Document Retention Policy Saves the Day

Aircraft Check Services Co. v. Verizon Wireless | 14-2301

April 2015

Next time you are meeting with the general counsel of your favorite  corporate client and trying to impress upon her the importance of an established document retention policy, pull out Aircraft Check Services Co. v. Verizon Wireless, 14-2301. Aircraft Check Services had the potential to be a huge, consuming antitrust class action lawsuit involving the pricing of text messages. 

Mercifully for the defendants, the case ended on summary judgment. The primary direct evidence of collusive pricing were two emails by a mid-level executive that described increased text pricing as “nothing more than a  price gouge on consumers,” and a price increase by a competitor as “collusive and opportunistic.” The plaintiff argued that the emails demonstrated collusion. And, the fact that author of the “collusive” email asked that certain related email exchanges be deleted was evidence that a jury could have relied upon to show that the deleted emails were evidence of illegal collusive price-fixing efforts.

The Seventh Circuit held that such an inference did not create an issue of fact that would defeat summary judgment. First, the Court reached the common sense conclusion that emails critical of corporate management are generally not good for one’s career and therefore the email destruction was intended to preserve the authors’ careers and not conceal a conspiracy. Second, and more to the point for our present purposes, the Court noted that the email destruction at issue was consistent with the corporate record retention policy, which did not require retention of the emails in question. The Court further noted that a “subordinate employee’s destruction of a document, even if in violation of company policy [cannot] be automatically equated to a bad-faith act by the company.”

Thus, the document retention policy helped on both ends. It demonstrated that the document in question did not need to be retained per company policy, and it was evidence of ‘lack of bad faith’ on the part of the company. At the end of the day, a well-thought out document retention policy saved the defendant much larger financial exposure through the litigation itself.