Tags Archives: Records Retention Policy

The Value of a Cross-Indexed Storage System

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Following your Records Retention Policy (RRP) to a “T” can get you into trouble.

Once a company is involved in litigation, all relevant records must be preserved, regardless of the company’s RRP. Having a properly cross-indexed storage system provides a necessary tool to identify all relevant documents.

Case study: Trigon Insurance Co. v. United States, 204 F.R.D. 277 (E.D. Va., Richmond Dist. 2001)

Trigon Insurance Company sued the federal government for its failure to allow certain tax deductions resulting from lost contracts. To defend their case, the government hired litigation consultants, some of which were brought in as expert witnesses.

Because some of the reports entered as evidence were ghostwritten by litigation consultants, Trigon sought discovery of draft documents exchanged between the government and its consultants [by way of Fed. R., Civ. Pro 26(a)(2), which required the production of all materials reviewed by testifying experts.]

Following your RRP during litigation

Unfortunately for the government, the consultants had followed their business’ RRP and had destroyed the draft documents as they had reached their disposal dates. Trigon sought sanctions against the government for spoilation of evidence (i.e., the destruction or alteration of evidentiary materials).

The court held the government had sufficient notice that the documents were relevant to the litigation at hand and construed the document destruction as intentional destruction of evidence. As a result, a strongly prejudicial inference was allowed, which negatively colored the credibility of the expert witnesses. The court further held the government had a duty to preserve the evidence (despite its Record Retention Policy) which, by destruction, crippled the ability of Trigon to cross-examine the witnesses.

As a direct result of this decision, a subsequent case involving the same parties, Trigon Ins. Co. v. United States, 234 F. Supp 2d 592 (E.D. Va., Richmond Dist. 2002), led to a judgement of nearly $180,000 in favor of Trigon.

Cross-indexed is the key

Having a properly cross-indexed storage system would have made it much easier to identify and locate all relevant documents related to this case prior to the destruction schedule specified in the consultant’s RRP. BIS is in the business of helping you manage all aspects of your Records Retention Policy to help ensure costly errors don’t happen.

Does this sound like a records management service your company could benefit from? Call us at (513) 721-FILE. We’d love to help.

How a Records Retention Policy Can Save Your Company Money

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Let’s be honest. At some point in the future, even if you have never been sued before, it is more likely than not that your company will be involved in a lawsuit.

Knowing that’s the case, are you prepared? Having a comprehensive Records Retention Policy (RRP) covering all types of records may help you avoid losing a lawsuit and subsequently costing your company hundreds of thousands of dollars in damages.

Case in point: Hollingsworth v. Time Warner Cable, 168 Ohio App.3d 658, 2006-Ohio-4903.

Patti Hollingsworth worked as an audit coordinator for Time Warner Cable from 1989 until she was fired in 2002. In her last few months of employment, Hollingworth suffered from chronic sinusitis, entitling her to time off under the Family and Medical Leave Act (FMLA). During her leave, she became pregnant and a short time later was terminated — allegedly because of her poor job performance. Hollingsworth sued, asserting pregnancy discrimination under Title VII and discrimination and retaliation under FMLA.

No paper trail

At trial, Hollingsworth presented testimony that after the termination, Time Warner destroyed her error logs and erased her emails without reviewing them. Time Warner stated the error logs and emails were destroyed in accordance with its RRP. But testimony at the trial revealed Time Warner’s RRP contained no reference to error logs.

No choice but to pay up

Time Warner admitted that if they had this information it would have helped to prove the case one way or the other. By destroying the error logs and deleting Hollingsworth’s emails, Time Warner forced the jury to weigh the testimony of multiple witnesses in determining whether it had intentionally discriminated against Hollingsworth.

If the error logs and emails had been preserved, there would have been room for speculation. Without them, the jury believed Hollingsworth’s assertion that Time Warner had intentionally discriminated against her because she was pregnant and awarded her $576,812 in damages, legal fees, and back pay.

Plan ahead

BIS can help your company develop and implement a comprehensive Records Retention Policy. By working together with us, you can protect your company against lawsuits.

Does this sound like a records management service your company could benefit from? Call us at (513) 721-FILE.

Email and Your Records Retention Policy

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Do you know where your company stores old email? In the following case study, a major company didn’t even know which emails were being kept or where they were being kept.

Obviously, they weren’t following their Records Retention Policy (RRP) for email. In addition, stored email messages weren’t indexed, which resulted in the company’s inability to limit plaintiff’s discovery demands.

