legal hold presentation no holds barred 2013

Presented byBarry Schwartz, Esq., CEDS

Brian Schrader, Esq.

February 19, 2013

T H E D A T A C O L L E C T I O N C O M P A N Y ™

No Holds Barred!The Real Deal With Litigation Holds

2T H E D A T A C O L L E C T I O N C O M P A N Y ™

Know When to Hold ‘Em: Legal Holds

Part I: The Law

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The process by which an organization notifies

potential custodians to preserve information, in

electronic, paper or other form, in anticipation of

litigation.

LEGAL HOLD DEFINED


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What Triggers a Legal Hold?(a.k.a. The Billion Dollar Question…)

• It Depends… • If in doubt – issue a legal hold!

• Common Law • At the outset of litigation.• When litigation is reasonably anticipated. • There is no Federal Rule for litigation

holds

• Triggering Event Examples• Product Complaints • Product Malfunctions• Harassment Complaints• Other H.R. Issues


•IP Infringement•Accidents•Claim Letters•Regulatory Investigations

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“Document” is used in the broadest sense possible and includes, without limitation, non-identical copies (whether different from the original because of underlining, editing marks, notes made on or attached to such copy, or otherwise), and drafts, whether printed or recorded (through a sound, video or other electronic, magnetic or digital recording system) or reproduced by hand, including but not limited to writings, recordings, photographs, letters, correspondence, purchase orders, invoices, facsimiles, telegrams, telexes, memoranda, records, summaries, minutes, records or notes of personal conversations, interviews, meetings and/or conferences, note pads, notebooks, postcards, “Post-It” notes, stenographic or other notes, opinions or reports of consultants, opinions or reports of experts, projections, financial or statistical statements or compilations, checks (front and back), contracts, agreements, appraisals, analyses, confirmations, publications, articles, books, pamphlets, circulars, microfilms, microfiche, reports, studies, logs, surveys, diaries, calendars, appointment books, maps, charts, graphs, bulletins, tape recordings, videotapes, disks, diskettes, compact discs (CDs), data tapes or readable computer-produced interpretations or transcriptions thereof, electronically-transmitted messages (email), voicemail messages, inter-office communications, advertising, packaging and promotional materials, and any other writings, papers and tangible things of whatever description whatsoever.

What Should be Preserved?(It’s not just an ESI thing!)


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Steps to a Successful Legal Hold Step 1: Identify Potential Custodians

• Cast a wide net, but not too wide• Interview key personnel to identify additional persons• Do not just blanket entire organization

Step 2: Compose the Legal Hold• Create a clear, written legal hold document• Must it be in writing? More about that in a minute…

Step 3: Distribute the Legal Hold• Reliable• Verifiable (acknowledgements are preferred)• Defensible (Audit Trail)

Step 4: Maintain the Legal Hold• Send custodians routine reminders• Properly track & release custodians

Step 5: The Audit Trail• Maintain detailed and complete records of each Legal Hold Notice & Process• Who received, when they received it, when they acknowledged it, when they were reminded,

when they were released, etc…


TO BE, OR NOT TO BE… (in writing)

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“Generally not deleting documents, and orally requesting certain employees to preserve relevant documents concurrently with filing a lawsuit, is completely inadequate… It is very risky—to such an extent that it borders on recklessness.”

Scentsy Inc. v. B.R. Chase LLC D. Idaho No. 1:11-cv-00249-BLW October 2, 2012

“The failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information."

The often criticized…Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Secs., LLC,

685 F.Supp.2d 456, 464-65 (S.D.N.Y.2010).

“We reject the notion that a failure to institute a "litigation hold" constitutes gross negligence per se. Contra Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Secs., LLC, 685 F.Supp.2d 456, 464-65 (S.D.N.Y.2010). Rather, we agree that "the better approach is to consider [the failure to adopt good preservation practices] as one factor" in the determination of whether discovery sanctions should issue.”

Chin v. Port Authority of New York & New Jersey685 F. 3d 135 - Court of Appeals, 2nd Circuit, 2012

Or how to risk a lot with no reward…

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What should be in a Legal Hold?• Who is subject to the Legal Hold?• Why was the Legal Hold issued?• What should be preserved?• How should it be preserved?• Where should it be preserved?• When is the Legal Hold effective?• Provide a contact person


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What Should a Legal Hold Recipient Do?

Read & Acknowledge NoticeSuspend any deletion strategiesIdentify data locations


Delete Files

Copy Files

Move Files*Unless specifically advised by appropriate personnel. Doing so may alter or destroy crucial metadata.

Do… Don’t…

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How Long Does a Legal Hold Last?Continuing Legal Hold Obligations of a Notice Recipient…

Simply Put: Until the event is concluded• Settlement or other final disposition

Thus, Importance of Routine Reminders• Routinely remind Custodians that the Legal Hold

remains in force until notified otherwise.• Remind Custodians that newly created or received

documents are also covered.• Prompt Custodians that, if in doubt, ask!

Note: Work Product doctrine applies to anything created in response to the hold (inventory of locations for example)


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What about Exited Employees?

• Need plan to address• Likely custodial status should be

determined early• IT team advised as to status• Take steps to preserve ESI

• Collect all user created ESI as for other custodians• Pull hard drive from laptop/desktop• Possibly image hard drive• Maintain chain of custody records

• If employee “terms” during hold, implement same steps


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Consequences of Non-ComplianceSpoliation & Adverse Inferences….

State Natl. Ins. Co v. County of Camden CIV. No. 08-5128 (2012)

• Imposed attorneys’ fees and costs due to failure to preserve

YCB Intl., Inc. v. UCF Trading Co. No. 1:09-cv-07221 (2012)

• Imposed a fine for failure to issue litigation hold with resulting spoliation.

Apple Inc. v. Samsung Electronics Co. Case No.: C 11-1846 (2012)

• Court imposed an Adverse Inference sanction for failure to preserve even after Litigation Hold in place.



Know When to Hold ‘Em: Legal Holds

Part II: The Real World…

It shouldn’t be this hard…

DEF

ENSI

BILI

TYCO

STS & RISKS

The Balancing Act


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Prepare for Eventuality of a Hold Create Legal Event Team

• Legal, IT, HR, Executive, O/C

Create / Select a Solution• Manual Processes• Software Solutions

Assign Responsibilities• Who will identify custodians?• Who will issue/track holds?• Automatic Processes Suspension

Know Potential ESI Resources• Identify ESI systems• Identify ESI locations• Know what processes and procedures

need to be altered



Identifying Data LocationsConsiderations Old & New

WEBMAIL, SOCIAL MEDIA,

CLOUD APPS,

The Ever Expanding Data UniverseCommonly overlooked data sources


AND MORE…

How do you identify what sources are relevant?


Custodian QuestionnairesThe next step in the Legal Hold process.

Q & A

For more information:www.totaldiscovery.comwww.biaprotect.com1-888-338-4242


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