For those responsible for issuing litigation holds at their organization the Zubulake and Pension Committee decisions are well known. The duty to issue a litigation hold continues to shape the preservation and spoliation landscape, including giving birth to a cottage industry of written litigation hold software, books, white papers and seminars. Remarkably, as the duty to issue a litigation hold continues to spread across the United States, few appellate courts have addressed the consequences of failing to issue a written litigation hold. Even more remarkable, the Second Circuit has not addressed the duty to issue a litigation hold – until now. (The Second Circuit Court of Appeals is the appellate court that hears appeals from the federal district court where the duty to issue litigation holds was born – the Southern District of New York).
Much like the Zubulake series of decisions, no one was watching Chin v. The Port Authority, 10-1904 and 10-2031 (2nd Cir. July 10, 2012) as a much anticipated litigation hold or spoliation decision. Fittingly, Chin also involves an employment discrimination case – like Zubulake. Yet, tucked at the end of its 55 page decision the Second Circuit addresses the question of whether the failure to issue a written litigation hold at the onset of litigation should result in sanctions. The Second Circuit holds in Chin that the failure to issue a written litigation hold does not equal per se gross negligence. It further held that the district court did not abuse its discretion by denying the motion for sanctions. Has the Second Circuit handed spoliators a “get out of jail free” card? No, but the decision will help the wary litigant that fails to issue a written litigation hold, yet preserves relevant evidence (whether by happenstance or through preservation efforts).
