Mastering When To Issue A Litigation Hold Boils Down To A Simple Phrase With An Elusive Meaning

Litigation holds are not just an option in today's e-discovery heavy litigation climate. The collective body of case law on the subject unambiguously instructs that litigation holds are a critical, early first step that must be activated when the reasonable hint of litigation arises. Especially in a world where electronically stored information is easily modified, deleted, and corrupted - even unintentionally without any nefarious motive whatsoever - a party's failure to properly institute a litigation hold at the correct time and in the corrected manner could result in crippling sanctions ranging from any one or a combination of the following in a civil action: the dismissal of a claim or granting judgment in favor of a prejudiced party, the suppression of evidence, an adverse inference (referred to as "a spoliation inference"), the imposition of monetary fines, and/or an award of attorneys' fees and costs. See MOSAID Techs. Inc. v. Samsung Elecs. Co., 348 F.Supp.2d 332, 335 (D.N.J. 2004); Mitsui O.S.K. Lines v. Continental Shipping Line Inc., 2007 WL 1959250 *6 (D.N.J. June 29, 2007).

In the most general sense of the phrase, a litigation hold is a comprehensive protocol to preserve evidence reasonably likely to be relevant in litigation. In its most common application, it starts with a written notice of some variety, for example, an e-mail, and also includes some sort of concrete plan of action to preserve subject data. Yet, that simple concept has proven far more difficult in practice than the basic academic construct presented might appear on first blush. The difficulty surrounds assessing, in the first instance, whether the obligation to institute a litigation hold has been triggered.

United States District Court Judge Shira Scheindlin of the United States District Court for the Southern District of New York is widely credited with authoring some of the leading decisions on the topic of e-discovery in the nation. Judge Scheindlin's series of Zubulake opinions have become the benchmark for courts across the entire country on e-discovery issues. In Zubulake v. UBS Warburg LLC (Zubulake IV), 220 F.R.D. 212, 217 (S.D.N.Y. 2003), Judge Scheindlin held that the duty to preserve evidence attaches at the time that litigation is reasonably anticipated.

In Major Tours, Inc. v. Colorel, 2009 WL 2413631 *4 (D.N.J. August 4, 2009), Magistrate Judge Joel Schneider of the United States District Court for the District of New Jersey cited a host of...