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.
Prescribed medication order and communication skills.pptx
M12S15 - CASE STUDY: Spoliation - The Actual Case As It Was To Be Argued in Court - Until It Settled Just Before Trial
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
3
2012 Managing Electronic Records Conference 15.1
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
6
2012 Managing Electronic Records Conference 15.2
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
9
2012 Managing Electronic Records Conference 15.3
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
12
2012 Managing Electronic Records Conference 15.4
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.
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2012 Managing Electronic Records Conference 15.5