Systems, Processes & Challenges Understanding & Representing your Business Client Daniel S. Day
Determine At Which Point A Litigation Hold Is Necessary
Determine the point at which it is necessary to implement a litigation hold
Has a subpoena been issued or a lawsuit filed?
Is litigation anticipated?
Balancing the risks & weighing the burdens
Avoid false alarms where there are only rumors or vague threats of litigation; threats made by a discredited plaintiff, or where the threats lack credibility.
When Does the Duty to Preserve Arise? Anticipating Litigation
“The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D. N.Y. 2003) (Zubulake IV).
“Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” Id. at 218.
Legal Duties: The Duty to Preserve
Determine The Scope Of The Litigation Hold & Issue The Hold
How to implement the litigation hold
“[T]he failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.” The Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F. Supp. 456 (S.D. N.Y. 2010).
The hold must direct employees (“key players”) to preserve all relevant records, paper and electronic
Determine the scope
Cover all potential document storage: laptops, PDA’s, smartphones, home computers, thumb drives, etc.
Create a mechanism for collecting preserved records
Cannot place total reliance on the employees without supervision of counsel
“Once a ‘litigation hold’ is in place, a party and her counsel must make certain that all sources of potentially relevant information are identified and placed ‘on hold,’ to the extent required.” Zubulake v. SBS Warburg LLC, 229 F.R.D. 422, 432 (S.D. N.Y. 2004) (Zubulake V).
Legal Duties: Duty to Locate
Will the litigation hold be implemented to involve an entire IT system?
Is it manageable?
If the burden of compliance is placed on individual employees:
Communications to preserve documents must be clear, and repeated.
Follow up to ensure compliance is required.
Systems v. Custodian Approach
Get Confirmation Document The Hold
It is important to document every step of the litigation hold process.
Date and rationale for instituting a hold
Names and titles of the key decision-makers or custodians
Scope of the hold and how the parameters were determined
A copy of the hold notice
Dates hold notices were sent
Who received the hold notices
Date and rationale for releasing the hold
Corporate retention policies
Following policies & identifying exceptions
Costs & burdens
Hold in place or collection
Considerations Regarding Document Preservation
What IT systems, software & policies regarding document retention does the client have.
What is the budget & costs considerations.
What impact does the hold have on the business.
What resources does the client have, can they manage it in-house or does it need to be outsourced.
What is your client’s risk tolerance?
Understanding Your Client
Determine how a litigation hold will be communicated and who will manage each of the separate tasks.
Who will conduct the litigation hold interviews and how will outside counsel be involved?
Make sure information is recorded and shared with outside counsel.
Know the costs. Manage the costs. Reduce the costs.
How In-house And Outside Counsel Can Work Together
For a large organization with recurring litigation, utilizing litigation hold software is a “no-brainer.”
Record of acknowledgements from records custodians
Regular reminders and follow up communications
Facilitate collection records in one place
Automate the Litigation Hold?
A paper trail
Everything archived in one place
Getting a confirmation or acknowledgement from custodians
Updating the hold—automatic reminders
The Benefits Of Automation
There are a lot of vendors in the space, but there is a lot of infancy. There are only a few mature vendors.
Determine your requirements.
Determine your budget.
Attend a demonstration to make sure the vendor can perform to set requirements.
Is the vendor system a work in progress or is it fully developed?
Selecting A Litigation Hold Vendor
Merely automate communication of the litigation hold (a notice tool).
Forensics teams have access.
Document collection tool.
Record and document collection efforts.
Determine Your Requirements
Is the scope and breadth of the litigation hold reasonable and defensible?
How large is the case? What is the financial exposure?
What will it cost to implement the litigation hold? What are the burdens on the system?
Balancing Competing Interests Of Risk V. Cost
Conduct a conference
Discuss issues about preserving discoverable information
Discuss issues about disclosure or discovery of electronically stored information
How will information be retained?
In what form will documents be produced?
What information is available or unavailable?
Discuss scope of the litigation hold/resolve issues & problems
Rule 26(f) Conference Federal Rule Of Civil Procedure
(D) Responding to a Request for Production of Electronically Stored Information. The response may state an objection to a requested form for producing electronically stored information. If the responding party objects to a requested form--or if no form was specified in the request--the party must state the form or forms it intends to use.
Rule 34(D) Federal Rule of Civil Procedure
E) Producing the Documents or Electronically Stored Information.Unless otherwise stipulated or ordered by the court, these procedures apply to producing documents or electronically stored information:
(i) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;
(ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms; and
(iii) A party need not produce the same electronically stored information in more than one form
Rule 34(E)Federal Rule of Civil Procedure
(e) Failure to Provide Electronically Stored Information. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.
Rule 37(e) Federal Rule of Civil Procedure
Update The Litigation Hold
“Counsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched.” Zubulake v. SBS Warburg LLC, 229 F.R.D. 422, 432 (S.D. N.Y. 2004) (Zubulake V).
Legal Duties: The Duty to Monitor Compliance
Follow up reminders
Refine the scope of the hold based on updated information and understanding of the case
Keep track of terminated employees
Gather documents responsive to the litigation hold
Release requests that are no longer relevant
Use the meet & confer so that you don’t over-preserve and increase burdens & costs
How To Monitor And Maintain And Manage The Litigation Hold
Terminating or Releasing The Litigation Hold
If you don’t release the hold in time, your litigation costs may increase substantially
Documents subject to the hold may be subject to other litigation
Communicate and coordinate with IT and other departments
Practical Issues Regarding Terminating A Litigation Hold