False certifications and phantom legal hold underlie Big Law malpractice suit

There are basically two types of malpractice: those that emerge from well-meaning mistakes and others that are akin to absentee parenting.

A recent malpractice suit alleging discovery failures by lawyers and vendors for two major firms — a suit charging those firms with misconduct that forced their client to settle the underlying case for $9 million — appears to be an example of the latter.

The complaint by a Wisconsin-based electronic headset maker, a problematic “victim” if there ever was one (more on this below), is an anomaly in some regards. For one, it is a very rare publicly available example of a malpractice suit alleging harm from failures almost exclusively related to e-discovery. But it is also an example of attorneys suffering consequences for certifying technical knowledge of the kind they don’t actually possess — which likely occurs frequently but with little negative effect.

When it comes to so-called “e-discovery malpractice,” the few known examples can be divided into a) well-meaning but ultimately calamitous technical confusion or breakdown or b) omissions arising from either feet-dragging or negligence. The second group is comprised of missed deadlines, failures to produce clearly relevant documents, false testimony arising from ignorance of the facts, botched or non-existent application of legal holds, and failure to supervise vendors, all of which are alleged in this case.

The glaring caveat here — and the reason the allegations are “problematic,” to say the least — is that the client suing for malpractice instructed employees during ongoing litigation to destroy compromising evidence, actions that in part contributed to the levying of an adverse inference instruction, issue sanctions, and a motion seeking a finding of contempt. It is an asterisk that cannot be overstated.

But why this case is worthy of attention and not just an example of client-behaving-badly — obvious “don’t dos” that don’t deserve analysis — is because it shows how the inability to grasp the full scope, complexity and importance of various moving discovery parts can bring disaster, including this worse-case scenario: attesting to the client’s veracity when he’s pulling a fast one on your watch.

Below are representations you don’t want to make if your client has yet to produce some 375,000 documents that, it will soon become clear, should have been. From a 2014 court-ordered meet-and-confer (malpractice defendant’s actual responses are in bold):

Attorney for producing party: Everything’s been produced.

Opposing counsel: Did your client conduct an ESI search for communications?

Attorney: Everything has been produced.

Opposing counsel: Well, that’s not really my question.

Attorney: That’s my response, though. We produced everything when we did that by checking computers.

Opposing counsel: I’d like to understand the methodology you did to conduct.

Attorney: I didn’t conduct the ESI search, so I don’t know the methodology. They were told to look for documents on their computer. They did so and we produced them. They obviously conducted the search and produced what they had.

The malpractice case has been removed to a federal court in Chicago and it is yet unclear if anything will come of the allegations or whether they’re even legit. The law firm defendants, who have filed a motion to dismiss, say the plaintiff (their former client) can’t successfully sue on account of “unclean hands,” a doctrine stating that a complaint should be dismissed if the party bringing it has done anything unethical in relationship to the claims at issue. The defendants also say that the plaintiff can’t show damages arising from their actions — essentially that it would have been forced to settle irrespective of the firms’ alleged failures.

Still, the case serves as yet another reminder that attorneys must possess the requisite knowledge to handle highly complex e-discovery issues, must oversee them diligently, and are responsible for the attorney supervisees and vendors of whom they are in charge. They are also bound by Rule 26(g), whose signatories attest they’ve made a “reasonable inquiry” into discovery issues and that disclosures made upon that inquiry are “complete and correct” to the best of the person’s knowledge.

The behavior described in the malpractice complaint and sanctions order underpinning it is the kind to which a recent California Bar ethics opinion responds: either understand the issues and grab them by the horns, or get help.

Court documents are available here:
Sanctions Ruling (PDF)
Malpractice Complaint (PDF)
Motion to Dismiss (PDF)

If you’d like to learn more about how to avoid malpractice related to e-discovery, check out our recent article “Is your processing tool leading you down the road to malpractice?”, or request a consultant below.
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