ELECTRONIC  DISCOVERY LAW:  e-discovery
DISCOVERY OF
ELECTRONIC DATA
© Richard E. Best 1998-2003 All Rights Reserved

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DOCUMENT RETENTION POLICIES

FACTORS & PROCEDURES IN DEVELOPMENT OF RETENTION POLICY
FACTORS RE REASONABLE RECORDS RETENTION POLICY
SPOLIATION FROM INADEQUATE POLICY
SANCTIONS / ADVERSE JURY INFERENCE
POLICIES AND PRACTICES AS FACTOR IN DISCOVERY COST ALLOCATION
PARTICULAR PROBLEMS & ISSUES
PRODUCTION OF POLICIES

See also Willard v. Caterpillar (1995), 40 Cal.App.4th 892, 923 below re the suggestion that a reasonable, bone fide document retention policy that is enforced and consistently followed should not give rise to a spoliation claim. See also Tulip Computers International B.V. v. Dell Computer Corporations (D.Del.2002), 2002 WL 818061 [destruction in accord with document retention policy was improper once Dell had notice of case even though no document request had been served; but following retention policy appears to be factor in court's determination that there was no evidence of bad faith warranting the requested sanctions.] Wiginton v. CB Richard Ellis (N.D.Ill. #02 C 6832 , 10/24/03); Zubulake v. UBS Warburg (SDNY 10/22/03)220 F.R.D. 212 aka Zubulake IV; .Stevenson v. Union Pacific Railroad Company (8th Cir. 1/5/04) 2004 U.S. App. LEXIS 6.  However, a document retention/destruction policy that results in the systematic destruction of probable evidence will not provide protection from spoliation charges. Reimgold v. Wet 'N Wild Nevada Inc.(Nev.S.C.1997), 944 P.2d 800 [jury verdict reversed for failure to instruct on adverse inference from failure to produce first aid records to show notice of prior accidents; policy to destoy records at end of each season prior to running of statute of limitations; "following the company's normal records retention policy" may be willful suppression.] See also Carlucci v. Piper Aircraft, 102 F.R.D. 472, 481, 486(S.D.Fla.1984);

FACTORS TO CONSIDER IN DEVELOPMENT OF RETENTION POLICY

A document retention policy adopted to avoid production in litigation, to avoid production review costs,  or in contemplation of litigation may  be preceived as spoliation. If so, the crime-fraud exception to the attorney -client privilege may apply.

Rambus Inc. v. Infineon Technologies AG (E.D. Va. 2004),    222 F.R.D. 280.

Develop in conjunction with overall review of document storage, retrieval, use and privacy policies and procedures

Consider economic advantages of being able to locate and use documents efficiently
Risk management function
Necessary part of litigation; expense of not having adequate policies and procedures exceeds cost of policy
Rationale for storage and retention policies designed to enable identification, location, and production of documents with precision

Know or learn what documents you have so you can properly respond, produce or object to discovery
Evaluate relevance and importance of your own documents
Establish integrity with court and opponent
Avoid inadvertent disclosures of unnecessary or privileged docs
Reduce access costs when ordered to produce
Avoid claims of obstruction or spoliation
Enable your attorney to locate documents cost effectively

Systematic development of policy to meet business and other needs

Form  development team of top management and all relevant disciplines: records managment, tax & accounting , IT, legal etc.
Identify the content to be preserved, location of data, and means of preservation for each
Identify special problems: privileged , confidential or private information
Have all members of team sign off on original and all revisions;
Legally required document retensions, documents essential for business operations, contracts and accounting records form  base
Policies should not be motivated by litigation or to eliminate adverse evidence
Cost of attorney review in case of litigation suggests litigation motivation and relevance
Focus should be on business needs such as elimination of unnecessary and duplicative documents, protecting and preserving critical business documents, efficient access to business documents
Tailor policy to corporation's particular needs and obligations:

Official status of documents
Importance to business for contracts or operations
Importance to government, to customers, to potential claimants
Period necessary for normal business operations
Period necessary for response to lawsuits or claims based on statute of limitations
Minimum retention periods set by statute or regulations
Period necessary to substantiate compliance with law
Reduce storage volume and costs
Efficiency in storage and retrieval
Cost of storage as motivation should be quantified and documented

