In a July 24, 2012 order in the Apple Inc. patent infringement case against Samsung Electronics Co., a U.S. magistrate judge in California ruled that Samsung admitted it was on notice that Apple would file a patent infringement lawsuit in August 2010, but Samsung did not institute a litigation hold notice. As a result, Samsung's automatic deletion of emails continued until April 2011 when Apple actually filed the lawsuit. Apple is seeking damages of more than $2.5 billion, and at trial, the jury will be given an adverse inference instruction that the reason that Samsung did not retain the emails was that they were adverse to Samsung's case.
Why You Need to Comply
It goes without saying that eDiscovery has changed litigation forever and is part of every lawsuit. It is estimated that every day there are over 350 billion emails and since everyone carries a smartphone that receives emails, we now operate all businesses using electronic information. Also there are estimates that more than 99 percent of all information is electronic.
What does that mean to you? First, you cannot save everything forever since there are natural limits on the cost of storage on disks and tapes, and many of the 350 billion emails are spam which no one wants and must be deleted by some means.
Records Retention Policies
Managing electronically stored information (which is the way the federal rules of civil procedure now define this category of information) is a necessity for every business today for a number of reasons. One good reason is that the records retention policy helps establish for your employees how long to keep records and allows the destruction of certain items that no longer have business value. As a result, some individuals call these policies records destruction policies, since the policy allows an excuse to delete records.
But, the best reason to have a records retention policy is that if you are drawn into litigation and the other party claims that you wrongfully deleted ESI, you probably will be protected if the destruction of that ESI was in accord with the records retention policy. On the other hand, if you have a records retention policy and do not follow it, you run the risk that a judge will conclude that you intentionally destroyed the ESI.
Litigation Hold Notices
When you decide you want to sue somebody, you should issue a litigation hold notice to protect the ESI of the employees who may relate to the lawsuit even though you are the plaintiff. Likewise, when you receive an indication that you might be sued, you should issue a litigation hold notice to protect the ESI. In both circumstances, you should formally change your records retention policy to preclude the destruction of ESI.
For additional information or to discuss any issues regarding records retention policies and litigation holds, please contact Trial Partner Peter S. Vogel, chair of Gardere's Electronic Discovery and Document Retention Practice, (pvogel@gardere.com or 214.999.4422). Please also feel free to contact Trial Partners Mark W. Bayer (mbayer@gardere.com or 214.999.4521) and Craig Florence (cflorence@gardere.com or 214.999.4796).
