Forget Da Silva Moore. Apple v. Samsung is the most important case to watch right now. Two tech titans are squaring off in complex patent litigation involving huge volumes of digital evidence. Already, the case is proving a lesson in how to, and how not to handle digital evidence.
Samsung managed to dig itself a deep hole at the outset with a major eDiscovery failure. For its failure to stop deleting emails in anticipation of litigation, Samsung has been hit with an adverse inference, which is a potential killer to any case. The judge in the case imposed what he called a “modest, optional adverse jury instruction.” Even so, with an adverse inference, the judge is effectively telling the jury they are free to assume the worst about one party. Juries love conspiracies, which the inference implies, making it much easier for them to reach a conclusion against Samsung.
A Bad Attitude Towards eDiscovery
How does a mistake like this happen? Shockingly, Samsung was the subject of sanctions for spoliation of electronic evidence once before, in the matter Mosaid v. Samsung from 2004. Yet, the company has clearly not changed its habits toward electronic evidence.
There are a couple of theories as to why organizations are lax about eDiscovery habits. Despite a handful of multi-million dollar sanctions handed down for discovery failures and abuses, sanctions are increasing, but still rare. According to law firm Gibson Dunn’s 2011 Mid-Year Update on E-Discovery Cases, there were 68 sanction requests across the country in the first half of 2011. Law firms and large litigants may feel that it’s easier to disregard their duty to preserve than try to respond to a discovery request since the threat of sanction is still pretty rare.
Set Up to Fail
But a larger reason why attorneys still fail to manage basic eDiscovery duties may simply be inexperience. According to the recently released ABA Legal Technology survey, many lawyers are not prepared for eDiscovery. According to the report, only 159 out of 650 firms reported having an eDiscovery initiative. Compounding that situation, eDiscovery decisions are not handled centrally, with almost 40 percent of respondents saying it is up to individual partners to make most of the EDD decisions. That means it’s up to individual lawyers to be prepared to handle these issues.
The lack of eDiscovery preparedness will only become more obvious as electronic evidence continues to complicate matters. According to the Gibson Dunn report, the number of eDiscovery decisions continues to increase at a blistering pace, with 187 decisions identified in the first half of 2011, an 82 percent increase over the 103 decisions a year ago.
Lawyers are setting themselves up to fail. In the recent Pension Committee of Montreal v. Banc of America Securities, eDiscovery heavyweight Judge Shira Scheindlin issued sanctions because parties had neglected their duty to preserve evidence. According to Scheindlin, she was frustrated to find that parties in that case seemed not to have learned to properly handle electronically stored information since she had last issued eDiscovery sanctions in a widely noted decision six years ago. “I was surprised that so many years later not enough had changed,” said Scheindlin. “Lawyers should be on notice that their clients have a duty to preserve.”
This is a real threat, but it also presents an opportunity for many firms and partners. eDiscovery isn’t difficult to master if a firm applies the time and resources to learn the issues and technology. In fact, the firm that can master the basics will likely find it has a huge competitive advantage at trial. The firm that fails to learn is more likely to find itself on the wrong end of an adverse inference.