Case study: Boeing Sec. Litig.,  No. C97-1715Z (W.D. Wash. 1997) [This consolidated 13 individual class action suits] (Stipulation of Settlement of November 16, 2001, Exhibit B, Final Judgement and Order of Dismissal With Prejudice, Entered February 20,2002)

Just knowing where isn’t enough

Thirteen individual class action lawsuits from 1997 alleged securities fraud against aerospace manufacturer, Boeing. The case centered on the $4 billion loss in value of shares of common stock. Leading up to a merger with McDonnell Douglas, material misrepresentations and concealment of production problems were discovered.

During a deposition, a plaintiff’s attorney learned the company had warehoused approximately 14,000 email backup tapes in Washington, D.C. If the company had established and followed an RRP for email, this electronic data would have been legally destroyed prior to the filing of the lawsuits.

The plaintiffs issued a discovery request for production of these tapes. Boeing countered by trying to place limits on which tapes had to be produced. Unfortunately for Boeing, this effort had the effect of revealing to the court where the remainder of Boeing’s email backups were warehoused at multiple international sites. To make matters worse, Boeing didn’t know what data was contained on which tape.

Boeing was ordered to restore all of the backup tapes at a tremendous cost, which led to the production of enough damaging evidence that the company settled the class action suits for $92.5 million in cash, among other reparations.

Lesson learned too late

If Boeing had regularly followed a RRP which included email; and had that RRP detailed the location and specific contents of retained materials, this evidence might never have been discoverable. BIS is in the business of helping you understand and effectively manage your record —including your email. We can assist your company in establishing an effective and cost-saving Records Retention Policy.

Does this sound like a records management service your company could benefit from? Call us at (513) 721-FILE. We’d love to help.

The Importance of a Records Retention Policy

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In October 2000, Owens Corning filed Chapter 11 bankruptcy. One of the reasons for this decision had to do with the company’s lack of a Records Retention Policy (RRP). Let me explain:

Notes and memos need a RRP, too

A significant number of asbestos liability suits were brought against Owens Corning, the Toledo-based manufacturer of insulation materials. During the course of these cases, discovery demands from the plaintiffs turned up large quantities of notes and memos dating from the 1940s and 1950s. Though these records could have been legally destroyed during the intervening decades, once they became subject to discovery, they had to be preserved and made available to plaintiffs.

The discovery of these damaging 40- and 50-year-old documents created an insurmountable obstacle for the company’s defense team. As a result of the tidal wave of asbestos litigation, Owens Corning was forced to establish a fund valued at $5.2 billion for those injured by the company’s asbestos. Owens Corning eventually re-emerged from bankruptcy in 2006.

Tough lesson learned

Owens Corning learned a tough and expensive lesson too late. If they had an RRP and followed it, all of the notes and memos from the 40s and 50s ago would have been long-since destroyed. BIS is in the business of helping customer control their records regardless of their format, paper, electronic, or even film.

To get our help, call us at (513) 721-FILE. We’d love to be of assistance.

Does Your Company Enforce Your Records Retention Policy?

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Playing catch-up with your Records Retention Policy (RRP) can cost you your company or even put you out of business.

A well-known company failed to consistently destroy stored documents according to its perfectly acceptable RRP. When this organization saw trouble looming, it tried to go back and fix this. But by then it was too late.

Case study: Arthur Andersen, LLP vs. United States, 544 U.S. 696 (2005)

A Records Retention Policy must be enforced

Arthur Andersen, LLP, was Enron’s accounting firm, and had in place an unenforced RRP. When Andersen’s management saw that Enron-based litigation resulting from an investigation by the Securities and Exchange Commission was imminent, it directed employees to comply with their previously unenforced RRP. As a result, an untold number of documents were destroyed.

In May 2002, the United States filed criminal charges against Andersen for obstructing the SEC investigation based on its destruction of documents. What would have normally been a legitimate destruction of documents under the RRP became prohibited due to Anderson’s knowledge of the looming SEC investigation. Because the charge was a felony, and felons may not be auditors of public companies, Andersen was forced to relinquish its CPA license, sealing its fate.

After an appeal to the U.S. Court of Appeals for the Fifth Circuit, which affirmed a lower Court’s ruling, Andersen sought and was granted a final appeal of its criminal guilt before the U.S. Supreme Court. Although Andersen won the appeal and its criminal charges were reversed because of defective jury instructions, it was too late to save the accounting firm. The damage of the lower Court’s rulings forced Andersen—a company that began 2002 as a $9 billion business—to shut down.

Sometimes it’s just not enough

Just having a RRP won’t suffice. You need to regularly follow your policy and comply with your own disposal schedules. BIS is in the business of helping customers understand and effectively manage their records—all of their records— paper or electronic. We can assist your company in establishing an effective and cost-saving Records Retention Policy.

Does this sound like a records management service your company could benefit from? Call us at (513) 721-FILE. We’d love to help.