Relaxed legal hold processes, including letting custodians self-collect relevant data, have long been the de facto means of responding to the duty to preserve electronically stored information (ESI) in a legal action. This has always been a weak link in the e-discovery process, but two recent court decisions are making that strategy even more risky.
This past summer, both the Second Circuit and Southern District of New York courts issued opinions addressing the adequacy of legal hold notices, self-collection, and ESI search capabilities.
On July 10, 2012, the Second Circuit issued an opinion in Howard Chin v. The Port Authority of New York & New Jersey addressing the legal standard for failure to issue a legal hold notice for relevant evidence. The opinion limits the often-cited standard for legal holds announced in Pension Committee by Judge Shira Scheindlin, U.S. District Court judge for the Southern District of New York, in 2010.
Perhaps serendipitously, Judge Scheindlin issued an opinion three days after the Second Circuit opinion addressing the adequacy of preservation and ESI searches for Freedom of Information Act requests in National Day Laborer Org. Network v. United States Immig. & Customs Enforcement Agency, 2012 WL 2878130 (S.D.N.Y. July 13, 2012) (NDLON).
Both opinions provide a good summary of the state of the law for the left-hand side of the standard Electronic Discovery Reference Model (EDRM), including addressing the following points:
- Failure to issue a legal hold notice for relevant documents is not gross negligence per se, but a factor in determining whether an organization should be sanctioned for preservation failures.
- Custodians cannot be trusted to run effective searches without providing a detailed description of those searches, NDLON, slip op. at 36 (internal quotations omitted).
- There is a need for the testing and refinement of e-discovery search terms.
To Hold or Not To Hold
The Chin case is an appellate opinion that addresses the alleged failure to institute a legal hold for relevant files. The case involved a group of Asian American police officers alleging violations of Title VII by the New York and New Jersey Port Authority based on their being passed over for promotions. Charges of discrimination were filed in January of 2001. During discovery, the plaintiffs learned that the Port Authority had failed to issue a legal hold to preserve at least 32 promotion folders used to make decisions between August 1999 and August 2002. Plaintiffs sought an adverse inference instruction for the spoliation, but the district court denied the motion, finding ample alternative evidence regarding the relative qualifications of the plaintiffs. The district court found that the defendants destruction of relevant documents was negligent, but not grossly so.
