"Spoliation" is a Nasty Word: Preserving materials before they are gone.
Whenever you start an internal investigation today, you need to think about
company document retention and destruction policies, and about what documents
you as investigating attorney will have to gather and save. And
"documents" means items stored electronically !!! I repeat:
"documents" means items stored electronically !!!
Whenever push comes to shove and either an internal investigation or external
litigation looms, you are going to have to consider what you have in paper or
electronic format. At a minimum you will have to consider it at the start of any
litigation. Federal Rule of Civil Procedure 26(a)(1)(B) requires a party to
provide to other parties "a copy of, or a description by category and
location of, all documents, data compilations, and tangible things that are in
the possession, custody, or control of the party and the disclosing party may
use to support its claims or defenses . . . "
Federal Rule of Civil Procedure 34(a) states: "(a) Scope. Any party may
serve on any other party a request (1) to produce . . . to inspect and copy, any
designated documents . . . and other data compilations from which information
can be obtained . . . or to inspect and copy, test, or sample any tangible
things which constitute or contain matters within the scope of Rule 26(b). . .;
or (2) to permit entry upon designated land or other property . . . inspection .
. . testing, or sampling the property or any designated object or operation
thereon, within the scope of Rule 26(b). Some courts have used this rule to
authorize the "mirroring of hard drives" or searches on a party's
computer systems. If the adversary in your investigation may later search your
computer system, should you do it first? Probably.
The courts have held that if litigation was reasonably anticipated that
preservation of electronic information should begin immediately. If destruction
of this data will impact your investigation or a later lawsuit, then you must
take steps to preserve any and all electronic and paper information relating to
the matter in issue. Recall the ethics and legal problems faced in Enron when
house counsel reminded people of the records retention/destruction policy after
Enron problems began, and thereafter records were shredded "in accordance
with the established records retention policy." If you are doing an
in-house investigation, you will be hard put to excuse destruction of records
you did look at, or could have looked at, on the excuse that you did not know
that it was reasonable to expect litigation. Therefore, impress upon your client
that your client has a duty to preserve both paper and electronic information
that is relevant to your in-house investigation.
One of the first issues that you should consider in regard to existing
information is the possible routine destruction, deletion or alteration of
information. Most businesses have document retention policies that routinely
destroy information after certain period of time. Some businesses allow
employees to erase at any time the e-mails they send or receive from their
desktop computer. Do not forget to ask about the company actual backup and
retention periods (they may be different than the legal checklist you gave them
a year ago and thought they were following)
Business communications include a lot of electronic transmissions. Today
probably most communications are done electronically. Most corporate accounting
data underlying the final financial statements is stored only electronically. In
addition to e-mail and corporate accounting records, think about items such as:
word processing copies of documents, calendaring systems (on the employee's
computer and handheld PDA), digital photographs, accounting audit trail records
(not the same as the final financial data), telephone records, bank records,
computer histories of Internet activity, "instant messaging" records.
When you start an internal investigation, considering the location of
electronic data is wise. Data may be stored on devices beyond the company
desktop computers or network servers. Think about:
fax machines (they store information about the messages and sometimes the
messages themselves), Palm Pilots (in addition to calendars and addresses and
memos, some have e-mails on them). company laptops (who has them?) ZIP disks,
portable hard drives, and other storage media the secretaries and others use.
backup tapes (both on premises and off premises), and your employee's
non-business home computers!
You can have an expert create a mirror image of computer hard drives. See
Playboy Enterprises, Inc. v. Teri Welles, 60 F. Supp. (S.D. Cal. 1999)(court
ordered an expert to create a "mirror image" of the opposing parties
hard drives to prevent any further destruction of electronic data.)
"Metadata" or "hidden data" may be important in your
investigation. For example, in e-mails metadata can show you if someone was
blind copied on a particular e-mail. This metadata information is generally not
available when the electronic information is converted to paper. Therefore,
consider the need to obtain and retain the original electronic files, even if
the electronic data is reduced to paper printouts.
Requests from adversaries to preserve your material can be done even prior to
the filing of their case. Such a requests puts you on notice that you have to
retain this information. In the event you fail to do so the courts have been
aggressive in using their authority to fine the business client, impose costs on
the opposing party, allow for a spoliation instruction, or enter a default
judgment against the offending party. A court has the authority to impose
sanctions for the destruction of evidence. Sanctions can include adverse
presumptions, various spoliation instructions, costs and punitive fines against
counsel or the party, and default judgment against the party.
It is now common to be served with a request for discovery of electronic
information or have to provide such information under mandatory disclosure
rules. As an attorney you have to an obligation to investigate your client
information management systems to locate information discoverable pursuant to
discovery rules. This does not mean that you simply ask your client a few
questions and receive a few relevant files relying upon his understanding of his
computer systems and files to provide the relevant information. See Linnen v.
A.H. Robbins Co., 1999 Mass. Super. LEXIS 240. (attorneys themselves faced
sanctions for failing to completely investigate their client's stored computer
backup tapes, relying on the in-use computer files, while representing to the
court that all relevant computer files had been produced.)
Initially, only focus on the specific electronic information that you are
seeking. For example, in a sexual harassment lawsuit any e-mail between the
perpetrator and the victim will be of substantial importance. Also, any other
e-mail that the perpetrator may have sent to other victims may be important to
establish past improper acts.
But to know what electronic documents exist, you must go beyond the specific
electronic information you first think of seeking. Brainstorm the possible
electronic information available. Consult with your company's information
technology managers, experts, or others who will be able to explain to you the
different electronic information formats and locations where case information
may be located, application software and computer utilities that the company
uses, and computer data access information such as names, logons, passwords and
information about any encryption programs.
Why do we say brainstorm with your company's information tech expert? The
answers is: because there is much information that you may not know about, that
he/she might suggest. For example: did your know that WordPerfect and Microsoft
Word allow viewing some prior versions and edits of word processing documents? A
secretary may be routinely using the Word feature that saves a
"snapshot" of the document each time anyone closes the document after
making changes. All versions are stored within one document. Word displays only
the current version by default. But you can view any of the previous versions .
Moreover, for each version in the document, Word records the date and time the
version was saved and the computer ID name of the person making the changes.
Some secretaries think it is a great feature, because it allows a quick recovery
of material mistakenly edited out two versions ago. If the secretary is using
this Word feature and you tell the court previous versions of the document are
not available or there is no record who deleted certain paragraphs, you may be
mistaken.
As you review data, screen the information for privilege, and catalog it as
such. As a producing party to later discovery requests you have the same
objections against discovery of electronic files as you would have against
discovery of paper files. It is a lot easier to label or catalog paper and
electronic privileged documents in some way the first time you see them, rather
than having to do it later. Few things are worse than disclosing critical items
because you forgot to label or catalog them were privileged.
When you are faced with an internal investigation that involves electronic
documents, you will wish that someone had had the foresight to develop and
implement a document retention program calling for"
1. the routine destruction of unneeded electronic
documents, so you are not faced with sorting hundreds of thousands of documents,
and.
2, the routine segregation of privileged documents and
intellectual property documents so that you did not have to actually look at
hundreds of thousands of documents to see if there is anything in them that fall
in those categories.
One of the best reviews of the development of a
document retention program is by the Perkins Cole law firm.
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