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Legal Hold Should Be Easy by Now. So, Why Do We Still See So Many Failures to Execute It?

Written by Doug Austin, Editor of eDiscovery Today

Over the years, the most common type of eDiscovery case law rulings I’ve covered involved sanctions requests for spoliation of electronically stored information (ESI). It’s a common issue for organizations – whether the sanctions request is ultimately granted or not.

I’m baffled by how many organizations – including large enterprises – fail to preserve data in these cases. Sometimes, there is intent to deprive the party of that ESI. But the issue still too often boils down to mistakes that are made in implementing a legal hold that resulted in spoliation of ESI that should have been preventable.

Recent Cases Involving Failure to Preserve ESI

Here are a few recent cases I’ve covered where the party failed to preserve ESI:

Bursztein v. Best Buy: New York Magistrate Judge Katharine H. Parker, finding that “[d]efendants have thwarted and disrupted discovery throughout the life of this case” sanctioned them for failing to produce certain ESI, including video of a “slip and fall” incident at one of their stores. Best Buy is a Fortune 100 company, yet they evidently handled their duty to preserve (in fact, their entire discovery process) poorly.

In re Gold King Mine Release in San Juan Cty.: New Mexico District Judge William P. Johnson granted in part the plaintiffs’ Motion for Sanctions due to the Federal Parties’ Spoliation of Evidence, specifically the request for an order permitting the plaintiffs to introduce evidence of the Federal Parties’ spoliation of mobile device and OneDrive data at trial for two custodians. This failure happened even though the Federal Parties issued a litigation hold six days after a wastewater spill, “sought to preserve texts through this process on approximately 500 cell phones” and put 1,000 custodians on litigation hold, yet they failed to do so for perhaps the two most important custodians – the EPA’s On Scene Coordinators.

In the Matter of In Re Skanska USA Civil Southeast Inc., et al.: Florida Magistrate Judge Hope T. Cannon, calling this a “text book case of spoliation”, granted in part the claimants’ spoliation motion, seeking sanctions against Skanska, including the ultimate sanction of a dismissal, for the destruction or loss of cell phone data and the deletion of text messages, finding bad faith on the part of Skanska for failing to preserve cell phone data for five custodians.

Hollis v. CEVA Logistics U.S., Inc.: Illinois District Judge Iain D. Johnston, finding the five threshold requirements of Rule 37(e) were met and that the plaintiff was prejudiced by the loss of video evidence, but because of the difficulty to establish intent, left the intent to deprive decision to the jury in the form of factual findings and instruction. In his ruling, Judge Johnston referenced “Hanlon’s Razor”, which says “in its most polite form, that we should not infer malice from conduct that can be adequately attributed to incompetence.”

The Tools and Resources are There

I had originally planned to write this post as a post on best practices regarding what corporations should do to create and execute legal holds. But there are so many articles and blog posts online already that it just feels like reinventing the wheel. One of the best I’ve seen is this article on the Association of Corporate Counsel website from a few years ago, with the top ten practice tips for better legal holds. From the article, they are:

  1. Understand When the Preservation Obligation Arises and What It Means.
  2. Create a Written Legal Hold Plan/Process.
  3. Identify and Interview Custodians.
  4. Issue the Legal Hold – Part I
  5. Issue the Legal Hold – Part II
  6. Utilize Templates.
  7. Communicate Regularly with Custodians.
  8. Release the Hold.
  9. Document Your Processes.
  10. Be Prepared.

Also, as I wrote a few months ago, IPRO and ZyLAB published a terrific whitepaper titled The Three Stages of Legal Hold Maturity (available here), which discusses a combination of best practices, legal hold automation, and in-place preservation to effectively manage legal holds today. Too many organizations over-preserve ESI while failing to preserve some of the most critical ESI in their cases, despite all the tools and resources available.

Conclusion

During his presidency, Harry S. Truman was known for having a sign on his desk that said: “The Buck Stops Here” to indicate that he was not one to “pass the buck” (i.e., pass the responsibility) on to someone else. In the case of legal hold, the “buck” should stop with an organization’s Chief Legal Officer or General Counsel. The responsibility of following proper legal hold best practices starts at the top and CLOs and GCs need to accept and embrace that responsibility.

More than ever before, corporations have the tools and resources to implement and manage legal holds, with well documented best practices, tools to automate legal holds and even in-place preservation. There’s no excuse to improperly execute a legal hold today.

And for more educational topics from me related to eDiscovery, information governance, cybersecurity and data privacy, feel free to follow my blog, eDiscovery Today!