The following Bricker & Eckler report on the Intel Microchip litigation is interesting, not on the privilege question but on the legal hold issues. Based solely on the article, it appears Intel chose not to turn off its 35-day auto-delete technology, but to impose legal holds through custodians. After gaps appeared, things got complex. Interesting decision -- turn off the auto-delete system-wide for the length of the case (years) or try to do this through custodians. Morton's Fork (cf Hobson's Choice), I think. See below:
District Court approves, without objection, Special Master’s conclusion: in providing summary reports of data loss investigation to AMD, Intel waived attorney-client privilege and non-core work product protection
Bricker & Eckler LLP
Alan J. Ross
USAJuly 7 2008
In re Intel Corp. Microprocessor Antitrust Litigation, Case No. MDL 05-1717 (D. Del. June 4, 2008)
Judge Joseph J. Farnan, Jr. of the District Court of Delaware adopted the Special Master’s Report and Recommendation, first discussed here, without objection from Intel. From this dance floor, the decision not to object looks to be primarily an economic one. On the surface, Intel appears to be no more interested in “embarking on a world tour of costly … preservation depositions,” than is AMD. On the other hand, Intel may very well have opted for the governing facts to be those reported by its lawyers in their interview notes of the 1,000 plus custodians.
In a nutshell, this decision is about Intel failure to implement a legal hold, which would have involved turning off the automatic delete function on its world-wide email system, which was currently set for thirty-five days, after the first of what became these cases was filed. Instead, it implemented an elaborate, six-continent-wide program to preserve and sequester potentially relevant data, which the parties agreed would, if stacked – presumably as hard copy, stretch some 137 miles high.
From this space, introducing a legal hold onto such a complex system in such a complex case – alleging a violation of Section 2 of the Sherman Act – where relevancy is extraordinarily broad, appears virtually impossible. At the very least, it would have involved expanding Intel’s email storage capability, essentially world-wide, from thirty-five days to apparently the length of this case, which will be measured in years. The Special Master never mentioned this difficulty in his detailed discussion of Intel’s failure and the “safe harbor” provision of amended Rule 37(f).
Human failures led to some problems in data preservation. Who ever would have foreseen that? Intel then commissioned an investigation. After Intel informing AMD and the other plaintiffs, AMD’s demanded and got a stipulated Order requiring Intel to provide a summary of what the investigation uncovered, by custodian. Thereafter, the plaintiffs sought production of the individual interview notes from each custodian. Intel objected on the basis of the attorney client privilege and work product protection. The Special Master concluded that the summaries waived the attorney-client privilege and non-core work product protection, which seems to have resulted in the production of the “facts” portion of the interview notes.
There is an element of fairness that leaps out at you in the decision. It does seem mighty unfair to make poor AMD take a 1000 plus depositions to be able to argue spoliation. On the other hand, there may be a very few that really need to be deposed, and that seems unlikely to change with the production of the notes. The fact that Intel chose not to object suggests a degree of confidence about what is in the notes, a sort of, we know what the issues are, let’s get to them.
Unfortunately, the rest of us are left with a decision that just simply appears wrong. In my initial discussion of the decision, I essentially argued that the Special Master misinterpreted Westinghouse Electric Corp. v. Republic of the Philippines, 951 F. 2d 1414, 1426 n.12 (3d Cir. 1991) and In re Kidder Peabody Sec. Litig., 168 F. R. D. 459, 468 (S.D.N.Y. 1996), concluding that the disclosure of “facts” was sufficient to waive the privilege. I won’t repeat that argument. Let me just leave you with four quotes from the Special Master’s Report and Recommendation:
In the context of the discovery phase of Intel's preservation issues, Intel, by and through its attorneys, agreed to this form of discovery. Intel agreed to produce, "detailed written description[s] of the preservation issues affecting [every] Intel Custodian, including the nature, scope and duration of any preservation issue(s)." (D.I. 301 at ¶ 9). Intel could have left AMD and the Class Plaintiffs to their own devices, forcing them down the path of protracted world¬wide preservation depositions. It did not. Rather it trumpeted its willingness to have AMD, the Class Plaintiffs and the Court informed as to fact work-product gathered and provided "a detailed written description of the information provided by each custodian [to Weil] during the interviews."
Special Master R & R at 27 (emphasis added).
AMD proposed that Intel provide to the Special Master and the parties "a complete accounting of its preservation problems, a custodian-by-custodian tally of issues, identification of data that appears to have been lost, and an inventory of back-up tapes that exist and can be successfully restored."
The parties ultimately stipulated to a disclosure order….
Special Master R & R at 8 (emphasis added).
it appears to the Special Master that the disclosure of the privileged information to AMD, the Class Plaintiffs and to the Court were not "disclosures necessary to encourage clients to seek informed legal advice," but rather were for the purpose of supporting Intel's litigation position.
Special Master R & R at 19 (emphasis added).
Moreover, the Special Master believes it is important to note that to the extent the primary focus of the interviews reflect the mental impressions of Intel counsel, it cannot be said that the focus was chosen by Intel counsel alone. Rather, the focus was developed collaboratively with all of the parties with the ultimate imprimatur of the Court.
Special Master R & R at 28-29 (emphasis added).
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