Retain record of development and implementation to demonstrate business justification and motivation for retention / destruction policies
All inclusive coverage of policy including copies, reproductions, and backups; include all media: pda, home computers, cell phones etc.
Strict and consistent adherence and enforcement
Periodic review, audit and revision of precedures
Provide for implementation and enforcement of litigation hold; systematic reminder of policy
Provide for suspension of destruction upon notice of claim or litigation to avoid spoliation claim [See Zubulake IV,220 F.R.D. 212 SDNY 10/22/03]
Preserve and provide for accessing data relevant to pending or foreseeable legal disputes
Retain hardware and software necessary to access data as software and systems are changed
Adopt security precautions to protect data from hackers, viruses, disgruntled employees etc.
Provide for security audits and upgrades
Adopt procedures to readily identify, segregate, store and retrieve documents that are privileged, confidential, trade secrets, subject to privacy concersn of empolyees and 3d parties etc.

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REASONABLE RECORDS RETENTION POLICY - factors to consider

See Lewy v. Remington Arms Co. Inc. (8th Cir.1987), 836 F.2d 1104, 1112
See also Zubulake v. USB Warburg,  220 F.R.D. 212(S.D.N.Y. 10/22/03)

Particular documents

Consider facts & circumstances surrounding particular documents

Lewy v. Remington Arms Co. Inc.

Notice of importance

Frequency and magnitude of other complaints or lawsuits

Lewy v. Remington Arms Co. Inc. (8^th Cir 1988), 836 F.2d 1104 , 1111
Willard v. Caterpillar (1995), 40 Cal.App.4th 892
Stevenson v. Union Pacific Railroad Company (8th Cir. 2004), 354 F.3d 739, ( 8th Cir.(Ark.2004) 2004 U.S. App. LEXIS 6 [bad faith intent can be inferred from knowledge of litigation history and relevance and importance of such records]

Good faith policy

Not policy designed to limit damaging evidence available to potential plaintiffs

Lewy v. Remington Arms Co. Inc. (8^th Cir 1988), 836 F.2d 1104 , 1111
Carlucci v. Piper Aircraft, 102 F.R.D. 472, 481, 486(S.D.Fla.1984)
Rambus Inc. v. Infineon Technologies AG (E.D. Va. 2004),    222 F.R.D. 280.
Cf. Hynix Semiconductor Inc. v. Rambus, Inc.(N.D.Cal.2006)Slip Copy, 2006 WL 565893.

Good faith application of policy; the need for a "litigation hold" to avoid destruction pursuant to policy

Policy should provide for suspension when claim or lawsuit provides notice of importance [See Zubulake IV, S.D.N.Y. 10/22/03]

Lewy v. Remington Arms Co. Inc. (8^th Cir 1988), 836 F.2d 1104 , 1111 [Suspend or modify policy to retain docs when “knew or should have known docs would become material at some point in the future]

Tulip Computers International B.V. v. Dell Computer Corporations (D.Del.2002), 2002 WL 818061 [destruction in accord with document retention policy was improper once Dell had notice of case even though no document request had been served; but following retention policy appears to be factor in court's determination that there was no evidence of bad faith warranting the requested sanctions.]

Wiginton v. CB Richard Ellis (N.D.Ill. #02 C 6832 , 10/24/03); [Defendant had a duty to suspend or alter its document destruction to preserve potential evidence. The initial notice to employees to preserve was too narrow in that it restricted preservation to ducuments regarding plaintiff and should have covered alleged harassers, offices involved, and sexual harassment environments.]

Stevenson v. Union Pacific Railroad Company 354 F.3d 739, ( 8th Cir.(Ark.) 2004) 2004 U.S. App. LEXIS 6. [should suspend policy of document destruction of track maintenance reports after 2 year period when litigation filed  and document request made]

Zubulake v. UBS Warburg (SDNY 2003),  220 F.R.D. 212 aka Zubulake IV  [Spoliation was found when backup tapes containing emails of key players were lost and emails were deleted. Preservation duty arose, 10 months prior to litigation and 4-5 months prior to filing of formal complaint with EEOC, at the time the immediate supervisor and other key employees reasonably anticipated litigation. At that time "...it must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents."]

