Discovery and Spoliation Issues in the High-tech Age

• Publication year: 2003
• Pages: 81

32 Colo.Law. 81 Colorado Lawyer 2003.

2003, September, Pg. 81. Discovery and Spoliation Issues In the High-Tech Age

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81

Vol. 32, No. 9, Pg. 81

The Colorado Lawyer
September 2003
Vol. 32, No. 9 [Page 81]

Specialty Law Columns
The Civil Litigator
Discovery and Spoliation Issues In the High-Tech Age
by Mary Price Birk, Cassandra G. Sasso

The Civil Litigator column addresses issues of importance and interest to litigators and trial lawyers practicing in Colorado courts. The Civil Litigator is published six times a year

Column Editor

Richard L. Gabriel of Holme Roberts & Owen llp, Denver - (303) 861-7000

About The Authors

Cassandra G. Sasso Mary Price Birk

This month's article was written by Cassandra G. Sasso and Mary Price Birk, Denver, partners with Baker & Hostetler LLP - (303) 861-0600, csasso@bakerlaw.com, mbirk@bakerlaw.com.

This article discusses some of the unique discovery problems related to electronic data. It summarizes possible legal and ethical sanctions resulting from spoliation of such evidence, and provides guidance as to appropriate document retention policies to avoid litigation risks.

Unexpected issues arise in the litigation process as a result of computer use. Litigators and courts often are unfamiliar with strategies for preserving and discovering electronic information. Lawyers may be uncertain as to how to proceed when faced with the prospect of having to discover information contained on electronic media.1 Lawsuits, such as the Microsoft antitrust lawsuit,2 are won or lost based on what parties said in uncensored e-mails that they mistakenly believed to be "private."3 In the Microsoft case, the U.S. Department of Justice used a large number of intra-company e-mails as evidence of predatory, monopolistic behavior.

"Spoliation" is the intentional or reckless destruction or alteration of potentially relevant evidence.4 Businesses with record retention systems for paper documents know when to destroy, and when to keep, their paper records. If businesses have not adopted record retention programs to "fit" electronic files, they may be retaining potentially harmful files in perpetuity, long after paper would have been destroyed. Similarly, they may be prematurely spoliating relevant information.5

Lawyers need to familiarize themselves with problems engendered by the use of computers so they can prudently advise clients regarding data creation and retention and engage in effective discovery. This article discusses some of these issues and provides suggested strategies for handling discovery and spoliation of electronic evidence.

What is Discoverable
From Computers

Computers are sources of discoverable information that may never have been translated to hard (paper) copy. This may include document drafts, spreadsheets, diaries, and e-mail. Computers also contain system history files that reveal dates on which documents were created, deleted, or disseminated, as well as all sources and recipients of those documents. It has been estimated that

more than one-third of electronic business records are never reduced to paper form6

at least two-thirds of America's workforce uses e-mail7

more than 130 million U.S. workers send more than 2.8 billion e-mails a day.8

Moreover, computer files reveal in great detail the channels of communication within an organization and on the Internet, via "mouse droppings" or "cookies."9 Evidence once lost through witnesses' diminished memories now can live on for indeterminate periods of time in electronic media.10

Relevant, non-privileged computer-retained data is discoverable.11 "Documents" discoverable under Rule 34(a) of the Federal Rules of Civil Procedure ("F.R.C.P.") include "data compilations from which information can be obtained . . . through detection devices. . . ." The Advisory Committee Notes to the 1970 Amendment to Rule 34 explain:

The inclusive description of "documents" is revised to accord with changing technology. It makes clear that Rule 34 applies to electronic data compilations from which information can be obtained only with the use of detection devices, and that when the data can as a practical matter be made usable by the discovering party only through respondent's devices, respondent may be required to use his devices to translate the data into usable form. . . .

