Instant Messaging Rules: A Business Guide to Managing Policies, Security, and Legal Issues for Safe IM Communication

In the course of one lawsuit, William T. Thompson Co. v. General Nutrition Corp., the court ordered GNC to preserve all records maintained in the ordinary course of business. In spite of the order, management told employees that the judicial orders ‘‘should not require us to change our standard document retention or destruction policies or practices.’’ Because GNC did not stop deleting files as ordered, electronic documents that were not otherwise available were deleted. The court ordered a default judgment and over $450,000 in monetary sanctions against GNC. ^[5]

During the course of Trigon Insurance Co. v. United States, computer forensic analysis determined that the defendant had ‘‘willfully and intentionally’’ destroyed documents that should have been produced during discovery. Despite objections, the court ordered the defendant to pay $179,725.70 for hiring and deposing computer forensic experts and adjudicating the spoliation issue. ^[6]

In a securities proceeding, In re Cheyenne Software, Inc. v. Securities Litigation, the court imposed $15,000 in attorney’s fees and sanctions against the defendant for failing to respond to the court’s discovery order. The defendant was also ordered to bear the cost of downloading and printing up to 10,000 pages of additional documents that were responsive to keyword searches requested by the plaintiff. ^[7]

The government is equally strict about document retention. Title 26 of the Internal Revenue Code, for example, carries penalties of up to $500,000 and three years in prison for the destruction of records. ^[8]

In a lawsuit filed by employee Laura Zubulake against her former employer UBS Warburg, the parties discovered that certain backup tapes were missing and that e- mails had been deleted.

Zubulake moved for sanctions against UBS Warburg for its failure to preserve the missing tapes and e-mails. The court ruled that UBS Warburg had a duty to preserve the missing evidence because it should have known that the e-mails may be relevant to future litigation.‘‘Almost everyone associated with Zubulake recognized the possibility that she might sue,’’ the court wrote.

The court also found that UBS Warburg failed to comply with its own retention policy, which would have preserved the missing evidence. The court ordered UBS Warburg to bear its former employee’s costs for redeposing certain witnesses for the limited purpose of inquiring into the destruction of electronic evidence and any newly discovered e-mails. ^[9]

Don’t take chances with evidence. Establish and adhere to written policies governing the retention of business records (instant messages, e-mail, and otherwise). And educate executives and employees about their roles in the retention and deletion process and about how to handle evidence.

IM Rule # 27: You cannot hide from instant messaging discovery. Be prepared.

^[5]William T. Thompson Co. v. General Nutrition Corp., 593 F. Supp. 1443 (C.D. Cal. 1984).

^[6]Trigon Ins. Co. v. United States, 204 F.D.R. 277 (E.D. Va. 2001) and Trigon Ins. Co. v. United States, 2002 WL 31864265 (E.D. Va. Dec. 17, 2002).

^[7]In re Cheyenne Software, Inc. v. Securities Litigation, 1997 WL 714891 (E.D.N.Y. Aug 18, 1997).

^[8]MichaelOsterman, ‘‘E-Mail Retention,’’ NetworkWorldMessaging Newsletter (January 28, 2002), www.nwfusion.com/newsletters/gwm/2002/01196628.html .

^[9]Zubulake v. UBS Warburg, 02 Civ. 1243 (S.D.N.Y Oct. 22, 2003). See ‘‘Zubulake IV: Defendant Ruled Negligent for Destruction of E-mail Evidence,’’ Kroll Ontrack Case Law Update and E-Discovery News (November 2003), www.krollon track.com.