Broccoli v. Echostar Communications Corp., 229 F.R.D. 506 (D.Md.,2005)

Testa v. Wal-Mart Stores, Inc. 144 F.3d 173, 177-78 (1st Cir.1998) [Institutional knowledge is critical and good faith or lack of knowledge of employee destroying potential evidence may not suffice]

Blind adherence to policy cannot justify destruction if materiality known

Reiteration of policy when it may lead to destruction of relevant discoverable documents may be interpreted as condoning destruction
Wm.T. Thompson, v. General Nutrition(C.D.Ca.1984), 593 F.Supp.1443 at p.1447-48
Arthur Andersen v. United States (2005), 125 S. Ct. 2129; 161 L. Ed. 2d 1008; 2005 U.S. LEXIS 4348

Efforts to notify employees must be effective

Wiginton v. CB Richard Ellis (N.D.Ill. #02 C 6832 , 10/24/03) [One email to employeee to follow normal policy but to preserve all  docs regarding plaintiff was inadequate as to scope]
Wm.T.Thompson Co. v. General Nutrition(C.D.Ca.1984), 593 F.Supp.1443,
Prudential Ins.Co. of America Sales Practices Litigation (D.NJ 1997), 169 FRD 598
Willard v. Caterpillar (1995), 40 Cal.App.4th 892 [error to submit issue to jury when reasonable, good faith document retention policy followed]
Crescendo Investments Inc. v. Brice (Tex.App.2001), 2001 WL 576586 [judgment aff'd.; No error in refusing spoliation instruction when fradulent intent was rebutted by testimony re normal policy of deleting emails after reading]

Testa v. Wal-Mart Stores, Inc. 144 F.3d 173, 177-78 (1st Cir.1998)
Records were destroyed before suit was brought pursuant to a standard record-retention policy by an employee who "stated that she did not know about the accident at the time and no one instructed her to preserve either the purchase order or the telephone records." The issue on appeal was whether a jury could be permitted to draw a negative inference from the unavailability of documents. The appellate court noted the relevant knowledge was institutional knowledge and not merely the knowledge of the person who destroyed the documents purusant to the document retention policy. "We hold that, on these facts, the district court properly told the jury that it could (but need not) draw a negative inference if the plaintiff proved by a preponderance of the evidence that, when Wal-Mart destroyed the documents, it had notice both of a potential lawsuit and of the documents' relevance to the claim that underlay such a suit."

SPOLIATION BASED ON INADEQUATE DOCUMENT RETENTION POLICIES

RESPONSIBILITY OF SENIOR MANAGEMENT

Prudential Ins. Co. of America Sales Practices Litigation (N.J.D. 1997) 169 F.R.D. 598,604, 615
[$1 million sanctions for violating general preservation order; lack of direction and implementation from top management; "Prudential top management...recognized that the sales practices lawsuits and regulatory investigations are an extremely important part of Prudential's business. ...More importantly, they all recognized Prudential's obligation to preserve documents in connection with the lawsuits and investigations. Yet, none took an active role in formulating, implementing, communicating, or conducting a document retention policy." p.615 "When the [preservation order] was entered, it became the obligation of senior management to initiate a comprehensive document preservation plan and to distribute it to all employees. Moreover, it was incumbent on senior management to advise its employees of the pending multi-district litigation venued in New Jersey, to provide them with a copy of the Court's Order, and to acquaint its employees with the potential sanctions, both civil and criminal, that the Court could issue for noncompliance with this Court's Order.
4. When senior management fails to establish and distribute a comprehensive document retention policy, it cannot shield itself from responsibility because of field office actions. The obligation to preserve documents that are potentially discoverable materials is an affirmative one that rests squarely on the shoulders of senior corporate officers."]

EXISTENCE OF ADEQUATE POLICY

Company wide policy

Prudential Ins. Co. of America Sales Practices Litigation (N.J.D. 1997) 169 F.R.D. 598, 615 ["No comprehensive document retention policy with informative guidelines and lacks a protocol that promptly notifies senior management of document destruction. These systemic failures impede the litigation process and merit the imposition of sanctions." 
" While there is no proof that Prudential, through its employees, engaged in conduct intended to thwart discovery through the purposeful destruction of documents, its haphazard and uncoordinated approach to document retention indisputably denies its party opponents potential evidence to establish facts in dispute. Because the destroyed records in Cambridge are permanently lost, the Court will draw the inference that the destroyed materials are relevant and if available would lead to the proof of a claim."]

