"A jury awarded $800-million in punitive damages when Morgan Stanley repeatedly failed to produce emails in a timely manner,. The judge stated that “efforts to hide its emails” were evidence of “guilt.” (Coleman Holdings v. Morgan Stanley) -- InBoxer whitepaper entitled "Conducting Speedy Investigations That Involve Email".
Hundreds of whitepapers and PowerPoint presentations, including the one above from InBoxer, will have to change. The judgement in Morgan Stanley v. Coleman (Parent) Holdings, Inc., a poster child case regarding electronic discovery and email fines, was reveresed moments ago by the a Florida state appellate court. (Thank you, Electronic Discovery Law blog for alerting me.)
Although the reversal had nothing to do with electronic discovery or the mishandling of email, the cost to Morgan of defending itself vastly exceeds the cost of a good record management system, as Andrew Cohen, Associate General Counsel, and Vice President, Compliance Solutions for EMC, points out in his excellent blog entry, (Recommended reading.)
Of course, whitepapers need to change because the reversal will impact the amount of the award. The court said that the the original compensatory damages were not properly established. So, since the size of the punative fines are based on the compensatory damages, the punative damages need to be re-established. Somehow, we will need to write about the original verdict and the cost of defense.
"The eDiscovery lessons of the Morgan case remain unchanged (despite the reversal of the verdict). It would have been hard enough (and expensive enough) for Morgan just to defend itself on the underlying allegations in the case. However, due to their eDiscovery problems, Morgan has been on its heals for several years, the appeals will continue, the legal bills will continue, and Morgan will spend perhaps tens of millions more than they would have spent had they had good records management, proactive and repeatable eDiscovery processes and a proactive information management infrastructure in the first place," said Andrew Cohen, Associate General Counsel, and Vice President, Compliance Solutions for EMC, in his excellent blog entry.
Companies like InBoxer frequently listed as a major precedent in electronic discovery because of the size of the judgement -- triple damages. The InBoxer whitepaper entitled "Conducting Speedy Investigations That Involve Email" contained the following examples:
- A jury awarded $800-million in punitive damages when Morgan Stanley repeatedly failed to produce emails in a timely manner,. The judge stated that “efforts to hide its emails” were evidence of “guilt.” (Coleman Holdings v. Morgan Stanley)
- A jury awarded $29.2-million in the largest single sex discrimination verdict in U.S. history after UBS Warburg could not produce copies of relevant emails. The jury was instructed to “infer that the [missing] evidence would have been unfavorable” to the defendant. (Zubulake v. UBS Warburg)
- The SEC imposed a fine of $10-million on Banc of America Securities, the brokerage arm of Bank of America, after they “repeatedly failed promptly to furnish” email and gave “misinformation.”
Certainly, the $800-million amount mentioned above will change if the compensatory damages change. While the text is literally correct, it will need to be expanded. I wonder if this ruling will would give courts a new opportunity to review the entire issue of mishandling the emails. i am sure we will hear more.
Subscribe by Email
