UCLA Journal of Law and Technology, Forthcoming
Electronic Discovery and the Challenge Posed by the Sarbanes-Oxley Act
June 14, 2006
By Daniel B. Garrie
While the Sarbanes-Oxley Act was intended to protect and increase publicly held corporations’ accountability, lurking in the background are judicial inequities resulting from mandatory Sarbanes-Oxley technology investment. Sarbanes-Oxley compels public companies to invest millions in new technology while exempting private corporations from these costs. Consequently, in the discovery phase of a private versus public company dispute, the private litigant’s discovery costs are likely to be more burdensome than the public corporation’s costs. This provides the private litigant with a stronger and more compelling judicial argument to transfer costs to the discovering party under the Zubulake framework. Both attorneys and judges must be mindful of this potential e-discovery loophole.
To read the full article, go to SSRN