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DOCUMENT RETENTION ISSUES FOR IN-HOUSE COUNSEL

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Pitney Bowes, Inc., 257 F.R.D. 334 (D. Conn. 2009) Innis Arden sued Pitney Bowes and other potentially responsible parties (PRPs) ... – PowerPoint PPT presentation

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Title: DOCUMENT RETENTION ISSUES FOR IN-HOUSE COUNSEL


1
DOCUMENT RETENTION ISSUES FOR IN-HOUSE COUNSEL
  • Rebecca A. Brommel
  • BrownWinick
  • 666 Grand Avenue, Suite 2000
  • Des Moines, IA 50309-2510
  • Telephone 515-242-2452
  • Facsimile 515-323-8552
  • E-mail brommel_at_brownwinick.com

2
Document Retention - Generally
  • Purpose Set forth how your company will preserve
    and destroy information
  • Purpose Ultimately save time in searching for up
    to date and necessary information
  • Purpose Helps business deal with documents when
    and if litigation or investigations occur

3
In-House Counsel Responsibilities
  • Development of the Policy
  • Oversee records inventory and appraisal
  • Help identify legally required retention periods
  • Update policy as law or technologies change
  • Enforcement of the Policy
  • Training of employees
  • Review/audit procedures regularly

4
In-House Counsel Responsibilities (cont)
  • The Litigation Hold
  • Clear procedures set forth in policy
  • Be in charge (or determine who is in charge) of
    determining when the hold is in effect
  • Communication to employees
  • Determination of scope of hold
  • Determine when hold expires

5
Litigation Holds Generally
  • May apply even if you are not a party to the
    litigation, but are simply a holder of
    documents/information
  • Reasonably foreseeable litigation
  • Service of petition/complaint
  • Demand letter
  • Subpoena or informal request for records
  • Legitimate verbal threat of litigation
  • Notice of investigation by law enforcement or
    government agency
  • Formal employee complaints to management
  • Incident involving personal/property injury

6
Duty to Preserve
  • The litigation hold relates to companys duty
    (and your duty as attorney) to preserve evidence
  • Minimum duty develop and oversee and
    preservation process, even if you do not yet have
    a formal document retention policy
  • Also duty to alert others with relevant documents
    through issuance of hold letters

7
What do you do?
  • Assess scope of necessary hold
  • Discuss with others internally who hold those
    documents
  • Determine whether there are those outside who
    also hold relevant documents
  • Discuss and determine the costs of review,
    retrieval, costs and strategy of the hold and any
    necessary response

8
Duty to Preserve Test for Sanctions
  1. Is the document retention policy reasonable
    considering the facts and circumstances
    surrounding the records at issue?
  2. Have lawsuits or complaints been filed concerning
    the types of records at issue? If so, what is
    the frequency and magnitude of those lawsuits or
    complaints?
  3. Was the document retention policy instituted in
    bad faith?

9
Duty to Preserve Test for Sanctions (cont)
  • Standards may be different pre v. post litigation
    commencement
  • Typically requires
  • Evidence of intent to destroy
  • Intent to destroy is for purposes of obstruction
    or suppressing the truth
  • Evidence of bad faith/mal-intent
  • Opposing party is prejudiced by the destruction

10
Duty to Preserve - Sanctions
  • Payment of reasonable expenses, including
    attorney fees
  • Adverse Jury Instruction
  • Orders from Court
  • Establishing certain facts
  • Refusing to allow your company to support or
    oppose certain claims/defenses
  • Refusing to allow your company to introduce
    certain evidence
  • Striking parts of pleadings/defenses
  • Stay of proceedings until documents provided
  • Dismissal of action (if plaintiff)
  • Judgment by default (if defendant)
  • Contempt of court

11
Likelihood of Sanctions
  • Sanctions decreased in 2010 awarded 55 of time
    where they were sought
  • E-discovery sanctions reached all time high prior
    to 2010
  • 410 cases where sanctions sought awarded 230
    times
  • Most common misconduct failure to preserve
    electronic evidence, failure to produce, delayed
    production
  • Rarely sanctioned attorney without also
    sanctioning client
  • Most severe sanctions dismissal, adverse jury
    instruction, significant monetary awards
  • Most common sanction payment of attorneys fees
    and costs
  • Source Weiss, Debra Cassens, E-Discovery
    Sanctions Reach All-Time High for Litigants and
    Lawyers, (Jan. 13, 2011) posted on
    www.abajournal.com

