Against: The Liberal Definition and

use of Litigation Holds

Team 9

Litigation HoldLitigation Hold - "preservation order" or

"hold order," is a process used by companies to advise their employees of pending or anticipated litigation and of their obligation to preserve relevant records and to suspend their normal records-destruction policies as they relate to potentially relevant records.

DifficultiesDelays of several days may permit

overwriting or permanent loss of files, tapes, or other media

Electronic information is stored on a bewildering variety of devices, some of which a company can't easily control – Email, instant messages, text messages, etc.

Ensure all employees follow standards of when and what to hold

General Guidelines for Legally Defensible Policies

Companies must have a clear written document retention policy and schedules that meet its business needs and are fully endorsed by senior management

Companies must take reasonable steps to ensure that this policy is effectively communicated to employees and is actually followed

Companies must enact administrative procedures that will immediately stop the routine destruction of records when and if they become the subject of corporate governance, regulatory, or legal concerns

Companies must guide and train all employees on how to prepare effective, accurate records

Duties Of EDD Target and Requesting Parties

Duty to preserve records is triggered when a party learns of pending litigation or “reasonably anticipates” litigation or is put on notice that litigation is imminent.

The courts have held that the requesting party must show that the request is at least likely to lead to the discovery of admissible evidence.

Once the duty to preserve arises, parties must be prepared to take affirmative steps immediately to preserve information that – they know or should reasonably know is relevant to the action– is reasonably calculated to lead to the discovery of admissible

evidence– is reasonable likely to be requested during discovery or is the

subject of pending discovery requests.

Prohibitions and Sanctions

Spoliation-“Adverse inference instruction” in (Zubulake and Coleman (Parent) Holdings cases), or default judgments, substantial fines, and civil contempt judgments, attorneys’ fees and costs for sanctions motion

Criminal liability for document destruction (punishable by fines and by up to twenty years in prison) is a possibility as federal prosecutors can now use Section 802 of Sarbox

The Facts Behind Litigation Holds Negligent e-discovery conduct has been sanctioned in all 12 federal judicial circuits.

However, Judge Scheindlin (from Zubulake case) notes the courts have been right on target with sanctions.

“The results of our survey reveal that the profile of a typical sanctioned party is a defendant that destroys electronic information in violation of a court order, in a manner that is willful or in bad faith, or causes prejudice to the opposing party.”

(see: Shira A. Scheindlin and Kanchana Wangkeo, Electronic Discovery Sanctions in the Twenty-First Century, 11 Mich.Telecomm.Tech. L. Rev. 71 (2004) available at http://www.mttlr.org/voleleven/scheindlin.pdf)

“Fortunately, while the duty to preserve evidence is a broad mandate, it does not require a litigant to keep every scrap of paper or electronic document. Moreover, information searches can be easily automated. “[If it is not feasible to speak with every key player] counsel must be more creative. It may be possible to run a system-wide keyword search; counsel could then preserve a copy of each ‘hit.' Although this sounds burdensome, it need not be.”

(See: Zubulake v. UBS Warburg, LLC, 2004 WL 1620866 (S.D.N.Y. July 20, 2004)

Any broader “safe harbor” provisions would hinder the notion of fairness needed for courts to punish willful and reckless destruction of evidence and documents.

Best ERM Practices Anticipate circumstances that can trigger the suspension of usual document destruction

procedures. Litigation holds can attach well before a formal administrative or judicial proceeding is commenced, possibly as early as an employee’s internal complaint of discrimination or a lawyer’s demand letter submitted on the employee’s behalf. Do not solely rely on cooperation of employees.

Employers should identify persons authorized to impose a litigation hold and those responsible for implementing that hold and effectively communicating it throughout the company. The employer must ensure that all sources of discoverable information are identified and searched and relevant documents preserved. Evidence Lifecycle Management Plan. Establish automation in searching documents.

Employers and their in-house and/or outside counsel must take affirmative steps to monitor compliance with litigation holds and to periodically reissue such holds.

– Fed. R. Civ. P. 26(f) counsel review with the client the client’s information management system (how is information stored and how it can be retrieved?)

– Fed. R. Civ. P. 26(a)(1), counsel shall further review with the client the client’s information files, including currently maintained computer files as well as historical, archival, backup, and legacy computer files . . .”

– Federal Rule of Civil Procedure 37 sections (b) and (c), non-compliance leads to sanctions