A failure to retain email records is the basis of Wednesday’s $1.45 billion ruling against investing giant Morgan Stanley (via).   Apparently, the judge in the case regarded Morgan Stanley’s failure to produce records of email correspondence to be conspiratorial. 

Banks and broker-dealers are obliged to retain e-mail and instant messaging documents for three years under U.S. Securities and Exchange Commission rules. But similar requirements will apply to all public companies from July 2006 under the Sarbanes-Oxley corporate reform measures.

At the same time, U.S. courts are imposing increasingly harsh punishments on corporations that fail to comply with orders to produce e-mail documents, the experts said.

Where judges once were more likely to accept that incompetence or computer problems might be to blame, they are now apt to rule that noncompliance is an indication a company has something to hide.

I don’t know how these policies generalize to academic institutions—public or private.  In various work situations (no need to name institutions), I was within earshot of a few cases of email mishandling—events where this or that person deleted email messages with certain implications, instances where
people claimed never to have received a message (even when the sender had receipt confirming delivery), and problems with systems deletions that kick out old messages because of limited capacities on local servers.  I suppose we’re all familiar with cases like these, situations where the mysterious email
gnomes trick on our records systems.  If nothing else, it does call to mind the efforts I’ve seen recently—especially in my teaching–to hear “I never received it” or “I have no record of it,” as a justification for being uninformed.  So it’s interesting to me that in a broader, systemic way, “incompetence or computer problems” are waning as viable excuses.  Lest I be made accountable for reading too much into this, I’ll just say I find it interesting because—in one example—it suggests still-shifting sensibilities about the reliability of email.  $1.45 billion: quite a pile of chips.

Notably, the Reuters story quotes the executive officer of a “provider of records retention software systems” who said he anticipates this case will be viewed by others as—in the hyperbolic blend of the week—”legal Chernobyl.”  What the heck does that mean?  Forced abandonment of email systems because of their disastrous high-level toxicity to corporations that can’t manage fluid texts? Seems like
just the thing a provider of records retention software systems would want people to believe.  Anything to avoid another Chernobyl.  And, sure, coupled with the $1.45 billion ruling, a ruling that will certainly come under appeal, many companies will be forced to rethink their records-retention processes.