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Recent court cases awarding sanctions under Federal Rule of Civil Procedure 37, which provides penalties for failure to disclose discoverable data, illustrate the problems in implementing effective legal holds and the potential consequences for failing to do so [See “Discovery Discipline”].
Ralph Losey, a shareholder in Akerman Senterfitt Losey, points out that keeping track of data and managing e-discovery holds was a bit easier in the “old days,” three or four years ago, before the advent of PDA’s, thumb drives, smartphones, Internet-based e-mail and instant messaging accounts and other cloud computing data. Such technologies now permit the storage of data in many other locations beyond an institution’s servers and data map.
A recent decision from the Federal District Court for the Middle District of Florida, Southeastern Mechanical Services, Inc. v. Brody, illustrates the problems that can result. In that case. employees left a company to work for a competitor. Their former employer sued, alleging that they had passed trade secrets to the competitor. The new employer asked them to turn in their BlackBerrys and laptops and produced them for forensic examination.
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