Month: March 2011

eDiscovery Results in Second Look at Records Management Policies

Bill Tolson records retention , , ,

From the PIHRAeScope Blog:

By Allen Smith

Truly robust records management policies can help keep the costs of e-discovery in check, according to Danuta Panich, an attorney with Ogletree Deakins in Indianapolis.

Having a policy that outlines when records are to be destroyed can reduce the amount of information that needs to be reviewed when there’s litigation, explained Philip Gordon, an attorney with Littler Mendelson and chair of the firm’s Privacy and Data Protection Group in Denver. E-mail can be particularly voluminous without a records management policy and costly to search through during e-discovery, he noted.
“Courts recognize that employers don’t have a duty to retain every scrap of information produced by the organization and that information is destroyed that’s no longer needed,” he added.

Panich told SHRM Online that a records management policy should address such issues as:

  • Avoidance of casual proliferation.
  • Where and how electronically stored information (ESI) should be stored.
  • The importance of prompt deletion of all ESI that is not specifically required by the retention schedule, is no longer of immediate use and is not subject to a litigation hold.
  • A process for periodic review of all information stored.
  • Appropriate methods of eliminating ESI.
  • An audit process to ensure compliance.

Different Approaches
There are different schools of thought with records retention. Gordon noted that some categories of information by law need to be retained for a minimum period. For example, he said documents pertaining to the Employee Retirement Income Security Act need to be preserved for six years, while job applications need to be preserved for at least a year and some Occupational Safety and Health Administration documents need to be preserved for 30 years. But documents that don’t need to be preserved for a minimum period, like most e-mails, should have a short life span—such as 30, 60 or 90 days—to keep the volume of material down during e-discovery, he remarked.

However, Robin Shea, an attorney with Constangy, Brooks & Smith in Winston-Salem, N.C., said that since the enactment of the Lilly Ledbetter Fair Pay Act, which theoretically allows employees to recover based on long-past employment decisions, her ideal has been to preserve everything and have no automatic destruction. But she acknowledged that this is too burdensome and expensive for some employers. The next best thing is to retain the records for the longest applicable statute of limitations, she said.

“We recommend these long retention periods not because the Rules of Civil Procedure require them but because the information retained may very well provide the evidence needed to help the employer defend itself,” Shea remarked.

But Karin McGinnis, an attorney with Moore & Van Allen in Charlotte, N.C., warned against saving too much and instead recommended the use of retention policies to narrow down the amount of company information that is preserved.

Litigation Hold
A good retention policy can be a defense against spoliation of evidence, McGinnis added. If e-mails are deleted after 30  days and certain older e-mails are not available when litigation arises, the policy can show that the e-mails were deleted not to hide or destroy evidence but because of the records retention policy.

But once litigation arises, a litigation hold bars the destruction of records potentially relevant to the issues in the case. It would violate the Federal Rules of Civil Procedure for an employer to destroy ESI that was potentially discoverable after the employer became aware of the threat of litigation, Shea noted.

It is critically important to have a process in place to get a litigation hold set quickly so there are no issues about the employer destroying information that should not have been destroyed, McGinnis said.

Key Players
HR or an in-house attorney should coordinate the entire e-discovery effort, according to Shea.

HR must be in close contact with counsel to ensure that it understands what types of information may be relevant and subject to preservation and production, Panich remarked. HR also must coordinate with individuals whose decisions or actions are being challenged to ensure that information in their control is preserved.

And HR should work with information technology for a variety of reasons. HR should gain an understanding of what potentially relevant information is stored in company systems so that it can alert the managers of those systems about preservation requirements, she said. HR also needs to work with IT to devise automated solutions to preservation, such as capturing particular employees’ e-mail automatically without depending on the employee to identify and take action to save relevant e-mail. IT also is integral to the process of identifying and addressing features built into many systems that result in the automatic deletion of relevant information, she noted. Under the Federal Rules of Civil Procedure, employers are expected to take reasonable, good-faith steps to disable such features when there is a litigation hold.

