Litigation counsel and compliance professionals often find themselves tracking new developments in electronic discovery, specifically in regards to legal hold requirements. A "legal hold" is an affirmative act by an organization to prevent the destruction of documents and electronically stored information which are potentially relevant to a lawsuit or government investigation.

Multi-million dollar sanctions and penalties in high profile cases have seized the attention of litigants nervous regarding the threat of spoliation of evidence sanctions resulting from the failure to preserve electronically stored information.  Even those with only a passing knowledge of the subject recognize the importance of a recent decision from Judge Shira Scheindlin, the renowned federal judge from the Southern District of New York and author of  the well-known and groundbreaking series of electronic discovery decisions in Zubulake v. UBS Warburg.

In the original Zubulake series of decisions, Judge Scheindlin held “[o]nce 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.” Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003). Among other holdings, including the granting of an adverse inference instruction,  Judge Scheindlin also found that "[c]ounsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched".  Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004).

In her January 2010 decision, The Pension Committee of the University of Montreal Pension Plan et al., v. Banc of America Securities, LLC, et al., 2010 WL 184312 (S.D.N.Y.), titled “Zubulake Revisited: Six Years Later”, Judge Scheindlin considered preservation and spoliation from the plaintiff’s perspective, specifically regarding information that the plaintiff should have preserved after filing the suit, but did not.

At the outset of the 85-page opinion, Judge Scheindlin stressed that “[t]his case does not present any egregious examples of litigants purposefully destroying evidence.  This is a case where plaintiffs failed to timely institute written litigation holds and engaged in careless and indifferent collection efforts after the duty to preserve arose.  As a result, there can be little doubt that some documents were lost or destroyed.”   Id at 5.  Judge Scheindlin defined a continuum of fault, considering specific failures and mapping those failures to a level of culpability.  Notably, on this continuum, some levels of culpability can result from “a pure heart and an empty head”, while the failure to issue a written litigation or legal hold notice constitutes gross negligence.  Id.at 8, 9.   As observed by Kevin Brady, an internationally recognized expert in electronic discovery, in the Delaware Corporate and Commercial Litigation blog (http://www.delawarelitigation.com/admin/trackback/177797)

“Judge Scheindlin addresses, in great detail, ways to define the levels of culpability - negligence, gross negligence, and willfulness in the electronic discovery context, identifying the following “failures” and levels of culpability as examples:

• the failure to issue a written litigation hold (gross negligence);
• the failure to collect information from key players (gross negligence or willfulness);
• the destruction of email or backup tapes after the duty to preserve has attached (gross negligence or willfulness);
• the failure to obtain records from all employees (some of whom may have had only a passing encounter with the issues in the litigation), as opposed to key players (negligence);
• the failure to take all appropriate measures to preserve ESI (negligence).
• the failure to collect information from the files of former employees that remain in a party's possession, custody, or control after the duty to preserve has attached (gross negligence); and
• the failure to assess the accuracy and validity of selected search terms (negligence).” 

Other areas reviewed by Judge Scheindlin include the burden of proof, a discussion of a burden-shifting test, and guidance on preservation of backup tapes.  The full opinion can be viewed at http://www.delawarelitigation.com/uploads/file/int93(1).pdf.

To assist you in your legal hold compliance, CSC provides a Web-based solution that enables you to create written legal hold notices, distribute the notices electronically, view and  track recipients of each notice, and capture the recipients’ confirmation of receipt of the notice in a downloadable audit trail. Utilizing this simple compliance and audit solution provides an easy and seamless method of providing notice as required – whether upon receipt of initial service of process or at other times – and an audit trail that the written legal hold notice was issued and received.  The CSC® legal hold compliance solution for corporate legal departments and outside counsel enables you to:

• Ensure and track compliance with legal hold obligations
• Reduce risk of spoliation of evidence and sanctions
• Effectively create custom legal hold notifications
• Distribute notifications via e-mail alerts throughout your organization  
• Require and track acknowledgement of legal hold notices across all recipients
• Maintain an audit trail of notices sent and acknowledgements received

For more information, please contact us at 800.905.6584 or visit us at www.cscglobal.com.