ENFORCEMENT OF POLICIES

Identification of specific documents
Commuicated to and accessible by employees generally

Prudential Ins. Co. of America Sales Practices Litigation (N.J.D. 1997) 169 F.R.D. 598, 613 [. Prudential's use of PROFS notes to preserve documents and to prevent their destruction was ineffective and failed to implement this Court's document preservation Order."]

Communication to specific persons capable of preserving documents

SUSPENSION OF DESTRUCTION TO PRESERVE EVIDENCE

Lewy v. Remington Arms Co. Inc. (8^th Cir 1988), 836 F.2d 1104 , 1111 [Suspend or modify policy to retain docs when “knew or should have known" docs would become material at some point in the future]

Mosaid Technologies Inc. v. Samsung Electronics (D.N.J.2004), 348 F.Supp.2d 332 [Spoliation based on failure to impose litigation hold]

Mastercard Intern., Inc. v. Moulton 2004 WL 1393992 (S.D.N.Y.2004)

Spoliation based on gross negligence was found when defendant continued its 21 day e-mail deletion policy which probably resulted in the destruction of potentially relevant e-mails after the lawsuit was filed, after opposing counsel "reminded" defendant of its duty, and after discovery was served encompassing the e-mails. "In this case, defendants' failure to preserve the e-mails plainly constituted at least gross negligence in light of (a) the pendency of the case, (b) their attorney's advice to Kevin Moulton to preserve evidence and (c) the specific nature of plaintiff's document request." ... "As for culpability, we are not persuaded that defendants acted in bad faith, that is, for the express purpose of obstructing the litigation. They appear simply to have persevered in their normal document retention practices, in disregard of their discovery obligations." The lesser remedy was granted permitting plaintiff to "argue to the trier of fact that this destruction of evidence, in addition to other proof offered at trial, warrants the inferences that the public was confused and that the MasterCard marks were diluted and tarnished."

Broccoli v. Echostar Communications Corp., 229 F.R.D. 506 (D.Md.,2005) Although Echostar had an extremely short period for destruction of all e-mail  and records of terminated exployees, the retension policy alone did not give rise to sanctions though the court observed "under normal circumstances, such a policy may be a risky but arguably defensible business practice undeserving of sanctions." However, spoliation was found when Defendant  failed to suspend normal destruction and preserve documentss when notice of a potential claim was  received, failed to preserve any e-mails, failed to send company wide notice to preserve.

Wiginton v. CB Richard Ellis (N.D.Ill. #02 C 6832 , 10/24/03); [Defendant had a duty to suspend or alter its document destruction to preserve potential evidence. "Its failure to change its normal document retention policy, knowing that relevant documents would be destroyed if it did not act to preserve these documents, is evidence of bad faith." slip opinion p. 14]

Zubulake v. UBS Warburg 220 F.R.D. 212 (SDNY 10/22/03) aka Zubulake IV. Spoliation was found when backup tapes containing emails of key players were lost and emails were deleted. Preservation duty arose, 10 months prior to litigation and 4-5 months prior to filing of formal complaint with EEOC, at the time the immediate supervisor and other key employees reasonably anticipated litigation. At that time "...it must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents."

United States v. Koch Industries Inc.(N.D. Okl.1998), 197 F.R.D. 463 [reacting to investigations and complaints in a less than exemplary manner found to be at least negligent spoliation]

Prudential Ins. Co. of America Sales Practices Litigation (N.J.D. 1997) 169 F.R.D. 598

Rambus Inc. v. Infineon Technologies AG (E.D. Va. 2004),    222 F.R.D. 280.   May 18, 2004 [220 F.R.D. 264. Preliminary decision  March 17, 2004. The court initially deferred its decision until completion of an in camera review of the documents sought.]  Retaining and consulting a lawyer to develop a document retention policy, if done in anticipation of litigation, may invoke the crime/fraud exception to the attorney client privilege. At the same time plaintiff was preparing for litigation it was developing its document retention policy and program. Defendant sought documents involving the creation and implementation of a document retention program contending counsel had been consulted to assist spoliation. Defendant was found to have engaged in spoliation by failing to suspend destruction of documents relevant to that anticipated litigation. There was some basis to infer the attorneys who had developed the document retention policy had been retained and consulted to effectuate the spoliation. If so, the crime/fraud exception to the attorney client privilege would apply, though spoliation might not be a crime, fraud or tort.

