JUDGE SCHEINDLIN OF ZUBULAKE ISSUES COMPREHENSIVE LEGAL HOLD OPINION

by John Jablonski

The Judge that brought us the now famous Zubulake series of legal hold decisions has weighed in on the state of litigation holds in the United States.  In particular, Zubulake IV requires a corporation to issue a litigation hold to preserve relevant evidence (including electronically stored information, like e-mail) whenever litigation is initiated or reasonably anticipated.  See Zubulake v. US Warburg, 220 F.R.D. 212 (S.D.N.Y. 2003).

Her latest decision, The Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities LLC, et al., Amended Opinion, Case No. 05-cv-9016 (SDNY Jan. 15, 2010), considers facts over a period of time from pre-Zubulake through the present.  In a lengthy (89 pages) and well researched opinion (including 251 footnotes) the Judge carefully analyzes the state of legal hold law in the United States (a footnote suggests the Judge and two law clerks spent over 300 hours researching and writing the opinion.)

If you do not feel like reading all 98 pages, here are a few key takeaways:

1.  When faced with anticipated litigation (aka a trigger event) a litigant in federal court must issue a written litigation hold.  (Yes, the Opinion says it must be in writing.)  That means, to avoid being grossly negligent as a matter of law a written notice must be delivered to custodians of relevant evidence once the duty to preserve evidence is triggered.  So if you had any doubt about whether a legal hold notice is required, this Judge just removed it.  To be clear: in order to avoid sanctions and implement a legal hold you MUST issue a written legal hold notice (at least in the Southern District of New York, and I suspect any jurisdiction that has cited to Zubulake as requiring a litigation hold.)

2.  Identify all key players and ensure that their electronic and paper records are preserved.

3.  Cease the deletion of email and preserve the records of former employees that are in a party’s possession, custody or control; and

4.  Preserve backup tapes when they are the sole source of relevant information or when they relate to key players, if the relevant information maintained by those players is not obtainable from readily accessible sources.

Why has the Judge created a legal duty to issue a written litigation hold?  Reading between the lines of the Opinion, it is very clear that the Judge views the time spent on the “detour” of this spoliation motion and passing judgment on the failure to preserve evidence as a huge waste of judicial resources.  Rather than reviewing reams of motion papers and conducting hearings on the sufficiency of a party’s preservation efforts; looking at an audit trail of actions following a written litigation hold is much more economical.  As a result, the Judge titled her Opinion, Zubulake Revisited: Six Years Later.  The ominous message of the subtitle shows that Judge Scheindlin believes that nothing has changed in six years.  Litigants still do not understand that preserving evidence means just that, preserving evidence.  To drive the point home she wrote:

By now, it should be abundantly clear that the duty to preserve means what it says and that a failure to preserve records, will inevitably result in the spoliation of evidence.

For a copy of the Amended Opinion and Order of Judge Scheindlin in The Pension Committee of Montreal, et al. v. Banc of America Securities, et al., 05 Civ. 9016 (SDNY Jan. 15, 2010) or a whitepaper about the opinion and its impact on corporate legal hold policies and procedures email [email protected] or go to www.legalholds.typepad.com (a blog authored by Goldberg Segalla LLP lawyer John Jablonski.)

John Jablonski is a partner at Goldberg Segalla LLP. An experienced trial lawyer, John consults with Fortune 500 companies about records management, retention schedules, legal hold policies and procedures, pre-litigation planning, and electronic discovery. John is a frequent author in publications and speaker on records management, legal holds and e-discovery. John is co-author of 7 steps for legal holds of ESI & Other Documents (ARMA 2009), a book designed to help organizations understand and implement legally defensible litigation holds. John is also Editor of www.legalholds.typepad.com, a blog devoted to current document preservation trends.

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