Counsel’s Failure to Understand Computer Systems

Counsel’s Failure to Understand Computer and Archive Systems Results in Production Delay, Monetary Sanctions

New York

In re A & M Florida Props. II, 2010 WL 1418861 (Bkrtcy.S.D.N.Y. Apr. 7, 2010). In this bankruptcy litigation, the defendant sought sanctions alleging the plaintiffs and their counsel intentionally obstructed the discovery process by causing misunderstandings and by delaying the production of relevant e-mails, which resulted in “needless costs and frustrations.” The plaintiffs eventually produced more than 9,500 e-mails that were stored in the company archive system following two forensic searches. Based on the absence of intentional destruction and the fact that the sought-after e-mails were ultimately produced, the court noted that dismissal or an adverse inference would be “unjustly harsh.” However, the court found that the plaintiffs’ counsel “did not understand the technical depths to which electronic discovery can sometimes go” and noted that counsel has an obligation to search for sources of information to understand where data is stored. According to the court, if the plaintiffs’ counsel would have spoken with key figures at the company regarding the computer and archiving systems in place, the forensic search and subsequent motions would have been unnecessary. As such, the court found monetary sanctions to be appropriate.

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