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Electronic Discovery Rules – Safe Harbor


The Federal Rules of Civil Procedure (FRCP) mandate that parties identify and produce all discoverable electronically stored information (ESI). The Rules also provide for harsh sanctions against companies destroying relevant ESI. Modern corporate computer systems destroy ESI every day. The simple act of turning on a computer, or turning off a cell phone, can destroy ESI. So then, if you cannot help but inadvertently destroy ESI, why make the effort to comply with the FRCP?

Luckily FRCP 37 provides a “safe harbor” for companies that inadvertently destroy relevant ESI. The safe harbor only applies, however, to ESI destruction associated with the routine, good-faith operation of an electronic information system. So what constitutes “good-faith” in the context of the FRCP?

In accessing whether your inadvertent destruction of ESI was in good-faith, and whether sanctions are in order, a court will look at several factors. Most importantly, a court will examine the steps you took to comply with any court order or agreement with the other side requiring the preservation of ESI. While the factors will obviously vary from case to case, one overarching theme is the existence of a corporate ESI management policy. Companies with an ESI management policy are more likely to be afforded safe harbor under the FRCP and those without such a policy are more likely to find themselves santioned by the court.

An appropriate ESI management policy includes items such as:
1) A document destruction policy
2) A litigation “hold” policy – including the tagging and preserving of relevant documents
3) ESI agreements with third party vendors – including litigation hold provisions
4) ESI destruction “sign-off” and deletion log
5) Process for removing “hold” after appeal period ends

Investing a little in an ESI management policy up is a good insurance policy against court sanctions down the road. The ESI safe harbor provisions of the FRCP are broad, but without an appropriate ESI management policy in place, it may be difficult to convince a judge that you merit its protections.

Brett Trout

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