Source: https://percipient.co/litigation-hold-triggers-and-the-duty-to-preserve-evidence/
Timestamp: 2019-04-24 12:46:59+00:00

Document:
For a party to meet its obligation to produce relevant evidence during the discovery phase of litigation, they must first meet their obligation to preserve evidence. Often, one of the first steps taken to preserve evidence is issuing a litigation hold letter (or “legal hold”).
Litigation hold letters are issued in anticipation of litigation instructing recipients to preserve relevant documents and other information. The duty to preserve relevant information is triggered when litigation is “reasonably anticipated.” Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 612-613 n. 7 (S.D. Tex. 2010). The test for “reasonable anticipation of litigation” varies by jurisdiction, but, in general, reasonable anticipation of litigation arises when a party knows there is a credible threat that it will become involved in litigation. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003).
Events rising to the level of a credible threat of litigation take many forms and may occur several years before actual litigation commences. Situations triggering an obligation to preserve evidence include receipt of a demand letter, formal complaint, records subpoena, or the occurrence of an event that typically results in litigation. Additionally, a reputable media report suggesting an impending government investigation (and possible litigation) may also trigger litigation hold obligations.
Bagley v. Yale University, Civ. No. 3:13-CV-1890 (D. Conn. Dec. 22, 2016) (Duty arose before filing of suit and arguably when university staff exchanged emails noting plaintiff’s threat of legal action).
Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 612-613 n. 7 (S.D. Tex. 2010) (Duty arose for defendants when they were planning to institute a related legal action).
Jones v. Bremen High Sch. Dist. 228, No. 08-CV-3548 (N.D. Ill. May 25, 2010) (Duty to preserve documents arose when party received EEOC charges).
D’Onofrio v. SFZ Sports Group, Inc., No. 06-687 (D.D.C. Aug. 24, 2010) (duty to preserve evidence triggered on receipt of letter stating that sender intended to initiate litigation and requesting preservation of electronic documents).
Cache La Poudre Feeds, LLC v. Land O’Lakes, Inc., 244 FRD 614 (D. Colo. 2007) (No duty to preserve evidence based on “equivocal letters” about a dispute).
Mosaid Tech. Inc. v. Samsung Electronics Co., 348 F. Supp. 2d 332, 336 (D.N.J. 2004) (Duty arose when complaint served).
The Sedona Conference’s “Commentary on Legal Holds” explains that whether a reasonable anticipation of litigation exists and whether a party must preserve documents should be determined on a case-by-case basis based on facts known to the potential litigant. Along those lines, judicial evaluation of a party’s preservation and legal hold efforts is a factual inquiry and generally based on the good faith and reasonableness of the decision (including whether a legal hold is necessary and how the legal hold should be executed).
Adoption and compliance with an information governance policy may help demonstrate reasonableness and good faith in meeting preservation obligations as will adoption of an effective and defensible legal hold process. Implementation of these processes will minimize the risk of document spoliation (loss or destruction), sanctions, and even damage to reputation.
To document preservation efforts and to fully understand the extent and nature of information to preserve, use of ESI (electronically stored information) questionnaires and custodian interviews are often advisable.
If there is even a remote chance of litigation, it is best to err on the side of caution and preserve information relevant to the dispute or run the risk of penalties, evidentiary sanctions, adverse rulings or fines. Silvestri v. General Motors Corp., 271 F.3d 583 (4th Cir. 2001). For additional information about legal holds and ESI preservation, additional articles may be found here.

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