Tuesday, February 7, 2012
Above the Law reports on Pippins v. KPMG (SDNY), in which several former KPMG auditors have sued for nonpayment of overtime. In the course of litigation, the court ordered KPMG to preserve hundreds -- perhaps more than a thousand -- hard drives containing information about the working hours of thousands of employees. KPMG, which apparently has not turned over any hard drives yet, argued that only a sample handful of drives should be preserved. Not so, said Judge Colleen McMahon:
Even assuming that KPMG’s preservation costs are both accurate and wholly attributable to this litigation — which I cannot verify — I cannot possibly balance the costs and benefits of preservations when I’m missing one side of the scale (the benefits).
I gather that KPMG takes the position that the only Audit Associates who are presently ‘parties’ are the named plaintiffs, and so only the named plaintiffs’ hard drives really need to be preserved. But that is nonsense.... Under [relevant precedent], the duty to preserve all relevant information for "key players" is triggered when a party "reasonably anticipates litigation." ... At the present moment, KPMG should "reasonably anticipate" that every Audit Associate who will be receiving opt-in notice is a potential plaintiff in this action.