For The Defense, October 2010 - DRI Today

This requires a client and counsel to produce,as well as to preserve, evidence, orface judicial sanction. See id. at 465–66.In the context of ESI, this requires counselto become actively involved in a client’sdiscovery process and to work to ensurethat relevant information is preserved andcollected. See Zubulake v. UBS WarburgLLC, 229 F.R.D. 422, 432 (S.D.N.Y. 2004)(Zubulake V). Counsel must actively participatethroughout the collection and preservationprocess by ensuring that a clientimplements a litigation hold, identifyingand communicating with personnel thatmanage the relevant data, and ensuringthis data is retained and produced for theopposing party. See id.Failure to meet these obligations willresult in harsh penalties. In the discoveryof electronically stored information, thefailure to preserve and adequately searchfor relevant material “inevitably resultsin the spoliation of evidence,” and a courtcan sanction counsel for even careless mistakesthat result from a “pure heart andan empty head.” Pension Comm., 685 F.Supp. 2d at 464 (holding the failure to preserve,collect, and review evidence resultingin loss of relevant data was at leastnegligent). These sanctions can be quitesevere and involve fines, adverse inferencejury instructions, and other costs.See, e.g., Google, Inc. v. Am. Blind & WallpaperFactory, Inc., No. C 03-5340 JF, 2007WL 1848665, at *1, 5–6 (N.D. Cal. June 27,2007) (evidentiary sanction and fine of$15,000 for willful indifference toward discoveryobligations); Phoenix Four, Inc. v.Strategic Res. Corp., No. 05 Civ. 4837, 2006WL 1409413, at *9 (S.D.N.Y. May 23, 2006)(payment of costs of bringing motion andre- depositions for delinquent production ofdocuments); Zubulake V, 229 F.R.D. at 439–40 (adverse inference instruction for failureto preserve e-mails after receiving adequatewarnings). Therefore, it is important thatcounsel identify the moment when discoveryduties arise and respond effectively.E-discovery obligations present a challengeeven with products that are no longermarketed and involve static informationgenerated from a closed group of key players.Discovery challenges increase exponentiallywith litigation involving liveproducts, as companies juggle compliancewith ongoing regulatory demands,business obligations, and personnel withchanging organizational responsibilities.These challenges require counsel to takeextra steps to respond to changes as theyoccur and to ensure confidentiality andprivilege issues are not compromised.Develop a Strong Offense andDefense—Anticipation of LitigationTriggers Counsel’s DutiesThe obligation to oversee a client’s preservationof evidence begins with the anticipationof a lawsuit: “Once a party reasonablyanticipates litigation, it must suspend itsroutine document retention/destructionpolicy and put in place a ‘litigation hold’to ensure the preservation of relevant documents.”Pension Comm., 685 F. Supp. 2dat 466 (quoting Zubulake v. UBS WarburgLLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003)(Zubulake IV)). The beginning of this dutyto preserve evidence often coincides withthe commencement of a lawsuit. But, thisduty “may arise even earlier if a party hasnotice that future litigation is likely.” CacheLa Poudre Feeds, LLC v. Land O’Lakes Inc.,244 F.R.D. 614, 621, 622–23 (D. Colo. 2007)(holding that a party’s duty to preserve wastriggered by filing a complaint rather thanby pre- filing correspondence); see Goodmanv. Praxair Servs, Inc., 632 F. Supp. 2d494, 511 (D. Md. 2009) (finding that a dutyto preserve was triggered by a letter threateninglitigation). Thus, counsel must beprepared to initiate a litigation hold at veryearly stages of a conflict or face judicialsanction. See, e.g., Doe v. Norwalk Cmty.Coll., D. Conn. 2007 (finding defendantsgrossly negligent for failure to implementa litigation hold upon initial discovery ofsexual assault allegations).Once the duty to preserve begins, counselmust not only help implement a litigationhold but also continually monitora client’s document- gathering process.Implementing a litigation hold is “only thebeginning” of counsel’s duties in the discoveryprocess. Zublake V, 229 F.R.D. at432; see also Cache La Poudre Feeds, 244F.R.D. at 630. Accordingly, it is insufficientto establish a litigation hold and merelycommunicate it to company employees.See Cache La Poudre Feeds, 244 F.R.D. at630 (holding that counsel failed to dischargediscovery obligations by directingemployees to produce relevant informationwithout overseeing and verifying theirproduction). Instead, counsel has a dutythroughout the discovery process to ensurecompliance with a hold and to oversee andmonitor a client’s efforts to retain and produceESI. Zublake V, 229 F.R.D. at 432; seePension Comm., 685 F. Supp. 2d at 473(holding a counsel’s instruction to plaintiffs,absent active supervision, failed toIt is important thatcounsel identify the momentwhen discovery duties ariseand respond effectively.meet the standard for a litigation hold).Counsel must work with a client to identifyappropriate custodians throughoutthe organization, communicate the holdto employees, interview potential custodiansand IT staff, conduct diligent inquiryof information repositories, suspend routinedeletion protocols, and frame andimplement reliable collection methodologies.See Pension Comm., 685 F. Supp. 2dat 473 n.67 (noting that attorney oversightincludes “the ability to review, sample, orspot-check the collection efforts”).For actively marketed products, thisongoing obligation provides unique challengesthroughout the litigation period.The “live” status of the relevant productrequires vigilant monitoring of a legal hold,as the product continues to be marketedthroughout litigation. Counsel must providespecific instructions on preservationof metadata and then continually monitorthe performance of a client’s personnel,verifying that a hold directive has beenextended to terminated employees and tonew hires. Attorneys should also implementprocedures that track informationand provide continuing reminders to a client.For example, counsel could track holdnotice receipts and confirmations, on paperor electronically, and use a tickler systemto implement a preestablished scheduleto send reminder notices. Counsel couldalso work with a client to schedule frequentreminders to ensure compliance andFor The Defense n October 2010 n 33