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Activating Your Information Management Shield

We talk with companies every day about how they can be better at managing their enterprise information.  Good policies, with technology to enable and enforce them, can help insure that records and compliance information are retained for the right amount of time, while also enabling the deletion of stale and useless information which has outlived its retention period.  Good information management processes insure that protected information is stored in the right place, operational efficiencies are enhanced by focusing on useful information and the e-Discovery process is easier and more efficient.

Many organizations know that they should implement information management initiatives, but often have difficulty in providing concrete reasons to the business.  If your organization is looking for more reasons why good information management is valuable, two recent cases provide some great reasons:

  • If you have an information governance policy, it may help you to defeat a claim for sanctions even if data has been deleted; and
  • If you don’t have an information governance policy, and you delete data that was subject to compliance requirements, the lack of a policy can help to establish the bad faith necessary to award sanctions.

Diligence As A Shield

In Danny Lynn Electrical & Plumbing, LLC v. Veolia Es Solid Waste Southeast, Inc., 2012 U.S. Dist. LEXIS 62510 (M.D. Ala. May 4, 2012), the plaintiff requested sanctions for the defendants’ alleged failure to properly implement a litigation hold.  Specifically, the plaintiff claimed that defendants had deleted nine email accounts and kept in place an auto-delete function which removed email from the trash after 10 days.  They also alleged that the defendants improperly sent notifications to employees on legal hold that they should continue to delete email messages to comply with email account size limitations.

The court found it significant that the defendants had deployed an email archive to capture all of its email messages.  (Interestingly, the court did not discuss or make any findings about how the archive had been setup, configured or managed).  In addition, in finding that there was no bad faith (a requirement in the 11th Circuit), the court found it important that defendants “began using a software system that archives all emails”:

The court’s impression is that the defendants have expended great effort to insure that the plaintiffs receive information from both their live and archived email system by providing document review technology and allowing access to its database.  All of these factors added up to the court finding that no sanctions were warranted.

Lack of Diligence Can Be A Final Straw

The flip side to the protection offered by information management can be found in FDIC v. Malik, 2012 U.S. Dist. LEXIS 41178 (E.D.N.Y. Mar. 26, 2012) where the court also considered a spoliation motion for the deletion of emails.  The email messages related to a law firm’s prior representation of a mortgage company.

In determining whether bad faith was present to enable sanctions, the court noted that the subject email messages were required to have been preserved not initially for litigation hold, but under compliance requirements — professional responsibility and ethical rules.  The court found that retention under the compliance requirement was especially important to this case:

A regulation requiring retention of certain documents can establish the preservation obligation necessary for an adverse inference instruction where the party seeking the instruction is ‘a member of the general class of persons that the regulatory agency sought to protect in promulgating the rule.  The court held off on a final decision pending an evidentiary hearing.

Being Proactive With Information Management

We all know that litigation holds are difficult to implement and are almost never perfect.  Sometimes something bad actually does occur– a custodian is inadvertently omitted, a handful of emails are lost.  But more often, nothing bad happens at all.  Still, even in those cases it can be difficult (and time-consuming and expensive) to fight off the other side’s claim that something “must have been lost.”  A good information management policy, with tools and education to enable it, can go a long way towards showing good faith and protecting your organization from harm.

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