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Litigation: First criminal charges filed in the BP oil spill disaster

Is your company’s litigation hold notice appropriate, and when is the duty to preserve electronic evidence triggered?

On April 20, 2010, the Deepwater Horizon disaster claimed the lives of 11 people and led to a devastating environmental catastrophe in the Gulf of Mexico. After an extensive 3-year investigation following the largest environmental disaster in U.S. history, one would have expected the first criminal charges to relate to the loss of human life or the irreversible damage to the environment.

Rather, on April 24, 2012, the U.S. Attorney General’s office announced that Kurt Mix, a former engineer for BP, had been arrested and charged with intentionally destroying evidence. Mix was a drilling and completions project engineer for BP at the time of the disaster and during various efforts to stop the oil leak. He is accused of two counts of obstruction of justice for allegedly deleting electronic data from his iPhone after he had been put on notice to preserve that data.

First incident

On Oct. 4, 2010, Mix learned that a vendor working for BP was going to collect his electronically stored information (ESI). Pursuant to Zubulake v. UBS Warburg, a critical e-discovery opinion by Judge Shira A. Scheindlin, the duty to preserve electronic evidence is triggered when the party could have “reasonably anticipated litigation.” Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 431 (S.D.N.Y. 2004). Mix deleted more than 200 text messages  regarding BP’s failure to contain the leak after he allegedly knew his ESI was going to be collected.

Second incident

On Aug. 19, 2011, Mix learned that his iPhone was going to be imaged by a vendor working for BP’s outside counsel. He allegedly proceeded to delete more than 100 additional text messages between himself and a BP contractor regarding various issues surrounding failed attempts to stop the oil leak.

By this time, Mix had been communicating with a criminal defense attorney regarding the pending grand jury investigation of the Deepwater Horizon disaster, and he had received numerous legal hold notices requiring him to preserve his data. The standard again will look to determine, based on all facts, whether Mix should have reasonably anticipated litigation at this point.

The lesson  of the first BP oil spill case is a simple one: The failure to preserve evidence can have devastating consequences. Litigation hold notices and the duty to preserve electronic evidence are critical responsibilities for in-house counsel. This is due to the fact that electronically stored information is expanding at an astronomical rate, and ESI is easily deleted. It only takes a few clicks to delete the data, and now you, and potentially your company, are liable.

Keep in mind that depending on the circumstances computer forensic experts are often able to recover that deleted data. Therefore, the user could be liable for obstruction of justice and then the data could still be recovered and used against them. Kroll Ontrack, a provider of e-discovery services, reported that in 2009, 40 percent of all e-discovery cases involved claims for sanctions, and 66 percent of the time those sanctions stemmed from a party’s failure to properly preserve the data.

Take the time to inspect and update the written litigation hold notice that your company utilizes. Companies have been held liable for their employees’ failure to preserve data, especially when they were not promptly informed of all relevant data to preserve for a pending litigation. A good litigation hold notice is written, clearly illustrates all potentially relevant information that needs to be preserved, and is dispersed in a timely fashion.

Contributing Author

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Matthew Walsh

Matthew Walsh is a partner in the Chicago office of Hinshaw & Culbertson LLP and co-leader of the firm's Business Litigation Department. His practice concentrates...

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