If you’re involved in current or even threatened litigation, you have an obligation to retain information that is reasonably likely to be relevant and turn it over during discovery (the pretrial exchange of evidence). In the electronic world we live in, this increasingly includes and often revolves around electronically stored information (ESI). Compliance (or failure to comply) can really make or break a case. This article provides an overview of what ESI is, why it needs to be preserved, and best practices on how to do so in a way that protects your company. 
What is ESI?
ESI can refer to any files kept in electronic formats, including e-mails, Word documents, spreadsheets, presentations, drawings, and more.
In the litigation context, ESI files are collected and processed through software to extract metadata for searching. This process of extraction normalizes the data so that one program can be used for review instead of opening files in their various original programs.
Review software allows legal teams to organize the files for review by date, concept, and custodian. Depending on the size, needs, and trajectory of the case, this can be an onerous process. However, as discussed later in this article, there are steps you can take before litigation to be prepared and to mitigate the costs associated with this process.
Why preserve ESI?
Why should you care about preserving, reviewing, and producing ESI? The Federal Rules of Civil Procedure impose specific obligations on companies to maintain, store, and produce ESI in litigation. Specifically, though, “[t]he duty to preserve and produce discoverable evidence only covers the discoverable information that a party knows or reasonably should know may be relevant to the pending or impending litigation.” This includes tangible and intangible information as well as transient information, such as text messages, e-mails subject to automatic deletion, instant messaging, or Web-based platforms that could be deleted or erased.
Failure to comply with the obligations could—and indeed often does—result in a spoliation of evidence claim. A spoliation claim could be brought during the course of litigation if the other side suspects (or perhaps knows) the company has failed to maintain information it was supposed to keep. This can range from allegations of poor record-keeping practices or failure to cease automatic purging processes when notified of the litigation to allegations of intentional misconduct or “bad faith.”
While some allegations are certainly more defensible than others, it’s never ideal to defend against a spoliation claim of any sort. So how can you avoid such a claim?
How should we handle ESI?
Even before a lawsuit hits, having a good grasp of where your company’s data is stored—perhaps even setting out a data map—can put you ahead of the game when litigation does come down the pike. This goes beyond where executives think data is stored or what the corporate policy says, and requires examining the actual practices of employees.
At the first sign of litigation—which can be before any complaint is filed—a retention letter or notice should go out to key people who might be involved or could potentially have ESI the company is obligated to preserve.
The next important step early in the preservation and collection process is to interview key custodians and help them identify where their data might be located. Generally, when documents are forgotten, it’s not because people are hiding things, it’s because they don’t understand either where they’re storing their data or how they’re storing it. If they fail to identify it, then you likely will fail to preserve it.
Preliminarily, the chief aim is identifying and preserving the data. This could mean ceasing any automatic deletion systems and ensuring the data is stored in an accessible location. Once your data set is determined, document-processing software can allow the legal team to organize, analyze, and review the information. Ideally, at this point, the analysis can begin to work in your favor. The software allows attorneys to look at the metadata, run “smart” searches, and do much more with the data than if it was contained in a box of paper.
If you have access to a litigation support specialist, use him as early and often as you can to make sure you fully understand the technology, think through what other forms of data you may not have considered, and any other ideas he might have to help you.
Bottom line
We no longer operate in a world where documents relevant to an employee or issue are all contained in a small filing cabinet. That small filing cabinet has turned into various data systems, methodologies, backups, and electronic formats. With the frequent use of e-mail, text messaging, and instant messaging internally, many companies are generating a larger electronic data trail than they realize.
Many companies find managing their ESI during litigation overwhelming, and if you aren’t careful, you can fall into traps that allow ESI to become your downfall. Being intentional about managing ESI before and throughout the litigation process can help you avoid the traps and, ideally, use ESI to your advantage.
Sarah E. Caldwell Breslin is an attorney with Faegre Baker Daniels LLP, practicing in the firm’s Indianapolis, Indiana, office. If you have questions about ESI, or any other employment concern, contact the author at sarah.breslin@faegrebd.com or any of Faegre Baker Daniels’ labor and employment attorneys.
