Many organizations assume that because their information is stored “in the cloud,” it is automatically preserved and easily retrievable. In reality, cloud storage does not eliminate an organization’s legal obligation to preserve electronically stored information (“ESI”) for litigation and regulatory purposes.
Modern businesses increasingly rely on software-as-a-service (“SaaS”) platforms, including Microsoft 365, Google Workspace, Slack, Teams, and other cloud-based applications, for email, document management, accounting systems, project management, and internal collaboration tools. Although these systems are hosted by third-party vendors, the responsibility for preserving relevant data remains with the organization.
Once litigation is reasonably anticipated, companies must take reasonable steps to preserve relevant ESI, including cloud-based data, shared drives, archived data, administrator-level accounts, and certain backup environments. Courts expect litigants to understand their own data systems and retention practices, even when information is maintained through third-party cloud providers.
Failure to preserve relevant cloud-based data may constitute spoliation, which can result in sanctions, adverse inference instructions, limitations on the use of evidence, or dismissal of claims or defenses.
Why Cloud-Based Data Preservation Matters
Referring to information as being “in the cloud” does not shield an organization from e-discovery obligations. Effective preservation requires an understanding of how data is created, stored, retained, and deleted within each SaaS platform or cloud environment.
Early coordination between legal counsel, IT personnel, and vendors is often critical to:
- identify relevant data sources;
- evaluate retention settings;
- implement litigation holds; and
- establish defensible preservation strategies.
As businesses continue to increase their reliance on cloud storage and SaaS platforms, proactive e-discovery planning and data preservation practices are becoming increasingly important in litigation risk management.
About Us
Newman & Lickstein, LLP advises businesses and organizations on e-discovery obligations, litigation risk management, data preservation, and complex commercial litigation matters. Our attorneys work closely with clients to address evolving legal and technological issues involving electronically stored information, cloud-based systems, and defensible preservation practices in modern litigation.
