothstein ponzi scheme and the Apple v. Samsung suit in California over tablet technology in which Apple is claiming damages in the billions. In Miami, the Judge sanctioned TD Bank and the large state-wide law firm that represented it, which will likely result in tens of millons in additional liability. In California, the Judge gave Apple a favorable jury instruction because Samsung failed to save important e-mails when the dispute began. While Samsung may have valid defenses in that case, what would you think if you were on that Jury and the Judge told you to draw an adverse inference against Samsung for what it did ?
Got your attention? So what can businesses operating in Florida subject to these new Rules do? They can implement plans now to safeguard electronic information to protect themselves against being penalized or sanctioned in civil lawsuits later. This article is not meant to provide legal advice or to form an attorney-client relationship; it is meant only to provide general information about this important topic.
"DISCOVERY" IN THE DIGITAL AGE
Discovery is the process in a civil lawsuit by which parties obtain and exchange information. Most people think of depositions when they hear of discovery. While depositions are one component, discovery also involves the exchange of documents. In the future, parties will routinely exchange electronic documents or "ESI" (electronically stored information). To keep pace with this reality, the Rules that govern discovery in Florida are changing on September 1, 2012.
WHAT IS THE EFFECT OF THESE NEW RULES?
The impact of these new e-discovery Rules on all businesses operating in Florida is largely economic. Discovery in civil suits is often where a substantial amount of expenses occur (see my video on discovery at http://www.davidsteinfeld.com/phases-of-a-lawsuit for further information). Therefore, it is important for companies to efficiently manage these discovery expenses to avoid situations where, despite the strength of their claims, burdensome discovery expenses preclude their ability to get to Judge or Jury.
WHAT CAN YOU DO? - IMPLEMENT ESI PRESERVATION PROTOCOLS AND LITIGATION HOLD PLANS
So what can businesses in Florida do right now to avoid increased and potentially burdensome costs or sanctions in connection with electronic discovery ? They can implement ESI Preservation Protocols and Litigation Hold Plans now, before disputes arise. This ounce of prevention isn't worth a pound of cure in e-discovery dollars, it will be worth ten.
Can a business or its IT staff craft these Protocols and Plans or can they be found on the internet? Possibly, but they will likely not comply with these new Rules and Florida law, fit the unique circumstances of the business, and might not be defensible in Court. Generic legal documents never quite fit circumstances that arise later because they are not tailored to fit any. The better approach is to engage a competent business lawyer that knows the technology and law of e-discovery, can ask you the right questions, and more importantly of whom you can ask questions and express concerns to gain an understanding of e-discovery and the new legal obligations placed on your business.
When you search for Florida counsel for your business to help you in preparing ESI Preservation Protocols and Litigation Hold Plans, seek out those in the Bar with an expertise in these areas, such as Board Certified Business Litigation attorneys and those knowledgeable in e-discovery. Also, bear in mind that in the digital world in which we now live, your attorney need not be down the street because you can communicate with him or her via video, e-mail, and screen sharing programs.
DON'T WAIT TO PUT THESE PLANS IN PLACE
Be proactive. In Florida, our Courts consider business people to be sophisticated by the very nature of them engaging in business and will expect them to have these plans. Likewise, the discussions and debates leading to the enactment of these new E-Discovery Rules has made it clear that Judges will not consider a party or its counsel's ignorance in this new area of the law. Therefore, now is the time for your business to prepare ESI Preservation Protocols and Litigation Hold Plans with counsel, before any dispute and before you are called upon to fund potentially costly e-discovery.
By David Steinfeld, Esq.
Florida Bar Board Certified Business Litigation Specialist
Phone: (561) 316-7905
Videos and other business law articles available at www.davidsteinfeld.com