Cohasset Associates, Inc.                                                                          NOTES               Ses...
Cohasset Associates, Inc.                                                                     NOTES            Without Any...
Cohasset Associates, Inc.                                                                  NOTES          Defendants Attem...
Cohasset Associates, Inc.                                                                 NOTES          Access to Confide...
Cohasset Associates, Inc.                                                                     NOTES                       ...
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M12S15 - CASE STUDY: Spoliation - The Actual Case As It Was To Be Argued in Court - Until It Settled Just Before Trial


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Speakers: Richard Cowen, Esq. Hon. Ronald J. Hedges Matthew Prewitt, Esq.

A key executive with access to his company's confidential and trade secret information downloads information from his company-owned laptop to flash drives, and then, the evening before resigning, uses a commercially available "wipe" to erase his laptop. He claims he didn't want his employer to see porn, personal messages and comments critical of his boss, and didn't realize he erased virtually everything. After leaving the company, and after suit had been filed, he throws away the flash drives, now claiming he did this so it would be clear he wouldn't have any information in his possession.

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M12S15 - CASE STUDY: Spoliation - The Actual Case As It Was To Be Argued in Court - Until It Settled Just Before Trial

  1. 1. Cohasset Associates, Inc. NOTES Session 15: Spoliation of Electronic Evidence – A Hypothetical Case Based on an Actual Dispute that Settled Before Trial Tuesday, May 8th, 2012, 10:45 a.m. to 12 p.m. Richard Cowen, Esq. – Stahl Cowen Crowley Addis Matthew Prewitt, Esq. – Schiff Hardin Ron Hedges – Ronald J. Hedges, LLC THE PARTIES  ABC: No 1 in developing software programs and systems to manage huge volumes of records. Headquarters in Nowhere, USA  XYZ: No. 3 in the industry. Aggressive, fast growing. Headquarters in Anywhere USA Anywhere,  ABC and XYZ are direct, head-to-head competitors in all U.S. Markets  In this industry timing is crucial 2 Plaintiff’s Argument A 32012 Managing Electronic Records Conference 15.1
  2. 2. Cohasset Associates, Inc. NOTES Without Any Prior Notice, Two Key ABC Regional V.P.’s of Sales Quit to Join XYZ  Joe Brown was ABC’s top grossing salesman in the entire U.S. market  Sam Smith was the No. 3 grossing salesman, a rising star in charge of the fast growing West Coast Region  Both Brown and Smith had signed Confidentiality Agreements with ABC 4 Brown and Smith Turn In Their ABC Laptops  But not before they scrubbed them using “C Cleaner”  They keep ten or more thumb drives  ABC’s in-house I.T. staff finds “C Cleaner” has pretty much done its job  ABC’s counsel sends out Preservation Notices  Two weeks later ABC files suit, seeking a T.R.O. (Temporary Restraining Order) against Smith, Brown and XYZ  T.R.O. is entered by the Court in the State of Anywhere  Smith, Brown and XYZ are all served with copies of the T.R.O. 5 But What About the Thumb Drives?  Brown and Smith admit ABC documents had been downloaded  They had the thumb drives with them at a meeting at XYZ’s main offices in Anywhere, USA A h  At least one was opened and information shared with XYZ  After the meeting at XYZ headquarters they threw them in the garbage 62012 Managing Electronic Records Conference 15.2
  3. 3. Cohasset Associates, Inc. NOTES Defendants Attempt to Justify Destruction of Evidence  Only intended to erase porn, cookies, personal emails, critical comments about ABC executives  No special effort to download before they left  Threw away the thumb drives so ABC could not claim they had anything  Nothing confidential anyway 7 Screen Shot of C Cleaner Proves They Are Lying 8 Throwing Away the Thumb Drives  No credibility whatsoever  They knew ABC wanted to inspect the thumb drives  Preservation Hold Letter  Complaint  T.R.O.  Confidentiality Agreement 92012 Managing Electronic Records Conference 15.3
  4. 4. Cohasset Associates, Inc. NOTES Access to Confidential Information  Customer Lists: prospects  ABC Budgets  Sales Budgets  Strategic Plans  Discount Policy  Price Quotes  All Password Protected 10 Damages  ABC did not lose any customers or prospects  This is not “No harm, no foul”  Violated Rules of Court  Violated Case Law  Caused ABC Substantial Damages  Experts’ Fees ($75,000.00)  Attorneys’ Fees ($50,000.00)  ABC Employees Time 11 Relief Sought By ABC  Default Judgment  An Adverse Inference  Damages 122012 Managing Electronic Records Conference 15.4
  5. 5. Cohasset Associates, Inc. NOTES Defendants’ Argument 13 ABC Has Suffered No Prejudicial Loss of Evidence  ABC had ample opportunity to conduct discovery.  Any evidence that Smith or Brown used ABC s ABC’s data would have existed on other sources.  After full discovery, there is no evidence that Smith or Brown ever used ABC’s data after resigning. 14 ABC Has No Factual or Legal Basis to Recover Fees  Running “C Cleaner” did not violate any court rules or order. - A standard application installed by ABC. - Smith and Brown ran only once before any party anticipated litigation.  Loss of th fl h d i L f the flash drives i imposed no additional d dditi l expense on ABC. - Smith and Brown admit that the flash drives contained ABC files. - ABC conducted the same forensic examination they would have conducted anyway.  XYZ acted properly to comply with its discovery obligations. 152012 Managing Electronic Records Conference 15.5