E-discovery. If this word strikes terror into your heart, you are not alone. Already a formidable task, discovery became exponentially more onerous with the advent of modern technology. Instead of just looking through a file cabinet or two, even routine litigation regularly requires scouring everything from computers to phones to third-party servers for relevant information. But in the case of class actions, e-discovery often requires even greater expense and effort. And the failure to properly handle it can lead to significant sanctions.
While it may seem overwhelming, here are three basic points that every company should keep in mind about e-discovery. In later articles, we’ll explore each point in more depth.
A Company Must Preserve Potentially Relevant Information
When a company is involved in litigation, it has a duty to preserve any information in its possession that might be relevant to the claim. This duty generally arises when litigation is reasonably anticipated (which may be before suit is even filed) and continues until the action is completely concluded (either by settlement, voluntary dismissal with prejudice, or final judgment after all appeal periods have expired).
The failure to preserve potentially relevant information is called spoliation, and a court can order sanctions for this conduct. These sanctions range from imposing fines to instructing the jury that the missing evidence should be construed against the party who failed to preserve the evidence. Sanctions can be ordered even when the spoliation is innocent, if the harm cannot be remedied in any other way.
However, recent amendments to the Federal Rules of Civil Procedure bode well for employers facing class litigation. First, the amended discovery rules now provide that parties may obtain discovery regarding any matter that is both relevant to a claim or defense and proportional to the needs of the case. The amended rules also provide that any sanction imposed for a failure to preserve electronically stored information should be no greater than necessary to cure the loss or prejudice. Finally, a court cannot order the most serious sanctions – such as dismissing the lawsuit or instructing a jury to find that the missing information would have favored the opposing party – unless it finds that a party acted intentionally. Taken together, these rules should allow the court to more closely tailor the discovery (and any sanctions) to the specific facts of the case.
It is often the sheer volume of the potentially relevant information that makes e-discovery in class actions expensive and time consuming, because the duty to preserve evidence can encompass everything from text messages to digital time punches. This duty to preserve has been found to extend beyond company equipment to personal devices, which brings us to the next point.
Establish Proactive Policies for the Digital Workplace
Even before the threat of litigation arises, every company should consider whether it has a comprehensive digital governance plan to address the issues inherent in the digital workplace. For example, if you allow or require employees to use their personal devices for work, then a clear policy setting forth the requirements and responsibilities of your bring-your-own-device plan is invaluable. If and when litigation arises, you will know where information could be stored and be better able to collect it.
Another prong of a thorough digital workplace governance program is a comprehensive litigation-hold scheme. For example, it should provide a way to inform all the relevant employees of the need to retain and produce information and materials related to the case, while ensuring that they don’t delete anything going forward. It should also take into account any auto-delete program and confirm it is suspended during litigation. Further, it should ensure you revisit the issue on a regular basis throughout the litigation to remind everyone of the continuing obligation to preserve and produce information, which is particularly important in long-lasting class action cases.
Make It a Team Effort
Like any other digital quandary, implementing proactive policies and responding to active litigation should combine the professional expertise of your legal, technical and leadership teams. If you don’t tell your lawyer that your management often texts about business, then she can’t make an informed decision about what type of data collection is necessary. If your leadership doesn’t understand the software issues underlying the preservation of electronic data, they may not implement the most effective policies. If your IT guru doesn’t understand the seriousness of the duty to preserve all potentially relevant information, then you cannot take full advantage of his ability to assess and limit the scope of that data.