Effective Document Retention:Lean, Mean, But Not Spoiling Youor Your Lawsuit

Effective Document Retention:Lean, Mean, But Not Spoiling Youor Your Lawsuit

Carol A. PetersonAssistant General Counsel, 3M Company

Thomas TinkhamStewart D. AaronShari L. JerdeDorsey & Whitney LLP

Carol A. PetersonAssistant General Counsel, 3M Company

Thomas TinkhamStewart D. AaronShari L. JerdeDorsey & Whitney LLP

Dangerous PracticesDangerous Practices

• “Cleaning” your files in anticipation of suit

• Assuming employees will file e-mail

• Storing unorganized paper or electronic material

• Not collecting documents after notice of claim

• Not identifying critical documents

• Violating laws on record retention

Best PracticesBest Practices

• Issue a Litigation Hold

• Identify Key Players

• Develop a plan to address electronic discovery

• Maintain an on-going role in document preservation and collection

The CSFB Document Retention PolicyThe CSFB Document Retention Policy

[N]o documents related to a transaction may be destroyed if (i) CSFB has been made a party to litigation involving such transaction or has received a subpoena which calls for the production of such documents or (ii) it is reasonably likely that litigation may be commenced in connection with such transaction or any matter relating to CSFB's involvement therein.

On or about December 4, 2000, at approximately 6:20 p.m. EST, CSFB's "Global Head of Execution - Technology Group" sent an email to Quatronne:

On or about December 4, 2000, at approximately 6:20 p.m. EST, CSFB's "Global Head of Execution - Technology Group" sent an email to Quatronne:

With the recent tumble in stock prices, and many deals now trading below issue price, I understand the securities litigation bar is mounting an all out assault on broken tech IPOs.

December 4, 2000 email to Quatronne: (cont’d)December 4, 2000 email to Quatronne: (cont’d)

In the spirit of the end of the year (and the slow down in corporate finance work) you may want to send around a memo to all corporate finance bankers (and their assistants) reminding them of the CSFB document retention policy and suggesting that before they leave for the holidays, they should catch up on file cleanup.

Today, it's administrative housekeeping. In January, it could be improper destruction of evidence.

On or about December 4, 2000, at approximately 8:13 p.m. EST, with the authorization of Quattrone, the Head of Execution sent an email to members of the Technology Group:

On or about December 4, 2000, at approximately 8:13 p.m. EST, with the authorization of Quattrone, the Head of Execution sent an email to members of the Technology Group:

With the recent tumble in stock prices, and many deals now trading below issue price, the securities litigation bar is expected to [sic] an all out assault on broken tech IPOs. In the spirit of the end of the year (and the slow down in corporate finance work), we want to reminding [sic] you of the CSFB document retention policy. The full policy can be found at http://intranet.csfb.net/ GlobalIBD/lcd/doc_retention_us.html

. . .

December 4, 2000 email to members of the Technology Group: (cont’d)

December 4, 2000 email to members of the Technology Group: (cont’d)

Note that if a lawsuit is instituted, our normal document retention policy is suspended and any cleaning of files is prohibited under the CSFB guidelines (since it constitutes the destruction of evidence). We strongly suggest that before you leave for the holidays, you should catch up on file cleaning.

Eighth Circuit View On Spoliation Of EvidenceEighth Circuit View On Spoliation Of Evidence

The district court has the authority to impose sanctions

for spoliation of evidence where: (1) a party destroys evidence that he knew or should have known was

relevant to litigation and (2) the destruction prejudices the

opposing party.

The district court has the authority to impose sanctions

for spoliation of evidence where: (1) a party destroys evidence that he knew or should have known was

relevant to litigation and (2) the destruction prejudices the

opposing party.

Adverse Inference Jury InstructionsAdverse Inference Jury Instructions

The Eighth Circuit has identified three factors for the district court to assess in determining whether an adverse inference jury instruction is appropriate when evidence is destroyed pursuant to a company’s document retention policy:

• Whether the policy is reasonable in light of the facts and circumstances surrounding the relevant documents;

• Whether lawsuits concerning the complaint or related complaints have been filed, as well as the frequency and magnitude of such complaints; and

• Whether the document retention policy was instituted in bad faith.

“Where a routine document retention policy has been followed . . . we now

clarify that there must be some indication of an intent to destroy the evidence for the purpose of obstructing or suppressing the truth in order to impose the sanction of an

adverse inference instruction.”Stevenson v. Union Pac. R.R. Co., 354 F.2d

739, 747 (8th Cir. 2004)

“Where a routine document retention policy has been followed . . . we now

clarify that there must be some indication of an intent to destroy the evidence for the purpose of obstructing or suppressing the truth in order to impose the sanction of an

adverse inference instruction.”Stevenson v. Union Pac. R.R. Co., 354 F.2d

739, 747 (8th Cir. 2004)

Record Retention: The Five QuestionsRecord Retention: The Five Questions

• Why

• Who

• What

• How long

• What again

Why?Why?

• Business needs

• Statutory requirements

• Litigation obligations

• Minimize storage

• Preserve critical records

• Adequately organize

Who?Who?

• Senior-level support critical

• Clearly defined ownership

• Organizational structure

• Usually within administrative services, IT, Legal, sometimes independent

• Departmental coordination

What?What?

• Inventory of records– Documents

– Electronic records

– Other items

– Third-party records that you control

• Tools available

How Long?How Long?

• Assessment of needs– Business needs

– Statutory requirements

– Litigation obligations

• Keep it simple

What Content?What Content?

• Every type of record

• Record categories

• Retention periods

• Destruction procedures

• Record creation (including email) guidelines

• Litigation/investigation holds

Making It WorkMaking It Work

• Communicate to employees

• Provide ongoing support

• Periodic reminders

• Incentives/certifications/forced compliance

• Be willing to modify

• Make it okay and easy to destroy useless documents and records