Document Retention Programs for Electronic Records: Applying a Reasonableness Standard to the Electronic Era (1999)

I. INTRODUCTION Corporations1 create and maintain records for a number of reasons.2 Notably, the effective maintenance of records facilitates the organization and retrieval of information used to support the corporation's operations and activities.3 In addition, the creation and maintenance of records enables a corporation to better comply with legal requirements imposed by statutes and regulations.4 effective maintenance of records [p]rovide[s] support for organization actions and helps the organization avoid adverse consequences during litigation, government investigation and audit.5 Since corporations will continue to create and maintain records, the development of effective document retention programs is necessary.6 Such programs serve a number of functions.7 Notably, an effective document retention program can significantly reduce storage problems.8 Such programs also facilitate the retrieval of needed documents for business purposes.9 Notwithstanding the underlying rationales for the implementation of document retention programs,10 particular applications of such programs might result in severe consequences to corporations.11 Notably, the implementation of document retention programs for electronic data could create enhanced exposure to civil liability if the retention program is unreasonable.12 reasonableness of any particular document retention program for electronic data, however, should be a function of the unique facts and circumstances that have driven the electronic revolution. Specifically, the tremendous capacity and efficiency afforded by electronic instrumentalities should compel the implementation of longer retention periods. Part II of this Note outlines the underlying rationales for the implementation of such programs and discusses the features of an arguably valid document retention policy.l3 Part III then examines the application of a reasonableness standard to document retention programs for electronic data. Specifically, it compares traditional document retention procedures, which have historically been tailored to paper records, with modern document retention procedures, which are aimed at information stored in electronic form. II. UNDERLYING RATIONALES A. Defining Retention Program A document retention program involves the systematic review, retention, and destruction of documents received or created in the course of business.14 The existence of a document policy may under certain circumstances be deemed a mitigating factor in litigation when documents are destroyed pursuant to it, while a company's failure to have a coherent policy may be an aggravating factor.15 Historically, document retention programs have been geared toward concerns regarding the accumulation of documents in paper form. electronic revolution, however, has created a new concern-the accumulation of information stored by electronic instrumentalities.16 B. Rationales Underlying the Adoption of Document Retention Programs decision to implement a particular document retention program17 involves the balancing of potentially competing interests. These interests take a number of forms, but certainly include (1) legal obligations,18 (2) efficiency considerations,19 and (3) prelitigation concerns.20 Each interest, in its own way effectuating a distinct policy concern,21 affects the nature of the program ultimately adopted by the corporation. 1. Legal Obligations State or federal law might subject a corporation to an affirmative legal requirement to keep certain records for specific time periods.22 To the extent the corporation must comply with these specific mandates,23 these regulations encourage the implementation of minimum retention periods.24 Specifically, the final version of the program must incorporate the particular mandates of the law.25 2. Efficiency Considerations Though specific legal mandates alone might sufficiently encourage the development of a document retention program, efficiency considerations also play an important role. …