Reality Check | Ephraim Schwartz » Zero tolerance for zero retention

December 04, 2007 | Comments: (0)

Zero tolerance for zero retention

TAGS: Compliance, E-discovery

One year after FRCP laid down e-discovery guidelines, and the courts are clear: hammer out a retention policy posthaste

Dec. 1 marked the first anniversary of the new Federal Rules for Civil Procedure. Although it did not codify the rules for e-discovery, FRCP certainly clarified for companies what their e-discovery policies should be.

I spoke with Alan Armstrong, vice president of business development at Fortiva, an e-mail archiving company, about the FRCP milestone and asked him whether we've learned anything new in the past 12 months.

"Effectively, the court is carrying out FRCP to the fullest extent possible. There is no such thing as undiscoverable information," Armstrong responded.

Actually, we know that there were about 105 e-discovery legal opinions issued since Dec. 1, 2006, thanks to Kroll Ontrack, a company that offers computer forensics services.

The breakdown of those cases is fascinating.

Twenty-five percent of the cases -- which covered a variety of issues, including copyright infringement, fraud, and breach of fiduciary duty -- dealt with discovery requests and court motions to compel discovery.

Twenty-four percent addressed the issue of "spoliation."

Michele Lange, director of legal technologies at Kroll, says in these cases there was a court sanction for an act of document or data destruction.

With a nod to Armstrong's point about discoverability under FRCP, only 6 percent of the cases addressed the question of the admissibility of electronic evidence.

Here's a quick summary of a few of the most significant cases heard this year.

In the case of Columbia Pictures Industries v. Justin Bunnell, the suit claimed copyright infringement, and the plaintiff sought user IP addresses along with dates and times of user requests.

The defendant argued that the data was stored temporarily in RAM and therefore did not come under the new FRCP guidelines that say only ESI (electronically stored information) is discoverable.

Guess what?

The court said data held in RAM constitutes ESI.

In Peskoff v. Faber, the suit alleged fraud and breach of contract, and the plaintiff argued that the ESI produced contained "unexplained gaps."

The plaintiff therefore asked for additional discovery of e-mail. The court ruled in favor, stating that "accessible data must be produced at the cost of the producing party, unless the producing party can prove the documents are inaccessible."

The case of Qualcomm Inc. v Broadcom Corp. is especially interesting as far as the court's opinion is concerned.

In this case of patent infringement, during testimony by one of the very last witnesses for the plaintiff, the witness revealed the existence of relevant e-mails that were not discovered.

The judge characterized this as "an organized program of litigation misconduct" and asked the plaintiff attorneys why they should not be personally sanctioned.

What can we learn from these cases? While some may say there needs to be a fundamental discussion of whether retaining e-mail is an asset or a liability, I think that horse is out of the barn, so let's move on.

Assuming a company, your company, is well intentioned, the real fundamental issue is the disconnect between legal and IT, say both Armstrong and Lange.

"The most frequent complaints I hear from the IT side is that they are always looking for legal to make a decision on policy and to tell them what their requirements are," Armstrong says.

But if you know anything about lawyers, they typically hate making definitive statements. I suppose that comes from the fact that our legal system is based on case law rather than codified into inflexible statutes.

One of the solutions Armstrong suggests is to get all of the concerned parties in a company together to lobby for a truly centralized e-mail system. Say the legal department wants a two-year retention policy for e-mail. IT has storage issues to consider and may have an even shorter time frame in mind.

IT is embroiled in the never-ending nightmare of collecting Microsoft PST (Personal Storage) files that sit all over the network, created by end-users who want to save all of their e-mail as an invaluable knowledge base forever.

Armstrong believes managing e-mail centrally has benefits for IT, users, and legal departments because it addresses all of the problems of each stakeholder.

This is more than likely a better approach and should be considered part of an overall best practice for e-discovery.

As Lange says, "An enterprise needs a litigation response team that brings together all of the key players, including outside and inside counsel, IT, executives, and service providers."

One year later, we have a more sophisticated perspective on e-discovery along with a better educated bench and bar. Given that, companies need to become more sophisticated as well.

Additional FRCP coverage
New litigation rules put IT on the front lines of data access
The art of e-discovery
Court rules content of RAM memory is discoverable
Businesses slow to adopt e-discovery rules

Posted by Ephraim Schwartz on December 4, 2007 03:00 AM

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