How Not to Approach Information Governance

Guest Post By 

Julia Romero Peter, Esq.
TERIS VP of Business Development

Just having a plan for document retention is not enough, as recently demonstrated by U.S. District Judge Ronald M. Whyte’s September 21 2012 ruling (Hynix Semiconductor Inc. V. Rambus Inc.). Although Rambus had a document preservation outline already in practice, those guidelines did not protect Rambus from inadvertently spoliating evidence. 

What happened…

Rambus had a broad document retention policy in place dating back to early 1998. The infamous “shred days” that took place were part of this policy. Rambus did not launch its first patent litigation until January 2000; the shred days took place in September 1998, August 1999 and December 2000.

The earlier decision from Judge Whyte in 2006 (later vacated by the Federal Circuit) in Hynix I stated that the “trigger point” for Rambus’s duty to preserve did not present itself until late 1999, and therefore, no spoliation had taken place.

Companies have a “duty to preserve” when litigation is “reasonably foreseeable.”  The debate is whether Rambus’s shred days occurred after their duty to preserve was already triggered. Even though he could not offer a definitive trigger date in his 2006 decision, Judge Whyte found litigation was not reasonably foreseeable at the time of the September 1998 and August 1999 shred days.

However, in another Rambus case (Micron I), U.S. District Judge Robinson determined that the duty to preserve should have been initiated approximately a year prior to the date Judge Whyte had suggested. Judge Robinson explained that Rambus had outlined possible litigation targets, discussed courses of action and planned negotiations by December 1998, making any document destruction after that point a clear spoliation.

In the Federal Circuit, the 2011 Micron II ruling held that “reasonably foreseeable” is an objective standard. The determining factor is not whether or not the party in question actually anticipated litigation, but instead “whether a reasonable party in the same factual circumstances would have reasonably foreseen litigation.”

In light of the Federal Circuit opinions for Micron II and Hynix II, Judge Whyte stated that “[g]iven this statement by the Federal Circuit, it is difficult to see how this court could do other than find that Rambus spoliated evidence . . . .” and his September 21 decision concluded that Rambus did indeed act in bad faith regarding the spoliated evidence. 

Developing a Comprehensive Plan

Despite having a plan already in place, Rambus faced sanctions for failing in their duty to preserve. Shredding of data according to an existing retention policies may still amount to spoliation if a court plays “Monday night quarterback” and determines that litigation was reasonably foreseeable after the fact.

A well-planned document retention policy must be carefully followed, especially with regards to preservation of electronic data and ediscovery.  It must take into account Legal Holds, which must be implemented when litigation is first contemplated and thus, reasonably foreseeable.   It isn’t just when you think you will be sued.  It applies when you are the one filing suit.

In addition to the broad framework for organizing and retaining documentation, a process must also be implemented for determining an action plan when (or if) the duty for preservation has been triggered. Above all, document retention plans need to adopt a comprehensive, holistic approach that addresses not only retention policies but information governance as a whole, including electronic data and with an eye toward ediscovery. 

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