Legal Obligations with Respect to Electronically Stored Information

People delete ill-advised emails. They take down their most unfortunate or incriminating social media posts. Computer files go missing, and digitally stored photos disappear.

But whether these digital mistakes are innocently (or not so innocently) sent to a recycling bin which is then routinely emptied, or instead systematically scoured from a hard drive with scrubbing software, the process of deletion leaves a mark. And the courts have noticed.

When litigation is commenced, threatened or merely anticipated, the parties to that litigation will be under a legal duty to preserve what they know or reasonably should know to be relevant to that litigation. Under Federal Rules of Civil Procedure 37(e), if electronically stored information (“ESI”) that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through other means, the court can enter sanctions against the party that failed to preserve it. Further, if the court finds prejudice to another party from the loss of that information, it may order such measures as necessary to cure any prejudice or, if the court finds that the party acted with the intent to deprive another party of that information, the court may presume that the lost information is unfavorable to the party that lost it, instruct a jury that the jury must presume the information was unfavorable to the party, or even dismiss the action or enter a default judgment.

The Pennsylvania courts have established their own standard for determining sanctions for the destruction, or in legal terms, “spoliation,” of electronically stored information. In Pennsylvania, the courts may sanction a party for violations of the duty to preserve electronic information, and in considering the proper sanction for failure to preserve evidence, the court will consider the degree of fault of the party who altered or destroyed the evidence, the degree of prejudice suffered by the opposing party, and the availability of any lesser sanctions that will protect the opposing party’s rights while also deterring future similar conduct.

In the context of traditional ESI, such as word processor files, emails and spreadsheets – files that are typically stored on the party’s own computer devices – the obligation to preserve evidence goes beyond a duty to simply not delete files. The duty requires the active and affirmative preservation of these files, which may include the interruption of routine document destruction and data dumps.

In the context of social media, where information is stored externally, and current information is constantly changing, both attorneys and their clients may need to take more active steps to avoid the inadvertent spoliation of evidence. That is, such externally stored information may have to be actively downloaded in order to preserve it and avoid a charge of spoliation.

Parties who believe they might be able to get away with the deletion of potentially incriminating files should think twice. Attorneys and law firms now routinely engage forensic computer analysists to search the other parties’ computer devices for signs of file deletion and destruction. Often times, deleted files can be recovered. And even where files have been removed with scrubbing software, the very fact that scrubbing software was used can be used as evidence that whatever was scrubbed would have been harmful to the cause of the party who scrubbed it.

As suggested above, spoliation of ESI has consequences. In the most general terms, if the court finds that a party has engaged in or allowed the spoliation of evidence, the court can enter an “adverse inference” against that party. This adverse inference can be used as affirmative evidence in support of the other party’s legal position in a lawsuit. For example, in a case where the issue is a former employee’s alleged theft of the employer’s confidential information, evidence that files were deleted from a laptop or thumb drive shortly before the start of litigation can be used as affirmative evidence that the deleted files were indeed confidential information of the former employer.

In order to avoid the prospect of such adverse inferences, and in any case where ESI may be significant, attorneys now routinely issue “litigation hold” letters to both their clients and opponents alike, instructing them on their obligation to affirmatively preserve ESI. In any case where social media is concerned, these litigation hold letters should specifically instruct the parties to download and preserve information stored on external sites.

Also, in the context of social media, attorneys should be instructing their clients that while it is acceptable, and often advisable, to change their account privacy setting so as to limit third parties’ ability to access these social media sites, the clients must not delete any social media posts. In fact, attorneys who have failed to offer such advice, and who have instead advised their clients to take down or delete their social media posts, have been sanctioned for their role in their clients’ failure to preserve these posts.

The failure to preserve ESI can create enormous legal headaches and alter the outcome of litigation. If there is potential litigation on your horizon, you should contact your attorney immediately to understand your legal rights and obligations with respect to ESI.

Bruce L. Baldwin, Esquire is a partner in the law firm of Wolf, Baldwin and Associates, P.C., with offices in Pottstown, West Chester, and Reading, and has represented employers and employees in business matters and litigation for over 30 years. He may be reached by calling 610.323.7436, or by e-mail at BBaldwin@wolfbaldwin.com.

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