United States: Digital Age Expands Communication But Creates Discovery, Litigation Pitfalls

E-mails. Text messages. Instant messages. Social media. The digital age has given birth to powerful new ways to communicate that have transformed how we live and conduct business. But the proliferation of communication options has come with increased exposure to claims in litigation of withholding, hiding, destroying and losing evidence.

A reminder of the increasing danger of the digital age in discovery recently arose in the New York state attorney general's investigation of ExxonMobil's research into the causes and effects of climate change.

After receiving documents from Exxon pursuant to a subpoena, the state attorney general informed a New York court that it had discovered that former Exxon CEO and Chairman Rex Wayne Tillerson had used an alias email address on the Exxon system under the pseudonym "Wayne Tracker" from at least 2008 through 2015.

In the Exxon matter, the state attorney general claimed that emails from the Tracker email address contained information responsive to its subpoena, but that neither Exxon nor its outside law firm had disclosed to the state attorney general that the Tracker email address belonged to Tillerson and that it appeared that some of the arguably responsive Tracker emails had not been properly saved and produced.

Exxon, in its reply to the court, claimed that there was nothing improper with Tillerson's use of the Tracker email address, which it said "allowed a limited group of senior executives to send time-sensitive messages to Tillerson that received priority over the normal daily traffic that crossed the desk of a busy CEO. The purpose was efficiency, not secrecy."

Exxon's lawyers also suggested that a technical glitch may have prevented automatically preserving emails from the Tracker account.

Tillerson is hardly the first or only CEO who has used more than one email address. As The Wall Street Journal recently reported, high-profile CEOs whose email inboxes can be overwhelmed often use another email address that allows a more select group of people to reach them without their email message perhaps getting lost in the CEO's inbox.

While use of an alias email is an understandable and perhaps necessary inbox management tool, the Exxon matter should serve as a reminder of how the expanding array of communication tools can cause issues in litigation. Even if a secondary email address serves a legitimate purpose, if it is not searched and preserved during discovery and sufficiently disclosed and produced, it can, at minimum, allow the opposing party to try to bias the judge and create advantageous press.

Indeed, shortly after the New York state attorney general raised the Tracker email issue with the court, it was widely covered in the press. Of course, much more serious consequences can result from mishandling of electronically stored information (ESI).

Severe Consequences

In a criminal investigation, mishandling of ESI can influence charging decisions by prosecutors or expose defendants to further probes and charges of obstruction of justice.

In civil litigation, a judge can impose sanctions or give an adverse inference charge to a jury, which essentially instructs the jury that it would be proper for them to infer that the missing evidence would have been harmful to the party who failed to preserve it.

To be sure, it is not easy to obtain an adverse inference. Effective December 2015, the Federal Rules of Civil Procedure (FRCP) were amended to address the failure to preserve ESI. The changes were made, according to the Advisory Committee, to take account for the "serious problems resulting from the continued exponential growth" of ESI and the differing standards among circuit courts for imposing sanctions. "These developments have caused litigants to expend excessive effort and money on preservation in order to avoid the risk of severe sanctions if a court finds they did not do enough," the Advisory Committee wrote in its notes to the 2015 amendments to Fed. R. Civ. P. 37(e).

Under the new Rule 37(e) of the FRCP, it first must be established that the ESI "should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery." As the Advisory Committee noted, since "electronically stored information often exists in multiple locations, loss from one source may be harmless when substitute information can be found elsewhere." If that first requirement is satisfied, then a court may impose measures "no greater than necessary to cure the prejudice."

For more serious sanctions, the rule provides that a court must find that a "party acted with intent to deprive another party of the information's use in the litigation." If that intent is established, then a court may "(A) presume that the lost information was unfavorable to the party; (B) instruct the jury that it may or must presume the information was unfavorable to the party; or (C) dismiss the action or enter a default judgment." Previously, some courts had imposed severe sanctions for negligence and gross negligence. The new rule seeks to end that practice.

New Rule in Practice

The new rule already has had a significant impact.

Take, for instance, the July 2016 opinion in GN Netcom v. Plantronics, a case alleging violations of the Sherman Act, the Clayton Act, as well as tortious interference with business relations against Plantronics over its program for distributing its headsets. At issue in GN Netcom were thousands of emails intentionally deleted by a senior-level Plantronics executive who had responsibility for a Plantronics' headset distribution program that was central to the underlying claims in the case. Such executive also encouraged other employees to delete emails as well.

As recounted in the court's opinion, Plantronics argued sanctions for the deleted emails were unwarranted, noting that the company "went to great lengths to ensure that its employees were aware of and understood their preservation obligations," including issuing multiple litigation holds and conducting training sessions to ensure compliance.

Plantronics also claimed that upon learning of the deleted emails, it "immediately took steps to preserve documents and prevent any further loss of data, and to recover whatever missing data it could."

These efforts, Plantronics asserted, were proof that it took the requisite responsible steps to preserve ESI and that it did not intend to deprive GN Netcom of evidence.

But in his opinion, U.S. District Judge Leonard P. Stark disagreed and found "Plantronics' extensive document preservation efforts do not absolve it of all responsibility for the failure of a member of its senior management to comply with his document preservation obligations." Judge Stark also wrote that he was "not convinced that Plantronics took all the reasonable steps it could have taken to recover deleted emails."

The court in Plantronics ordered a $3 million punitive monetary sanction against Plantronics as well "instructions to the jury it may draw an adverse inference that emails destroyed by Plantronics would have been favorable to GN's case and/or unfavorable to Plantronics' defense."

Under the new rule, a showing of bad intent is not required to obtain less severe remedies. For instance, in Security Alarm Financing v. Alarm Protection Technology, a lawsuit between home security competitors about the alleged poaching of customers, a district court judge in Alaska considered a motion for sanctions for customer call recordings that had been lost by the plaintiff.

The court concluded that the evidence prejudiced the defendant and that the plaintiff had failed to take steps to preserve the recordings. But based on a "murky" record involving discussions between the parties over what they agreed needed to be produced, the court wrote it was "not persuaded that the failure to preserve the recordings . . . was done with the intent to deprive APT of the recordings." Accordingly, instead of ordering an adverse inference, the court allowed the jury to hear about the spoliation of evidence and precluded the plaintiff from using 150 saved call recordings that were favorable to its case.

Clear Protocols Needed

These recent cases demonstrate how the digital age exposes litigants to potentially serious setbacks in litigation. Adverse inference jury instructions—among the most severe sanctions—have been made tougher to obtain by recent amendments to the Federal Rules of Civil Procedure, which now require a showing of intent to deprive a party of information. But, it is important for companies to recognize that a showing of bad intent by just one of its employees can be attributed to the organization.

Even if bad intent is not established, mishandling ESI still negatively can affect the outcome of a case in less severe but crucial ways.

The bottom line: As new communications technologies continue to expand, it is important for companies to establish clear protocols for preserving and disclosing relevant content and using those protocols to avoid costly court setbacks.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.