Electronically Stored Information (ESI)

Question: What is electronically stored information and what should my life sciences company do to preserve it?

 

Answer: Electronically stored information (“ESI”) and its preservation are increasingly important issues in U.S. based litigation. What constitutes ESI and how to preserve it can be crucial to the defense of your case and to your compliance with court rules and decisions. Here are some important things to remember about ESI and its preservation:  

There are many types of ESI.

Much of what your company does, from its communications to its substantive work, likely involves ESI. A non-exhaustive list of types and locations of ESI includes:

• • E-mail/Web-based e-mail
  • Word processing documents
  • PDFs
  • Spreadsheets/Databases
  • Webpages
  • CAD drawings
  • Audio and video files
  • Instant messages
  • Cell phones
  • Text messages/Mobile device apps
  • Social media
  • Voice mail and VOIP
  • Hidden or deleted data
  • Servers/The Cloud/External hard drives
  • Desktop and Home PCs
  • Laptops
  • CD-ROMs
  • Flash drives
  • iPads/Tablets
  • Virtual systems
  • Image files
  • System files
  • Metadata

Your duty to preserve ESI is not necessarily dependent upon your company being sued.

Remember that a duty to preserve ESI can exist independent of a lawsuit being filed against your company. According to The Sedona Conference Commentary on Legal Holds, a leading organization studying ESI-related issues, a duty to preserve exists when there is a reasonable anticipation of litigation. This occurs when the organization is on notice of a credible probability that it will become involved in litigation, seriously contemplates initiating litigation, or when it takes specific actions to commence litigation. See The Sedona Conference Commentary on Legal Holds:  The Trigger & The Process (2010). As such, a duty to preserve may arise in a variety of different contexts, and it is a fact-specific inquiry unique to each situation.

Have a plan in place to deal with ESI preservation issues before they occur.

Rather than react when your company is confronted with an ESI issue, think about having mechanisms in place that will allow your company to more easily deal with an ESI preservation issue when it occurs.

Know your company’s ESI.

Take the time to know the types and locations of your company’s ESI. As explained above, the types and locations of your company’s ESI can be extensive. Understand whether and to what extent your company automatically retains its ESI. Conversely, if ESI is not retained or able to be deleted, then understand what is deleted and how to turn off any routine deletion of ESI if a duty to preserve is triggered.  Have someone within your company responsible for knowing your company’s ESI and for preserving your company’s ESI. Understanding your company’s information architecture and governance policies is key.

Create policies and procedures now to deal with an ESI preservation obligation.

In addition to understanding how your company creates, maintains, and deletes ESI, consider putting procedures into place that will allow you to quickly and effectively deal with an ESI preservation obligation. Think about implementing a document/ESI retention policy. Make sure that your document/ESI retention policy is in writing, is known to your company’s employees, and is followed by your company’s employees. Ensure that you have the ability to terminate routine deletion protocols and make sure that someone within your company is tasked with this responsibility.

Finally, you should consider having draft litigation hold letters ready to be issued in the event of a preservation obligation. A litigation hold letter is a letter sent to people within your company explaining the need to preserve and cease routine deletion of ESI. The letter typically gives a discussion of the facts of the underlying case, the categories of documents and ESI to be preserved, and the individuals who must follow the litigation hold. Litigation holds are issued when an ESI preservation obligation is triggered. Consider implementing a procedure that makes your general counsel or other appropriate company employee responsible for drafting and sending your company’s litigation holds. Keep in mind that a preservation letter needs to be tailored to the facts of a specific case, and it is critical to follow up on preservation instructions to ensure compliance.

Remember that ESI preservation is an ongoing obligation.

Your company’s obligation to preserve ESI is an ongoing and continues beyond the initial litigation hold letter. A preservation obligation can exist through the claim/litigation and can include ESI generated after the initial litigation hold is put into place. It is important to implement procedures within your company that would make someone responsible for ensuring and auditing ongoing compliance with a litigation hold.