If a company is not able to produce required data or show that it had a good-faith policy in place, it could face legal sanctions including spoliation, in which the jury is told that the company cannot produce potentially damaging evidence and is left to infer what that evidence could have been.

The following are a few examples of cases and rulings by the Courts in which parties have been penalized or sanctioned for their failure to properly conduct themselves or respond to electronic discovery issues in accordance with the Courts' requirements:

PML v. Hartford (E.D. Mich 2006)
"There is a point beyond which bumbling and blindness to a party's discovery obligations sufficiently resembles the sort of…malicious conduct that calls for … judgment by default."

Mastercard v. Moulton (S.D.N.Y 2004)
"[Defendants] appear simply to have persevered in their normal document retention practices, [disregarding] their discovery obligations. The absence of bad faith, however, does not protect defendants from appropriate sanctions, since even simple negligence is a sufficiently culpable state of mind… [for] spoliation"

April 2008 Edition of InsideCounsel
A string of internal screw-ups could lead to sanctions for Intel Corp., which disclosed in March it may have lost e-mails it was required to produce in an antitrust case…

Despite sending notice to some employees to retain their e-mails, Intel neglected to inform about 400 employees to stop deleting files. In addition, some of their employees, whom Intel did not notify, wrongly assumed the company kept an archive of their e-mail. Because employees never transferred their e-mail messages to their hard drives, the e-mail system deleted the messages after a certain amount of days

Since the incident, Intel has stated that it plans to implement an e-mail archiving system rather than relying on employees to comply with litigation holds

The above examples are illustrative of the importance of proactively preparing for electronic discovery issues and properly handling electronic discovery through the litigation process. Percento Consulting is uniquely equipped to assist and advise clients prior to the occurrence of litigation and to work with clients and their legal counsel during the litigation process to ensure proper measures are taken relative to electronic discovery.