IN 1994, Mary J. Linnen died of a medical condition arising from her use of phen-fen--a diet drug combination. The drug was later pulled from the market after its side effects became public. Linnen's parents sued the drug manufacturer, Wyeth-Ayerst Laboratories, claiming that it knew of the potentially deadly effects of the drug and that it failed to inform physicians and consumers of the risk. In the wrongful death lawsuit, plaintiffs' attorneys requested that Wyeth-Ayerst turn over electronic backup tapes containing e-mail and other documents from January 1994 to May 1995. During the ensuing discovery period, the company filed a claim requesting that the order to retrieve the e-mails be vacated because such actions would be unduly burdensome and too expensive.
The court disagreed, ruling that one of the risks taken on by companies that decide to use computer technology is that electronic information may be required in litigation (Linnen v. A.H. Robins Co., Massachusetts Superior Court, 1999). Companies, ruled the court, should not be able to "reap the benefits of such technology and simultaneously use it as a shield in litigation." Also during discovery, the plaintiffs requested that the company retain certain electronic documents that might be relevant to the case. Instead, Wyeth-Ayerst "recycled" four months of backup tapes containing the documents, thus destroying them. As a sanction for the company's actions, the court allowed plaintiffs' attorneys to point out its destruction of evidence at trial. The company settled the multimillion-dollar case.
THE RULES OF EVIDENCE, including the obligation to retain and produce files ruled admissible and relevant, are generally the same for digital and paper files. But some companies are more aware of their obligations with regard to hard copy. They tend to view those files as formal records requiring written retention and destruction policies.
The approach to retention of electronic data may be less formal--it may be left to individual employees, for example. But it is also more complicated because each file typically exists in multiple versions, including on backup tapes, where the policy may be to routinely wipe files in batches by date, regardless of subject matter. The result is that companies can face charges of spoliation--destruction of evidence--in the event of litigation involving electronic records. As the case discussed above illustrates, a failure to produce electronic records at trial can be costly. To avoid liability, managers must understand the rules of spoliation. The company should also develop comprehensive retention and destruction policies and procedures.
RULES OF SPOLIATION
Although the precise rule varies slightly by jurisdiction, a party is usually guilty of spoliation if it destroys evidence relevant to litigation with the purpose or intent of preventing another party from using the evidence. To establish spoliation, courts must determine that the company had an obligation to preserve evidence and that it intentionally destroyed such information. Then the court may sanction the company for its deeds.
Obligations. To establish spoliation, the court must first find that the party had an obligation to preserve electronic evidence. Obligations can be those required by law or regulation or those that evolve out of litigation.
Statutory. State and federal laws and regulations require that designated types of records be retained for specified periods of time. For example, federal statutes were at issue in Byrnie v. Cromwell (U.S. Court of Appeals for the Second Circuit, 2001). In the case, a prospective teacher sued a school district for age discrimination after the district failed to hire him and chose a younger applicant. During the trial, the court found that the school district had an unwritten policy of destroying notes of interviews and hiring decisions soon after the hiring process had been completed. …