Systems, Processes & Challenges

Understanding & Representing your Business Client

Daniel S. Day

Determine At Which Point A Litigation Hold Is Necessary

• Determine the point at which it is necessary to implement a litigation hold• Has a subpoena been issued or a lawsuit filed?• Is litigation anticipated?

• Balancing the risks & weighing the burdens• Avoid false alarms where there are only rumors or

vague threats of litigation; threats made by a discredited plaintiff, or where the threats lack credibility.

When Does the Duty to Preserve Arise? Anticipating Litigation

• “The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D. N.Y. 2003) (Zubulake IV).

• “Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” Id. at 218.

Legal Duties: The Duty to Preserve

Determine The Scope Of The Litigation Hold & Issue The Hold

• “[T]he failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.” The Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F. Supp. 456 (S.D. N.Y. 2010).

• The hold must direct employees (“key players”) to preserve all relevant records, paper and electronic

• Determine the scope

• Cover all potential document storage: laptops, PDA’s, smartphones, home computers, thumb drives, etc.

• Create a mechanism for collecting preserved records

• Cannot place total reliance on the employees without supervision of counsel

How to implement the litigation hold

• “Once a ‘litigation hold’ is in place, a party and her counsel must make certain that all sources of potentially relevant information are identified and placed ‘on hold,’ to the extent required.” Zubulake v. SBS Warburg LLC, 229 F.R.D. 422, 432 (S.D. N.Y. 2004) (Zubulake V).

Legal Duties: Duty to Locate

• Will the litigation hold be implemented to involve an entire IT system?• Is it manageable?

• If the burden of compliance is placed on individual employees:• Communications to preserve documents must be

clear, and repeated.• Follow up to ensure compliance is required.

Systems v. Custodian Approach

Get Confirmation Document The Hold

• It is important to document every step of the litigation hold process.• Date and rationale for instituting a hold• Names and titles of the key decision-makers or

custodians• Scope of the hold and how the parameters were

determined• A copy of the hold notice• Dates hold notices were sent• Who received the hold notices• Date and rationale for releasing the hold

Paper Trail

• Corporate retention policies

• Following policies & identifying exceptions

• Overkill

• Costs & burdens

• Hold in place or collection

Considerations Regarding Document Preservation

Practical Considerations

• What IT systems, software & policies regarding document retention does the client have.

• What is the budget & costs considerations.  • What impact does the hold have on the business.

• What resources does the client have, can they manage it in-house or does it need to be outsourced.

• What is your client’s risk tolerance?

Understanding Your Client

• Determine how a litigation hold will be communicated and who will manage each of the separate tasks.

• Who will conduct the litigation hold interviews and how will outside counsel be involved?

• Make sure information is recorded and shared with outside counsel.

• Know the costs. Manage the costs. Reduce the costs.

How In-house And Outside Counsel Can Work Together

• For a large organization with recurring litigation, utilizing litigation hold software is a “no-brainer.”• Automated communication

• Record of acknowledgements from records custodians

• Regular reminders and follow up communications

• Facilitate collection records in one place

• Generate reports

Automate the Litigation Hold?

• A paper trail

• Everything archived in one place

• Getting a confirmation or acknowledgement from custodians

• Updating the hold—automatic reminders

The Benefits Of Automation

• There are a lot of vendors in the space, but there is a lot of infancy. There are only a few mature vendors.

• Determine your requirements.

• Determine your budget.

• Attend a demonstration to make sure the vendor can perform to set requirements.

• Is the vendor system a work in progress or is it fully developed?

Selecting A Litigation Hold Vendor

• Merely automate communication of the litigation hold (a notice tool).

• Forensics teams have access.

• Document collection tool.

• Record and document collection efforts.

Determine Your Requirements

• Is the scope and breadth of the litigation hold reasonable and defensible?

• How large is the case? What is the financial exposure?

• What will it cost to implement the litigation hold? What are the burdens on the system?

Balancing Competing Interests Of Risk V. Cost

• Conduct a conference

• Discuss issues about preserving discoverable information

• Discuss issues about disclosure or discovery of electronically stored information• How will information be retained?• In what form will documents be produced?• What information is available or unavailable?• Cost sharing

• Discuss scope of the litigation hold/resolve issues & problems

Rule 26(f) Conference Federal Rule Of Civil Procedure

• (D) Responding to a Request for Production of Electronically Stored Information. The response may state an objection to a requested form for producing electronically stored information. If the responding party objects to a requested form--or if no form was specified in the request--the party must state the form or forms it intends to use.

Rule 34(D) Federal Rule of Civil Procedure

• E) Producing the Documents or Electronically Stored Information.Unless otherwise stipulated or ordered by the court, these procedures apply to producing documents or electronically stored information:

• (i) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;

• (ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms; and

• (iii) A party need not produce the same electronically stored information in more than one form

Rule 34(E)Federal Rule of Civil Procedure

• (e) Failure to Provide Electronically Stored Information. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

Rule 37(e) Federal Rule of Civil Procedure

Update The Litigation Hold

• “Counsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched.” Zubulake v. SBS Warburg LLC, 229 F.R.D. 422, 432 (S.D. N.Y. 2004) (Zubulake V).

Legal Duties: The Duty to Monitor Compliance

• Follow up reminders

• Refine the scope of the hold based on updated information and understanding of the case

• Keep track of terminated employees

• Gather documents responsive to the litigation hold

• Release requests that are no longer relevant

• Use the meet & confer so that you don’t over-preserve and increase burdens & costs

How To Monitor And Maintain And Manage The Litigation Hold

Terminating or Releasing The Litigation Hold

• If you don’t release the hold in time, your litigation costs may increase substantially

• Documents subject to the hold may be subject to other litigation

• Communicate and coordinate with IT and other departments

Practical Issues Regarding Terminating A Litigation Hold

Conclusion