March 4 & 5, 2008

Jeffrey M. Judd
Jessica Hoogs

De-Fanging The Litigation Sound Byte: Tips To Minimize Litigation Risk

Caused By Electronic Communications
This presentation does not constitute legal advice.
 The Era of Blockbuster Litigation

• The Vioxx Litigation

• The Fen-Phen Litigation
• Prosecution of Frank Quattrone
• Investigation Into Wall Street Conflicts
• Mercury Interactive Options Backdating
Derivative Action

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 Have you ever heard a plaintiff’s lawyer say?

“We’re not going to litigate

our case in the press.”

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The Vioxx Litigation
Copyright CBS Interactive Inc.

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The Fen-Phen Litigation
 “Do I have to look
forward to spending
my waning years
writing checks to fat
people worried about a
silly lung problem?”
-email between employees
of American
Home Products (mfgr of
“Fen-Phen”)

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Prosecution of Frank Quattrone
 “Clean up those files”
-email from Frank Quattrone to Credit Suisse First
Boston colleagues, December 2000

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Investigation Into Wall Street Conflicts
 “You know everyone thinks I upgraded [AT&T] to get
lead for [AT&T Wireless]. Nope. I used Sandy to get my
kids in 92nd St. Y pre-school (which is harder than
Harvard) and Sandy needed Armstrong's vote on our
board to nuke Reed in showdown. Once coast was
clear for both of us (ie Sandy clear victor and my kids
confirmed) I went back to my normal negative self on
[AT&T]. Armstrong never knew that we both (Sandy
and I) played him like a fiddle.”
-email from CitiGroup Analyst Jack Grubman to friend

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Mercury Interactive Options Backdating Derivative
Action
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 A Common Thread

• Electronic Documents
– Taken Out of Context
– Disclosed to the Press
– Twisted for Rhetorical Benefit, and
– Used by Plaintiffs’ Lawyers to Define
the Case

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 Electronic Documents Are Pervasive

• In 2007, business email volume was predicted to total

5 billion gigabytes
– Source: IDC research study: Worldwide Email Usage 2007 – 2011 (Mar.
2007)
• The average employee sends and receives more
than 135 emails per day.
– Source: Osterman Research survey for LiveOffice Managed Message
Services (2007)
• A typical mid-sized company with 500 employees will
thus average over 17.5 million emails per year

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 E-Discovery is Ubiquitous
• 77% of discovery requests target email and
attachments
– Source: Enterprise Strategy Group (ESG) research report, Digital Archiving:
End User survey and Market Forecast 2006-2010 (Jan. 2006)
• 63% of surveyed organizations have had to produce
email in response to litigation requests
– Source: Osterman Research survey for LiveOffice Managed Message
Services (2007)
• The average e-discovery “event” is estimated to cost
a business $1.5M
– Source: Gartner research report, Cost of E-Discovery Threatens to Skew Justice
System (April 20, 2007)

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 Some Observations and Conclusions
• Plaintiffs’ use of electronic documents is NOT
UNIQUE TO
• Any case
• Any company
• Any industry
– Pharma
– Finance
– Technology
– Energy
– Insurance
– Manufacturing

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 Email Is Dangerous Because

• PERCEPTION • REALITY
– Private – Accessible
– Temporary – Everlasting
– Informal – Frequently admitted as
– Conversational evidence
notwithstanding
foundational problems

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 • “It’s remarkable how many corporate
executives don’t understand that the ‘e’ in
email stands for both evidence and eternal”
– Prof. Joseph Grundfest
(as quoted in the Wall Street Journal, 6/27/2007)

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 Anything you say or write
can and will be used and twisted
against you and your employer
or client in a court of law
and the media.

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 “Anything” includes:
• Memos
• Letters
• Marketing Materials
• Presentations
• Notes
• Email
• Phone calls and voice-mail
• Recorded conversations
• Web sites
• Text/Instant Messaging
• Blogs, Wikis, New Communications Technology
• Metadata

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 Even Instant Messaging!

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 Can We Eliminate These Concerns
Completely ?

Probably NOT
But we CAN make documents
and statements more clear,
precise, and complete . . .
to create a better record.

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 Where Will Plaintiffs Focus Most?

• Marketing projections/profit plans

• Communications with sales
representatives
• Training Materials
• Employee Performance Reviews and
Evaluations
• Communications with Attorneys

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 8 Tips To Create A Better
Record

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 #1

• Maintain some level of formality

– Don’t write anything you would mind seeing in the media
– If you’re angry or frustrated, WAIT
– Avoid strong or colorful language
– Choose words carefully
– Proofread before sending
– Avoid using ALL CAPS
– Check email addresses
– Avoid “Reply to All”
– Assume that email will be forwarded and saved

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 #2

• Beware of jargon and buzzwords

– Marketing people may talk about “neutralizing”
people or “obstacles”
– “Problem” customers or employees

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 #3

• Avoid rumor, speculation and

guesswork
– Don’t offer opinions outside your area of
responsibility or expertise
– Recognize that you may (probably do) have
limited information

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 #4

• Don’t exaggerate or editorialize

– Avoid the temptation to dramatize a situation
– Avoid name-calling
– Avoid personal comments

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 #5

• Don’t inadvertently imply wrongdoing

– Avoid legal terminology
• e.g., “negligent,” “liability,” or “misrepresentation”

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 #6

• Be wary of humor and sarcasm

– Emails cannot communicate tone or “body
language”
– Colorful language may be entertaining, but also
have unintended, everlasting consequences

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 #7

• Close the loop

• If a document raises a concern
– Acknowledge it
– Respond in writing to it
– Resolve it
– Document the resolution

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 #8
• Special considerations for attorney-client privileged
communications
– Limit distribution to those who “need to know”
– Clearly designate all privileged communications
– Separate legal and business discussions to the extent possible
– Create, communicate, and enforce corporate policies about
preserving confidentiality
– Email strings may not be considered single documents for
privilege analysis

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 Recap
1. Maintain some level of formality
2. Be wary of jargon and buzzwords
3. Avoid rumor, speculation, and guesswork
4. Don’t exaggerate or editorialize
5. Don’t inadvertently imply wrongdoing
6. Be wary of humor and sarcasm
7. Close the loop
8. Treat privileged communications special

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 QUESTIONS?

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