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.

Pilot Program to 'Play Nice' in E-Discovery

As we all know by now, in 2006 the Federal Rules of Civil Procedure were amended to standardize how litigants should deal with their electronically stored information (ESI). Soon thereafter, courts at both the Federal and State levels started putting out their own rules (See Tom Allman's Article and a listing of links to state e-discovery rules.)

In addition to the rules themselves, the various courts are trying to find implementation language and protocols that govern the specifics of what the opposing sides must actually do. One example is the 2007 Administrative Order 174 in the Middle District of Tennessee, which spells out what the judges want to see happen at the meet and confer and during the whole discovery process.

Then in 2008, The Sedona Conference published its Cooperation Proclamation in an attempt to codify the steps that opposing counsel should take on the intricate and expensive matters related to identifying, preserving, collecting, searching, reviewing and producing ESI.

Now the 7th Circuit has taken the next step and announced a Pilot Program to last from October 1, 2009 to May 1, 2010, whereby selected cases will have to follow specific principles of cooperation.

The stated purpose is to assist the courts to, among other things, “promote…the early resolution of disputes regarding the discovery of electronically stored information (“ESI”) without Court intervention.” Basically, the Courts are tired of dealing with the lawyers who don’t play nice on matters of e-discovery.

The proposed standing order contains the following (paraphrased) duties: (1) Attorneys not cooperating will be sanctioned; (2) ESI requests should be proportional to the case; (3) Duty to meet and confer, including discussions on identifying ESI and format of production; (4) Identification of an e-discovery liaison to handle disputes; (5) Creation of appropriate and specific preservation requests; and, interestingly, (6) a friendly reminder that the attorneys should become familiar with ESI prior to filing an appearance in one their courtrooms.

First came ESI and the high cost of e-discovery; then came the rules; now comes cooperation and specific actions to follow … all in an attempt to lower costs, deal with the huge influx of discovery disputes and have lawyers play nice.