Here is a short summary. In 1993 Louis R. Testa drove up to a Walmart loading dock. The dock was coated with ice but Testa gamely delivered his load of tropical fish with a dock worker's help. Sadly he slipped and fell on the ice and threatened to sue right then and there. The Walmart employee alerted his supervisors who ordered a full investigation. The finished report included photos of the ramp, a description of events and Testa's threat to sue.
Three years later, he did sue. Walmart's defense? That an invoice clerk had contacted all of the store's vendors just the day before to tell them that Walmart would not be receiving any deliveries on that day. This is why the loading ramp was icy: the store expected no deliveries and so had not cleared it. And they might have made their case - except that 2 years after the incident, the clerk's contact records were deleted as part of a corporate-wide deletion policy. The incident report survived.
Walmart ended up losing the case both in district court and on appeal. Although the invoice clerk testified to her actions, Walmart could not produce the records that might have exonerated them. The retailer had recorded Testa's threat to sue and should have preserved the clerk's contact records. Even proving a corporate deletion policy did not excuse them from destroying records that were relevant to a reasonable expectation of litigation.
Don't get me wrong -- a deletion policy is a good thing in general, since corporations commonly keep much more data than they should. Automated data retention and retirement goes a long way towards keeping storage costs lean and mean, and speeds up data searches by controlling the size of ESI. But it is not as simple as that. When records are related to a possible lawsuit - especially one that was quite likely to happen - there must be policies in place to preserve them until settlement, or until a statute of limitations has passed. Archival management with deep eDiscovery options is a must in these cases, and I urge you to look at companies like Mimosa to do it.