Sep 06, 2018

Emails—the smoking gun

Twenty years ago, if a colleague wished to communicate with another colleague, he or she simply walked to their office and had a conversation. With the advancement of technology and the increase in technological device ownership, however, this has drastically changed. Email has become one of the preferred methods of communication with more than 500 billion emails sent daily.

In 2006, the Federal Rules of Civil Procedure involving litigation in federal courts was amended to allow for the discovery of electronically stored information, including emails. Today, almost every state has adopted the rules of civil procedure, known as e-discovery.

E-discovery is particularly helpful in litigation conversations where the content of what is said often gets lost or, for that matter, questioned if a conversation even took place. In many cases, documents are shredded or burned, making them irretrievable. Emails, on the other hand, are nearly permanent. Even if they are deleted, they can still be retrieved through various methods during e-discovery.

A recent case involving a client in connection with the sale of his business, in which there was substantial due diligence performed by the buyer, demonstrates the above. Nine months after the sale of the business, and at a time the buyer was performing poorly—having terminated many of the former employees—the buyer sued the seller, alleging fraud. During the discovery process it was learned that the basis for the alleged fraud were emails sent from one owner to another. In these emails the owner made statements such as, “We should terminate our entire sales force because they are awful,” and “We should terminate the general manager of the production department because our production stinks.” These types of emails were the owner’s vehicle for venting frustrations, rather than the accurate description of the business condition. Still, the plaintiff used these emails for the base of its lawsuit.

It is crucial for businesses owners to recognize that emails and other electronic stored information can be a “smoking gun” and cause adverse and unnecessary risks to their business.

Feel free to contact the attorneys at Chuhak & Tecson, P.C. to discuss email communication in further detail. Staying in contact with your attorney increases your chances of being prepared for whatever unfolds in the upcoming term.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: Edwin I. Josephson, Principal