State Law on Cost of E-Discovery is Starting to Take Shape

Publication Source: New York Law Journal

It's hard to believe it was six years ago that the government's Microsoft antitrust litigation hit the headlines by exposing incriminating internal e-mails from the very top of the corporate ladder, leading Bill Gates to lament: I had expected [David] Boies to ask me about competition in the software industry, but [instead] he put pieces of paper in front of me and asked about words from e-mails that were three years old.¹ Meanwhile, the front page of The New York Times declared: 'Never mind monopoly power in the marketplace; the real lesson corporate America is taking away from the Microsoft antitrust trial is that old e-mail can be a minefield of legal liability, not to mention a source of public embarrassment.²

Apparently not everyone in corporate America has learned the 'lesson,' however, because, as anyone who has read the recent headlines knows, devastating e-mails continue to rear their ugly head in high-profile litigation. Just last month, The New York Times proclaimed: 'Once Again, Spitzer Follows E-Mail Trail; Marsh Suit, Like Others, Cites Indiscreet Electronic Messages,³ while this month, The Wall Street Journal announced: 'E-Mails Suggest Merck Knew Vioxx's Dangers at Early Stage; As Heart-Risk Evidence Rose, Officials Played Hardball; Trainees are Told: 'Dodge!'.⁴

Of course, litigators would be naïve to think that troublesome electronic messages appear only in high profile, headline-grabbing cases. Indeed, in Creditriskmonitor.com, Inc. v. Fensterstock, 006211/2001, a commercial dispute in Nassau County Supreme Court, Justice Ira B. Warshawsky cited volumes of incriminating e-mail evidence in his Aug. 6, 2004, 115-page decision holding defendants in contempt of court for willfully violating a so-ordered stipulation of settlement, and imposing compensatory and punitive damages.

Justice Warshawsky noted that the court had 'sifted through hundreds of e-mails that . . . would not have been discovered without the services of an outside contractor who cloned the defendants' computers and then searched them for material related to [the plaintiff and defendant].

Obviously, attempting to uncover electronic evidence in pretrial discovery is an essential endeavor. Unfortunately, the cost in seeking, investigating and uncovering electronic evidence could be prohibitive.

Read the full article in the attached PDF.

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Kevin Schlosser is a Shareholder at Meyer, Suozzi, English & Klein, P.C., where he is Chair of the Litigation and Alternative Dispute Resolution Department which has a full roster of available private judges from virtually all disciplines of law. Mr. Schlosser also authors the popular blog, “New York Fraud Claims,” which analyzes the latest developments concerning civil fraud claims under New York law.

Reprinted with permission by the New York Law Journal.