Court Rejects Argument that Companies Can Transfer Responsibility to Employees for Email Management and Retention
The case in question is Phillip M. Adams and Associates v. Asus Computer International. It is important to note that Asus is only one of many well known industry heavyweights named in this lawsuit but this ruling singled out Asus and how it responded to this eDiscovery request. The lawsuit revolves around a patent granted in 1992 to Dr. Phillip Adams for software that identified defects in floppy disk controllers. It is alleged that ASUS gained access to his software, reversed engineered it to illegally test their motherboards, and then required chip manufacturer Winbond to modify the chips sold to ASUS using Dr. Adams technology.
Although ASUS stated no documents pertaining to the case had been destroyed since 2005, ASUS provided very few documents related to the eDiscovery request. Due to this there were numerous questions as to the reasons behind the lack of documentation, and more specifically, why so few emails pertaining to the case were released. Based on the lack of produced documents the Plaintiff asked for sanctions due to spoliation. ASUS provided an interesting response to the allegation of missing document by saying:
- Its email servers were not designed for archival purposes and employees were instructed to assume responsibility for preserve any emails of long term value.
- It is its routine practice that its employees download to their individual computer those emails the employee deems important or necessary to perform his or her job function or comply with legal or statutory obligations.
- Any information not saved by the employee was erased.
- Determination of "long term value" was determined by the employee.
From that explanation came the following quote from the court:
"An organization should have reasonable policies and procedures for managing its information and records." [Citation omitted.] 'The absence of a coherent document retention policy' is a pertinent factor to consider when evaluating sanctions."
In short, if an organization does not have a document retention policy guiding its approach to electronically stored information (ESI) such as e-mail, then it will be a pertinent factor in deciding sanctions against your company. The court also stated, "It is clear that ASUS' lack of a retention policy and irresponsible data retention practices are responsible for the loss of significant data."
This plainly lays blame on ASUS and could very well lead to a large sanction against it because of it. These are powerful statements made by the court and show just how serious the courts are in regards to policies and procedures and retention of e-mails pertinent to an eDiscovery request. Relying on employees to retain and produce relevant e-mails based on the Federal Rules of Civil Procedure (FRCP) just cannot happen in today's legal environment.
Only through the use of technologies such as Estorian's LookingGlass can companies answer email eDiscovery requests in a complete and timely fashion, and without worry of whether emails pertinent to the case are either missed or destroyed. Although ASUS' email servers may not be designed for archival purposes, using LookingGlass fills this void by ensuring emails are archived, preserved, and searchable.
This case serves as a good lesson to those companies who continue to debate the necessity of technologies such as LookingGlass, as well as whether they need polices and procedures guiding document retention. Not only are they needed, but they are mandatory when faced with litigation involving eDiscovery. As was demonstrated in this case, relying on your employees' judgment is not an acceptable document management and retention policy and failing to the take the necessary steps to define and retain documents from spoliation will certainly lead to costly sanctions.
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