Considerations for Records and Information Management Programs in Light of the Pension Committee and Rimkus Consulting 2010 Decisions. Agenda. Review and Implications of Pension Comitteee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, et al.
Court found the plaintiffs negligent or grossly negligent in failing to preserve and produce documents.
Court found that plaintiffs failed to issue timely litigation holds and identify and preserve backup tapes and other sources of potentially responsive evidence.
Defined the degrees of conduct to determine the appropriate sanctions.
Any failure to take appropriate measures to preserve and collect relevant data.
Something “more than negligence” that “differs from ordinary negligence only in degree and not in kind.”
“Intentional or reckless conduct that is so unreasonable that harm is highly likely to occur.”
Examples of Negligent Conduct:
Failure to preserve resulting in loss or destruction of relevant information;
Failure to obtain records from all employees who had any involvement with the issues in the litigation;
Failure to take all appropriate measures to preserve ESI;
Failure to assess validity and accuracy of search terms.
Examples of Gross Negligent Conduct:
Failure to cease the deletion of email;
Failure to preserve backup tapes when they are sole source of relevant information or relate to key players;
Failure to collect information from former employees that remain in possession, custody or control after the duty to preserve attaches;
Failure to issue a written litigation hold;
Failure to obtain paper and electronic records from key players;
Failure to identify key players and preserve their data.
Special jury instructions;
Entry of default judgment or dismissal.
Objective of sanctions:
Deter parties from engaging in spoliation;
Place the risk of an erroneous judgment on the party who wrongfully created the risk;
Restore the prejudiced party to the same position absent the wrongful destruction of evidence.
Implications to consider?
Does the corporation’s email policy protect against destruction when litigation is or should be reasonably anticipated?
What do I do with back-up tapes since they may relate to key players but are not the sole source of relevant information and are used primarily for DR purposes? Are they still reasonably inaccessible? Cheap insurance to hold a tape or potential for review and production?
How are litigation holds issued, tracked and audited?
Who is responsible for assessing the accuracy and validity of search terms? Can that person testify?
Implications to consider?
Does the company know where all the evidence is and is there a policy to protect against loss or destruction when litigation is reasonably anticipated? If not, is this per se negligence?
How does the company obtain records from all employees related to a litigation? How does this affect the management of a valid destruction policy?
What is the company’s policy with respect to departing employees whose data is on preservation hold? Tracking mechanism to know on hold?
Cites and distinguishes Pension Committee.
Does not impose the most severe sanctions because other extensive evidence available to the plaintiff to prosecute its claims.
An issue for the jury to decide if defendants’ conduct was intentional spoliation of evidence and if so jury to decide if an adverse inference warranted.
What did the Court consider in Rimkus?
Court considered the following factors:
The defendants’ level of culpability with respect to the lost ESI.
The degree of relevance of the lost ESI to both parties’ legal theories.
The availability of other relevant ESI which would support the plaintiff’s claims.
Court found the following:
Defendants acted in bad faith and intentionally deleted emails and other relevant ESI.
There were other sources available to obtain some of the spoliated evidence.
Other evidence led to the content of some of the deleted ESI (other docs, deposition testimony or circumstantial evidence).
Why such a different approach to Pension Committee?
Rimkus noted the different approaches in the various federal circuits assessing spoliation:
5th, 7th,8th, 10th, 11th and D.C. Circuits require bad faith;
1st, 4th and 9th Circuits do not require bad faith
3rd Circuit applies a balancing of degree of fault and resulting prejudice;
Only the 2nd Circuit appears to permit an adverse inference instruction for gross negligence
Implications to consider?
How will the corporations’ approach to the creation, storage and preservation of ESI fare in the various federal courts?
What test will the specific court apply to determine the appropriateness of sanctions?
Should a corporation approach eDiscovery according to the court’s approach to sanctions or a one size fits all approach and hope for the best?
What effect do these cases have on retention rules for electronic data?
What effect do these cases have with respect to back-up tapes?
What effect do these cases have on litigation hold policies?
What effect do these cases have on running search terms to collect data?
What effect do these cases have on employees’ data when they leave the company?