Litigation - New to In-House

This Wisdom of the Crowd, compiled from questions and responses posted on the New to In-House Forum,* addresses the systematic steps that an in-house counsel should take when a company is served with a new lawsuit.

*(Permission was received from the ACC members quoted below prior to publishing their eGroup Comments in this Wisdom of the Crowd resource.)

Question:

What would you say are the key steps in-house counsel should systematically take when the company is served with a new lawsuit?

Wisdom of the Crowd:

Response #1:

1. Review the Complaint.
2. Forward to the principals of the Company
3. Interview and Retain an outside attorney in that jurisdiction so he or she can file an answer within the court-prescribed time or ask for an extension.
4. Investigate the issue internally and start compiling the necessary documents
5. Forward relevant documents to said attorney.
6. Stay in constant communication with your attorney.¹

Response #2:

Anonymous: Does your organization provide any resources (e.g., Q&A sheets or dedicated "handbooks") to help its employees understand the legal obligations with respect to "personal data"? Have you found those materials helpful in containing risk to your organization? How so or how not?

Poster: We have an online policy program and have recently developed separate policy instructions for applicable employees who handle personal data from the initial collection, how long it is to be retained and then how it is destroyed. We just implemented the policy so I cannot opine as to its effectiveness yet. We have never had any security breaches to begin with, although it is helpful in the sense that those handling the information know what is expected of them and what to do with the information.

Anonymous: Do you attend non-legal technology conferences to get a better understanding of the current cyber-security threat environment and latest security protocols? If so, what key "takeaways" have you gained that you would share with your Litigation Committee brethren?

Poster: No, but I would like to if there was one tailored to in-house counsel and general counsel.

Anonymous: If there were one particular area of discussion (program) or learning that you"d like the ACC Litigation Committee to provide to you in this realm, what would it be?

Poster: A state by state breakdown of applicable law based on type of information collected. Applicable federal law as well.²

Response #3:

• 1. Review the Complaint. Forward to the principals of the Company Interview and Retain an outside attorney in that jurisdiction so he or she can file an answer within the court-prescribed time or ask for an extension. Investigate the issue internally and start compiling the necessary documents Forward relevant documents to said attorney. Stay in constant communication with your attorney.¹
• I have been a litigator/trial attorney for six years and a litigation paralegal for four prior. I have acted in roles from corporate counsel to general counsel where I litigated issues in other states. First step is to calendar the deadline to draft and file a responsive pleading. Consider the idea of a demurrer or other attack on the pleading or service of summons. I don"t know what state you are in but a great resource for CA is CA Civil Procedure Before Trial.

  Also, meet with your "client" and gather the facts of the situation to prepare for your answer to the complaint. Whatever you do not wait until the last minute to attack/answer the complaint. Also, you need to look at this case as if it is going to trial and begin from day one preparing accordingly even though only a few cases actually go to trial. This includes discovery, depositions, witness interviews, etc. Don"t forget your duty to preserve information and look at your legal hold processes. http://apps.americanbar.org/lpm/lpt/articles/tch04081.shtml³

  Response #4:

  A few preliminary thoughts: issue a litigation hold directive or preservation memo (there are several names for this) - something to notify the appropriate business units that relevant electronic and physical documentation/items must be preserved; take note of the answer deadline so you don"t miss it!; consider hiring experienced outside counsel (you can get many referrals, probably, through ACC); and yes, don"t panic.⁴

  Response #5:

  You also want to timely tender the Complaint to your company"s insurance carrier(s). Simply send a copy of it to your broker and ask them to put your carriers on notice. Your insurance company, in turn, will contact you to gather more information and discuss the matter. They will also send you a coverage letter discussing your insurance, the alleged facts and their coverage position. If any of the allegations are covered under insurance you may be entitled to a defense provided by your insurance. This is a topic by itself. This may take some time, so in the meantime, you should follow the advice of the others, issue a discovery hold, talk to the interested internal parties, and retain outside counsel.⁵

¹ Joconde Gaubert, Managing Counsel, Structural Group, Inc., Hanover, Maryland (New to In-House).

² This question and answer response was a private communication between an ACC member and the poster.

³ Tracy L. Henderson, Contract Corporate Counsel, Legalzoom ETC, Mill Valley, California (New to In-House, March 11, 2014).

⁴ Allison Lynn Phillips, Staff Counsel, Hobby Lobby Stores, Inc., Oklahoma City, Oklahoma (New to In-House, March 11, 2014).

⁵ Jim Office, Vice President & General Counsel, Victory Wholesale Group, Springboro, Ohio (New to In-House, March 12, 2014).