It is becoming increasingly commonplace for businesses to conduct complex transactions electronically. Electronically produced documents, such as e-mail, provide companies with a fast and efficient means of communicating and discussing problems. Entire transactions are being completed without any data ever reduced to writing. Many people, however, do not realize that courts commonly require businesses to produce electronic documents during litigation. These electronic documents are valid as evidence, even if they were never printed out on paper. In fact, the recent antitrust case against Microsoft exemplifies the importance of such evidence and the extent to which it can reveal confidences in a way never intended. This electronic revolution has created the need for businesses to implement strategies for dealing with electronic documents both before and after disputes arise. Most companies, unfortunately, are not prepared to meet this challenge.

Under the Federal Rules of Civil Procedure, parties are required to produce “computerized data and other electronically-recorded information” as part of their discovery obligations. Advisory Committee Notes to the 1993 Amendments to Fed. R.Civ.P.26. “[I]t is black letter law that computerized data is discoverable if relevant” even if hard copies of the documents have already been produced. Anti-Monopoly, Inc. v. Hasbro, Inc., 1995 WL 649934 (S.D.N.Y. Nov 3, 1995). Courts have defined “computerized data” to include information such as “e-mail messages and files, back-up e-mail files, deleted e-mails, data, files, program files, backup and archival tapes, temporary files, system history files … and other electronically recorded information.” Kleiner v. Burns, 2000 WL 1909470 (D. Kan. Dec. 15, 2000).

The use of electronic documents as the sole manner of conducting business means that companies must seek to preserve this electronic data. If a company fails to maintain such electronic records, it may not be able to adequately prosecute or defend actions. Additionally, companies may be sanctioned for destroying electronic data. Consequently, it is important that companies implement a document retention policy in relation to electronically stored files in order to reduce this threat. Typically, companies should preserve all electronically stored documents for a period of time. Once a party becomes aware that a suit has been filed or is likely to be filed, it must make sure to preserve all electronic data which it knows (or should know) as the subject matter of the dispute and/or will be requested during discovery. Courts have gone as far as requiring the production of e-mails which had previously been deleted off a computer system. Playboy Enterprises, Inc. v. Welles, 60 F.Supp.2d 1050 (S.D. Cal. 1999). If electronic files are destroyed after suit is filed, companies may be subject to severe sanctions, such as adverse judgment or dismissal of an action.

The ever-expanding use of electronically produced and stored information has led to the creation of new technology to deal with electronic discovery issues once litigation has commenced. This technology can help attorneys prepare for litigation, arbitration and/or mediation by assembling, storing and sorting the electronic documentation and allowing it to be retrieved almost instantly. Reliance on this new technology makes it easier and quicker to prepare complex, document intensive cases. An added benefit from this technology is that attorneys will need to spend less time reviewing and searching for documentation and more time preparing the case.
About the this Article: This article, written by Scott A. Aftuck, was originally published in the Spring 2002 issue of “Building on the Law,” the legal newsletter of the law firm of Haese, LLC; 70 Franklin Street, 9th Floor; Boston, MA 02110; 617-428-0266. ( BIDDING OPPORTUNITIES. Be sure to check out the law firm’s large website that includes public and private bidding opportunities throughout the United States. There are currently over 300 links to websites maintained by state and federal agencies, municipalities and other sources of project information. It is organized by region and then by state within each region. Report, Vol. 4, No. 10 (Nov 2002)

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