Preservation: Legal Requirements
While this document is not intended to be used as legal advice, a brief discussion of the duty to preserve relevant and material evidence is appropriate. The duty to preserve evidence to be used in a contested matter, such as a litigation or governmental investigation, certainly pre-dates electronically stored information and the resultant process of electronic discovery. For example, if faulty wiring was the cause of an industrial accident and shreds of the wiring are found by employees of the company who owned the facility, the shreds would definitely be useful to a trier of fact at some point, thus the company has an affirmative duty to preserve those fragments--no matter how advantageous it may be for them to discard them. Many early philosophical discussions debated the duty to preserve and produce evidence that is detrimental to one's legal position, and many pointed out that this approach was somewhat inconsistent with the adversarial process. That being said, from a legal standpoint the duty to preserve evidence that may be relevant and material to a future legal proceeding (or may help an adverse party find other evidence it may need) is clearly established, in principle and is outside the purview of this piece.
With the advent of the information age, the "frayed wire" evidence referred to above can be represented today by "smoking gun emails" and other electronically stored business records. However, the applicability of the analogy ends there. For example, there are no auto-delete routines in place that automatically will find and destroy the wire shavings unless steps are taken to prevent them from doing so. Therefore, there are considerations peculiar to the preservation of electronically stored information. A detailed discussion of the various considerations one must take into account regarding the preservation of relevant electronically stored information is the topic covered below.
There exists a variety of applicable rules, regulations and case law regarding the duty to preserve electronically stored information. In most circumstances, there are several consequences for failing to do so, and in some cases the case law, rules and regulations can combine to result in a particular outcome.
Those organizations that are subject to regulation by various governmental agencies charged with oversight of specific industries often have more onerous preservation obligations, due to the nature of their industry. For example, those companies who have chosen to avail themselves of being licensed brokers of the sale and exchange of securities must comply with record retention requirements of SEC 17a-3 and SEC 17a-4 (requiring all communications with clients to be maintained for periods of 3 and 6 years). This differs a bit from our frayed wire analogy, as this is a proactive framework prescribed by a regulation and not related specifically to certain transactions and occurrences. For more discussion of proactive document retention, see the Records Management Node.
Rules of Civil Procedure
An authority much more directly on point with regard to this section covering "Preservation" is certainly the rules of civil procedure applicable in various jurisdictions and the cases that interpret the same. While each state, and some local jurisdictions, has promulgated its own rules, this section contemplates the Federal Rules of Civil Procedure (FRCP) specifically, and addresses the current amendments awaiting final action. For example, FRCP 26(a) and FRCP 26(b) set forth the guidelines for producing, both spontaneously and upon request relevant and material evidence. Inherent in the reasoning behind these rules is the requirement that in order to produce a thing, one must first have preserved it. For those parties who are not inclined to appreciate this inherent reasoning, there are other rules (and corresponding sanctions) designed to enhance this understanding.
FRCP 37 details various procedures that lead up to the levying of sanctions by a court on a party for failing to comply with discovery obligations, but a detailed discussion of the duty to preserve is notably lacking. It is another source of law that more directly asserts this duty.
For discussion of the "safe harbor" provisions of a proposed amendment to FRCP 37, and an analysis of numerous federal sanction request cases as related to the advisability of such amendment, see S. Scheindlin and K. Wangkeo, eDiscovery Sanctions in the 21st Century, 11 Mich. TELECOMM. TECH. L. REV. 71 (2004), http://www.mttlr.org/voleleven/scheindlin.pdf.
Common Law (Case Law)
Written judicial opinions most clearly define the duty to preserve that attaches to virtually every litigant, potential litigant and even third party witness to a lawsuit. Unfortunately, it is also the most difficult source to correctly and completely interpret, and ultimately leads to a somewhat subjective determination as to the various details associated with one's duty to preserve. See, e.g., Stevenson v. Union Pac. R.R. Co., 354 F.3d 739 (8th Cir. 2004) and Morris v. Union Pac. R.R. Co., 373 F.3d 897 (8th Cir. 2004) for detailed discussion of the subjective elements associated with a determination of when the preservation duty attaches and to what material the duty may attach. For this reason, the authors of this document must abstain from providing much in the way of suggesting tactical guidance in this area. For more discussion of the duty to preserve, and the potential consequences for breach of that duty, see Lisa M. Arent, Robert D. Brownstone and William A. Fenwick, EDiscovery: Preserving, Requesting & Producing Electronic Information, 19 Santa Clara Computer & High Tech L.J. 131, 133-143 (2002) (co-author), as updated December, 2003, http://www.fenwick.com/docstore/publications/litigation/ediscovery.pdf.
