Courts are becoming increasingly cognizant of the eDiscovery burdens that the information explosion has placed on organizations. Indeed, the cases from 2012 are piling up in which courts have rejected demands that sanctions be imposed for seemingly reasonable information retention practices. The recent case of Grabenstein v. Arrow Electronics (D. Colo. April 23, 2012) is another notable instance of this trend.
In Grabenstein, the court refused to sanction a company for eliminating emails pursuant to a good faith document retention policy. The plaintiff had argued that drastic sanctions (evidence, adverse inference and monetary) should be imposed on the company since relevant emails regarding her alleged disability were not retained in violation of both its eDiscovery duties and an EEOC regulatory retention obligation. The court disagreed, finding that sanctions were inappropriate because the emails were not deleted before the duty to preserve was triggered: “Plaintiff has not provided any evidence that Defendant deleted e-mails after the litigation hold was imposed.”
Furthermore, the court declined to issue sanctions of any kind even though it found that the company deleted emails in violation of its EEOC regulatory retention duty. The court adopted this seemingly incongruous position because the emails were overwritten pursuant to a reasonable document retention policy:
“there is no evidence to show that the e-mails were destroyed in other than the normal course of business pursuant to Defendant’s e-mail retention policy or that Defendant intended to withhold unfavorable information from Plaintiff.”
The Grabenstein case reinforces the principle that reasonable information retention and eDiscovery processes can and often do trump sanctions requests. Just like the defendant in Grabenstein, organizations should develop and follow a retention policy that eliminates data stockpiles before litigation is reasonably anticipated. Grabenstein also demonstrates the value of deploying a timely and comprehensive litigation hold process to ensure that relevant electronically stored information (ESI) is retained once a preservation duty is triggered. These principles are consistent with various other recent cases, including a decision last month in which pharmaceutical giant Pfizer defeated a sanctions motion by relying on its “good faith business procedures” to eliminate legacy materials before a duty to preserve arose.
The Grabenstein holding also spotlights the role that proportionality can play in determining the extent of a party’s preservation duties. The Grabenstein court reasoned that sanctions would be inappropriate since plaintiff managed to obtain the destroyed emails from an alternative source. Without expressly mentioning “proportionality,” the court implicitly drew on Federal Rule of Civil Procedure 26(b)(2)(C) to reach its “no harm, no foul” approach to plaintiff’s sanctions request. Rule 2626(b)(2)(C)(i) empowers a court to limit discovery when it is “unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.” Given that plaintiff actually had the emails in question and there was no evidence suggesting other ESI had been destroyed, proportionality standards tipped the scales against the sanctions request.
The Grabenstein holding is good news for organizations looking to reduce their eDiscovery costs and burdens. By refusing to accede to a tenuous sanctions motion and by following principles of proportionality, the court sustained reasonableness over “gotcha” eDiscovery tactics. If courts adhere to the Grabenstein mantra that preservation and production should be reasonable and proportional, organizations truly stand a better chance of seeing their litigation costs and burdens reduced accordingly.