Tuesday, March 20, 2012

Delta Lawyers Learn a Difficult Lesson: Court Levies Sanctions After Counsel's Reliance on IT Department

With discovery seemingly complete and in the books, the situation takes an unexpected turn when Defendant located new data in In re Delta/AirTran Baggage Fee Antitrust Litigation. The court sanctioned defendant, Delta Air Lines, for locating and producing 60,000 pages of responsive material after the close of discovery. Defendant discovered that they had inadvertently failed to search several hard drives and failed to locate several backup tapes prior to the close of discovery despite claiming nearly 20 times that they had produced all responsive material. Defendant’s counsel asserted they relied on assurances given by their IT department, and although the court did not find defendant’s omission to be intentional, it nevertheless found that defendant “did not conduct a reasonable inquiry” and levied monetary sanctions against defendant. However, given that defendant did cooperate once the error was reported, the court refrained from precluding defendant’s use of the material.

Judge Timothy C. Batten identified several key errors in how defendant dispatched its discovery obligations, including:

• Defendant’s counsel did not confirm with IT that each hard drive that was supposed to be loaded for searching actually had been; counsel did e-mail IT with a list of custodian hard drives that should have been loaded, but IT “did not respond with confirmation that each listed person’s drive was on the system[.]”
• Despite intense questioning and discussion of backup tapes with the court, counsel did not personally search the location the backup tapes were ultimately discovered; instead, counsel relied on IT’s statements regarding the contents of the location, and the absence of backup tapes in that location.
• Prior to discovering the misplaced data, defendant repeatedly (approximately 20 times) stated to the court and plaintiffs that they had produced everything.
• Defendant did not promptly inform the court of its misrepresentations; defendant waited nearly two weeks and until after the court ruled on a spoliation issue to inform the court of the newly discovered data.

To defendant’s credit, once the court and the plaintiffs were aware of the issue, defendant was very cooperative in working to produce the responsive data. Some other measures that Defendant, as a corporation that is confronted with numerous disputes and investigations over the course of a year, could have implemented to avoid such issues altogether, include the following:

• Create and follow a standardized process(es) for use in every matter. These processes should include the tracking of collections, processing, searching, review, and production of all data for a given matter.
• Implement and utilize a team dedicated to e-discovery who can work across matters serving as a single point of contact for the various players involved.
• Counsel cannot merely rely on the assertions made by their client; they must be actively involved and make reasonable efforts to verify statements are accurate and complete.

The Delta decision is a good example of how a party can fall victim to an ad hoc e-discovery approach rather than a well defined plan that is repeatable across matters. The most important takeaway for practitioners, is the need to be involved in all aspects of a matter and not simply rely on assertions made by your client; taking statements at face value without reasonable inquiry into their veracity, leaves one open to sanctions.

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