Don't Adopt a Policy Executives are Disinclined to Follow in Practice
A famous e-mail spoliation case involved a formal policy that corporate executives were to “print and retain” important e-mails. In this case the drafters of corporate records policy misunderstood how a written policy – which was sound in theory -- would be observed, or ignored, in practice.
Philip Morris and the federal government were engaged in a long-running lawsuit regarding marketing of cigarettes. During the lawsuit, the company was required to preserve important records related to the topic of the case.
Philip Morris and its attorneys did not trust e-mail records (executives might make embarrassing, off-the-cuff comments in e-mail!), so they promulgated a two-part policy. The first part would be to destroy e-mail in 60 days. But they knew some e-mails would be relevant to the pending litigation and therefore the company must put those e-mails in a special category and prevent them from being destroyed. So the second part of the policy would be print and retain – a kind of “legal hold”. Written company policy informed executives they must print and retain paper records of e-mail pertaining to the topics important to the lawsuit.
Court Reviews Results
In 2004, after this policy had been in effect for some time, the court reviewed the results. The court was shocked and disappointed to learn that company executives performed poorly at the task of printing and retaining. (Question to the reader: Should it come as a surprise to anyone other than a judge or a lawyer that well-compensated executives will falter at the job of [a] reading carefully through each and every one of their e-mails and deciding which ones do and which ones do not fit into a special legal hold category, and then [b] printing those special e-mails one-by-one and placing them in a select file in the cabinet for safekeeping?)
The court learned that some executives printed and retained some e-mails, but many did not. Reply Memo in Support of the United States' Motion for Evidentiary and Monetary Sanctions Against Philip Morris USA . . . Due to Spoliation of Evidence, February 6, 2004, at page 15, footnote 20.
Further, the court learned that the print and retain policy confused some executives, as it was just one part of a complex statement of policies within the enterprise. Id. at page 15, footnote 19
One can surmise that many executives believed they had more important things to do than (a) staying facile with the details of complex record retention policies, and (b) rigorously following the clerical duties specified by the policies.
The company did not implement an inspection program to monitor or audit compliance with the print and retain policy – even though the company claimed – and probably honestly believed that it “vigorously monitors and reinforces compliance with its document retention polices”. Id. at page 14.
Many relevant e-mails were lost.
Said the court: “[T]here is no question that a significant number of emails have been lost and that Philip Morris employees were not following the company’s own internal procedures for document preservation. What is particularly troubling is that Phillip Morris specifically identified at least eleven employees who failed to follow the appropriate procedures, and that those eleven employees hold some of the highest, most responsible positions in the company. These individuals include officers and supervisors who worked on scientific, marketing, corporate, and public affairs issues that are of central relevance to this lawsuit.”
Concluding that Philip Morris’ practice amounted to spoliation (i.e. wrongful destruction of evidence), the court levied memorable sanctions. It fined the company $2.75 million. But more importantly, it barred 11 key Philip Morris executives from giving testimony in the trial. This latter sanction was more damaging to Philip Morris than the fine because it severely handicapped the company’s ability to defend itself in the lawsuit.
U.S. v. Philip Morris USA Inc. (D.D.C.Civil Action No.99-2496) (Sanctions Order)
Lesson to Be Learned
What is the practical interpretation of the Philip Morris case? My interpretation: a print-and-retain policy does not work. A print-and-retain policy means that the default is to destroy e-mail quickly . . . subject to the dubious exception that busy people like executives will one-by-one select individual e-mails for retention. In practice busy people (who may receive scores or even hundreds of messages every day) are unlikely to patiently review every e-mail, make a responsible decision whether to keep it, and then if required dutifully ensure it is printed and stored in a paper file.
A modern update to the print-and-retain procedure is to direct employees to place retained e-mails in special folders like PST files. Washington Metro learned that professional and managerial employees fare poorly at that task as well.
Mr. Wright is an advisor to messagingarchitects.com, experts on email discovery and forensic analysis.