E-discovery uncovers key evidence in New York case

The Southern New York District Court recently handed down a fairly controversial ruling involving the role of e-discovery in the case of Pippins v. KPMG.

Former employees of auditing firm KPMG, Kyle Pippins, Jamie Schindler and Edward Lambert, filed a class action suit against the company, claiming that they were denied proper overtime compensation. Forbes reported that Magistrate Judge James Cott ordered that all of the company's 2500 hard drives be preserved for the duration of the trial, considering they contain payroll and attendance records.

After an attempt at an appeal, United States District Court Judge Colleen McMahon ruled that the company was forbidden from destroying the hard drives, the news source explains, out of concern for future e-discovery requests. Experts have suggested that the sheer cost associated with managing this data may force KPMG's hand and prompt an early settlement. 

E-discovery is a relatively new element of litigation and, while beneficial, is becoming prohibitively expensive in some scenarios. According to Accounting Web, the associated technology and labor costs could account for 50 percent to 90 percent of a lawsuit's total expense.