12
Case Law Examples
  • Nacco Materials Handling Group, Inc. v. The Lilly
    Co., 2011 WL 5986649 (W.D. Tenn. Nov. 16, 2011)
  • Lawsuit arose from Lillys alleged unauthorized
    use of Naccos secure dealer website
  • Lawsuit served 2/25/2011
  • Lillys attorney sent litigation hold letter to
    Lillys President 3/09/2011 providing specific
    instructions as to issuance of a litigation hold
    and the wide sweep of the hold
  • Lillys President only sent letter onto 7 others
    in company
  • 5/2011 Lilly searched electronic servers for
    term Yale (Naccos d/b/a)

13
Case Law Examples (cont)
  • Nacco Materials Handling Group, Inc. v. The Lilly
    Co. (cont)
  • Lilly failed to
  • Issue company-wide litigation hold (only sent to
    7 of 160 employees, not even all the key
    players)
  • Provide additional instruction to employees re
    the hold
  • Take steps to prevent emails from being deleted,
    to prevent data from being overwritten or to
    identify and preserve backup tapes
  • Take steps to collect evidence from key players
    or search key players computers to determine if
    information existed
  • Oversee or supervise the collection process (left
    it up to employees)
  • Did not follow up with employees to determine
    what efforts had been made
  • Document their search and collection efforts
  • Identify a person in charge of the
    preservation, search and collection
  • To retain a technical expert (because they were
    not equipped to handle the computer searches)

14
Case Law Examples (cont)
  • Nacco Materials Handling Group, Inc. v. The Lilly
    Co. (cont)
  • Court first determined degree of culpability
    was the conduct negligent, grossly negligent, or
    willful, wanton and reckless
  • Exhibits the continuum of fault that many
    courts are now using to determine sanctions in
    failure to preserve cases
  • Court found that Lilly was, at a minimum,
    neligent
  • Sanctions
  • Reimbursement of costs to Nacco for its forensic
    examination of Lillys computers and forensic
    examination of hard drives
  • Payment for mirror imaging of computers of
    persons in Lillys parts department
  • Lilly also required to file an affidavit
    detailing each step it took to preserve, search
    for and collect potentially relevant information
    from date of service of complaint to present,
    detailing the date and person taking such steps
  • Also awarded Nacco its reasonable costs,
    including attorney fees, associated with bringing
    the Motion

15
Case Law Examples (cont)
  • Innis Arden Golf Club v. Pitney Bowes, Inc., 257
    F.R.D. 334 (D. Conn. 2009)
  • Innis Arden sued Pitney Bowes and other
    potentially responsible parties (PRPs) under
    CERCLA and state law to recover costs incurred in
    removing PCB from its property
  • Innis Arden failed to preserve soil samples
  • Court held that duty to preserve began when Innis
    Ardens counsel was actively involved in
    investigation and analysis of samples in
    preparation for legal action against the PRPs and
    when they hired the company to do the sampling
  • Even though Court did not find purposeful
    destruction, the loss was significant and could
    not be adequately remedied by an adverse jury
    instruction
  • Sanction imposed preclude Innis Arden from
    introducing any evidence based upon the soil
    samples it took and then subsequently destroyed
    (note impact on expert witness testimony)
  • Lessons (1) Plaintiffs have equal duty to
    preserve (2) even if not purposeful destruction,
    importance of evidence can impact sanctions

16
Ethical Implications
  • No specific rule related to document
    production/preservation (yet)
  • Court sanctions may resulting ethical
    implications
  • Iowa Rule of Profl Conduct 321.3 A lawyer
    shall act with reasonable diligence and
    promptness in representing a client.
  • Iowa Rule of Profl Conduct 321.17
    Organization as client

17
Lessons Learned
  • Have a good written document retention plan
  • Be diligent upon receipt of anything that
    triggers a litigation hold
  • Control and oversee the hold process
  • Document the who, what, when and where of the
    hold process
  • Regularly review and audit procedures and
    employee compliance

18
Website www.brownwinick.com Toll Free Phone
Number 1-888-282-3515 OFFICE LOCATIONS 666
Grand Avenue, Suite 2000 Des Moines, Iowa
50309-2510 Telephone (515) 242-2400 Facsimile
(515) 283-0231 616 Franklin Place Pella, Iowa
50219 Telephone (641) 628-4513 Facsimile (641)
628-8494 DISCLAIMER No oral or written
statement made by BrownWinick attorneys should be
interpreted by the recipient as suggesting a need
to obtain legal counsel from BrownWinick or any
other firm, nor as suggesting a need to take
legal action. Do not attempt to solve individual
problems upon the basis of general information
provided by any BrownWinick attorney, as slight
changes in fact situations may cause a material
change in legal result.
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