When Does the Duty to Preserve Arise
While the authors cannot assist in interpreting the specifics of the legal duty to preserve, it is appropriate to frame the issues. Perhaps the most crucial issue, and most difficult determination regarding one's duty to preserve is identifying the temporal occurrence that signifies when the duty to preserve attaches. A general axiom that exemplifies most common law standards is that the duty to preserve electronically stored information (or any potentially relevant evidence) attaches when a party reasonably foresees that the information may be relevant to future litigation. Zubulake IV, 220 FRD 216 (SDNY 2003).
It is similarly accepted that destruction of documents (evidence) during the routine implementation of a document retention policy in the usual course of business is also acceptable. Herein lies the difficulty in determining an action that is not "in the usual course of business" - meaning that it is designed to defeat the duty to preserve, and that which is part of a document retention policy that is valid and benevolent. See Rambus v. Infineon Technologies AG, 220 F.R.D. 264 (E.D. Va. 2004). Another interesting twist in the document destruction/retention policy cases is the reversal by the U.S. Supreme Court of the conviction of Arthur Andersen & Co. because the jury instruction on the federal obstruction of justice statute failed to adequately articulate the culpable mens rea element, in measuring the conduct of Andersen employees as they followed the firm's document destruction policy following Enron's collapse. U.S. v. Andersen, 544 U.S. 696, 125 S. Ct. 2129 (2005), http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=544&invol=696.
ABA Civil Discovery Standards
The American Bar Association has also published standards that can aid in become educated as to the legal obligations present in this arena. Standards 29 and 31 are particularly relevant to this issue.
Standard 29 sets forth detailed checklists of both the various types of electronic data to be considered for preservation or production, as well as the range of platforms and places such data may be found. It also urges clear statements by requesting parties of whether electronic data will be sought, as well as specifications of both the forms of production and formats in which the requesting parties wish to receive electronic data. The commentary to Standard 29 emphasizes, however, that these are not iron-clad codifications of items which will fall within the duty to preserve for every case. Rather, they are intended to serve as checklists of those areas counsel needs to consider and question in guiding its clients regarding the scope of electronic discovery.
Standard 31 focuses on effective use of discovery conferences, mandated by the Federal Rules and some state courts, to deal with electronic discovery issues. Included in the suggested agenda for such conferences are discussions of data retention policies, preservation actions taken both before and after the filing of the claim, and identification of the people, time periods, entities, places and platforms which will define the scope of electronic discovery. An important factor to remember is, to the extent the parties can agree on specifics in defining these categories during "meet and confer" negotiations, the scope of the client's duty to preserve can become more certain, and often reduced.
The Sedona Principles
Another persuasive authority that provides some guidance on this issue is The Sedona Principles. Principle 1 articulates the discoverability of electronic data and documents, and the need for organizations to preserve those which can reasonably anticipated to be relevant to litigation., Principle 3 deals with the need for parties to confer early in the discovery process and try to agree on issues of scope and respective rights and responsibilities pertaining to preservation and production of electronic data and documents. Published by The Sedona Conference, these principles are often cited by courts as persuasive, as in the recent case of Williams v. Sprint United Management, 230 F.R.D. 640 (D. Kan. 2005), which discusses metadata.
"The Other Side"
In essence, communication between parties on opposite sides of a dispute can be a persuasive "authority" in a determination of a duty to preserve electronic evidence. The revised FRCP place a great deal of importance in "meet and confer" requirements - requirements that are designed to cause the two adverse parties to work together in determining many attributes of the electronic discovery process as it pertains to a given case. For example, if a plaintiff in a product liability suit has already decided that it will not be pursuing a "defective design" strategy, but will instead pursue an alternate strategy, that plaintiff might agree that certain electronically stored information need not be preserved, even though the legal standards might typically suggest it should be. Of course, it is ultimately the court that can approve or reject any proposed case management order or stipulation as to such an arrangement, but the language in the revised FRCP and in ABA Civil Discovery Standard 31 would suggest that a great deal of weight will be placed in an agreement made between the two parties.
