Complex Safe Harbor FRCP Amendment Requires New "Good Faith" Document Destruction Best Practices to Avoid Fines and Sanctions
ZANTAZ White Paper Analyzes Rule 37(f), Proposes a Framework for Determining "Good Faith" and Outlines Best Practices for Document Destruction
PLEASANTON , Calif. - January 17, 2007 - ZANTAZ, Inc., the global leader in content archiving and electronic discovery solutions, has developed a set of best practices for satisfying the "good faith" element of the Safe Harbor provision contained in the recent amendments to the Federal Rules of Civil Procedure (FRCP) which went into effect on December 1, 2006. Failure to understand and satisfy the good faith element of Rule 37(f) could preclude a company from enjoying the protections against sanctions afforded by the Safe Harbor provision. To assist organizations addressing this issue, ZANTAZ is distributing free of charge a white paper authored by Russ Yoshinaka, Esq., vice president, Legal Affairs at ZANTAZ.
In general, FRCP Rule 37(f) precludes federal courts from imposing discovery sanctions against a party for failing to produce electronically stored information that was lost as a result of the routine, good faith operation of an electronic information system. The white paper, titled "FRCP 37(f): What the Heck is Good Faith?" includes best practices, a detailed analysis of the rule change and a working definition of "good faith." The white paper is available for download at the ZANTAZ website: http://www.zantaz.com/news/resources/white_papers_list.php. In September 2006, ZANTAZ also published a white paper that offers best practices for addressing other aspects of the FRCP amendments. "Best Practices for Ensuring You - and Your Data - Are Prepared for the Changes to the Federal Rules of Civil Procedure (FRCP)" is available free of charge at the same website.
"As the content archiving vendor for many of the world's largest organizations, we are seeing a move in the industry towards what we refer to as 'intelligent archiving,' meaning, organizations are slowly shifting away from the conservative approach of keeping all electronic data to a more thoughtful and pragmatic approach of keeping just the data that they really need for regulatory, litigation or business purposes," said Steve King, president and CEO, ZANTAZ. "Rule 37(f) is the first time we have seen a statutory framework upon which organizations can now begin to model their policies of destroying electronic information in the ordinary course of business with less fear of fines and sanctions. However, there are several important caveats to this framework - the most significant of them being the caveat of 'good faith.'"
"The FRCP amendments make organizations more accountable for preserving and producing electronically stored records in discovery, but the good faith requirement of Rule 37(f) is particularly tricky because there is very little guidance on its meaning," said Yoshinaka, senior director of Legal Affairs, ZANTAZ. "This white paper provides courts with a suggested framework for establishing a meaning for good faith and determining whether it has been met, and provides organizations with practical advice on how to satisfy the good faith element and, in turn, help avoid fines and sanctions."
Briefly summarized, the ZANTAZ best practices for establishing good faith in connection with data destruction via the routine operation of an electronic information system are as follows:
Organizations wishing to implement a policy of data destruction through the routine operation of electronic information systems should first establish a well-defined destruction policy and clearly identify the legitimate business reasons that support the policy.
This policy should be implemented on a consistent basis, across all sources of electronically stored information. Failure to do so could undermine the stated legitimate business reasons for the policy.
Applying the policy on a consistent basis requires knowing what electronic information you have, and where you keep it. To that end, organizations should maintain an updated database showing all sources of electronically stored information, the type of information stored, and details, such as filenames and date ranges.
Organizations must also establish the means by which they can quickly and adequately implement "litigation holds" on any electronic information that might be relevant to actual or reasonably likely litigation. ZANTAZ recommends establishing and communicating a company-wide litigation hold policy that includes employees alerting corporate legal counsel of facts that are "reasonably likely" to lead to litigation, and, ideally, utilizing a document retention system that allows for the "tagging" of electronic records that are deemed subject to the litigation hold so as to prevent the inadvertent destruction of discoverable records.
Organizations should also designate a single management-level employee to serve as the company's representative on the issue of the organization's destruction policy - both the business reasons that support such policy as well as the measures undertaken in order to meet litigation hold requirements. This person will then serve as the organization's spokesperson on the facts that demonstrate "good faith" in connection with the organization's destruction policy.
ZANTAZ is the global leader in Information Retention and Discovery Management (IRDM) solutions. ZANTAZ archiving and litigation support solutions enable organizations to capture, preserve and access unstructured digital information-including email, IM, files, scanned documents, and other electronic records-and review and produce relevant documents in a manner that reduces operational risks and costs while complying with legal, regulatory and corporate policy requirements. ZANTAZ solutions are available as on-site software applications or on-demand hosted services, and include a broad set of professional services and integration support. ZANTAZ customers include 9 of the 10 top global law firms, 11 of the Fortune 25 and 14 of the top 20 Financial Securities firms. For more information, visit www.ZANTAZ.com or call 800.636.0095.
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