Managing a Major Hotel Lawsuit: How Electronic Discovery Can Make - or Break - Your Case
By William A. Brewer III Managing Partner, Brewer, Attorneys & Counselors | January 06, 2010
Explosive Growth of Electronic Information - The Challenge
Information today is shared at the speed of light - in volumes never before imagined. A recent study from the University of California at Berkely estimates that worldwide e-mail generates about 400,000 terabytes of new information each year (more than 40,000 times the amount of information found in the entire print collection of the U.S. Library of Congress) and that instant messaging generates 5 billion messages per day. This communication explosion requires that hospitality companies, and their lawyers, focus their attention on developing efficient data management policies and procedures.
Although electronic data can be easier to search than paper documents, the sheer volume alone is often overwhelming. Separating business from personal communications can be extremely difficult. Even more daunting is the task of distinguishing relevant communication from non-relevant. In hospitality litigation, those challenges can result in enormous discovery burdens and related costs. Companies must rethink their approach to data storage, retention, classification, and retrieval.
Consequences of Poor Data Management
The recent demise of companies such as Enron, Worldcom and Global Crossing has put the spotlight on electronic communications and related document discovery. In the wake of these corporate scandals, the Sarbanes-Oxley Act of 2002 established new rules for corporate governance. Provisions of these rules apply, to some degree, to all publicly-traded companies, including those that make-up the hospitality industry.
One of the provisions of the Sarbanes-Oxley Act is Title VIII-Corporate and Criminal Fraud Accountability, in which Section 802 adds United States Code SS1519 and SS1520. These codes speak to the destruction, alteration or falsification of records in federal investigations and bankruptcy, and to the destruction of corporate audit records, respectively. The failure to comply with these codes can include fines, imprisonment, or both.