When Kolon Industries recently found itself on the wrong side of a $919 million verdict, the legal department for the South Korean-based manufacturer probably started to take inventory on what it might have done differently to have avoided such a fate. While that list could have included any number of entries, somewhere near the top had to be an action item to revamp its process for supervising the preservation and collection of electronically stored information (ESI) from company executives and employees. Breakdowns in that process led to the destruction of nearly 18,000 pages of ESI. This resulted in an instruction to the jury in E.I. du Pont de Nemours and Co. v. Kolon Industries, Inc. that Kolon had engaged in wholesale destruction of key evidence. All of which culminated in the devastating verdict against the manufacturer.
Most enterprises will likely never have to deal with the fallout from a nearly $1 billion verdict. Nevertheless, many companies still struggle with the same issues associated with document collection that ultimately tripped up Kolon Industries. Indeed, one of the most troubling issues facing in-house counsel is determining the degree of oversight that must be exercised in connection with document preservation and collection in eDiscovery. While this is an issue counsel has always grappled with, the degree of difficulty has substantially increased in the digital age. With the explosion of information, courts have raised their expectations for how organizations and their counsel address ESI in discovery. Now that the stakes have been raised, should counsel allow executives and employees to decide what is relevant and have them “push” the data for production? Or, should the team collect (i.e., “pull”) the data and then cull and review for relevancy?
These issues were recently considered in an article published in May 2013 by the ACC Docket. Authored by Shawn Cheadle, General Counsel, Military Space, Lockheed Martin Space Systems Company, and me, the article describes how counsel can balance these countervailing factors to appropriately supervise the inextricably intertwined eDiscovery phases of ESI preservation and collection. In this article, we detail the elements in play, and discuss the leading court cases and their respective factual scenarios, with an eye toward helping in-house counsel understand the dynamics that are driving this trend. We also provide some suggestions for how counsel can meet the required degree of eDiscovery oversight without neglecting its other duties.
A copy of this article is available here for your reading pleasure.