Depending on the nature of the litigation, usually it will be necessary to involve someone from the substantive area from which the litigation arises, Shea noted. For example, if the plaintiff is a sales representative, the e-discovery team should include at least one member of sales management. This person can describe the various types of ESI that are available and interpret them for HR, the attorneys and IT.

Employees should be notified about the records retention policy and understand that failure to preserve relevant records can result in substantial liability for the company, she said.

It is better to have no retention policy than to have a policy that is not followed, Panich cautioned. Early in almost every significant case, there is a request to produce the employer’s records retention policy. It provides a road map as to what should be discoverable. “From there, spoliation claims are only a few steps away if the employer fails to have the referenced information for the requisite period. Nothing detours a case and builds costs like spoliation claims,” she remarked.


Email Storage Growth – Perspective for the Information Age

Bill Tolson records retention , , ,

From a blog by Bob Spurzem at the Information Management site

One of the more interesting aspects of email is how us users have adopted it in this new age of information.

If you are like me and have been actively using email at work for 15+ years, you remember the days when 10MB was considered a standard mailbox size. We could send 10-20 emails per day and were able to save email for months. Today, receiving 100-150 new email per day is very common. A 10MB mailbox would fill in a single day at those rates.

What is interesting is that email growth, as measured both in number of email per day and average size of email, appears to have plateaued. (Thank God!) One cause for this is the growth in alternative methods of communication that offer similar reliability and ease of use. Examples include cell phones (both traditional and smart) with full keypads, enterprise applications like SalesForce.com that include email and new social networking portals like Twitter, LinkedIn and Facebook. So when we examine the total use of email-like communication, I would wager to say that the total number of daily communication messages is still increasing, just across different types of technology.

The challenge to organizations is how to harness this growth. Where in the past, email storage was always treated as a scarce resource; new email providers like Google and Yahoo embrace the modern view of keep it all. Gmail was the first to offer multi-GB-sized mailboxes, and others quickly followed. A seven GB mailbox comes free with Google Gmail and, for a small fee of $5/year, you can have 20GB of capacity.

Microsoft is responding to user demand for capacity with its flagship email application – Exchange 2010. Based on many improvements to Exchange 2010, Microsoft claims support for 10GB mailboxes, and it offers simultaneous mailbox support in its cloud offering, Office 365. It will be interesting to see if exchange administrators shake their hardened attitudes toward keeping Exchange mailbox sizes small and embrace larger mailbox capacity.

In my next blog, I will take a look at how companies can improve business processes by saving email versus deleting it.

The Pension Committee Ruling – Revisited

Bill Tolson eDiscovery , , , , ,

Conclusion from Law.com article: Pension Committee – One Year Later

If the trend exemplified by Victor Stanley II and Rimkus is any indication, Pension Committee‘s bright-line rule that failing to issue a written legal hold constitutes per se gross negligence may not be widely accepted by other judges. To the contrary, the consensus view appears to be moving away from per se rules governing the conduct of e-discovery in favor of case-by-case analysis.

It should, nonetheless, be stressed that the issuance of a written legal hold is good practice and in many cases the failure to do so may constitute negligence or even gross negligence. Litigants should not interpret judicial embrace of the concepts of reasonableness and proportionality as a signal that doing less to preserve documents is now acceptable business practice.

The entire article can be seen here:

Spoliation does not require purposeful destruction of evidence

Bill Tolson eDiscovery , , , , , , ,

In a recent decision, Rosenthal Collins Group, LLC v. Trading Techs. Int’l, No. 05 C 4088, 2011 WL 722467 (N.D. Ill. Feb. 23, 2011), the court ordered the plaintiff to pay $1,000,000 in monetary sanctions, and ordered plaintiff’s counsel to pay “the costs and attorneys fees incurred in litigating this motion” because the plaintiff’s agent was found (and admitted) to have modified metadata related to relevant source code and had wiped several relevant disks and devices prior to their production. The court found plaintiff’s counsel had participated in “presenting misleading, false information, materially altered evidence and willful non-compliance with the Court’s orders.”

The plaintiff’s counsel did not dispute any of the allegations of misconduct” but instead sought to distance itself from “its own agent, employed for the purposes of pursuing this litigation” and disavowed any “actual knowledge” of wrongdoing. RCG’s counsel similarly disavowed “any personal wrongdoing and any actual knowledge of any wrongdoing, while unequivocally distancing themselves and RCG from [the consultant].”

