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Why Lawyers Need Knowledge of Data Retention Policies

by on March 11, 2010

A recent case decided in New York underscores the need to put the brakes on data destruction procedures when a company becomes the target of a lawsuit. The litigation, Einstein v. 357, LLC
, involved the alleged design, construction, development and deceptive marketing of a condominium unit in Brooklyn. During the electronic discovery process, Einstein’s lawyers detected that certain emails relevant to the case may have been wiped out because the data destruction policy of one of the defendants, the Corcoran Group, continued unabated after the lawsuit was filed. That policy required brokers to delete emails, at their own discretion, once the server space allocated for their email accounts reached 200 megabytes.


In its decision, the New York Supreme Court ruled adversely toward the defendants because they did not go the extra yard to protect potential evidence once they were targeted for litigation. “There is no dispute that the Corcoran Defendants intentionally discarded emails in the ordinary course of business,” the court wrote. “While the deletion of emails is not per se improper, particularly when such deletions occur in the ordinary course of business, the matter is quite different when litigation has commenced or is reasonably anticipated. At that point, a party must take additional steps to preserve potentially relevant emails.”


“The Corcoran Defendants’ inboxes were configured so that the individual users were obligated to delete emails on a regular basis in order to maintain the use of their email systems,” the court added. “[T]his Court has found that the Corcoran Defendants made no effort to stop this deletion policy or to make an image of the Corcoran Defendants’ inboxes or computer hard drives, instead relying solely upon the backup tapes even though those tapes indisputably would not capture all deleted emails.”


Writing in the New York Law Journal, Mark A. Berman, a partner with Ganfer & Shore and secretary of the e-discovery committee of the commercial and federal litigation section of the New York Bar Association, said of the Einstein decision: “[It] should remind counsel of the drastic perils, including the issuance of an adverse finding or preclusion order, that could result from not being aware of or not fully understanding a client’s policies regarding e-mail retention and storage, and not ensuring that responsive e-mails are properly searched for and appropriately produced.”

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