Of the wounds a litigation party can inflict upon itself, few have the potential to be more catastrophic than allowing relevant evidence to be destroyed. Nowhere is that risk more obvious than with electronically stored information (ESI). Emails and social media posts can be deleted with the click of a button and servers can be configured to delete data automatically. Because of this, legal counsel knows that they must take steps to preserve relevant ESI or risk the serious consequences courts have the authority to impose.

The best first line of defense against these consequences is a well-crafted litigation hold letter. If issued promptly after a claim is made or becomes reasonably likely, and updated diligently as a case progresses, a litigation hold letter will protect you in the often-likely event some potentially relevant ESI gets deleted along the way. Even an imperfect litigation hold letter and its implementation are better than the alternative. 

The federal court opinion, New Mexico Oncology and Hematology Consults., Ltd. v. Presbyterian Healthcare Svcs. et al., offers a good case in point. In this example, a federal magistrate judge in the District of New Mexico addressed whether to grant sanctions based on the plaintiff’s claim that the defendants failed to preserve relevant ESI. The court followed an analysis dictated by the recently revised Federal Rule of Civil Procedure 37(e), which commands that parties take “reasonable steps” to preserve ESI, but also limits the court’s ability to issue sanctions for the loss of ESI except in cases of intentional spoliation. 

In other words, if a party can show it tried to take reasonable steps to preserve ESI, even if they proved flawed in retrospect, that will go a long way in protecting against the worst sanctions. In fact, that is exactly how the defendants’ litigation hold proved valuable in the example above. The plaintiff claimed the defendants hadn’t preserved emails from enough of the defendants’ employees and hadn’t taken steps to preserve ESI from a server. But the defendants had issued a reasonably comprehensive litigation hold letter to their employees just days after the plaintiff filed its initial complaint and had made efforts to update it after amended pleadings were filed. Those efforts weren’t perfect. Potentially relevant emails were nevertheless deleted by some of the employees subject to the hold, and the court found that the defendants’ IT team had failed to follow the instructions of the litigation hold letter altogether in failing to preserve ESI on a server. The court found these errors “negligent.”

Yet, the court declined to go further and find that the defendants had acted intentionally, or that there had been prejudice to the plaintiff in the loss of some ESI. The court declined to issue potentially devastating sanctions such as adverse inferences or a dismissal. Instead, the court ordered the defendants to pay 75 percent of the plaintiff’s costs in bringing its sanctions motion. A stiff penalty to be sure, but not a case-losing one. The defendants’ litigation hold letter, imperfect though it was, offered meaningful protection.

Capital Investigating is experienced in ESI discovery matters and can help you craft an effective litigation hold letter. For more information about our ESI discovery-related services, contact us today.