May 24, 2005

“Statements that you don’t want to resurface at a later date shouldn’t be put in a business email," was the clear consensus at “Doing Battle in the 21st Century,” a conference hosted by TechLaw Group, Inc. and Jenner & Block, at the Firm’s Chicago headquarters. 

Jenner & Block Partners Debbie L. Berman and James A. McKenna played key roles in a particularly engaging panel discussion entitled, “Avoiding and Exploiting the Litigation Landmines by Doing Business Electronically.”

Ms. Berman, for instance, focused on how to create awareness among deal makers and employees about the proper use of e-mail, and how to  create and enforce e-mail content policies.

“More attention needs to be paid to the proper use of e-mail today because people are much more apt to fire off a quick email than they would if they had to sit down and give the same attention that is given to a more formal memorandum,” said Ms. Berman, Co-Chair of the Firm’s Trade Secrets and Unfair Competition Practice.  “Some of these emails are communications that would have been better not sent.” 

For attendees interested in e-mail tips for litigation, a “preservation checklist” was addressed during the panel.  Information on the checklist included identification of all material that should be disclosed or may be discoverable, the suspension of routine document deletion, and the segregation and securing of relevant archival media. 

Mr. McKenna addressed computer forensics, especially how to track the trail of information on an opponent’s hard drive, using advanced technology to mine e-mail files, and admitting forensics results into evidence.  Among the “red flags” during the discovery phase that should alert attorneys to potential misconduct by an opponent, he said, are the untimely re-loading of a new operating system, the presence of key files to an external storage device, and evidence of data wiping software having been used. 

“No matter how skilled your information technology department is in-house, you need to bring in a computer forensic expert to look for evidence that information has been deleted, de-fragmented or destroyed,” added Mr. McKenna.  “The power of the technology needed to mine your opponents’ email files, for instance, is usually beyond the capabilities of in-house technology staff at law firms.”

The topic of TechLaw Conference is particularly timely this week, noted each panelist, because of the  Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., Inc., No. 502003 (Fla. Cir. Ct., May 16, 2005).  In this case, a Palm Beach, Florida jury returned a $604.3 million verdict against securities firm Morgan Stanley on May 16, in a fraud case closely monitored because of several pre-trial e-discovery rulings.  Jenner & Block represented the successful plaintiff in the case, Coleman Holdings.  In the suit, Morgan Stanley was alleged to have defrauded Mr. Perelman in the course of the sale of his controlling interest in Coleman Co. to Sunbeam Corp., a transaction that occurred in 1998.  

Discovery during this trial was one of the more widely reported aspects of the case.  In the judge's order granting plaintiff's motion for an adverse inference jury instruction, the judge delineated several e-discovery failings.  These e-discovery failings included the defendant’s overwriting e-mails after 12 months, failing to conduct proper searches for tapes that might contain e-mails, and failing to use reasonable efforts to search the newly discovered tapes.  The March 1 order specifically required Morgan Stanley to continue to search for additional e-mail backup tapes or appoint a third party to conduct such searches.

Moderator Jay Kesan of the University of Illinois College of Law described the discussion as a timely one for practitioners.  After all, he noted, “you’re never more than five feet away from a computer at any time during your day.”