Consistent with this trend, § 2.715 of the Manual for Complex Litigation12 recognizes machine-readable disks as the primary mode for responding to discovery requests in "complex" cases. Paper is considered to be a secondary alternative.13

Recognizing that electronic data is an integral part of many of the litigation matters that they handle, a number of federal and state courts have adopted rules specifically addressing electronic discovery and computer forensics.14 Moreover, courts often protect a party producing electronic data from undue burden and expense. Thus, in determining whether a request for such data will be unduly burdensome on the responding party, courts typically balance the benefits and burdens of such discovery.15

Hazards Lurking
In "Cyberia"

Given the widespread use of computers, it is inevitable that electronic discovery issues have become pervasive in litigation. Nonetheless, many companies only now are becoming sensitive to the fact that employees often use e-mail to send incriminating messages, mistakenly thinking of e-mail as private, informal, and impermanent. One observer commented on this phenomenon:

. . . [P]eople often write things in an
e-mail they probably would not and should not say face-to-face, and e-mail creates a permanent record of the contents! Unfortunately, the impersonality and safety of sending and receiving an e-mail has proved to be a mask behind which its users hide - an electronic free-for-all for unrestrained and unprofessional behavior.16

Another commentator addressed the artificial sense of privacy that often is attributed to e-mail:

[T]he typical user often believes material in his or her own PC, protected by passwords, is similar to the telephone in privacy. (This sense of virtual privacy is one reason why juries find e-mail messages so compelling.) However, . . . the opposite is true: once written down, even if never sent, e-mail can last forever and can be devastating when unearthed months or years later - if not from the primary user's hardware, then from system hardware or from backup tapes from off-site copies, or . . . [an] ISP's e-mail server.17

During the 1980s, there were just twenty-eight federal and state cases mentioning e-mail; during the 1990s, there were more than 500 such cases.18 E-mail increasingly is the source of defamation suits.19 In addition, e-mail is appearing more frequently as evidence in litigation involving criminal,20 discrimination,21 commercial,22 and copyright and trademark infringement23 matters. Therefore, the dangers of inappropriate e-mails make it necessary for companies to implement clear and appropriate e-mail policies that simultaneously protect the company and are sensitive to employee privacy concerns.24

Creation of "Permanent" Records

E-mail has turned out to be more permanent than paper communication. Paper documents can be discarded, but electronic messages are more difficult to eradicate. When an employee sends a message over a company's network, numerous copies of the message are stored on file servers before they are transferred to archive tapes. Even after an e-mail is "deleted," most systems store it indefinitely on a centralized backup file.

Hitting the "delete" command does not actually remove a message from a computer unless it is contained in a UNIX-based e-mail system. On a Windows or Macintosh system, "deleting" e-mail only removes the indexing for that document and marks the file as reusable. The e-mail still is in the system and remains unchanged until it is written over, or until a computer expert runs a software program to wipe out old messages. By that time, multiple copies of the message may exist on a mainframe, other PCs, laptops, or disks.25

An excellent discussion of the use of forensic computer experts in litigation is contained in Gates Rubber Co. v. Bando Chemical Industries, Ltd.26 This case addresses how forensic computer experts find electronic data, ascertain whether such data has been purged, explain how computers retain data, analyze how "deleted" information can be recaptured through the use of various programs, and explain how computers can be "scrubbed" or "wiped clean" through the use of software programs.

It is important for lawyers and clients to face the reality that old document retention systems designed to discard paper files after a certain period of time are not getting rid of historical data. Unless a company is willing to accept that some of its files may live "in perpetuity," a new sort of system must be developed.27 Without a good document retention system, the company subjects itself to serious risks of spoliation claims, as well as the severe sanctions that come with such claims.

Spoliation of Electronic
Data and Resulting
Sanctions

Parties have a duty to preserve information they know or are on notice is relevant to ongoing or potential litigation.28 Parties have the same duty to preserve electronic data as to preserve information maintained on paper. Thus, courts impose a variety of sanctions when a party: "(1) destroys (2) discoverable matter (3) which the party knew or should have known (4) was relevant to pending, imminent, or reasonably foreseeable litigation."29...