Demonstrating Good Faith in ESI Preservation
By Conrad J. Jacoby, Esq
Preservation is the foundation for effective management of discovery materials—hardcopy and electronic alike. After all, documents that are not preserved cannot be examined for potential relevance. Courts routinely punish parties that have failed to preserve potentially relevant evidence—even though, as a statistical matter, it’s overwhelmingly likely that documents within an organization are supportive of the producing party’s position and not the “smoking guns” requesting counsel dreams of finding.
Statistics, of course, only speak to trends across larger data populations. Litigation is full of disputes in which a producing party was able to identify—and destroy—key documents while leaving other materials intact. For example, the older case of Carlucci v. Piper Aircraft Corp., 102 F.R.D. 472 (S.D. Fl. 1984) is only one excellent demonstration of how a records management system can be subverted to systematically destroy “bad documents” while leaving other materials available for discovery in litigation. More recently, willful mismanagement (i.e., disappearance) of key computers and other discoverable materials in Metropolitan Opera Assoc, Inc. v. Local 100, 212 F.R.D. 178 (S.D.N.Y. 2003), so angered the court that plaintiff was awarded a default judgment on grounds that it had been deprived of substantively all potential evidence in the case.
Because courts have entered severe sanctions for both willful and negligent destruction of discoverable materials falling under a litigation hold, requesting parties have an incentive to seek these sanctions in any situation where they believe that their opposing counsel has made an inadequate production of materials. Sanctions motions have become particularly common in the area of electronic discovery, where so much electronically stored information (“ESI”) is inadvertently mismanaged. Many of these motions are ultimately dropped or resolved in favor of the producing party, but they increase the cost of litigation, slow substantive progress in the matter, and tax an already overburdened judicial system.
Because of the substantial likelihood of challenges to the adequacy of their electronic document productions, producing parties should work proactively to reduce the scope of any disputes that do arise. Doing so may seem like an unfair burden of “proving the negative” by demonstrating defensible good faith efforts even before the requesting party complains, but the comparatively modest cost of putting these measures in place far outweighs the later cost of defending against allegations of discovery mismanagement after the production has taken place.
One important way that producing parties can manage the challenges of demonstrating adequate preservation and legal hold actions is by sharing some—or many—of the steps used to identify and retain potentially relevant materials. The challenge in disclosing this information, though, is that wholesale disclosure of this information may inadvertently waive privilege regarding the attorney thought process and work product used to set preservation parameters.
Legal teams may be able to separate much of the privileged strategic analysis from descriptions of legal hold procedures by using a non-attorney fact witness to describe the logistical arrangements that were put into place once strategy had been determined. This witness, whose testimony may or may be taken pursuant to Rule 30(b)(6), would not participate in attorney-client discussions that finalize a list of custodians of interest, date ranges, and other key search criteria. However, having received guidance from the legal team on these criteria, the fact witness would be able to speak to how these strategies were executed, including such specific details as how an existing key custodians list was supplemented by identifying relevant administrative assistants and colleagues, steps that were taken to halt any destruction of data (inadvertent or intentional), and the methodology used to collect ESI for processing and review. These subjects provide significant insight into the adequacy of the preservation measures taken without crossing into the legal analysis that defined the intellectual scope of the legal hold.
Though the majority of litigants and legal teams take their preservation obligations very seriously, enough high-profile legal disputes have shown that some people will always try to game the system. Thought it might seem unfair, litigants must be prepared to demonstrate their good faith efforts to meet their legal obligations.
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