FOLLOWING NEW FEDERAL RULES OF CIVIL PROCEDURE TO AVOID EMAIL PITFALLS

By Paul Calabrese and Jamie Koch, Esq.

A lawsuit for any company is an expensive and time-consuming process.  Now, with the recent changes to the Federal Rules of Civil Procedure, responding to a lawsuit is even more involved.  Specifically, amendments to the Federal Rules of Civil Procedure (Rules), which were drafted by Congress and approved by the Supreme Court as of December 31, 2006, now require a comprehensive presentation of Electronically Stored Information (ESI) with respect to discovery. 

The amended Rules require any business that could be involved in litigation in federal court to retain electronic records - such as e-mails, instant messages, and text documents - and be able to retrieve them if economically feasible. The Rules also require company attorneys and IT managers to be able to show how electronic records are stored, what mechanisms are in place to retrieve them, and when and how they are deleted.

Virtually all businesses are affected by the new Rules.  Companies involved in litigation related to lawsuits that cross state lines, Internal Revenue Service actions, and Health Insurance Portability and Accountability Act or Sarbanes-Oxley violations, for example, are all expected to comply.  According to industry analysts, events requiring electronic discovery are becoming more common.  A survey by Enterprise Strategy Group shows that 91% of organizations with more than 20,000 employees have experienced an electronic discovery involving e-mail in the past 12 months.  Many businesses may not be aware of the new amendments or may find it difficult to comply with the new rules.

As an example, many companies have no e-mail retention policy in place.  Although not all organizations' e-mail retention policies will be the same, there are three elements that are essential to make such policies litigation ready: a clearly written records and information management policy; a legal hold-and-lift process to secure all information that might be relevant to an action; and an e-mail archiving process that includes services and software.

The Rules do permit the routine destruction of ESI that no longer needs to be retained due to storage limitations or relevance.  In order to comply but also safeguard against future discovery, companies should enforce new email policies regarding personnel communications.  The new policies should discourage personal email, irrelevant chit chat between employees, inflammatory statements, and, most importantly, the discussion of significant problems with other contractors, subcontractors or federal, state or local governmental bodies over email.  The idea is to avoid recording problem issues that could be accessed through future discovery.  Rather, employees should be advised to discuss sensitive matters in meetings or on the telephone or under privilege with outside counsel to protect privacy.

Because of the complexity of the discovery process and the potential risks, it is more important then ever for companies that are subject to federal litigation to have their counsel and IT personnel work together to develop an electronic blueprint and inventory of all relevant ESI.  Companies should update their record retention policies to eliminate data that should not be retained.  In addition, companies should create or update a written record retention policy that includes ESI and the use of email, in order to protect against liability in any future federal litigation.