Ride the Lightning

NEWMAN OUTSOURCING SUIT WITHDRAWN

September 2, 2008

The LPO industry dodged a possible bullet but missed a chance for court clarification last week when a closely watched lawsuit was withdrawn. You may recall that on May 7th, Maryland law firm Newman McIntosh & Hennessey, LLP filed suit in the U.S. District Court for the District of Columbia seeking guidance on whether electronic evidence transferred to a litigation support service in India waives Fourth Amendment protections. The Fourth Amendment does not traditionally protect foreign nationals when the government is engaged in surveillance of electronic data submitted to foreign nationals. The lawsuit sought injunctive relief and declaratory judgment stating whether client data transmitted loses its Fourth Amendment protection when sent overseas, whether a law firm needs to ask for client permission before sending the information overseas, and whether President Bush has an obligation to establish protocols for such a process. The suit was widely regarded as an anti-outsourcing suit and viewed with horror by the burgeoning LPO industry, which is reaping untold riches by reviewing electronic evidence abroad. The complaint may be found at http://www.klgates.com/files/upload/eDAT_NMH_v_Bush_Amended_Complaint.pdf

13 days after Acumen Legal Services (the Indian firm in question) filed its motion to dismiss the outsourcing lawsuit, the Newman law firm withdrew its case. Prior to this, confronted with the motion to dismiss, Newman had requested permission to further amend its complaint and expand the case into a class action on behalf of multiple U.S. law firms. The day after that permission was denied, the law firm withdrew the lawsuit.

Hat tip to Russell Smith, President of the company whose Indian lawyers drafted the motion to dismiss (www.sddglobal.com), for passing this along. Also noted – Russell’s comment on the case: “I’m tempted to wax on and on about how Indian lawyers have run circles around a U.S. law firm, and how very significant this is, but the facts speak for themselves.”

The American Bar Association has recently spoken on this issue – more on that shortly . . .

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