Big Trouble in the Big Easy

Hurricane Katrina was the storm of the century down in the Ninth Ward, but in downtown New Orleans, a different kind of storm is brewing. Just in time for the February 24th Mardi Gras celebration, the party in City Hall has come to an abrupt halt, and the Krewe of Nagin has brought Trouble to River City. 

The city’s records retention policy and state public records law requires that all email and public records must be preserved. In fact, under the "enforcement" section of the Nagin administration's recommendations for preserving e-mail, the city's technology office suggested that "any employee found to have violated this policy might be subject to disciplinary action, up to and including termination of employment." Moreover, violations of the state law requiring the emails to be kept for three years is punishable by as long as five years in prison and fines up to $5,000.

Can you say “Uh-oh?” On February 19, 2009, Frank Donze reported in the New Orleans Times-Picayune, http://www.nola.com/news/index.ssf/2009/02/email_deletions_violate_nagins.html, that the Mayor’s office has disregarded its own policy, by deleting six months of the Mayor’s own emails, totaling over 1,500. The Nagin administration's only comment came from the city attorney, Penya Moses-Fields, who blamed the destruction of e-mail on "server storage and capacity problems, which have temporarily limited the city's capabilities to retain employee e-mails for any extended period of time."

Huh? Can’t Mayor Nagin or someone on his staff simply purchase a flash drive? A former city official, Tommy Milliner, compared the Nagin administration's assertion that lack of space is the reason for the deletions to saying, "you have files and then you leave them out in the rain because you think you can't afford a storage room to put them in." Milliner wasn’t the only one scratching his head; local technology and legal professionals were also puzzled by the argument that limited storage space was the underlying issue.

"Lack of storage is an easily solvable problem," said Stephen Segari, a senior developer at Carrollton Technology Partners, a New Orleans technology firm. "It's not an issue of money or time. If you say you don't have space, it's an excuse, not a reason." He also said that for approximately $100, he could install a 1-terabyte hard drive that is capable of storing more than 107 million typical e-mail messages. Similarly, Loyola professor Dane Ciolino said, "This mayor has often touted his administration as being very tech-savvy…and yet, what has happened in this case is inexcusable. The basic, fundamental thing you do is to make sure your data is secure and backed up."

The moral of the story is that data storage is cheap and easy. Make sure that your storage solution is adequate for all corporate records, including email.  Otherwise, you could face a Katrina sized flood of trouble when your records are examined more closely than a strand of mardi gras beads on Bourbon Street.

 

No One Escapes E-Discovery Obligations

Two e-discovery articles this week highlight a theme to remember:  no one escapes document retention and e-discovery obligations.

You think you can't lose.  The facts are on your side.  The law is on your side.  You have a slam-dunk motion for summary judgment.  Or three slam-dunk motions.  You can coast through until you prevail on the merits, right?  WRONG  Leonard Deutchman in the Pennsylvania Law Weekly looks at two of the more-famous e-discovery cases from 2008 - Qualcomm, Inc. v. Broadcom Corp. and Keithley v. The Homestore.com, Inc. - both of which demonstrate that even when you prevail on the merits, only a fool disregards her document retention and e-discovery obligations. 

In Qualcomm, the appellate court reversed an adverse judgment on the merits in the underlying patent infringement case, but  upheld the lower court's findings and rulings as to spoliation and other e-discovery violations, including sanctions imposed on counsel.  In Keithley, although the court ruled for the defendants on the merits, it adopted the magistrate judge's sanctions recommendations for spoliation of evidence and late production of discovery.  The only bright spot for defendants on the e-discovery front was that the court denied the plaintiffs' motions for adverse inference instructions, solely on the grounds that defendants' victory on the merits mooted that issue. 

Even the leader of the free world isn't exempt from document retention and e-discovery obligations.  As this Associated Press article on findlaw.com reports, on January 15, Magistrate Judge John Facciola "tore into" the Bush White House, finding that the administration had failed to meet its obligations to preserve ESI, including millions of missing e-mails.  And Judge Facciola isn't the only one hitting the White House hard over its document retention obligations; just the day before, U.S. District Judge Henry Kennedy issued an order requiring the White House to search for emails created between March 2003 and October 2005.

Lessons learned?  No matter who you are - from the most powerful person in the world to the owner of a small company - and no matter how good your case, you ignore your document preservation and e-discovery obligations at your own peril.

Recent Surveys Illustrate Complexity of E-Discovery Compliance for U.S. Companies

The challenge of complying with e-discovery rules was illustrated in the results of two surveys released recently. A survey from Robert Half Legal, (a company specializing in attorney recruitment and placement) found that one in four lawyers in North America believe that e-discovery will have the single largest impact on the practice of law in the next five years. Why? According to Charles Volkert, Executive Director of Robert Half Legal, "the complexity and cost of the task, coupled with the associated information technology and human resource needs, make [e-discovery] a challenge."

Similarly, a survey published in eWeek.com  found that two-thirds of U.S. businesses are generally ignoring the issue of e-discovery.  According to the survey's author Michael Osterman, the companies, "are either ignoring the new federal mandates for compliance and e-discovery or are clearly not well educated on how to meet the technical requirements."

The results of these two surveys, at first glance appear somewhat contradictory. Are the majority of companies really ignoring the legal issue expected to have the largest impact in the near future? However, both surveys seem to point to the same problem, a lack of clarity in many companies on how to effectively and efficiently comply with e-discovery rules. 

The survey conducted by Robert Half indicates that e-discovery is expected to have such a large impact because of the complexity and expense of compliance. Likewise, in discussing the results of the survey in eWeek, Michael Osterman, stated that many companies are still unclear on the concept of e-discovery in general. "There really is no consensus yet on whether a company should keep all its e-mail and other docs, or whether a company should keep a finite number of years' worth of data, or whether it should keep more than 30 days' worth of data."

Time will tell whether e-discovery will be the largest issue facing the practice of law in the U.S. However, the actual impact will likely largely be effected by the current corporate response to e-discovery rules.