Since my column last month, in which I discussed the U.S. District Court for the Southern District of New York's 2011 opinion in Pippins v. KPMG, many online journals and bloggers have noted and weighed in on the opinion, in which Magistrate Judge James L. Cott denied KPMG's motion to preserve a sampling of only 100 hard drives that could contain relevant data, as opposed to the 2,500 hard drives the defendant had been preserving at the cost of $1.5 million and an additional 6,500 it might have to preserve. Instead, the court ordered preservation of all 9,000 hard drives.
On Oct. 28, KPMG filed an objection; a week later, on Nov. 4, the U.S. Chamber of Commerce filed an amicus brief in support of KPMG, and a week after that, on Nov. 11, the Washington Legal Foundation filed its amicus brief.
As discussed in far greater detail in my November column, the plaintiffs in Pippins, KPMG audit associates of different types, challenged KPMG's treatment of them in its audit practice as exempt employees under the federal Fair Labor Standards Act and New York State Labor Law by misclassifying them as exempt employees under the FLSA, causing them to be deprived of overtime wages for time they worked in excess of 40 hours per week. They further alleged that KPMG failed to keep accurate records of the time they worked. The plaintiffs moved for class certification and KPMG objected. KPMG also sought a protective order to limit the scope of its preservation obligations to require it to preserve only a random sample of 100 hard drives from among those hard drives of former audit associates that it had already preserved in the course of this and other litigations. The parties could then search the drives using keywords proposed by plaintiffs.
In support of its motion for a protective order, KPMG made several arguments. It noted that the plaintiffs' argument that each class member's hard drive had to be preserved because it could hold data that was unique to that class member was inconsistent with its motion to certify the plaintiffs as a class. It argued that it had broadly preserved extensive and detailed human resource records that would establish the job duties and hours of audit associates, thus making preservation of the hard drives irrelevant or, at best, of marginal importance. It strongly asserted that the cost of preserving just the first 2,500 hard drives, at $1.5 million and climbing (the additional 6,500 drives would, presumably, add an additional $3.9 million), was wildly disproportionate to the value of the matter, and that the proportionality test under Federal Rule of Civil Procedure Rule 26(b)(2)(B) should be applied to narrow the universe of drives to be preserved.
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Source: law.com
By: Leonard Deutchman
On Oct. 28, KPMG filed an objection; a week later, on Nov. 4, the U.S. Chamber of Commerce filed an amicus brief in support of KPMG, and a week after that, on Nov. 11, the Washington Legal Foundation filed its amicus brief.
As discussed in far greater detail in my November column, the plaintiffs in Pippins, KPMG audit associates of different types, challenged KPMG's treatment of them in its audit practice as exempt employees under the federal Fair Labor Standards Act and New York State Labor Law by misclassifying them as exempt employees under the FLSA, causing them to be deprived of overtime wages for time they worked in excess of 40 hours per week. They further alleged that KPMG failed to keep accurate records of the time they worked. The plaintiffs moved for class certification and KPMG objected. KPMG also sought a protective order to limit the scope of its preservation obligations to require it to preserve only a random sample of 100 hard drives from among those hard drives of former audit associates that it had already preserved in the course of this and other litigations. The parties could then search the drives using keywords proposed by plaintiffs.
In support of its motion for a protective order, KPMG made several arguments. It noted that the plaintiffs' argument that each class member's hard drive had to be preserved because it could hold data that was unique to that class member was inconsistent with its motion to certify the plaintiffs as a class. It argued that it had broadly preserved extensive and detailed human resource records that would establish the job duties and hours of audit associates, thus making preservation of the hard drives irrelevant or, at best, of marginal importance. It strongly asserted that the cost of preserving just the first 2,500 hard drives, at $1.5 million and climbing (the additional 6,500 drives would, presumably, add an additional $3.9 million), was wildly disproportionate to the value of the matter, and that the proportionality test under Federal Rule of Civil Procedure Rule 26(b)(2)(B) should be applied to narrow the universe of drives to be preserved.
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Source: law.com
By: Leonard Deutchman
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