In 1999 the US Government launched a civil racketeering suit
against the tobacco industry, accusing it of misleading the public
over the effects of smoking. It claimed $280 billion.
Shortly after the suit was filed the Washington DC District
Court issued an order requiring Philip Morris and its parent
company Altria Group to preserve "all documents and other records
containing information which could be potentially relevant to the
subject matter of this litigation".
However, on every month for two years after the order was
issued, Philip Morris and Altria continued to delete e-mail that
was over 60 days old.
According to court papers, the two companies became aware of the
problem in February 2002, but did not advise the court until June
that year. In the meantime, the monthly deletions continued in both
February and March.
In her ruling, issued on 21st July, Judge Gladys Kessler said
that "there is no question that a significant number of e-mails
have been lost and that Philip Morris employees were not following
the company's own internal procedures for document
preservation."
"What is particularly troubling is that Phillip Morris
specifically identified at least eleven employees who failed to
follow the appropriate procedures, and that those eleven employees
hold some of the highest, most responsible positions in the
company", she added.
Judge Kessler therefore granted the Justice Department's request
that the companies be fined. She ordered payment of $2.75 million
in damages to reflect "the reckless disregard and gross
indifference" shown by the company.
She also issued an order that none of the 11 employees accused
of breaching the preservation order be allowed to testify in the
upcoming trial, which is due to begin in September.
But Judge Kessler refused to grant a request by the Justice
Department that an "adverse inference" be held on the reasons
behind the e-mail destruction. This, she said, would "cast too wide
a net".
