In the electronic age, destroying evidence has never been so easy. With a simple click, entire files can be erased, leaving your company or yourself in the clear. Although illegal and unethical, many companies and individuals are intentionally or inadvertently erasing electronic evidence. Until recently, much of this evidence-spoliation activity has gone relatively unnoticed.
The prevalence of electronic data in our society and the corresponding ability of individuals to manipulate or delete information is receiving increasing attention from the courts. This article will address electronic evidence and the sanctions that a court may impose on a party or potential litigant who fails to properly preserve electronically stored documents, e-mails and other data.
Electronic documents, as evidence, are treated no differently than any other documents in a court of law. As such, it is incumbent upon the company or individual responsible for the storage of electronic data to preserve the materials in the context of litigation.
Further, electronic data exists in many forms and locations. Back-up tapes and existing e-mails often contain more information than what is typically seen on the computer screen. Additionally, forensic computer experts can retrieve and/or recreate data once thought to be destroyed or removed from a computer system.
Recently, a case in the District Court of Southern New York (Zubulake v. UBS Warburg LLC) created a stir in the legal community over a party’s obligation to preserve electronic evidence. The Zubulake trial was a simple employment discrimination dispute. The court’s focus on the case, however, centered around five interlocutory appeals addressing a variety of electronic discovery issues. The decisions have created a bedrock of standards on electronic evidence spoliation.
In Zubulake, the plaintiff alleged that the defendant failed to preserve e-mails and other electronic data stored in back-up tapes. Certain discs were erased — per company protocol. (There was also an allegation that some e-mails were intentionally deleted.) Suspecting foul play, the plaintiff moved for sanctions against the defendant for the destruction of evidence.
In addressing the issue, the court held that a company has an obligation to preserve electronic evidence once there is a reasonable anticipation of litigation. Admittable, the triggering date for the preservation of this evidence may be difficult to determine. Obviously, if there is an explosion or a machine malfunction resulting in personal injury, there is a reasonable expectation of future litigation. In other cases, the triggering date is not apparent until the lawsuit is actually filed.
Once litigation is anticipated or actually begins, a “litigation hold” must be placed on all pertinent electronic evidence, regardless of format or location. Not all data, however, needs to be saved. The court recognized that saving vast amounts of everyday e-mails and other irrelevant data is costly and would cripple the efficient operation of many businesses. Consequently, the court limited the scope of protected information to data relating to the “key players” in the dispute.
According to Zublake, sanctions can be assessed against a party who negligently or intentionally erases discoverable electronic data. Sanctions may be severe, such as an adverse inference instruction to the jury. This instruction allows the jury to presume that any evidence destroyed by a party was damaging to that party’s interests in the litigation. Other sanctions may include the costs of discovery, attorney’s fees or the costs associated with data recovery.
In Zubulake, the plaintiff asked for and received an adverse inference jury instruction. At trial, the jury returned a $29.1 million verdict in favor of the plaintiff.
In light of the potential consequences associated with intentional and inadvertent spoliation, it behooves existing and potential litigants to err on the side of caution. Do not delete electronic data if your company is currently involved in litigation or if litigation is reasonably anticipated. Also, always handle e-mail and other electronic materials as if they where printed, physical documents.
Matthew Rosek is an attorney at McCoy & Hofbauer S.C. in Waukesha.
He can be reached at (262) 522-7022.
