“7 "Reasonable Steps" for Legal Holds of ESI and Other Documents

ARMA is the world's leading membership organization serving the professionals who manage and govern information assets. www.arma.org
Developing
Litigation Holds
John Isaza, Esq., FAI
John Jablonski, Esq.

John Isaza
John is a California-based attorney, CEO of Information Governance
Solutions featuring Virgo™, a cloud-based software for records
information management and global research, and partner at Rimon,
where he chairs the privcy, records management and
information governance practice. Mr. Isaza is one of the world’s
foremost experts in the field. He has developed information
governance and records retention programs for some of the
most highly regulated Global 1000 companies. He is co-author of 7
Steps for Legal Holds of ESI & Other Documents, a contributing
author to the ABA’s Internet Law for the Business Lawyer, 2nd
Edition, as well as Editor-in-Chief and co-author of Handbook on
Global Social Media Law for Business Lawyers. Mr. Isaza is past co-
Chair of the American Bar’s Social Media Subcommittee, a Fellow of
ARMA International, and current co-Chair of the ABA’s Consumer
Privacy and Data Analytics Subcommittee. John can be reached at
John.Isaza@RimonLaw.com or (949) 632-3860.

John J. Jablonski, Esq.
John is a founder and the Managing Partner of Gerber Ciano Kelly Brady
LLP. He chairs the firm’s Cyber, Technology and Information Governance
Practice Group. He has over 20 years of experience advising clients on
enterprise-wide initiatives involving data privacy, security, information
governance, IT governance, litigation readiness, protection of applications
and cloud-based systems (including click-wrap and browse-wrap
agreements, terms and conditions, master services, service level and
software licensing agreements), website privacy statements, enterprise-
wide electronic evidence preservation and e-discovery solutions. John is
currently a member of the ARMA Board of Directors and co-author of 7
Steps for Legal Holds of ESI and Other Documents.

Learning Objectives
Upon completion of this session, participants will be able to:
• Identify common events that may require an organization to
suspend its normal records retention policy and take steps to
preserve evidence
• Implement a systematic “reasonable steps” business process to
investigate records relevant to the event and identify custodians
• Plan the building blocks needed to implement an effective
litigation hold
• Take away practical advice to help organizations implement
legally defensible litigation holds

Seven Steps for Implementing Legal Holds
Agenda
• What is a hold policy?
• Spoliation & Recent Court Decisions Shaping
Litigation Hold Practices
• Discuss each of 7-Steps for Implementing Legal
Holds

What is a hold policy?
Sample definition recommended to a client:
“Suspends routine destruction of Records and other documents upon a
finding that such suspension is necessary under applicable law due to
actual or reasonably anticipated litigation or governmental
investigation (or audit, for any documents not otherwise appropriately
retained under a Tax Audit Record Series).

Sample definition continued:
“To be reasonably anticipated, particular litigation or investigative
proceedings related to specific facts and circumstances must be
anticipated, and not the mere fact that litigation regarding a particular
topic is a general possibility. The Legal Department shall wholly or
partially release a Legal Hold and issue instructions to return to routine
retention those released Records and other documents immediately
after the matter has been wholly or partially resolved.”

Part I
Spoliation & Influential
Court Decisions
Shaping Litigation
Hold Practices

Part I: The Spoliation of Evidence
Doctrine
• Where courts have great discretion, at minimum, to
impose sanctions for destroying records relevant to
pending or potential litigation.
• Some states recognize it as a separate cause of
action, while others simply give courts discretion on
how to punish the parties involved.

Conduct Leading To Sanctions
The Pension Committee v. Banc of America
1. Failure to issue written litigation hold,
2. Failing to identify key players and preserve their
documents and ESI,
3. Not turning off automatic deletion or failing to
preserve ESI of former employees,
4. Failing to preserve relevant backup tapes.

Examples of Spoliation Sanctions
• Evidentiary or legal sanctions
–Not allowing documents introduced at trial
–Special jury instructions or assumptions
• Financial sanctions
• Fines per Statute (e.g., $5 mill per S-Ox)
• Imprisonment per Statute (e.g., 20 yrs per S-Ox)
• New lawsuit in states where available
• Report to State Bar (it is unethical to destroy evidence)

The Duty to Preserve Continuum
1. Statutory or regulatory obligations to preserve
2. Statutes of limitations
3. Duty arising from potential or threatened litigation or
investigation
4. Duty created by preservation letter from opposing counsel
or agency
5. Duty created by service of a complaint and resulting civil
discovery statutes, discovery requests or court orders
Items 3 to 5 should trigger litigation holds.

The Duty to Issue a Legal Hold
Acorn v. Co. of Nassau, 2009 WL 605859,
(EDNY 3/9/09)
“The failure to implement a litigation hold at the outset of litigation
amounts to gross negligence."

The Duty to Issue a Legal Hold
The Pension Committee v. Banc of America,,
(SDNY 1/11/10 as Amended 1/15/10)
“The failure to implement a written litigation hold
constitutes gross negligence..."
“[O]nce a party reasonably anticipates litigation, it must
suspend its routine document retention/destruction policy
and put in place a ‘litigation hold’ to ensure preservation of
relevant documents.”

