Corporate Email Archives: Unwanted Liability or Searchable Asset?

Some corporate lawyers prefer to delete records as soon as possible.  They feel that informal records like email are a liability when the corporation heads into litigation.  The records are burdensome to search and turn under eDiscovery.

To support advice that email be deleted quickly, these lawyers will point to FTC v. Lights of America Inc., 2012 WL 695008 (C.D. Cal. Jan. 20, 2012).  In that lawsuit, the Federal Trade Commission possessed few email records to turn over in eDiscovery.  One reason for the paucity of records was FTC’s default policy to delete email at 45 days.

Upon scrutinizing the policy, the court saw nothing inherently wrong with it.  The court could not conclude that FTC should be punished for deleting relevant records.

Litigation Hold

Does a 45-day deletion policy make sense for an enterprise?

As a practical matter, if an enterprise like FTC deletes most email at 45 days, it must have a mechanism for applying litigation hold.  Under litigation hold, emails that are likely to be needed in a lawsuit or investigation must be spared from the default 45-day deletion policy.

Corporate Knowledge
For most enterprises litigation hold is difficult.  An enterprise may "know" it needs to apply litigation hold, but not have the infrastructure in place to understand and act on that knowledge.

It is difficult for knowledge of the need for litigation hold to stroll briskly through the organization and come to the attention of a lawyer who can cause a litigation hold to be implemented.  Most enterprises have relatively small legal departments.

The FTC is different.  A large percentage of the FTC’s staff is lawyers or professionals with a legal bent.  Unlike a corporation that makes widgets or a municipality that delivers city services, the FTC is a law-heavy enterprise.  Its very mission is law enforcement.

Thus, FTC is highly sensitive to when litigation hold needs to be applied to records.  Further, its culture enables swift implementation of litigation hold.  Its staff and culture are also highly attuned to composing formal “records” that tell the legal story FTC wants told.  Hence, an aggressive policy of deleting informal email at 45 days can work for the FTC.

Electronic Mail as Corporate Memory

Other enterprises – like private corporations and most other government agencies – must think differently about email.  Email is part of corporate memory.  Email records what happened, how it happened, and why it happened.

For most enterprises, it is not the key mission of staff to create formal “records” that tell the legal story the enterprise wants told.

For the typical enterprise, informal email records are a functional asset.  Electronic message archives, older than 45 days, answer practical and operational questions.

Cal Fire’s Need for Records

Take for example the California Department of Forestry and Firefighting (Cal Fire).  It is under investigation for something that previous leadership did in 2004.   In 2004 the department started using proceeds from fines imposed on corporations to set up a training and equipment fund.  Under California law, such a fund must be approved by the state’s Finance Department.

By 2013, however, Cal Fire could not easily document that the fund had received approval from the Finance Department.  So Cal Fire closed the fund and gave the money to the Finance Department.  The Finance Department opened an investigation into whether law had been broken.  “California Agency Burned by Discovery of Bank Account,” Wall Street Journal, January 26, 2013.

Whether Cal Fire has the records it needs I don’t know.  Whether it retains email back to that time, I don’t know.  However, when a question like this arises, complete email records from the time in question can be invaluable to an enterprise like Cal Fire.  Rarely can people remember old administrative details like whether approval was obtained for an unusual bureaucratic event.

Email as Searchable Diary

Email is a remarkably powerful resource for recording how, when, who and why.  Well-archived email is a detailed, easily-searchable, time-and-date-stamped diary of enterprise activity.

Most enterprises are well-meaning, and intend to do what is right.  On balance, email archives document the day-to-day efforts of people trying to do the best they can.