You’re an employer in Connecticut. You’ve just been sued. Besides contacting a lawyer (and you ARE contacting a lawyer, right?), what else are you doing about the new case?
A new case in Connecticut suggests that preserving electronic data should be a top priority. Why? Because under new court rules, failure to do so could lead to sanctions or inferences that a party destroyed evidence that would’ve been harmful to its case. Indeed, the case suggests, in fact, that the duty to preserve evidence may arise even before the lawsuit is filed.
In, Doe v. Norwalk Community College, 2007 WL 2066497 (D. Conn., July 2007), the court granted a motion for sanctions against a party who had failed to preserve electronic evidence.
Under the new safe harbor provision of Federal Rule of Civil Procedure 37(f), data management must be maintained through a routine system; moreover, the company must take some affirmative action (such as a letter to key potential witnesses and IT consultants within the company) to prevent that everyday system from destroying or altering information once the party becomes aware of the case.
In this case, the party (Norwalk Community College) did not do so. It did not preserve the hard drives of key witnesses. Indeed, and even more damaging, those hard drives had been cleaned of data. Indeed, the expert for the other side — who inspected the computers, concluded that there were inconsistencies in the PST or Outlook e-mail files.
Because the company did not suspend the routine document destruction policy and "put a litigation hold in place," the court rejected any safe harbor arguments under Rule 37(f). Instead, the court granted the plaintiff request for sanctions and imposed an adverse inference jury instruction regarding the destroyed evidence (along with attorneys fees, costs and expert fees).
So, does this mean that an employer can wait to be sued before preserving evidence? This decision clearly says no. It found that the obligation to preserve evidence arises even before the lawsuit is filed. Following other precedent, the court held that the duty to preserve electronic data arises at the time when litigation is "reasonably anticipated".
While some employers and companies prefer to handle pre-litigation matters by themselves, the case serves a reminder that little actions (or inactions) at the start of a case can have much larger consequences down the road. Issuing litigation holds and suspending routine document retention policies upon notice of a complaint may be one way to avoid these larger consequences down the road.