What legal and ethical obligation is your firm under regarding the preservation of a former client's e-mail?
In FDIC v. Malik,2012 U.S. Dist. LEXIS 41178 (E.D.N.Y. Mar. 26, 2012) the Court found that former lawyers for a mortgage company had an ethical obligation and legal duty to preserve e-mails relating to their prior representation of a mortgage company, and their failure to do so may result in an adverse instruction. As to the "duty to preserve" the Court noted: "A regulation requiring retention of certain documents can establish the preservation obligation necessary for an adverse inference instruction where the party seeking the instruction is 'a member of the general class of persons that the regulatory agency sought to protect in promulgating the rule.'"
The Court went on to note that, "plaintiff argues that the Malik defendants had a duty to preserve arising from professional responsibility rules and attorney ethics opinions. . . . .(citing Assoc. of Bar of City of N.Y. Comm. On Prof. and Judicial Ethics, Formal Opinion 2008-1, A Lawyer's Ethical Obligations to Retain and Provide a Client with Electronic Documents (July 2008)) . . . The Malik defendants have not responded to that argument and have made no attempt to explain why those rules and ethics opinions, which require lawyers to preserve electronic documents relating to a representation and seek to protect clients such as AmTrust, do not trigger an actionable duty to preserve under Byrnie. Therefore, I conclude that the Malik defendants had a duty to preserve in 2008 when they represented AmTrust in the loan transactions at issue. I also note that the Malik defendants have not argued that this retention obligation excludes the types of emails at issue in the instant motion."
The Court went on to set the case for an evidentiary hearing on the request for sanctions.
If you wish to obtain a copy of this opinion, register as a member (free) at LawCLECenter(www.lawclecenter.com) and go to member "Resources" to download your copy.