the litigation hold – systems, processes and challenges | daniel s. day

The Litigation Hold

Systems, Processes & Challenges

Understanding & Representing your Business Client

Daniel S. Day

• Determine the point at which it is necessary to implement a litigation hold •  Has a subpoena been issued or a lawsuit filed? •  Is litigation anticipated?

•  Balancing the risks & weighing the burdens •  Avoid false alarms where there are only rumors or

vague threats of litigation; threats made by a discredited plaintiff, or where the threats lack credibility.

•  “The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D. N.Y. 2003) (Zubulake IV).

•  “Once 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.” Id. at 218.

•  “[T]he failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.” The Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F. Supp. 456 (S.D. N.Y. 2010).

•  The hold must direct employees (“key players”) to preserve all relevant records, paper and electronic

•  Determine the scope

•  Cover all potential document storage: laptops, PDA’s, smartphones, home computers, thumb drives, etc.

•  Create a mechanism for collecting preserved records

•  Cannot place total reliance on the employees without supervision of counsel

•  “Once a ‘litigation hold’ is in place, a party and her counsel must make certain that all sources of potentially relevant information are identified and placed ‘on hold,’ to the extent required.” Zubulake v. SBS Warburg LLC, 229 F.R.D. 422, 432 (S.D. N.Y. 2004) (Zubulake V).

• Will the litigation hold be implemented to involve an entire IT system? •  Is it manageable?

•  If the burden of compliance is placed on individual employees: •  Communications to preserve documents must be

clear, and repeated. •  Follow up to ensure compliance is required.

•  It is important to document every step of the litigation hold process. •  Date and rationale for instituting a hold •  Names and titles of the key decision-makers or

custodians •  Scope of the hold and how the parameters were

determined •  A copy of the hold notice •  Dates hold notices were sent •  Who received the hold notices •  Date and rationale for releasing the hold

• Corporate retention policies

• Following policies & identifying exceptions

• Overkill

• Costs & burdens

• Hold in place or collection

• What IT systems, software & policies regarding document retention does the client have.

• What is the budget & costs considerations.

• What impact does the hold have on the business.

• What resources does the client have, can they manage it in-house or does it need to be outsourced.

• What is your client’s risk tolerance?

• Determine how a litigation hold will be communicated and who will manage each of the separate tasks.

• Who will conduct the litigation hold interviews and how will outside counsel be involved?

• Make sure information is recorded and shared with outside counsel.

• Know the costs. Manage the costs. Reduce the costs.

•  For a large organization with recurring litigation, utilizing litigation hold software is a “no-brainer.” •  Automated communication

•  Record of acknowledgements from records custodians

•  Regular reminders and follow up communications

•  Facilitate collection records in one place

•  Generate reports

• A paper trail

• Everything archived in one place

• Getting a confirmation or acknowledgement from custodians

• Updating the hold—automatic reminders

•  There are a lot of vendors in the space, but there is a lot of infancy. There are only a few mature vendors.

• Determine your requirements.

• Determine your budget.

• Attend a demonstration to make sure the vendor can perform to set requirements.

•  Is the vendor system a work in progress or is it fully developed?

• Merely automate communication of the litigation hold (a notice tool).

• Forensics teams have access.

• Document collection tool.

• Record and document collection efforts.

•  Is the scope and breadth of the litigation hold reasonable and defensible?

• How large is the case? What is the financial exposure?

• What will it cost to implement the litigation hold? What are the burdens on the system?

•  Conduct a conference

•  Discuss issues about preserving discoverable information

•  Discuss issues about disclosure or discovery of electronically stored information •  How will information be retained? •  In what form will documents be produced? •  What information is available or unavailable? •  Cost sharing

•  Discuss scope of the litigation hold/resolve issues & problems

•  (D) Responding to a Request for Production of Electronically Stored Information. The response may state an objection to a requested form for producing electronically stored information. If the responding party objects to a requested form--or if no form was specified in the request--the party must state the form or forms it intends to use.

•  E) Producing the Documents or Electronically Stored Information.Unless otherwise stipulated or ordered by the court, these procedures apply to producing documents or electronically stored information:

•  (i) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;

•  (ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms; and

•  (iii) A party need not produce the same electronically stored information in more than one form

•  (e) Failure to Provide Electronically Stored Information. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

•  “Counsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched.” Zubulake v. SBS Warburg LLC, 229 F.R.D. 422, 432 (S.D. N.Y. 2004) (Zubulake V).

•  Follow up reminders

•  Refine the scope of the hold based on updated information and understanding of the case

•  Keep track of terminated employees

•  Gather documents responsive to the litigation hold

•  Release requests that are no longer relevant

•  Use the meet & confer so that you don’t over-preserve and increase burdens & costs

•  If you don’t release the hold in time, your litigation costs may increase substantially

• Documents subject to the hold may be subject to other litigation

• Communicate and coordinate with IT and other departments