Documents Potentially Subject to Preservation Obligations
Anything and everything. It is the recommendation of this body that while a "laundry list" of types of documents (e-mail, word processing documents, etc.) could be helpful in determining what types of documents must be preserved, it could also be dangerous. Because technology changes so quickly, it is entirely possible that any list that is meant to be exhaustive could easily become outdated in a matter of weeks. Rather, it might be best to focus on the content of the electronically stored information instead. For a list of the "usual suspects" or typical types of electronic documents that must be preserved, see ABA Civil Discovery Standard 29.
Witnesses may also be subject to preservation orders. It is within the court's discretion to bind non-parties to various forms of the duty to preserve, when it is determined by the court that the necessity is present. We have included some considerations of non-party preservation below:
These guidelines set forth checklist items to be included in Preservation Notices issued by a requesting party in connection with a litigation matter and government investigation, when certain documents or data which may be needed are not within the requesting party's possession, custody or control. A Preservation Notice issued to a non-party will generally precede the issuance of a subpoena, which makes formal legal demand for the production of the needed items.
The primary purpose of the Preservation Notice issued to a non-party is, however, essentially the same as that for Preservation Notices issued to a party's own employees or agents: to place persons who are in possession, custody or control of potentially relevant documents or data on early alert for the need to discontinue routine document destruction practices which might otherwise permit evidence to be destroyed, and to place a hold on relevant material within their control.
Elements of a Preservation Notice to a Non-Party
The Non-Party Preservation Notice should be issued by, or on behalf of, the requesting party's general counsel, or another individual with sufficient authority within the company's management or legal department to command the attention of the recipient. It should contain the following:
- A statement of the name, venue and basic elements of the litigation or investigation, with sufficient specificity to provide the non-party recipient an adequate understanding of its subject matter, scope, and relevant time period.
- A description of the legal or business relationship between the requesting party and the non-party recipient, which has created the need for the non-party to take steps to preserve relevant material. If the relationship between the parties is such that the needed relevant material in the non-party's custody is, in reality, owned or within the control of the requesting party, this description should so state. To the extent known by the requesting party, this relationship description should include identification of the names, titles and locations of those persons within the non-party recipient's organization who are most likely to have been involved with the needed relevant material.
- A copy of or reference to any contract or agreement that was in effect during the relevant time period.
- Identification of the range of different types of material to be preserved,
- Paper and electronic documents
- Databases and other data
- Audio Files
- Video Files
- Photographs or image files
- Physical samples
- A statement that the non-party recipient should suspend its normal retention schedule and disposition policies for all relevant material until further written notice, and that the non-party recipient should not delete or destroy any relevant material, regardless of routine or automated practices in effect prior to the receipt of the Preservation Notice.
- A request that the non-party recipient distribute the Preservation Notice to all persons within their organization, or within the control of their organization, who are known or suspected to have relevant material in their possession, custody or control.
- A request that the non-party recipient track and obtain acknowledgment from all persons within their organization, or within the control of their organization, to whom the Preservation Notice was distributed, that such persons received and understood the Preservation Notice, and that such persons identify and categorize any relevant material within their possession, custody or control. Such request should also include an inquiry as to whether such persons know of others within the organization who may have relevant material, who should also receive a copy of the Preservation Notice.
- A request that the non-party recipient direct any questions about the subject matter or scope of the Preservation Notice to a designated legal representative of the requesting party.
- A request that the non-party recipient, and any of its employees or agents having possession, custody or control of relevant material, hold such material in suspense and safe from modification or destruction, until they are contacted by a legal representative of their own organization (or, of the requesting party's organization, if appropriate) to provide guidance on how such relevant material will be collected.
- A request that the non-party recipient periodically re-issue and refresh the Preservation Notice distributed to persons within their organization, or within the control of their organization, to remind persons having relevant material that the Preservation Notice is still in effect, until they are advised to the contrary.
- Written acknowledgement of receipt of notice; confirmation of intent to comply with preservation request.