Courts Smack Down Lack of Coherent Retention Policy

An interesting court decision just appeared that highlights several eDiscovery questions that I have heard in the past raised by corporate counsel. The case in question is Phillip M. Adams & Assoc., LLC v. Dell, Inc., 2009 WL 910801 (D. Utah Mar. 30, 2009) and highlights several points having to do with when notice of litigation is received, litigation hold responsibilities and records retention policies.

The first question addressed by the court was when was the defendants responsibility to start securing potentially responsive records triggered. The defendant argued that their duty to preserve started in 2005 when they received notice of litigation.  Instead, the court determined that the duty to preserve arose “in the 1999-2000 environment” in which multiple lawsuits related to the technology were ongoing. A notice of litigation does not have to be received to trigger your responsibility to preserve.

The second question that the court addressed was that of “Safe Harbor”. The defendant argued that it should find safe harbor against sanctions because of the rule providing protection against sanctions where electronically stored information is lost as the result of the “routine, good faith operation of an electronic information system.” The court disagreed, noting the absence of evidence supporting the assertion of reasonableness or good faith in ASUS’ document management and highlighting the reliance on individual employees.

The court noted: [U]tilizing a system of record-keeping which conceals rather than discloses relevant records, or makes it unduly difficult to identify or locate them, [renders] the production of the documents an excessively burdensome and costly expedition. To allow a defendant whose business generates massive records to frustrate discovery by creating an inadequate filing system, and then claiming undue burden, would defeat the purposes of the discovery rules.

Relying on employees “good faith” to do the right thing with records usually will not meet the “Safe Harbor” requirement. Many judges and attorneys now believe an archiving system that meets these requirements is a requirement for the “Safe Harbor” defense.

The third question addressed by the court was that of the defendant’s retention policies. The court noted: “An organization should have reasonable policies and procedures for managing its information and records.” [Citation omitted.] “The absence of a coherent document retention policy” is a pertinent factor to consider when evaluating sanctions. [Citation omitted.] Information management policies are not a dark or novel art. Numerous authoritative organizations have long promulgated policy guidelines for document retention and destruction.

These days there is an expectation that an organization will have a well thought out records retention policy that is put into effect to manage the information resources of the organization, not put in place to hide or destroy information.

The lessons learned from this very important case are:

1.      The litigation hold requirement can be triggered, not just by a notice of litigation but also by actions, news stories, precedent etc.

2.      Relying on a “Good Faith” manual process for ESI records retention can be a risky practice. The expectation of automation to assist or manage the records retention process  is becoming real.

3.      An organization needs to create and enforce records retention policies that make sense for the business as well as allows them to meet their legal requirements.

This case decision can be viewed at

Archiving All Relevant ESI Reduces Cost of Discovery and Raises Overall ROI


White v. Graceland Coll. Ctr. for Prof’l Dev. & Lifelong Learning, Inc., 2009 WL 722056 (D. Kan. Mar. 18, 2009)

In this wrongful termination case, plaintiff discovered discrepancies between certain relevant emails’ sent dates and the creation dates of their attachments. These discrepancies, plaintiff contended, were relevant to the issue of when the decision to terminate her employment was made.

Without additional information, however, plaintiff’s forensic expert could not come to a conclusion regarding the meaning of the discrepancies. Accordingly, plaintiff sought the re-production of the emails, in native format, and their attachments from the Outlook accounts of both the sender and the recipient of each email. Plaintiff also sought the production of the relevant PST and OST files and access to the hard drives used to create any of the emails’ attachments. Plaintiff’s motion was granted in part and denied in part.

Upon examination of three emails sent between plaintiff’s supervisors and those emails’ associated attachments, plaintiff’s expert discovered “discrepancies between the creation and sent dates of the emails and attachments” but could not make any definitive conclusions without additional investigation.

For example, despite defendants’ claim that the decision to terminate plaintiff was made on July 2, 2004, an attachment to one of the relevant emails showed a creation date of June 9th.

Plaintiff’s expert indicated that in order to determine when an email was created and transmitted, he needed to review the email from both the sender’s “sent items” and the recipient’s “inbox” and that he also needed access to the computer that created the emails and their attachments. Accordingly, plaintiff filed her motion to compel.

The above mentioned case highlights the case for retaining a complete set of ESI for a specific retention period. The cost associated with tracking down and restoring specific email messages and attachments from backup tapes or custodian PSTs can be extremely expensive and time consuming.

In this case, if the responding party had put in place a proactive ESI archive, the cost and time involved to produce the specific emails and attachments in a native format with all associated metadata would have been minutes.

Even more so, if the defendant had a searchable proactive archive to query the first time, the requested ESI could have been produced quickly without all of the additional costs associated with the second round of searches.