The "Zubulake" of Legal Holds

The Judge of Zubulake fame (various decisions in 2004 and 2005 which became the handbook on e-discovery obligations and the precursor to the amended Federal Rules of Civil Procedure in December 2006), has written a lengthy opinion outlining the obligations of parties to issue a properly worded, written legal hold to employees who might be relevant to an anticipated litigation.

In late 2003, plaintiffs’ counsel was retained for a lawsuit, which was filed in February 2004. The case was stayed for a number of years and finally a document production was made in 2007. This was found to be deficient and having gaps in what should have been produced.

While the Judge did not grant defendants’ motion to dismiss the case, she did grant an adverse jury instruction, stating that plaintiffs were grossly negligent and that relevant ESI had been destroyed, which the jury may presume was favorable to the defendants. She also imposed monetary sanctions of reasonable costs, including attorneys fees for dealing with the declarations, added depositions and this motion.

So what was the evil done by plaintiffs in their preservation efforts?

Plaintiffs’ counsel telephoned, e-mailed and distributed a memorandum instructing the relevant employees to be over, rather than under, inclusive, and noted that emails and electronic documents should be included. Counsel indicated that the documents were necessary to draft the complaint, although they did not expressly direct that the search be limited to those documents.

So how was the legal hold deficient?

  1. It did not specifically direct employees to preserve (and not destroy) relevant documents
  2. It did not create a mechanism for collecting the documents
  3. It placed total reliance on the employee to search and select what the employee believed to be relevant records

Problems were discovered when the defendants noticed gaps in the plaintiffs’ production. Follow up questions revealed some specific problems:

  1. Some plaintiffs destroyed backup tapes in 2004 after their duty to preserve arose
  2. Declarations on collection efforts were at best vague, lacked detail or at worst were an attempt to mislead
  3. Counsel failed to properly monitor/supervise the employee preservation and collection efforts. They could not identify which files were searched, how the search was conducted, who was asked to search or what they were told

A helpful reminder: The duties to preserve documents when litigation is anticipated are clear and they include a well-written instruction plan for preservation and collection and the guidance and supervision of counsel.

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