Legal Holds and Trigger Events

ACC's Litigation Master's Series Helps GC's Tackle Litigation Holds

The Association of Corporate Counsel held round two of its Litigation Master's Series on October 9, 2009.  If you missed the presentation or are not a member of the ACC, the presentation slides remain available to view at the ACC's website.

The first part of the program covers internal investigations and the second part covers litigation holds.  The presentation hits the basics and the slides contain some practical tips for General Counsel charged with implementing litigation holds for their organizations.

Here is an excerpt from the program description:

Also, while new technologies assist greatly in sending out a litigation hold, in-house counsel remains responsible for making the call to issue and direct the hold. This panel will provide practical guidance for establishing effective litigation hold procedures.

To see the ACC's post for this program click here.  To download a copy of the Presentation Slides click here.  (Litigation Hold slides start on page 15).

Book Review: 7 Steps for Legal Holds

 

We have had great feedback from readers following the release of Seven Steps for Legal Holds of ESI and Other Documents (ARMA, June 2009).  Now comes a favorable review of the book, posted at Law.com (in both its Technology and Corporate Counsel sections) further demonstrating that all the hard work was worth it.  Law.com certainly got the message as demonstrated by the closing lines of the review:

Isaza and Jablonski don't have the last word on legal holds, but they certainly have the right ones, in seven, digestible steps, to get your organization started in fashioning a legal hold policy and procedure to respond to an event that triggers the duty to preserve evidence. In the end, you will want to get out there and put a legal hold on something.

To read Law.com's review click, here.  To read more about the book, click here.

Applying a Legal Hold to Digital Voicemail

From time to time we reference the hypothetical checklist that proactive organization's keep as a reference when developing the scope of a legal hold.  The checklist, in theory, identifies all areas within an organization where electronically stored information ("ESI") exists to help implement a legal hold.  As the scope of a legal hold is developed, the checklist is used to idenify relevant ESI that should be preserved.

As organizations turn to more and more electronic solutions for staying in touch it is important to make sure voicemail is on this list.  If you think about your home answering machine, the use of a micro-cassettes to store messages went out of fashion long ago.  The same holds true for just about every organization.  Often voicemail is kept on a separate server in a closet right next to the phone system.  How voicemail is stored on the voicemail system is a matter of choice and voicemail box data size.  Many mailboxes for individual users are set to hold a set length of time for messages.  Typically, when the mailbox is full the user needs to delete older messages to free up space in the mailbox to allow callers to be able to leave a message. 

Alltop Internet Aggregator Adds Legal Hold Page

Alltop, the newest tool on the internet for following news about topics of interest has added a legal hold page available here.  Alltop is now in its third version and has over 700 topics.  It is a great tool for following some of the best known news and blogs on the internet.  If you are responsible for legal holds for your organization be sure to add our site and Alltop to your favorites.  We have added the Alltop link to our links on the right. 

Negligent Litigation Hold Does Not Result In Sanctions

In Scalera v. Electrograph Systems, Inc. et al, (EDNY Sept. 29, 2009) the Magistrate Judge denied plaintiff’s motion for an adverse inference instruction.  This is in contrast to Shukla v. Sharma (EDNY Aug. 21, 2009) (holding failure to implement a litigation hold constituted gross negligence leading to sanctions).

In Scalera, the court held that the haphazard litigation hold implemented by defendants’ counsel constituted negligence.   A formal written litigation hold was not issued.  Although, defendants' counsel did verbally tell some potential key players to preserve documents, counsel did not sufficiently communicate the need to preserve with defendants’ IT department.  Despite some other recent holdings in the EDNY, the court did not believe that the failure to implement a written legal hold was grossly negligent or “bad faith”.  In short, in the absence of gross negligence plaintiff needed to establish the necessary “relevancy” of the unpreserved ESI to obtain spoliation sanctions, including proving that the unpreserved ESI would have been favorable to plaintiff’s case.  Plaintiff provided no evidence in support of its motion on this issue, so plaintiff’s motion for sanctions was denied.

Enslaved Priest’s Negligent Loss of Laptop Results in Spoliation Sanctions Recommendation

In Shukla v. Sharma (EDNY Aug. 21, 2009), a Hindu Priest, claimed that the Ashram he lived and worked for in New York illegally trafficked him into the US in 2000 and enslaved him.  Defendants denied the allegations pointing to plaintiff's ability to come and go as he pleased, access to the internet, cell phones, phone cards, e-mail, duties that took him away from the Ashram, as well as television appearances promoting the Indian community.  Defendants claimed that despite plaintiff's admitted ability to call 911, plaintiff never reported his alleged enslavement for years. Plaintiff countered that he was psychologically coerced.

The opinion in this case is a Report and Recommendation ("Report") from a magistrate judge.  The primary discussion of the Report is a summary judgment motion by defendants, but a spoliation motion also considered by the magistrate brings the Report to our attention.  The magistrate recommended denial of the summary judgment motion, because credibility determinations were needed to make sense of the two competing sides of the story.

Given the he-said-she-said nature of the litigation, information on a laptop computer used by plaintiff was deemed highly relevant by the magistrate.  Although plaintiff made no complaints to authorities about his enslavement for seven years, the court theorized that correspondence, such as e-mail to friends and family, may hold some insight into plaintiff's state of mind.  The laptop apparently existed at the time the complaint was filed.  Yet, despite repeated requests and a court order, the laptop or its contents were never produced.  This was a problem because plaintiff testified that he owned the laptop during his deposition.  He told the court, however, that it belonged to an unidentified member of the congregation in response to the motion.  Making matters worse the mystery owner vanished without a trace, taking the laptop with him. 

Because there was no evidence that the laptop was willfully destroyed to keep it out of the hands of defendants, the court reminded us that mere negligent destruction of highly relevant evidence can lead to spoliation sanctions.  Here the sanctions recommended consist of an adverse inference jury instruction and costs associated with repeated attempts to compel discovery of the laptop. 

Failure to Preserve Security Camera Video Results in Adverse Inference Charge

 

When working on the scope of materials to preserve for a slip and fall case, be sure to add one more item to your checklist: security camera video. 

In Minaya v. Duane Reade a New York State appellate court upheld sanctions resulting from the failure of defendant to preserve video recordings of a stairway that may have shown the condition of the stairs prior to plaintiff's fall and may have even recorded plaintiff's fall.

The trial court actually precluded defendant from offering any evidence about the condition of the stairs and awarded an adverse inference charge.  The appellate court held that precluding all evidence of the condition of the stairs was too harsh.  The adverse inference charge was deemed sufficient to restore balance to the case.

This a very short opinion.  To read the opinion click here.  Quote worthy:

Defendant failed to preserve a video recording that may have shown the stairway before and during plaintiff's accident. The unavailability to plaintiff of the video recording may have impaired his ability to establish that defendant possessed the requisite notice of a defective condition on the stairs. Under these circumstances, however, the extreme sanction of preclusion is not warranted "to restore balance to the matter". Rather, an adverse inference is sufficient to prevent defendant from using the absence of the videotape to its own advantage