Today’s E-Mail, Tomorrow’s Legal Evidence

     Errant e-mail can’t be entirely blamed for the ruling against Microsoft Corp. in the recent antitrust suit. But it certainly didn’t help the company make its case.

     Embarrassing missives about browser battles played a key role in court.

     "I don’t understand how IE (Internet Explorer) is going to win," a senior Microsoft executive wrote in one note, referring to the company’s Internet browser and its competition with Netscape Communications Corp.’s rival product. "The current path is simply to copy everything that Netscape does."

     It’s amazing what winds up in e-mail, and then in lawsuits. The adage "loose lips sink ships" rings true in the digital age: E-mail makes great evidence.

     E-mail is the electronic information most often requested in lawsuits, says PricewaterhouseCoopers, a New York-based consultancy. It recently surveyed more than 200 trial lawyers and judges, who thought most of their corporate clients weren’t’ prepared for digital litigation.

     Some 83% of them have no policy for handling discovery requests for digital records, the study found. Most respondents said clients rarely try to keep relevant data from being overwritten.

     That doesn’t mean e-mail isn’t being saved somewhere, though.

Copies Abound

     "It used to be that you’d write memos or occasionally talk on the phone, and there was no written record," said Scott Charney, former head of the Department of Justice computer crimes section, now a principal at Price Waterhouse Coopers.

     But now, "If I send you an e-mail, there are probably at least eight copies at four locations," he said. "All of a sudden, we’ve propagated potentially proprietary information across a number of different servers."

     Deleting e-mail won’t make it disappear from every crevice of a company’s computer system or keep it out of court.

     Data recovery specialists like John Jessen can often find missing missives that were thought to have been deleted permanently.

     Some dandies have made it into litigation, says Jessen, chief executive of Seattle’s Electronic Evidence Discovery Inc.

     During a hospital audit, the company turned up this e-mail from a nurse to a colleague: "Did you see what Dr. (name withheld) did today? If that patient survives, it will be a miracle."

     Then there was the time Jessen’s firm represented a client in toxic waste dumping litigation. Another company in the case claimed it didn’t dump a chemical.

     But e-mail found on its shipping department computer told otherwise: "Yes, I know that we shipped 100 barrels of (name of chemical withheld,), but on our end steps have been taken to make sure no records exist. Therefore they don’t exist, if you know that I mean. Remember, you owe me a golf game the next time I’m in town."

     "People feel they can do the most outrageous things and hit ‘delete,’" Jessen said.

     One problem is that corporate e-mail is used informally. About 40% of it isn’t even about business, Jessen estimates. "It’s ‘kittens for sale’ mail," he said-people bidding on online auctions, sending party invitations or gossiping. E-mail has become the office water cooler.

     It’s a bad combination: casual messaging and the permanent record that e-mail creates.

     "Just look at the Microsoft antitrust suit and all those e-mails," Charney says.

     It’s "a wonderful example of where digital evidence gathering was critical and highly detrimental to the defendant," said Erik Laykin, president of Online Labs Inc., a Los Angeles-based computer security company.

Judge Jackson Weighed E-Mail

     U.S. District Judge Thomas Penfield Jackson, who presided over the Microsoft case, spoke about the weight of internal company messages.

     "The statements of Microsoft executives, when considered in conjunction with other evidence of anticompetitive behavior, at least raises a question as to Microsoft’s intent to monopolize the browser market," he wrote in a September 1998 order denying Microsoft’s motion for summary judgement in its antitrust case.

     The risk doesn’t pertain only to the contents of e-mail. As lawyers ask for more electronic records in discovery, companies face increasing legal and monetary liability for not handling data well.

     Routine computer backups often overwrite old data. Failure to change that procedure could mean running afoul of courts if a discovery order demands data preservation.

     The high cost of digging through electronic files also can put an unprepared corporate defendant at risk.

     Take an example from Jessen’s client files. A corporation faced an unlawful termination charge from an ex-employee.

     The judge vetoed a "ridiculous" plaintiff discovery request for all company e-mail. Instead, he told the defendant to provide only e-mail mentioning the plaintiff'’ name-for all the 13 years of his employment.

     The judge "felt he had done a good thing," Jessen said. But to comply with the directive, some 10,000 company backup tapes would need to be read at a cost of about $1,000 apiece-a $10 million expense.

     Before the court order, the employee had offered to settle for $80,000. The employer "thought that was ridiculously high," Jessen said. After the order, the ex-employee upped his demand to $1 million.

Many Questions Surface

     Digital evidence gathering is bringing new questions to the legal world. How much computer backup is enough? What amount of electronic data is reasonable in discover? Judges, lawyers and clients need guidelines to get a grasp on technology.

     Jessen tells of a judge faced with a massive discovery request for all of a company’s databases. Thinking of approving it, the computer-novice judge said, "This week my niece showed me what a database is on her computer, and it doesn’t seem like that big a deal."

     Both Jessen and Laykin are working with judicial subcommittees at the federal and state levels to help sort out whether rules of procedure need to be changed.

     Many judges lack a clear understanding of technology, says Laykin. "There’s a huge learning curve the judicial branch is going through right now."

     It’s a scary proposition for businesses. One of his clients generates 52 million new e-mails a week, Jessen says.

     Electronic fact-finding is "not going to go away," he said. "It’s going to dominate discovery."