"...crime/fraud exception extends to materials or communications created in planning, or in furtherance of, spoliation of evidence. ... [The proponent] must make a prima facie showing: (1) that Rambus was spoliating, or was planning to spoliate, evidence and sought or used the advice of counsel or the input of work product to further that endeavor; and (2) that the documents containing the communications or work product bear a close relationship to Rambus' scheme to engage in spoliation.

"Rambus had in effect a document retention program that was conceived and implemented as an integral part of its licensing and litigation strategy. That strategy, including the document retention program portion thereof, was devised and implemented with the aid and advice of lawyers, both in house and outside. The company's plan was to destroy discoverable documents as part of its litigation strategy and the allegedly privileged documents evince that plan."

Cf. Hynix Semiconductor Inc. v. Rambus, Inc.(N.D.Cal.2006)Slip Copy, 2006 WL 565893.  Note: the factual conclusions were considered in detail and criticised in  Samsung Electronics Co., Ltd. v. Rambus, Inc., 2006 WL 2038417 (E.D.Va.)

Note ABA Civil Discovery Standards 10 and 29 relevant to this issue:

10. The Preservation of Documents. When a lawyer who has been retained to handle a matter learns that litigation is probable or has been commenced, the lawyer should inform the client of its duty to preserve potentially relevant documents and of the possible consequences of failing to do so.
29. Preserving and Producing Electronic Information.
a. Duty to Preserve Electronic Information.
i. A party's duty ... also applies to information contained or stored in an electronic medium or format, including a computer word-processing document, storage medium, spreadsheet, database and electronic mail.

Willard v. Caterpillar (1995), 40 Cal.App.4th 892, 923 ["Therefore, if Caterpillar destroyed documents which were routinely requested in ongoing or clearly foreseeavble products liability lawsuits involving the ...tractor and claims similar to [plaintiff's], its conduct might be characterized as unfair to foreseeable future plaintiffs. However, the document destruction at issue began more than 10 years before [plaintiff] was injured and the evidence disclosed only one other accident involving on track starting.... [S]uch remote prelitigation document destruction would not be commonly understood by society as unfair or immoral."]

Tulip Computers International B.V. v. Dell Computer Corporations (D.Del.2002), 2002 WL 818061 [destruction in accord with document retention policy was improper once Dell had notice of case even though no document request had been served; but following retention policy appears to be factor in court's determination that there was no evidence of bad faith warranting the requested sanctions.]

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SANCTIONS / ADVERSE JURY INFERENCE

NOTE ALTERNATIVES: Discovery sanctions ranging from money to entry of judgment are normally available under federal rules or state rules or statute. In addition, federal courts and some state courts may rely on "inherent" authority to control abuses in the litigation process. Jury instructions permitting adverse inferences from non-production of evidence may be permitted pursuant to rules of evidence. In some states, an independent tort for spoliation may be available.

NOTE REMEDY: DO NOT IGNORE THE ISSUE OF WHAT HARM OCCURRED AND WHAT IS AN APPROPRIATE SANCTION FOR THAT SPOLIATION. Wiginton v. CB Richard Ellis (N.D.Ill. #02 C 6832 , 10/24/03); [Sanctions denied without prejudice to renewal upon a showing of harm resulting from a failure to preserve destroyed documents based on evidence from existing records in order to formulate appropriate sanctions proportionate to the offense.]