Part I. What is Foreseeable Litigation?
• General Guidelines per Zubulake (Pension
Committee) & Sedona Principles
–Sedona Principle #5
–Zubulake IV

Sedona Principle #5
“The obligation to preserve electronic data and
documents requires reasonable and good faith efforts
to retain information that may be relevant to pending
or threatened litigation. However, it is unreasonable
to expect parties to take every conceivable step to
preserve all potentially relevant data.”

Duty to Preserve
Zubulake IV (SDNY 2003) 220 F.R.D. 212, 216
“Identifying the boundaries of the duty to preserve
involves two related inquiries:
1. When does the duty to preserve attach, and
2. What evidence must be preserved?”
Citing Fujitsu v. Fedex (2d Cir. 2001) 247 F.3rd 423.

Foreseeable Litigation
Zubulake IV (SDNY 2003) 220 F.R.D. 212, 216
“The obligation to preserve evidence thus 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.”

Foreseeable Litigation
The Pension Committee v. Banc of America,
(SDNY 1/11/10 as Amended 1/15/10)
“The obligation to preserve evidence thus 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.”

Part II
The Seven Steps for Implementing
Legal Holds

1. Trigger Event
2. Analyze Duty
To Preserve
3. Define Scope
4. Implement
Hold
5. Enforce &
Examine
6. Modify
NO
Implementation / Oversight / Training /
Audit / Tracking / Legal Hold Releases
Preservation Not Required
YES
7. Monitor &
Remove

Step 1: Identify Trigger Events

1. Trigger Event
2. Analyze Duty To
Preserve
3. Define Scope
4. Implement Hold
5. Enforce &
Examine
6. Modify
NO
YES
7. Monitor &
Remove

Pre-Litigation Correspondence
Cache La Poudre Feed v. Land ‘O Lakes, 244 F.R.D. 614 (D.
Colo. 2007)
Once counsel’s letters turned from inviting compromise
to a threat to sue, litigation should have been reasonably
anticipated.

Known “Anticipated” Litigation Trigger
Events
1) Pre-litigation correspondence (aka “preservation letter”);
2) Pre-litigation discussions, demands, and agreements;
3) The creation of a list of potential opponents before filing a lawsuit;

4) Notice provided to an insurance carrier;
5) Claims filed with administrative agencies;
6) Substantive conversations with supervisors and
others about a potential lawsuit;
Known “Anticipated” Litigation Trigger Events

7) Retention of counsel or experts;
8) Imminent appearance of a lawsuit or other red flags;
9) Partial settlement of claim;

10) Circulation of internal “document hold”
memoranda; and
11) Letter requesting an explanation for non-hiring;
12) Severity of injuries combined with the totality of
circumstances.

Industry Wide Litigation
Adams v. Dell, 2009 WL 910801(D. Utah, Mar. 30, 2009)
The court held that in the 1999-2000 environment,
when several class actions were brewing, ASUSTEK
should have been preserving evidence related to floppy
disk controller errors.
EIGHT YEARS EARLIER!

Step 2: Analyze Preservation Duty

1. Trigger Event
2. Analyze Duty
To Preserve
3. Define Scope
4. Implement Hold
5. Enforce &
Examine
6. Modify
NO
YES
7. Monitor &
Remove

Preservation Duty Checklist
•Who determines whether a legal hold is necessary?
•Collect Facts To Make Determination
•Organizational Analysis
•Legal analysis

Step 3: Define Scope of the Hold

Relevant ESI and Documents
“Relevant Evidence” means evidence having any tendency to make the
existence of any fact that is of consequence to the determination of
the action more probable or less probable that it would be without
the evidence.

Scope Considerations
•Scope to be determined on a case by case analysis… Examples include:
• Email
• System Log Data
•Possible Data Locations
•What is reasonable?
•Records and Other ESI Requiring
Special Attention

Scope Considerations – Data Sources
Columbia Pictures v. Bunnell, 2007 WL 2080419 (C.D.
Cal. 2007)
Duty to preserve RAM if relevant to the determination of
the case.

Step 4: Implement the Legal Hold

1. Trigger Event
2. Analyze Duty To
Preserve
3. Define Scope
4. Implement
Hold
5. Enforce &
Examine
6. Modify
NO
YES
7. Monitor &
Remove

Systematic, Repeatable, Credible
•Who issues Hold order?
•Who receives Hold order?
•Form of Hold orders (notices & content)
•Coordinating with IT
•Technical Considerations (the Data Map)
•Interview Key Witnesses

Step 5: Enforce and Examine Effectiveness of the Hold

Compliance, Compliance, Compliance
•Interview Key Witnesses
•Stress Importance of Litigation Hold
•Get Together with IT
•Confirm Preservation
•Consult with Legal Hold Oversight Committee

Step 6: Modify the Legal Hold

Modify Scope
•Re-check scope of Distribution
•Broadening or Narrowing
•Adding Custodians
•Discussions with Potential Litigants
•Court Orders
•Modify Scope of ESI and Other Documents

Step Seven: Monitor and Remove the Legal Hold

Step Seven: Monitor and Remove the
Legal Hold
•Audits
•Record Hold Reminders
•Issuance to New Employees
•Narrow Over Time
•Monitor Holds and Re-Check
•Management of Terminated Employees
•Releasing Legal Holds
•The Cascading Hold Dilemma

Final Big Picture Considerations
•Legal Hold Oversight Committee
•Education & Training
•Auditing
•Ongoing Support
•Refine the Process

Thank You

“7 "Reasonable Steps" for Legal Holds of ESI and Other Documents

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