Breaking News: Court Clarifies Duty to Preserve Evidence, Denies eDiscovery Sanctions Motion Against Pfizerby Philip Favro on April 18th, 2012
It is fortunately becoming clearer that organizations do not need to preserve information until litigation is “reasonably anticipated.” In Brigham Young University v. Pfizer (D. Utah Apr. 16, 2012), the court denied the plaintiff university’s fourth motion for discovery sanctions against Pfizer, likely ending its chance to obtain a “game-ending” eDiscovery sanction. The case, which involves disputed claims over the discovery and development of prominent anti-inflammatory drugs, is set for trial on May 29, 2012.
In Brigham Young, the university pressed its case for sanctions against Pfizer based on a vastly expanded concept of a litigant’s preservation duty. Relying principally on the controversial Phillip M. Adams & Associates v. Dell case, the university argued that Pfizer’s “duty to preserve runs to the legal system generally.” The university reasoned that just as the defendant in the Adams case was “sensitized” by earlier industry lawsuits to the real possibility of plaintiff’s lawsuit, Pfizer was likewise put on notice of the university’s claims due to related industry litigation.
The court rejected such a sweeping characterization of the duty to preserve, opining that it was “simply too broad.” Echoing the concerns articulated by the Advisory Committee when it framed the 2006 amendments to the Federal Rules of Civil Procedure (FRCP), the court took pains to emphasize the unreasonable burdens that parties such as Pfizer would face if such a duty were imposed:
“It is difficult for the Court to imagine how a party could ever dispose of information under such a broad duty because of the potential for some distantly related litigation that may arise years into the future.”
The court also rejected the university’s argument because such a position failed to appreciate the basic workings of corporate records retention policies. As the court reasoned, “[e]vidence may simply be discarded as a result of good faith business procedures.” When those procedures operate to inadvertently destroy evidence before the duty to preserve is triggered, the court held that sanctions should not issue: “The Federal Rules protect from sanctions those who lack control over the requested materials or who have discarded them as a result of good faith business procedures.”
The Brigham Young case is significant for a number of reasons. First, it reiterates that organizations need not keep electronically stored information (ESI) for legal or regulatory purposes until the duty to preserve is reasonably anticipated. As American courts have almost uniformly held since the 1997 case of Concord Boat Corp. v. Brunswick Corp., organizations are not required to keep every piece of paper, every email, every electronic document and every back up tape.
Second, Brigham Young emphasizes that organizations can and should use document retention protocols to rid themselves of data stockpiles. Absent a preservation duty or other exceptional circumstances, paring back ESI pursuant to “good faith business procedures” (such as a neutral retention policy) will be protected under the law.
Finally, Brigham Young narrows the holding of the Adams case to its particular facts. The Adams case has been particularly troublesome to organizations as it arguably expanded their preservation duty in certain circumstances. However, Brigham Young clarified that this expansion was unwarranted in the instant case, particularly given that Pfizer documents were destroyed pursuant to “good faith business procedures.”
In summary, Brigham Young teaches that organizations will be protected from eDiscovery sanctions to the extent they destroy ESI in good faith pursuant to a reasonable records retention policy. This will likely bring a sigh of relief to enterprises struggling with the information explosion since it encourages confident deletion of data when the coast is clear of a discrete litigation event.