E-Discovery Lesson: You don’t want to be the next “McDermott”!

Author: E. Patrick Buntz

J-M Manufacturing Company, Inc. v. McDermott Will & Emery, California Superior Court, Los Angeles County – Central District, Case No.: BC 462832, is believed to be the first e-discovery legal malpractice lawsuit. McDermott Will & Emery, is an international law firm founded in Chicago in 1934 that houses more than 1,000 attorneys.

U.S. ex rel Hendrix v. J-M Manufacturing Co., Inc., US District Ct., CD California, Case No.: ED-CV06-000555, is the underlying case in which the legal malpractice allegedly occurred. This is a qui tam action (False Claims Act/whistleblower) brought by numerous governmental agencies based on allegations that J-M sold defective PVC pipe for use in water and sewage systems. If true, the qui tam actions could lead to the recovery of significant sums of money. The “Hendrix” referred to in the underlying case is an engineer who worked for J-M and who allegedly was fired one week after writing a memorandum that indicated the PVC pipe failed applicable product safety standards tests.

In the McDermott case J-M alleged that McDermott failed to supervise its e-discovery vendors and contract lawyers, and, as a result, almost 4,000 of J-M’s privileged documents were inadvertently produced to the other side. J-M filed its First Amended Complaint on July 28, 2011 and asserted that it had retained McDermott because the firm held itself out as knowledgeable in the area of qui tam actions and e-discovery. J-M claimed McDermott had billed on an hourly basis as high as $925 an hour.
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