The court stated; “The imposition of sanctions, however, does not require actual knowledge, but gross negligence or recklessness, i.e., RCG knew or should have known. See Porche v. Oden, 2009 WL 500622, at *7 (N.D.Ill. Feb.27, 2009). Even if this Court were to accept that RCG had no actual knowledge of the evidence destruction and modification that occurred, RCG’s conduct still warrants the imposition of a default judgment. See, e.g., Grochicinski v. Schlossberg, 402 B.R. 825, 842-43 (N.D.Ill.2009) (finding bad faith sufficient to impose default judgment because “[e]ven if Schlossberg did not destroy the files himself, the bankruptcy court found that at the very least Schlossberg acted in ‘reckless disregard’ of his discovery obligations”).

The court went on to reason that “it strains credulity that RCG now claims it had no knowledge of anything [its consultant] was doing and he was just a ‘non-party fact witness’ for whom it bears no responsibility.” The court found that the record reflected that the consultant was “under RCG’s control and was its paid agent,” as evidenced by a myriad of facts laid out by the court.

Accordingly, finding that plaintiff and its counsel “acted in bad faith and with willful disregard for the rules of discovery and this Court’s orders,” the court entered default judgment in favor of defendant and dismissed the claims and defenses of plaintiff. The court also ordered plaintiff to pay sanctions in the amount of $1,000,000 and, for their part in presenting “misleading, false information, materially altered evidence, and willful non-compliance with the Court’s orders,” ordered counsel to “pay the costs and fees incurred in litigating this motion.”

The managing attorneys on either side are responsible to the court to insure the discovery process was done correctly and in the timeframe expected by the court. The argument by RCG that they just didn’t know was seen by the Judge as not meeting their responsibilities. A spoliation finding does not need to be purposeful, grossly negligent will also do.

Metadata should be included in federal FOIA response

Bill Tolson eDiscovery , , , , , , , , , ,

A recent federal court decision, Nat. Day Laborer Org. Network v. United States Immigration and Customs Enforcement Agency, 2011 WL 381625 (S.D.N.Y. Feb. 7, 2011), has set the expectation that certain metadata is considered “responsive” in federal FOIA requests.

From ediscoverylaw.com:

In this Freedom of Information Act (“FOIA”) action, a dispute arose regarding the proper format of production and, in particular, whether metadata was subject to production pursuant to plaintiffs’ FOIA requests. Following substantial analysis of the issue, the court held that “certain metadata is an integral or intrinsic part of an electronic record” and, as such, is “‘readily reproducible’ in the FOIA context.” (FOIA provides that “in making any record available to a person under this paragraph, an agency shall provide the record in any form or format requested by the person if the record is readily reproducible by the agency in that form or format.”)

The court went on to describe the minimum metadata fields which should be considered reproducible and therefore should accompany any production electronically stored information (ESI) by the government:

1. Identifier: A unique production identifier (“UPI”) of the item.
2. File Name: The original name of the item or file when collected from the source custodian or system.
3. Custodian: The name of the custodian or source system from which the item was collected.
4. Source Device: The device from which the item was collected.
5. Source Path: The file path from the location from which the item was collected.
6. Production Path: The file path to the item produced from the production media.
7. Modified Date: The last modified date of the item when collected from the source custodian or system.
8. Modified Time: The last modified time of the item when collected from the source custodian or system.
9. Time Offset Value: The universal time offset of the item’s modified date and time based on the source system’s time zone and daylight savings time settings.

Why is this metadata decision important? Because it now puts a requirement on federal government agencies that they should be capturing and storing their ESI is ways that first capture the above noted ESI and second, insure that metadata is not inadvertently modified, for example when it is reviewed to determine its responsiveness to the FOIA request.

Federal government agencies deal with huge amounts of ESI on a daily basis and should have archiving systems already in place to insure ESI is captured and managed correctly per the National Archives and Records Administration (NARA) regulations. It now seems they need to relook at their ESI archiving systems to insure they can meet this new metadata requirement.