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Much has been written about the consequences of failing to establish a reasonable plan to preserve documents once there is a duty to preserve. However, surprisingly little has been written about when a party can resume its normal document retention and destruction policy.
The good news is that eventually the litigation hold can be lifted; the bad news is that you may not be able to lift the hold as soon as you would hope or like.
The obvious answer as to when a party can lift a litigation hold is, of course, when the litigation is "over." When litigation is over, however, may not be as apparent as you might think.
Imagine you're retained to represent a client against threatened claims. Having learned the lessons of Zubulake v. UBS Warburg, 220 F.R.D 212 (S.D.N.Y. 2003), you begin helping your client implement a plan to preserve potentially relevant documents as soon as litigation appears probable.
Then the lawsuit is filed, and your client is served. In response, you move to dismiss for failure to state a claim. Your motion is granted with prejudice before the costly discovery phase has commenced.
Your client, understandably, wants to resume business as usual, since the case is over from the client's perspective.
Not so fast. The plaintiff may appeal, and until the appellate process is complete, you should still be reasonably anticipating litigation and preserving documents. After all, the order granting the motion to dismiss could be reversed, requiring the case to proceed. That's the straightforward scenario.
LITIGATION THREAT
But what if litigation has been threatened but a long period of time passes and no suit is filed? The case of UMG Recordings. v. Hummer Winblad Venture Partners, 462 F. Supp. 2d 1060 (N.D. Cal. 2006), provides helpful analysis.
UMG Recordings is one of a series of cases related to litigation concerning Napster, the file-sharing company. The litigation started Dec. 6, 1999, when the recording industry sued Napster for copyright infringement. In May 2000, Hummer, which was not a party to the litigation, invested in Napster. In July 2000, a second Napster suit (the Katz litigation) was filed, naming Hummer as a defendant.
After Napster ceased operations, the Katz lawsuit was voluntarily dismissed in July 2001. Finally, in April 2003, UMG Recordings was filed and Hummer was served in August 2003.
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Carrie Mallen
Great comments Steve, all very true and thank goodness for this technology.
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Steve Lilley
Good article regarding the legal perspective of releasing legal holds.
I will add a technical perspective, now becoming 'supported' by proposed defensible deletion standards on the table for FRCP adoption that support Judge Peck's comments, etc.
That is that defensibly releasing custodian holds, through defensible technology now involves releasing preserved/collected/analyzed custodial data across respective active, not just closed, matters thus reducing data burdens even as a client's legal hold/preservation/litigation burdens may be increasing.
In the spirit of matter-based cost & risk proportionality as a guiding principle for attorneys on both sides of a matter, these technologies applied by attorneys will 'advance' the legal community.
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