E-Mail: A Two-Edged Sword That Congress Attempts to Dull—Amended Federal Discovery Rules

By Anthony C. Valiulis

Effective December 1, 2006, the U.S. Congress has amended the Federal Rules of Civil Procedure to offer, at least in theory, some relief to parties producing electronically stored documents in litigation, including e-mails. Recognizing the tremendous cost that electronic discovery has imposed on the business community, Congress has finally taken a first step to ease the burden. Under amended Rule 26(b)(2)(B), a party has the right to object to the production of electronically stored information if it can show that the information is not reasonably accessible because of undue burden or cost. Ultimately, the court can still order the party to produce the information, and it retains the discretion to allocate the cost. Although the long-term implications of this and other amended rules remain to be seen, it is important to review your internal policies now and begin monitoring and controlling your employees' e-mail usage.

The Benefits of Electronic Communication…

E-mail is a classic two-edged sword, with its countless benefits on one hand and its significant drawbacks on the other. It has become so much a part of the business world that we often wonder how we ever survived without it. E-mail gives us a fast and convenient means of communicating with people as close as next door and as far away as the other side of the globe. It makes no difference how far away the correspondents may be. With e-mail, communication is virtually instantaneous.

Just as important, you can access e-mail anytime from almost any location, whether it's from a desktop computer with Internet access or on the go with a cell phone, PDA or other wireless device. In fact, e-mail is so pervasive, so easy and so accessible that people mistakenly treat it just like conversation. But that can cause problems, especially for businesses.

…And the Risks

E-mail is not conversation, no matter how it is treated. Much like an impromptu verbal exchange, however, people often take an overly informal approach to e-mails, with little or no regard to grammar, spelling or content. What's more, they fail to recognize that e-mail is a written record and seldom take the time to review and edit their messages before clicking "send." That lack of review all too often can lead to unintended consequences.

Unlike conversation, the act of sending a single e-mail creates a series of almost permanent records. Copies proliferate everywhere: on the sender's and recipient's computers, on the server if part of a network, in the form of back-ups and archives, as well as throughout the Internet. What results are permanent records of comments that people make quickly—without thought and without review. These messages can easily come back to haunt both the person who made them and his or her company.

More and more, e-mails are being used in court as evidence in a variety of cases. We find them in business disputes and employment matters (including discrimination and sexual harassment cases), as well as antitrust cases, trade secret litigation and many other types of matters. Indeed, it is hard to imagine a piece of business litigation in which a company's e-mails are not potentially relevant.

We are all aware of the many high-profile cases in which e-mails have been used for devastating effect. (Simply look at recent headlines for examples, as well as the notorious Bill Gates and Microsoft case, among others.) And the reason e-mails can be so harmful is that they often contain loose language that is misleading or takes on unintended meanings. Again, that is because people tend to compose e-mails without considering the implications.

Not only are the messages themselves potentially harmful, but the cost of extracting the information in litigation can be extremely high. (Hence, some of the new amendments.) For example, a party may be asked to obtain copies of relevant e-mails, which could require a difficult and time-consuming review of boxes of backup tapes. To make matters worse, if these backups no longer work properly, expensive computer consultants must be retained to extract the information. This effort could cost hundreds of thousands of dollars, and the company may be required to pay that cost, even with the new amendments.

E-mail Dos and Don'ts

Inaction is the most dangerous position a company can take regarding electronic communication. What follows are some practical dos and don’ts that every business should consider in order to minimize risk when faced with electronic discovery.

First, every company should create and implement an Internet policy that expressly covers the deletion of nonessential e-mails. Second, make sure your employees are aware of the policy and are trained in the proper use of e-mails. All employees should be required to sign an acknowledgement that they have read the policy, which should also be included in the employee handbook. Third, take steps to ensure that the policy is enforced. Finally, monitor all e-mails, including internal correspondence among employees. Although most employers already do this with incoming and outgoing messages, only a small percentage conduct similar monitoring with respect to internal e-mails. That oversight can be a big mistake.

Equally important are the things a company should not do. For starters, don’t enforce your e-mail policy selectively. Your deletion/retention policy should apply to everyone in the organization. Don’t conduct secret monitoring of your e-mails either. Instead, inform your employees up front that you are going to monitor their electronic correspondence.

Don't retain e-mails forever or keep backups any longer than necessary. Why hold onto potentially harmful records when you don’t have to? E-mails that actually function as a type of business record should be retained as long as you would keep similar paper records. Informal messages, however, need not be saved at all. If you do choose to back them up, only keep them for a few days or weeks. Because circumstances differ from company to company, you should consult with an attorney or other advisor to ensure you are making sound legal and business decisions.

And, of course, don’t get sued or subpoenaed. If you manage to stay out of court, your e-mails will probably never hurt you. But that may be rather difficult to manage in today's litigious business environment.

If you have questions about how your company should address issues related to e-mail and the amended federal discovery rules, please contact your Much Shelist attorney. Better yet, send us an e-mail!

Anthony C. Valiulis is an accomplished litigator with 32 years of experience in a broad range of state and federal civil trial and appellate matters. A principal of the firm since 1979, Tony served as Chair of the Litigation & Dispute Resolution group for more than 20 years. His practice encompasses complex business and financial litigation, concentrating in three major areas: business disputes, non-compete agreements and insurance coverage. He represents both plaintiffs and defendants, including individuals, privately held companies and publicly traded corporations, in the areas of business fraud, unfair competition, labor-related litigation, employment discrimination, trademarks, trade dress matters, business torts, toxic torts, technology litigation, securities litigation and RICO fraud. Tony can be reached at 312.521.2691 or tvaliulis@muchshelist.com.

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