By Mike Hamilton, J.D.
“Old dogs won’t learn new tricks.” Sometimes old sayings hold true. Case in point is Samsung’s conduct surrounding its past and still current email document retention policies. On July 24, 2012, Samsung was sanctioned for not taking adequate steps to avoid spoliation, making it the second time in less than 10 years that Samsung has been sanctioned for not turning off the auto deletion switch on its proprietary email system. In both cases, Apple v. Samsung Electronics Co., Ltd. (N. Cal. July 24, 2012) and Mosaid v. Samsung (D.N.J. 2004), the courts awarded adverse jury instructions against Samsung.
Much to do with Apple and Samsung’s very public battle over patent rights, the granting of an adverse inference instruction by the Northern District of California court has caused waves throughout the tech and legal community, putting a spotlight on e-discovery and information governance policies. In Apple v. Samsung Electronics Co., Ltd., the court ruled that Samsung failed to employ a defensible preservation process once the duty to preserve was triggered because the company did not:
- Suspend its proprietary email system’s biweekly document destruction plan
- Distribute legal hold notices when the duty to preserve (litigation) was reasonably foreseeable
- Monitor, track and follow up with applicable custodians to “ensure its employees were at all compliant” (i.e. understood legal ramifications of a legal hold and knew how to retain emails)
What lies as the basis of the problem for Samsung was its unwavering unwillingness to modify the company’s email document retention policy. In 2004, within Mosaid, Samsung refused to suspend the auto-deletion of emails after the beginning of litigation. The court in Apple, referenced Mosaid stating:
“Rather than building itself an off-switch – and using it – in future litigation such as this one, Samsung appears to have adopted the alternative approach of “mend it don’t tend it”…Samsung’s mend, especially during the critical seven months after a reasonable party in the same circumstances would have reasonably foreseen this suit, fell short of what it needed to do.”
Since 2001, Samsung has maintained its own proprietary default email system. Accessed through the web, if emails are not manually saved, Samsung’s document retention policy goes into effect, automatically deleting all emails every two weeks. Some may view Samsung’s document retention policy as a little extreme, especially since various corporations lean toward a more cautious time frame when setting the frequency of email deletions over their system, but Samsung cited three primary business reasons for employing a short, two-week retention policy: lower costs, security of confidential IP and correspondence to local, Korean privacy law.
THE E-DISCOVERY BEAT’S TAKE
While there is a push to defensibly reduce data volumes and streamline document retention policies (i.e. employing a standardized document retention policy without saving everything), organizations still must adhere to protocols that preserve potentially relevant ESI, protecting against spoliation. As the court stated in Apple, “It is generally recognized that when a company or organization has a document retention policy, it ‘is obligated to suspend’ that policy and ‘implement a litigation hold to ensure the preservation of relevant documents after the preservation duty has been triggered.”
For many organizations, implementing defensible e-discovery protocols and streamlining information governance guidelines has become a balancing act. Throughout the past couple years, numerous court opinions have consistently framed the necessary guidelines for creating a defensible e-discovery approach, stating that e-discovery doesn’t need to be perfect; just reasonable. Even though there is ambiguity that still surrounds the reasonableness standard, the court has mapped a few foundational principles that serve as a great starting point for creating a reasonable e-discovery process which in most cases will meet a litigant’s duty to preserve relevant ESI. These foundational principles are as follows:
- When to Preserve? Litigation is reasonably foreseeable. An objective standard that applies to both the initiator or the target of litigation.
- How to Preserve? Three step process – (1) Identify key custodians, send out legal hold notices to all applicable custodians, monitor their compliance through email reminders, legal hold re-issuance notices. Primary objective of these legal hold notices is to ensure that custodians understand what a legal hold is, what needs to be preserved and the consequences of spoliation. (2) Suspend your document retention policy, preventing the loss of potentially relevant information, which is usually outside the control of the individual custodian. (3) Research and update custodian legal hold lists – add custodians to a legal hold after interviews with key custodians.
- What to Preserve? Any ESI (documents, tangible items) likely to have discoverable information that may be relevant to the subject matter of litigation and that either party may use to support its claims or defenses. In short, if it seems remotely likely to be relevant save it.
For more information on defensible legal hold processes, download Exterro’s “Five Steps to Overcoming Legal Hold Mistakes,” here.
Mike Hamilton, J.D. is a Sr. E-Discovery Analyst at Exterro, Inc., focusing on educating Exterro customers, prospects and industry experts on how to solve e-discovery issues proactively with technology. His e-discovery knowledge, legal acumen and practical experience give him a valuable perspective on bridging the gap between IT and legal teams. You can find him on Google+, Twitter and Linkedin.