Intel Gets More Time to Explain Lost E-Mails in Antitrust Case

Intel, the world's largest microprocessor maker, has been granted a few more days to explain how it is trying to locate a long list of missing e-mails in the legal discovery phase of a 2-year-old court battle initiated by its major competitor, Advanced Micro Devices.

A U.S. District judge on March 7 originally gave Intel 30 days to try to recover more than 1,000 lost e-mails that it was required to keep for an antitrust lawsuit filed by AMD in 2005.

Federal court rules enacted Dec. 1 require enterprises to be able to quickly find such data when required by the court.

The e-mails that Intel claims are missing reportedly discuss details relevant to the AMD lawsuit, which alleges that Intel engaged in anti-competitive practices to maintain a "monopolistic position" in the PC processor market, according to court documents.

Since then, Judge Joseph Farnan of U.S. District Court in Delaware has opted to give the Santa Clara, Calif., chip maker 10 more days - until April 17 - to come up with a report to AMD on how the e-mail search is progressing or whether the corporation will be able to produce the e-mails at all.

"That's when we will file our report on the e-mail," Intel spokesperson Chuck Mulloy told eWEEK April 5. "AMD then has another 10 days to respond to our report. Meanwhile, we are working on our remediation plan, and it gives us more time to locate them - the evidentiary e-mails - ."

Intel's e-mail system, which runs on Microsoft Exchange servers, serves 99,900 employees worldwide. It is automated to expunge e-mail sent or received by employees every 35 days; senior executive e-mail is purged every 45 to 60 days.

Some of the e-mail messages may be recoverable from backup tapes or by employee-initiated backup; Intel said it is busy tracking these down. However, trying to find individual e-mail messages with specific keywords in unindexed backup tapes is tedious and requires a substantial amount of work time. Individual backup tapes must be mounted one at a time to have their contents restored and examined.

About 1,000 Intel Employees Involved

According to court documents, Intel has identified about 1,000 employees as having potentially relevant information. In the company's best e-mail storage scenario, all these employees would have been contacted and asked to preserve the e-mails for the discovery team. Intel relies solely on employees to back up their own e-mail messages for reference.

In the best possible e-mail backup/archive scenario, Intel's employees wouldn't have had to worry about backing up any e-mails. A full-service corporate e-mail archiving system - a number of which have been available for several years and about which eWEEK has reported often - would likely have been able to solve this legal issue within a few hours.

If Intel cannot produce all the relevant e-mails that AMD and the court are demanding, the judge could levy a stiff fine if he considers this unreasonable behavior.

Judge Has Other Options

There are other ways to handle this loss of key evidence. It is entirely possible that AMD may have to help foot the bill for finding it if legal precedence comes into play.

In the 2003 Zubulake-versus-UBS Warburg case, defendant UBS Warburg claimed that old, deleted e-mail messages requested by the plaintiff in a gender discrimination and retaliation dispute were stored on 94 backup tapes and that the cost of retrieving them - $300,000 - made recovery of the information "unreasonable."

After several months of hearings, the court ultimately ruled that the plaintiff was to help pay for restoration of the evidence, although the defendant was to bear the major part of the expense: UBS Warburg had to pay 75 percent, while the plaintiff's share was 25 percent.

In addition, the court ruled that the defendant must pay "for any costs incurred in reviewing the restored documents for privilege."

So, if Intel reports on April 17 that it will take much more time and money to recover the missing e-mails, Farnan could indeed grant the time and theoretically could even order AMD to pitch in for the e-discovery costs - which could easily run into high-six-figure territory.

Most of the missing e-mails were written after AMD filed suit against Intel on June 27, 2005, according to court documents.

In a statement sent to the court, AMD said: "Through what appears to be a combination of gross communication failures, an ill-conceived plan of document retention and lackluster oversight by outside counsel, Intel has apparently allowed evidence to be destroyed. Intel executives at the highest level failed to receive or to heed instructions essential for the preservation of their records, and Intel counsel failed to institute and police a reliable backup system as a failsafe against human error."

Intel Admits Its Foibles

To its credit, Intel has been candid about its e-mail problem.

eWEEK obtained a copy of a letter Intel sent to AMD and to Farnan last month. In it, Intel said that despite a companywide effort to comply with AMD's requests for evidentiary documents - including tape backups of more than 1,000 of its employees' correspondence - the company admitted there were "inadvertent mistakes in the implementation" of its preservation process.

For example, some employees obeyed the request to save their e-mails to a backup hard drive but did not save their "sent" e-mail folders - only the "incoming" mail folder. As a result, those sent e-mails were purged as part of Intel's regular maintenance program. In the letter, Intel also said a few employees didn't follow the directive at all because they believed the IT department was automatically saving their e-mail on its own.

In addition, Intel said in the letter that it is reviewing its document retention efforts related to former employees because there "may be some lapses."

"We have been very transparent all along in this process," Intel's Mulloy told eWEEK. "We know we have some issues, but we've explained it all very clearly and are going to rectify the situation as quickly as possible."

Copyright 2007 by Ziff Davis Media, Distributed by United Press International