Morgan Stanley becomes Morgan Stainly

1
Morgan Stanley becomes Morgan Stainly
Ruining the image of Morgan Stanley through
unnecessary sanctions
2
Adverse inference instruction for thwarting
email discovery leads to 1.45 billion jury award

• In Coleman (Parent) Holdings, Inc. v. Morgan
  Stanley Co., Inc., 2005 WL 679071 (Fla. Cir.
  Ct. Mar. 1, 2005), a Florida court issued an
  adverse inference instruction against Morgan
  Stanley for overwriting emails, failing to timely
  process hundreds of backup tapes, and failing to
  produce relevant emails with their attachments.
  Relying on that instruction, a jury awarded a
  total of 1.45 billion in damages against Morgan
  Stanley.

3
Excessive amounts of unnecessary data

• No other investment banking company is asked to
  perform such a great task
• To produce all documents would be an impossible
  task
• Produced documents the company felt was relevant
• It is possible to miss data and make mistakes,
  regardless of how thorough a search is

4
Software Errors

• Software errors caused the searches of e-mails to
  be hyper case-sensitive, resulting in a failure
  to capture all e-mails.
• A script error prevented the insertion of some
  e-mails into the archive.

5
Who Conducts e-mail Retrieval?

• Requesting party usually prohibited direct access
• Confidentiality privilege barriers to
  examination of irrelevant matters
• Requesting party representative sometimes present
  may help design search method
• Increasingly, Neutral Third Party service
  provider used if production is complex or
  extensive
• (Bagby class slides Unit 8)

6
Third Party Help

• Court should have ordered a third party come in
  and assist with the discovery requests because of
  the enormous amount of data being searched.

7
From WestLaw

• Morgan Stanley continued throughout the trial to
  state how the e-mail searches could only be
  conducted at an enormous cost and would be
  fruitless because there were not backup tapes
  with e-mail from 1997 to 1998.

8
Dilbert and EDD Destruction