Zubulake v. UBS Warburg 220 F.R.D. 212 (SDNY 10/22/03) aka Zubulake IV. Spoliation was found when backup tapes containing emails of key players were lost and emails were deleted.In fashioning a remedy the court rejected further cost shifting for restoration of backup tapes since the facts had been previously considered by the court in its prior cost shifting order; it awarded payment of costs for redeposing people on the missing tapes and emails; but, it rejected a request for adverse inference instruction, “that the evidence, if available, would have been favorable to Zubulake and harmful to UBS.” as too extreme because the jury would be 'instructed that it may “infer that the party who destroyed potentially relevant evidence did so ‘out of a realization that the [evidence was] unfavorable.’” The injured party was required to prove relevance and damages i.e. that the destroyed evidence would have been favorable to her case. The court concluded: "“In sum, although UBS had a duty to preserve all of the backup tapes at issue, and destroyed them with the requisite culpability, Zubulake cannot demonstrate that the lost evidence would have supported her claims. Under the circumstances, it would be inappropriate to give an adverse inference instruction to the jury.”

Prudential Ins. Co. of America Sales Practices Litigation (N.J.D. 1997) 169 F.R.D. 598, 617 ["...No comprehensive document retention policy with informative guidelines and lacks a protocol that promptly notifies senior management of document destruction. These systemic failures impede the litigation process and merit the imposition of sanctions." p.613 "these PROFS notes do not constitute uniform guidelines and do not represent the systematic process necessary to preserve documents"]

Linnen v.A.H. Robins Company, Inc (Mass. 1999), 10 Mass.L.Rptr. 189, 1999 WL 462015 [Adverse inference, infer documents destroyed since unfavorable, jury instruction granted based on notice of claim + relevance of documents]

Lewy v. Remington Arms (8th Cir 1988), 836 F2d 1104, 1111 [adverse inference jury instruction given by trial court for routine destruction in accord with corporate policy; propriety of sanction in this case not determined but standards suggested  for evaluation of policy and its application]

Wm. T. Thompson v. General Nutrition Co (C.D.Cal.1984), 593 F.Supp.1443

Willard v. Caterpillar (1995), 40 Cal.App.4th 892 [Error to submit to jury intentional spoliation of design documents in products liability case when destruction occurred prior to injury and after 25 years with negligible accident history; theoretical analysis ]

Carlucci v. Piper Aircraft, 102 F.R.D. 472, 481, 486(S.D.Fla.1984)

Sanction dependent on degree of culpability and degree of prejudice: Intentional or reckless disregard of preservation duty; Importance and alterntive sources of evidence

Mastercard Intern., Inc. v. Moulton 2004 WL 1393992 (S.D.N.Y.)

 Spoliation based on gross negligence was found when defendant continued its 21 day e-mail deletion policy which probably resulted in the destruction of potentially relevant e-mails after the lawsuit was filed, after opposing counsel "reminded" defendant of its duty, and after discovery was served encompassing the e-mails. "In this case, defendants' failure to preserve the e-mails plainly constituted at least gross negligence in light of (a) the pendency of the case, (b) their attorney's advice to Kevin Moulton to preserve evidence and (c) the specific nature of plaintiff's document request." ... "As for culpability, we are not persuaded that defendants acted in bad faith, that is, for the express purpose of obstructing the litigation. They appear simply to have persevered in their normal document retention practices, in disregard of their discovery obligations." The lesser remedy was granted permitting plaintiff to "argue to the trier of fact that this destruction of evidence, in addition to other proof offered at trial, warrants the inferences that the public was confused and that the MasterCard marks were diluted and tarnished."

Danis v. USN Communications Inc. 2000 WL 1694325 (N.D.Ill.)

United States v. Koch Industries Inc.(N.D. Okl.1998), 197 F.R.D. 463, 483 [citing at p. 486 Aramburu v. Boeing and other cases the court concludes negative evidentiary inferences are improper sanctions when the spoliation is negligent and the opponent is not prevented from proving its case; but, other sanctions may be appropriate]

Willard v. Caterpillar (1995), 40 Cal.App.4th 892

POLICIES AND PRACTICES AS FACTOR IN DISCOVERY COST ALLOCATION

Playboy Enterprises v. Welles (S.D.Cal.1990), 60 F.Supp.2d 1050, 1054

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PARTICULAR PROBLEMS & ISSUES

Crime-Fraud Exception to Attorney-Client  Privilege
Lawyers counseling clients on preservation are simultaneously, by implication if not explicitly, counseling on destruction of  information and potential evidence. Courts may determine that facts support at least a prima facie showing that  services have been obtained in order to assist in the commition of a crime of spoliation of evidence and that the crime-fraud exception to the attorney-client privilege applies to those communications.

