In December, 2006, the federal court system enacted amendments to the Federal Rules of Civil Procedure (FRCP) regarding the handling of e-mail. This came as a result of hearing scores of cases that relied solely on email messages as evidence. In a nutshell, these amendments require any organization, no matter how small, with the potential for involvement in litigation in the US federal court system to 1) be able to produce emails requested as evidence, 2) be able to retrieve archived messages in a timely manner, 3) honor a “legal hold” by stopping any normal data purging processes until a legal case is settled, and 4) prove that the messages retrieved from archives are authentic or tamper-proof. Many states are enacting their own versions of these rules, so if you are a party to a lawsuit in any jurisdiction, you could be required to produce all electronic correspondence during the discovery process. Although companies can claim that the cost of discovery is burdensome, they must prove this to the judge. Once the company proves that the request is unreasonable, the judge can only order discovery for good cause. However, a judge can also instruct a jury that guilt can be presumed because the defendant could not produce the messages. According to an article by SearchStorage.com, “Even if a case never goes to trial, under the new rules all legal proceedings in civil cases begin with a preliminary "meet and confer session" to decide what electronically stored information should be produced for trial. At that meeting, each party must demonstrate that it has a systematic and enforced data retention policy”

According to Jill Holmquist of Schwartzkopf Schroff & Holmquist, LLP: "A U.S. appellate court recently upheld a decision by a district court that sanctioned the office that regulates Fannie Mae because it failed to produce all of the records it said it would by a given date—even though it had spent $6 million (9% of its annual budget) already producing records. This is an extreme example, but it does illustrate the fact that if you have records, you might have to produce them even if the cost is onerous."

Email and electronic document retention is often a low priority for small to medium size organizations, but not having a retention policy in place can become a costly burden, in the event of a wrongful termination suit or a if a product liability issue arises.

The Full Story-- by Jill Holmquist, Schwartzkopf Schroff & Holmquist, LLP

Civil litigation in federal courts is governed by the Federal Rules of Civil Procedure. The rules require parties to a lawsuit to disclose or “produce” records, including electronic records such as email, at the request of an opposing party when those records are “reasonably” accessible. Similarly, nonparties may be compelled to produce electronic records by subpoena.

The problem is what is reasonable is a gray area. Moreover, the party requesting the information can compel production even when records are not reasonably accessible by showing their need for the information outweighs the cost to the company providing it. In other words, if the other side convinces a judge that they really, really need the information, you might have to provide it regardless of the cost.

This month (January 2009), the U.S. Court of Appeals for the D.C. Circuit upheld a decision by a district court that sanctioned the Office of Federal Housing Enterprise Oversight (“OFHEO”, which regulates Fannie Mae and Freddie Mac) for failing to produce all of the records it said it would by a given date—even though OFHEO had spent $6 million (a whopping 9% of its annual budget) producing the information it already had. (In re Fannie Mae Securities Litigation _ F.3d _, U.S. App. LEXIS 9 (D.C. App. Jan. 6, 2009).)

This is an extreme example, but it does illustrate the fact that if you have records, you might have to produce them even if the cost is onerous. An efficient archival system could greatly reduce the cost of producing records.

A sound retention and destruction policy for emails and other electronic data, along with a good archiving system, can provide other benefits as well. A company can get in trouble for destroying records (remember Enron) when litigation is imminent or pending. But a company can also get in trouble when it fails to keep or cannot access information that it needs for to prove its own case—evidence needed to win. An archival system can provide access to critical proof when it’s most needed.

• Produce emails requested as evidence
• Retrieve archived emails in a timely manner
• Honor “legal hold”
• Prove that archived messages are tamper-proof

• Implementing a centralized email archive solution can reduce your costs and increase your chances if you are a defendant.
• An Email and document archive strategy can also be an important part of your company’s disaster recovery plan.
• A searchable email archive makes it easier to keep track of customer correspondence and employee HR communication.