Legal Holds Gone Wrong Will Cause Sanctions

With thanks to Logikcull for their recent post on important eDiscovery cases of 2018 which I reference here, legal holds are in the spotlight…again. It seems that many companies, or perhaps their legal counsel, when confronted with eDiscovery requests tend to “push the envelop” a bit too far too often in production of relevant documents.

In the Franklin v Howard Brown Health Center case referenced by Logikcull, plaintiff requested documents and text messages but did not specifically request “instant messages”. Defendant apparently felt that omission relieved them of not only producing IMs (except for 2), but of preserving them at all. They continued their (very short) retention rule and destruction process in the face of obvious obligations to preserve relevant information; in addition, defendant was extremely late in issuing a legal hold at all. Due to the rather extreme damage done to plaintiff’s case, the court imposed the strongest possible sanction that it felt possible under FRCP 37(e)(1), that allows the parties to present evidence to the jury “regarding the situation that was caused by defendant’s faulty and failed litigation hold.”

This ruling reinforces the need to follow proper and well-constructed legal hold procedures. Even though the ability of courts to impose strong sanctions has been somewhat reduced by the 2015 FRCP Amendments, lapses such as shown in this case will still draw the ire of the court; and the court still has sanction options at its disposal that will not bode well for the errant party.

A well-developed eDiscovery program that includes clear legal hold guidelines is core to a company or law firm’s “defensibility” in civil cases. The legal hold process itself must include a sophisticated software application, of course. Managing complex discovery requirements today cannot be left to homemade apps; they simply won’t hold up under the knowledgeable court scrutiny one can now expect as a matter of course. There is little if any room for error in the many discovery requirements imposed when a legal hold is issued upon reasonable expectation of litigation or regulatory audit/inspection. And, as an eDiscovery consultant, I include the essential need for a knowledgeable and experienced eDiscovery Administrator, in-house or contract, to lead the entire program. Software vendors provide needed expertise in specific discovery tasks, but a competent Administrator provides oversight into every part of the eDiscovery program; this expertise will help avoid errors and omissions such as those incurred by the defendants in this matter.