California Evidence Code §981

Rambus Inc. v. Infineon Technologies AG (E.D. Va. 2004),    222 F.R.D. 280.   May 18, 2004 [220 F.R.D. 264. Preliminary decision  March 17, 2004. The court initially deferred its decision until completion of an in camera review of the documents sought.]  Retaining and consulting a lawyer to develop a document retention policy, if done in anticipation of litigation, may invoke the crime/fraud exception to the attorney client privilege. At the same time plaintiff was preparing for litigation it was developing its document retention policy and program. Defendant sought documents involving the creation and implementation of a document retention program contending counsel had been consulted to assist spoliation. Defendant was found to have engaged in spoliation by failing to suspend destruction of documents relevant to that anticipated litigation. There was some basis to infer the attorneys who had developed the document retention policy had been retained and consulted to effectuate the spoliation. If so, the crime/fraud exception to the attorney client privilege would apply, though spoliation might not be a crime, fraud or tort.

"...crime/fraud exception extends to materials or communications created in planning, or in furtherance of, spoliation of evidence. ... [The proponent] must make a prima facie showing: (1) that Rambus was spoliating, or was planning to spoliate, evidence and sought or used the advice of counsel or the input of work product to further that endeavor; and (2) that the documents containing the communications or work product bear a close relationship to Rambus' scheme to engage in spoliation.

"Rambus had in effect a document retention program that was conceived and implemented as an integral part of its licensing and litigation strategy. That strategy, including the document retention program portion thereof, was devised and implemented with the aid and advice of lawyers, both in house and outside. The company's plan was to destroy discoverable documents as part of its litigation strategy and the allegedly privileged documents evince that plan."

In re Grand Jury Investigation (3d Cir. 2006),  445 F.3d 266, 2006 WL 1044212. Application of crime / fraud exception to attorney-client and work product was affirmed in grand jury proceedings when the attorney advised the executive of receipt of a subpoena and e-mail was subsequently deleted. Such advice was used in "furtherance" of the crime.

"The crime was the "...obstruction of justice by participating in a scheme to delete emails on the computers of the Organization, its officers, and staff. "...the crime-fraud test [requires] that the communication have been “in furtherance” of the crime.

"If, with knowledge of the Government's interest in retrieving any remaining emails, Jane Doe continued to receive emails that were arguably responsive to the subpoena and failed to use her position as an executive of the Organization to direct that all email deletions stop immediately, she may be viewed as furthering the obstruction of the grand jury's investigation or the obstruction of justice.

"...if Jane Doe learned of the Government's interest in certain documents from her conversation with Attorney on January 20, 2005 and subsequently acquiesced in the deletion or destruction of those documents, the second prong of the crime-fraud exception would be satisfied.

"The government does not have to show that the intended crime or fraud was accomplished, only that the lawyer's advice or other services were misused. Typically that can be shown by evidence of some activity following the improper consultation, on the part of either the client or the lawyer, to advance the intended crime or fraud.
"...the crime-fraud exception applies even when an attorney is unaware that the client is engaged in or planning a crime."

Wachtel v. Guardian Life Ins. Co. (D.N.J. 2006 Slip Copy), 2006 WL 1286189 Not for Publication.  [The crime-fraud exception to attorney-client privilege and work product applies to spoliation of e-mail.]

Email:

Identify different types
Those that need to be saved for business, legal etc reasons
Specify time for each
Organize storage
Delete all others after reasonable period [self destruction or regular purging]
See Rowe Entertainment v. The William Morris Agency (S.D.N.Y. 2002), 205 F.R.D. 421, 2002 WL 63190;
Murphy Oil USA v. Fluor Daniel Inc. (2/19/02, E.D. La.) 2002 WL 246439 suggesting that a document retention policy that provided for printing important email and inserting it into a paper file might obviate or avoid the need for discovery of email or might shift the cost to the party seeking it on the theory that the marginal value of discovery would not justify the cost; in those cases the argument was rejected because there was no policy and no assurance that all important emial was printed and filed.

See the AOL policy on retaining and destroying email of its members: automatic deletion 2 days after read, retention of unread email for 28 days and deletion from system once member deletes it. [5/1/01]