November 13, 2004
Published in Savannah Morning News
Have you ever sent an E-mail and wish you hadn’t? Or wish you had said something differently?
One of the problems with E-mail is that once we hit the “send” button, the message is gone. In some cases, though, you might get to see it, or at least hear about, again – in court.
Discovery
When a lawsuit begins, the parties go through a period of “discovery.” Essentially, the parties trade information and documents they have that is related to the lawsuit.
Depending upon the lawsuit, part of the information that may be exchanged is information that is stored electronically. A real difficulty arises when E-mails have been deleted.
If you know that a lawsuit is pending or may be brought, and you delete E-mails or other evidence potentially related to the subject matter of the lawsuit, you could be in big trouble.
Take, for example, the case brought by the United States against tobacco-giant Phillip Morris in the District of Columbia in 1999. The court overseeing the case issued an order that all potentially relevant evidence was to be preserved. Nevertheless, Phillip Morris continued its company policy of system-wide E-mail deletion every 60 days. When the E-mail deletion practice was brought to the court’s attention, Phillip Morris was fined $2.75 million dollars for destroying evidence.
Adverse inference
In addition to fines, a court may institute other punishments against a party that destroys potentially relevant evidence, including rendering judgment against the disobedient party.
The most common form of punishment, however, is an “adverse inference.”
For example, in January, Joe enters negotiations to buy a 1989 truck from Honest Abe’s Used Cars. He and Abe trade E-mails about the truck and the price for a few weeks. They finally agree on the deal in February.
Then, in March, the truck’s engine dies, and Joe calls Abe. Joe wants Abe to give him his money back, but Abe says a deal is a deal. They negotiate and argue about the truck until June. Joe then files suit against Abe, claiming that Abe misrepresented the condition of the truck’s engine as being brand new, and Abe is therefore liable for fraud.
Abe claims that is ridiculous, and that he even sent Joe an E-mail informing Joe that the engine had 400,000 miles on it. Honest Abe, however, not thinking at the time that the E-mail would ever be needed again after the sale, deleted the E-mail. The “adverse inference” punishment would allow the jury to presume that Abe really did misrepresent the condition of the truck’s engine.
Judges generally have discretion to decide what punishment to impose for destroying potentially relevant evidence, with the heaviest punishments reserved for those who intentionally destroy evidence that would harm their position in a case.
And if you think your opponent won’t find out that you have deleted relevant E-mails or other electronic evidence, you are probably wrong.
Advances in computer forensics have disclosed that “deleted” E-mails and other electronic documents are often not really deleted – they are just buried somewhere deep within a hard drive or a server. This means that, aside from your opponent’s obvious ability to find out about E-mail or documents from those who read them or sent or received them, your opponent may now have the option of having a computer expert investigate your hard drives, servers, and backup tapes.
Good business practices
All businesses, no matter what their size, should implement some standard business practices regarding E-mail and documents stored on computers.
Companies should prohibit their employees from using company E-mail for inappropriate purposes. A good rule of thumb is that E-mails should only be sent that you wouldn’t mind your mother seeing.
Companies should also prohibit the distribution of information that may invade the privacy of their clients, customers, and employees, and may compromise the company’s trade secrets and other sensitive or confidential information.
Every company should have an E-mail and document retention policy, with stated exceptions to that policy.
An E-mail retention policy should provide that E-mail is deleted on a regular basis, with an exception that no E-mail should be deleted that could potentially be related to litigation that is pending or is reasonably probable.
Other exceptions will also have to be made, depending on the business.
In the example above, Abe would be wise to retain all E-mail in which he makes representations as to conditions of vehicles, for a period of up to a year.
Failure to have or comply with such exceptions cost Phillip Morris $2.75 million, and has resulted in various other sanctions, such as the imposition of an adverse inference, in other cases.
The above are just a few components of what each company should consider in dealing with electronic information. The exact details of each company’s practices should be worked out with their counsel.
