Electronic discovery about more than unplugging the shredders

17 Jul Electronic discovery about more than unplugging the shredders

Editor’s note: This article is the last in a series of op-ed pieces about electronic discovery by attorneys in the law firm Michael Best & Friedrich.

My colleagues have discussed the changes to the Federal Rules of Civil Procedure and the importance of a document retention and destruction policy. This article will address litigation holds – preserving documents and electronically stored information (“ESI”) for litigation.
Litigation holds are not new. In the age of electronic discovery, however, preservation requires more than unplugging the shredder. This article will address the “when” and “how” of a litigation hold.
When?
The duty to preserve documents and ESI arises when you “reasonably anticipate litigation.” Heng Chen v. Triple 8 Palace, 2005 WL 1925579. This term is undefined and the determination is fact dependant. Unfortunately, it is also, judge specific.
Zubulake v. UBS Warburg is one of five opinions arising out of a retaliatory firing lawsuit. Zubulake sought discovery of certain emails. The emails had been destroyed pursuant to UBS’s destruction policy. Thus, the Court had to determine if UBS’s duty to preserve arose before they were destroyed.
The Court determined that the duty arose 11 months before the filing of the lawsuit, four months before the filing of the Equal Employment Opportunity Commission complaint and before the e-mails were destroyed. The Court reached this conclusion because the “relevant people” thought litigation was possible. Those people were Zubulake’s supervisor and co-workers. The Court did not limit the relevant people to executives, the HR manager or in-house counsel.
In Cache La Poudre Feeds, LLC v. Land O’Lakes, Inc., a trademark dispute, the Court held the duty to preserve did not arise until the lawsuit commenced despite the fact that several employees knew they were using a trade name used by the plaintiff, and the plaintiff’s counsel sent a cease and desist letter to the defendant. The Court reached this conclusion because the letter offered to resolve the claim without litigation.
How?
Once the duty arises, you need to craft a litigation hold. Outside counsel should be involved in this process. The duty to preserve falls jointly on clients and outside counsel. Heng Chen, supra. The hold should not be a form letter. It should be based on the specifics of each case. That said there are guidelines that should be followed in all cases.
The author matters
If your litigation hold is going to be given the appropriate attention, it must come from senior management. Also, the duty to ensure the preservation of information belongs to senior management. In re Prudential, 169 F.R.D. 598.
Define the audience
Not everyone needs to be included and over inclusion may negatively impact the “reasonableness” of your hold. Senior management needs to determine which employees/departments/offices should receive the hold. The IT department and the record custodian must always be included.
Keep it short and simple
A litigation hold must be understood by a wide range of people from executives to record clerks to judges. If it is not understandable, it is not effective. Limit the explanation of the issues to what is necessary to identify the relevant information. Avoid statements about the merits of the claim – anything you say is a potential admission.
Tell them what you are looking for
Define key terms (i.e. document, ESI) in simple language. ESI is more than e-mails and word files. It is Outlook calendars, audio/video recordings, voice mail, spreadsheets, telephone logs, etc. Define the sources: laptops, desktops, Blackberries/PDAs, cell phones, backup tapes, disks, CDs, DVD’s.
Tell them what to do
Your directions should be simple:
• Existing relevant documents and ESI must be identified, catalogued, segregated, and preserved.
• Future relevant documents and ESI must be maintained, catalogued, segregated, and preserved – even if in use.
• How to do it. The “how” does not need to be in the hold. Tell them where to find the specifics.
State the risks
Keep this brief. Tell them that the range of sanctions include losing the case.
Follow up and adjust
Your hold must state that you will follow up and you must follow up. Sending out the hold is the first step (Zublake V, 229 F.R.D. 422). Next, you and outside counsel must interview the recipients and adjust the hold accordingly.
Litigation in the electronic age presents new and challenging issues. Proper document and ESI management, however, can limit the impact of litigation and allow you to focus on the business of running your business.
Related articles
• John Flanagan: Document retention policy can get your arms around eDiscovery
• Juan Ramirez: Finding “Safe Harbor” in a sea of electronic discovery
• Tim Hansen: Quick peeks, Clawback Agreements, and the rules of electronic discovery
• Fusion 2007: IT threats make risk management paramount
• Fusion 2007: In “e-legalities,” CIOs and lawyers combine to provide business value