Beware digital do's, don'ts

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Now that your company has been sued, what are you going to do? Notify your defense insurance liability carrier? Call your attorney? Shift your company's assets to Swiss bank accounts? Skip the country? |ret||ret||tab|

After considering all these possibilities, you're ready to do battle, right? Maybe not. If you do not send immediate notice to your employees that the company has a duty to retain digital data relevant to the lawsuit, sanctions for destruction of evidence may be in the company's future. |ret||ret||tab|

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Predicament|ret||ret||tab|

Plaintiffs' attorneys are becoming increasingly savvy about digital data, and unless a company has a policy for retention of digital data, it could find itself in a discovery predicament regardless of how good its defense might be. |ret||ret||tab|

In a case where the defense is rock solid, the last thing the company wants to do is pay a settlement simply because it failed to retain relevant digital data and thus is facing possible sanctions.|ret||ret||tab|

For instance, relevant e-mails might exist when a company is served with a lawsuit. Those e-mails might be in employee in-boxes, sent items boxes, or even delete boxes. |ret||ret||tab|

If employees do not know about the duty to retain relevant information, they might purge these e-mails from their hard drives or network forever. |ret||ret||tab|

If the plaintiff has a copy of one of those purged e-mails, the plaintiff can show it to the court and argue that the company's failure to produce the e-mail in discovery shows that it destroyed relevant evidence after having been on notice of the duty to retain.|ret||ret||tab|

The company, of course, would argue that destruction of the e-mail was inadvertent, and that it would be unfair to impose sanctions based on an accident. |ret||ret||tab|

Courts, however, have awarded sanctions for destruction of evidence even if inadvertent.|ret||ret||tab|

So, upon being sued, the company notifies employees of the duty to retain relevant e-mails. |ret||ret||tab|

Does the company back up its e-mails? If so, it needs to notify the entity responsible for those backups that relevant e-mail backups must be preserved.|ret||ret||tab|

Many companies back up not only e-mail, but also their servers generally. It is absolutely critical that a company's attorneys be familiar with these backup procedures.|ret||ret||tab|

Oftentimes, backup tapes are rotated. In other words, once a set of backup tapes becomes full, they are overwritten with new information. If such an overwrite occurs after a company has been sued, the company could be in deep digital you-know-what.|ret||ret||tab|

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Overwrite|ret||ret||tab|

An overwrite also might not cover an entire tape. If it does not, then even after an overwrite, old data might still exist at the ends of the tapes. |ret||ret||tab|

Does the company do complete or partial overwrites? If that is not known, it should be determined.|ret||ret||tab|

One final note: Some courts have held that the duty to retain might arise even before a lawsuit is filed if the company knows that the lawsuit is imminent. |ret||ret||tab|

As soon as a company is aware that it might be sued, the prudent approach is to call a lawyer who specializes in digital discovery issues to walk it through the steps that will protect it from sanctions in the future. |ret||ret||tab|

(The preceding article, by Blaine Kimrey, chairman of the Missouri Bar Media Law Committee and a media, Internet, entertainment and intellectual property attorney at Lathrop & Gage LC in Kansas City, was provided by the Missouri Bar Association.)[[In-content Ad]]