Scenario No. 1: After receipt of a lawsuit, and again after receipt of request for documents, counsel for defendant discusses the need to gather pertinent documents, including electronically stored information. Defendant searches its computer system and locates no relevant ESI. Following depositions, a network server malfunctions and during a service call a computer technician identifies several gigabytes of relevant data in a dormant partition. Defendant immediately reports identification of the data to its counsel, who quickly notifies plaintiffs counsel. Plaintiff files a motion for sanctions, which is granted, including sanctions directly against counsel for their “gross negligence” in failing to identify potential sources of electronic information.

Scenario No. 2: Defendant logs into plaintiff’s computer system and downloads numerous files. The downloaded files, which are logged by plaintiff, are actually files owned by a third-party vendor common to plaintiff and defendant. There is thus no significant damage caused by the access. Defendant admits the access and offers an injunction prohibiting access to plaintiff’s computer system. In subsequent lawsuit, however, plaintiff engages in a scorched earth e-discovery examination. Such examination includes comparing the contents of dozens of defendant’s computers to the contents of plaintiff’s server. In creating the baseline of files from plaintiff’s server, no attempt is made to include only files owned by plaintiff. Instead, the baseline includes application files, such as Word and Acrobat, and files owned by third parties. As a result, there are tens of thousands of irrelevant “hits” in the file comparison. Ultimately, litigation costs far outweigh the possible range of damages, the winners being the attorneys.

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