eDiscovery mishandling lands sanctions for technology company

Contributed by Roumiana Deltcheva (Vendredi, 27 août 2010) | Category : eDiscovery

Recently, a prominent technology company received sanctions from a federal judge for its failure to produce correspondence relevant to a case.

Reportedly, the company lost the hard drives of two laptops that had been issued to the cases' plaintiffs, who were former employees at the organization. Southern District Judge William Pauley stated "[the company] must be 'mortif[ied]' by the ex-employees' argument that the company, as a leading purveyor of electronic data storage devices, cannot claim that it made an 'innocent' mistake in losing the hard-drive data." Pauley further explained that the company's "size and cutting edge technology raises an expectation of competence in maintaining its own electronic records."

As a a result of the eDiscovery failure, Pauley awarded the plaintiffs $150,000 for attorney fees.

The court case came about after the two plaintiffs were fired from their jobs by the technology company after seeking the full amount of "earn-out" fees the two sides agreed upon after the latter purchased the formers' company back in 2004.

Effectively handling eDiscovery is currently a major issue for companies in 2010. Law firm Gibson Dunn recently reported that 13.5 percent of all cases during the first half of 2010 involving eDiscovery resulting in sanctions.