[Source: "Current Perspectives on Healthcare Governance: A Roundtable Discussion Among Experts: Part I", AHLA]
Excerpt:
Mr. Silverman: Mr. Levine, what is the most important federal statute that addresses document destruction, and one to keep in mind when a company is designing and implementing its document retention policy?
Mr. Levine: In my view, it is 18 U.S.C § 1519, added to the criminal code by the Sarbanes-Oxley Act of 2002. Any knowing alteration or destruction of material in anticipation or contemplation of any kind of federal matter or proceeding could be obstruction under this law. A criminal investigation need not have started. Indeed, this statute does not require that there be any investigation at all. This covers any civil or administrative agency proceeding too. Moreover, under this statute, it is a crime if you destroy a document "in contemplation" of a possible federal proceeding. This is an incredibly broad statute, the reach of which has not yet been litigated.
Mr. Silverman: What advice would you give to a company to best design, and implement, a document retention policy?
Mr. Levine: Get a policy in place now, before a crisis erupts in the form of a serious internal investigation and/or government inquiry. Think about the substance of the policy, who the point person for document collection will be, how a "document hold" will actually be implemented, which offsite locations and agents with documents will be contacted, how employees will certify that a good faith search for responsive documents has been made, who in IT will be on the response team, and how employees will be trained about all of the above.
The basic parameters of a document integrity policy include the notion that destruction is not a crime when it is part of an ongoing, legitimate document retention/destruction policy – that's what the Supreme Court said in Arthur Andersen.
BUT the company must preserve material when it has reasonable grounds to believe a government inquiry will be coming OR when it learns of facts, which if known to government, would reasonably lead to government inquiry.
Also keep in mind that, of course, NEVER destroy materials for the purpose of having them unavailable for a government inquiry. Finally, remember that similar issues arise in civil matters. A court finding of "spoliation" of evidence can result in large financial sanctions and a jury being allowed to draw an adverse inference against the company.
Mr. Silverman: Ms. Cornell, do you have any thoughts to add to this from an in-house perspective?
Ms. Cornell: Yes, thanks, Stuart. Designing and rolling out a document retention policy in any company is a significant undertaking. Understanding the paper and electronic documents that are filed on site, are stored off site, and exist in electronic files and backup tapes for each and every department in the organization and then setting up schedules for appropriate document destruction (following contractual obligations and state/federal requirements) is a significant challenge. As Ron suggests, a company can destroy documents on an ongoing basis if it is following a legitimate policy. And honestly, companies are setting up these policies not only because of concerns about possible litigation and investigations, but also to reduce the significant costs to maintain and store the volumes of paper and electronic materials. However, to be a real legitimate process that will stand up under scrutiny there must be an ongoing process and commitment to clear out files. And the process must be alive; people must be accountable in the organization. Otherwise, despite best intentions, a decision to clean out files in the absence of a policy and ongoing practice, could be very problematic in the wrong place at the wrong time.
