So You Think Deleting E-mail Is a Good Idea?

Businesses in litigation might find they have the duty to preserve e-mail messages. They also might find that deleting electronic messages relevant to legal proceedings could result in sanctions. Several recent cases illustrate these complex issues that have arisen as the popularity of electronic messages continues to explode. The cases show that deleting e-mail is a bad idea.

In the August 2003 issue of Midwest Construction, we wrote about the obligation on a litigating party to locate "deleted" electronic documents for production in litigation.

We summarized the principles announced by a federal court in a dispute about discovery of electronic mail in the employment discrimination case of Zubulake v. UBS Warburg, LLC, 2003 U.S. Dist. LEXIS 7939 (S.D.N.Y., May 13, 2003) ("Zubulake II").

The lessons of Zubulake II were the following:

1. Electronic data is discoverable.

2."Deleted" electronic data, such as drafts and electronic mails, most likely continue to reside somewhere.

3. The party responding to a document request or subpoena might have to bear the cost of searching and retrieving all "accessible" data, which will include the data on hard drives, servers, optical disks and, depending on the system, some back-up tapes.

4. The party responding to discovery might have to search and retrieve some or all "inaccessible" data such as on back-up tapes and fragmented or overwritten data especially if the requesting party will bear the cost.

5. The party requesting documents might (but might not) have to bear the cost of retrieving and searching that "inaccessible" data.

The Zubulake parties' disputes about the preservation and production of e-mails have continued.

In Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003) ("Zubulake IV"), the court held that a party has a duty to preserve its electronic documents. That duty attaches at the time litigation is reasonably anticipated, not just after a complaint is filed:

"Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a 'litigation hold' to ensure the preservation of relevant documents. As a general rule, that litigation hold does not apply to inaccessible backup tapes (e.g., those typically maintained solely for the purpose of disaster recovery), which may continue to be recycled on the schedule set forth in the company's policy. On the other hand, if backup tapes are accessible (i.e., actively used for information retrieval), then such tapes would likely be subject to the litigation hold.

"[I]t does make sense to create one exception to this general rule. If a company can identify where particular employee documents are stored on backup tapes, then the tapes storing the documents of 'key players' to the existing or threatened litigation should be preserved if the information contained on those tapes is not otherwise available. This exception applies to all backup tapes" Zubulake IV, 220 F.R.D. at 218 (ordering sanctions against the employer for failing to preserve electronic mail).

Another Opinion Issued

Now the Zubulake case has generated another court opinion, this one on the consequences of not just failing to preserve but actually deleting e-mails, Zubulake v. UBS Warburg, LLC, 2004 U.S. Dist. LEXIS 13574 (S.D.N.Y. July 20, 2004) ("Zubulake V").

Zubulake V imposed severe sanctions on the employer. The sanctions might make it impossible to defend the case.

Zubulake V sets forth principles for lawyers and clients to follow in the preservation, search and production of electronic mail. Zubulake V also is illustrative regarding how it came to light that e-mail had been deleted.

The facts in Zubulake V were the following:

(a) Immediately after the employee filed an EEOC charge in August 2001, the employer's in-house counsel orally instructed personnel not to destroy or delete hard copy or electronic material potentially relevant to the employee's claims and to segregate that material into separate files for later attorney review. (The in-house counsel failed to consider segregating "back-up tapes" that were maintained by the employer's information technology personnel.)

(b) Shortly thereafter, outside counsel met with a number of the key players in the litigation, reiterated the earlier instructions and stressed the need to retain e-mail.

(c) Some six months later - and just after the employee had filed her federal court complaint that followed the EEOC charge - outside counsel repeated the earlier instructions, but this time in writing. Another six months later, after receiving the employee's formal document request seeking e-mails, outside counsel again gave the written instruction to retain e-mails.

(d) Because the employee's document request specifically requested e-mails on back-up tapes, outside counsel instructed the employer's information technology personnel to stop recycling back-up tapes. However, this instruction came some 18 months after the court said the instruction should have been given.

(e) Every key employee spoke with outside counsel or received his e-mails about the duty to preserve e-mails.

(f) After the court had ordered the employer to restore particular back-up tapes, the parties discovered (i) some back-up tapes were missing, and (ii) other back-up tapes contained e-mails that were not present on the employer's "active" files (but chronologically should have been).

(g) The review of the back-up tapes disclosed that at least six key personnel had not retained certain e-mails germane to the employee's claims. Once the back-up tapes were searched, it became clear that the primary alleged discriminator had deleted selected e-mails after counsel's instruction to maintain all e-mail.

(h) More damaging, the recovered e-mails were found after the primary alleged discriminator already had testified at deposition and denied a critical fact. The e-mail recovered from the back-up tape would easily contradict the denial.

(i) Another key employee deleted an old e-mail but forgot, or failed to recognize, that he had forwarded it to another employee months earlier. Thus, the deleted email appeared on multiple back-up tapes.

(j) Many back-up tapes were lost or overwritten. As a result, it was impossible to know how many e-mails were lost entirely.

(k) The parties also discovered more e-mails in the "active" files that should have been produced but were not because they were in individual employees' archived files on their hard drives. This discovery was not made until after the employee took thirteen depositions, and four ordered redepositions, of the employer's key employees.

Points of Obligation

The Zubulake V court clarified that "[a] party's discovery obligations do not end with the implementation of a 'litigation hold' - to the contrary, that's only the beginning" Zubulake V, 2004 U.S. Dist. LEXIS 16574, *31. Zubulake V explained the lawyer's responsibilities:

(1) Issue a "litigation hold" at the outset of litigation or whenever litigation is reasonably anticipated. The hold must be re-issued periodically to refresh all employees and to advise new employees.

(2) Communicate directly with the "key players" in the litigation about preserving evidence. Those people should be periodically reminded.

(3) Instruct all employees to produce electronic copies of their relevant active files.

(4) Ensure that all back-up media are retained to avoid recycling over relevant material

Zubulake V, 2004 U.S. Dist. LEXIS 13574, *32-41.

Despite the Zubulake V court's admonishment of the lawyers, "[a]t the end of the day, however, the duty to preserve and produce documents rests on the party" Zubulake V, 2004 U.S. Dist. LEXIS 13574, *48. Because the employer "deleted e-mails in defiance of explicit instructions not to," the Zubulake V court imposed significant sanctions, Zubulake V, 2004 U.S. Dist. LEXIS 13574, *49.

The most onerous of the Zubulake V sanctions was an adverse inference instruction that would be given to the jury at the trial:

"You have heard that [employer] failed to produce some of the e-mails sent or received by [employer] personnel in August and September 2001 . . . you are permitted, but not required, to infer that the evidence would have been unfavorable to [employer]" Zubulake V, 2004 U.S. Dist. LEXIS 13574, *61-62.

That type of instruction obviously makes it much more difficult for the defending party to prevail. If the e-mails had not been deleted, their contents might have been explained away. Now, the defending party has lost the chance to explain.

A Look at Another Case

John S. Mrowiec is a partner with Chicago-based Conway & Mrowiec, a construction and public contracts law and litigation practice. He may be reached at (312) 658-1100. For information, go to the firm's Web site at www.cmcontractors.com.