PIC Group v. Landcoast Insulation was a federal case in Mississippi arising out of the death of a worker and injuries to six others following the collapse of scaffolding. Claims for insurance coverage and indemnity followed, during the course of which requests were made for electronic data or what the Federal Rules call electronically stored information (ESI). U.S. District Court Judge Keith Starrett found that, while those responding to the ESI requests may not have intentionally destroyed digital evidence, they were grossly negligent in gathering and producing it. The consequences were awful for everybody. “After all is said and done,” wrote Judge Starrett, “the parties will have easily rung up over a half million dollars in combined attorney’s fees, expenses, and costs associated with this discovery dispute, and the Court will have expended far more of its resources than it should have over the production of a few documents of questionable worth.” In addition, because of one party’s laxity and neglience in gathering the ESI, they were ordered to pay out of pocket (not through insurance) an additional $40,790.17 to the other side.
ESI can take many forms; more typical examples include email, hard- or thumb-drive stored documents and the data they contain, voicemails, text messages, data on smartphones, websites, blogs, tablets, laptops, and other. Writing recently in Forbes, Seagate’s Rocky Pimental commented that “only 3 percent of the world’s information was stored on digital devices like hard drives or optical disks in 1993. In 2000, … digital storage still only accounted for 25 percent of the world’s total information storage capacity. 2002 marked the first year that the amount of data stored digitally surpassed the amount stored on paper, …. But by 2007, … digital devices accounted for 94 percent of the information storage capacity around the globe. Hard drives alone accounted for 52 percent of the total, up from just five percent seven years earlier. In 2012, the total amount of digital information in the world reached 2.7 zettabytes – that’s 2.7 followed by 21 zeros – a 48 percent increase from 2011.”
The problem, as some have noted, is no longer computation; it’s management and storage. For litgants and those representing them, the challenges are clear (how to identify, preserve and produce discoverable digital information in this exploding digital environment) even if solutions are less so. Both the Federal and Mississippi Rules of Civil Procedure were amended (Mississippi’s in 2003 and more recently in 2012, the Federal Rules in 2006) to account for the reality that digital data and duties to gather and produce it during litigation are of paramount importance. My recommendations include:
1. Regardless of the size or sophistication of your business, don’t wait until you are in a lawsuit to implement and follow an electronic data management and retention plan.
2. If you are sued, preserve all ESI. Do not destroy or delete.
3. If you have questions, seek and obtain advice of legal counsel. It may be the best money you’ve ever spent.