Thursday, February 18, 2010

The Nose Test

We were drafting a legal hold policy for a client’s law department when the client asked when it was necessary to issue a legal hold notice to preserve information. My answer usually involves an application of the nose test—which is “the first smell of trouble”. But what is trouble? Great question. Let me consult my nose. My nose says, “it might involve getting into trouble with a regulator or court.” OK, got it. But that is really way too simple. No doubt failure to provide employees with timely notice of the need to preserve information for a pending, threatened or imminent lawsuit is essential. In a recent court case a judge made the following statement “…plaintiffs failed to timely institute written litigation holds and engaged in careless and indifferent collection efforts after the duty to preserve arose. As a result, there can be little doubt that some documents were lost or destroyed.” But, making a determination of when to do it is not simple and has serious implications.
Say I’m an insurance company, do I need to issue a legal hold notice every time I get a letter from an annoyed insurance policy owner. Oh. If I issue early—at the FIRST smell of trouble, I might over-preserve. How about preserving after we get served with a lawsuit? Well, that may be too late especially if a lot happens before the lawsuit. What if we get a nasty gram from a lawyer demanding the matter be addressed? How about a letter to mediate? How about a written complaint filed with the state department of insurance? How about a notice by the state that it intends to commence an investigation? You get the idea, before a lawsuit is filed, much can happen that should commence the legal hold notice process. So what to do. We deal with it all the time and if you want our help, please call early and often. Clearly earlier in time is safer. So a threatened lawsuit is earlier in time than a filed one but it has implications. Bottom line it’s a lawyers question and don’t let them delegate to you IT or RIM.

Wednesday, February 10, 2010

Case Law and Text Messages

A client recently asked me what is real life meaning of ESI (electronically stored information, the term used by the Federal Rules Of Evidence ”FRE”). In the old days I used to say “if it was relevant and available even if it was on the bottom on my shoe, cough it up”. Well, that may have been a bit too cute, but the point remains—evidence that is even potentially relevant needs to preserved and produced to the other side in litigation, even if it hurts your legal position. Only a little has changed with the amendments to the FRE. There are exceptions—you may not have to produce “inaccessible data”. But in the end, you may have to do discovery on e-stuff that you normally don’t think about. There are cases where even temporary cache files had to be produced. There is now case law that covers text messages.
In Southeastern Mechanical Services, Inc. v. Brody (M.D. Fla. Aug. 31, 2009) employees had to produce text messages from devices owned by the company and personally owned devices. Because the employees apparently “cleaned” the devices in this case, it turned into a destruction of evidence case. Beware, ESI could be just about anything. Plan, Prepare, Preserve and Produce.

Wednesday, February 3, 2010

To Preserve or Not To Preserve? That is the question

Hey IT-don’t accept the quiet delegation by the lawyers of determining relevance in a lawsuit. Err-Maybe overly broad(preserve everything) legal holds are not good. Err-Hey lawyer do your job and tell me, IT, what to preserve based on the facts of YOUR case. Lawyers (some of the lazy or fearful ones) like to lock down the whole place when they learn of a lawsuit. Keep everything just in case is their battle cry. Well its bad guidance most of the time, unless really required. Stopping the inner workings of the IT shop to preserve everything, creates a whole host of new issues. So don’t bite until you make the lawyers show you why it’s needed. Case in point. The Federal Court-7th Circuit are developing principles to better manage e-discovery. The E-Discovery Committee’s stated goals are “the fostering of a better balance for the ‘just, speedy and inexpensive’ determination of cases…”

Under proposed Principle 2.04 (Scope of Preservation)
(a) Every party to litigation and its counsel are responsible for taking reasonable and proportionate steps to preserve relevant and discoverable ESI within its possession, custody or control. Determining which steps are reasonable and proportionate in particular litigation is a fact specific inquiry that will vary from case to case. The parties and counsel should address preservation issues at the outset of a case, and should continue to address them as the case progresses and their understanding of the issues and the facts improves.

Whether or not it becomes the “rule” or not, it’s good guidance to you. The courts don’t require everything needs to be preserved, so don’t do it just because.