Courts Can Still Order a Party to Issue a Litigation Hold

Lawyers are eagerly awaiting Courts to start their engines applying the new Federal Rule of Civil Procedure Rule 37(e) for sanctions against a party that failed to preserve ESI. However, the case of Bruner v. Am. Honda Motor Co, is a healthy reminder that Courts will keep ordering parties to enact litigation holds.

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Here is the crux of what happened: the Plaintiff brought a motion to compel the Defendant to respond to discovery requests and enact a litigation hold. Bruner v. Am. Honda Motor Co. (S.D.Ala. May 12, 2016, Civil Action No. 1:15-00499-N) 2016 U.S. Dist. LEXIS 62810, at *2.

The Defendant argued that no responsive emails existed, because of their data retention and destruction policy, and that enacting a litigation hold was “burdensome” and “expensive.” Bruner, at *6. The Defendant offered no evidence supporting their burden argument. Id.

Judge Katherine P. Nelson recounted that a party has a duty to preserve ESI when it “reasonably anticipates litigation.” Bruner, at *6-7, citing Fed. R. Civ. P. 37(e). This means that a party must suspend its ESI destruction policy by issuing a litigation hold. Id. The Court explained:

The deletion of potentially relevant emails since the instigation of this action is unreasonable considering their potential importance to this litigation. Additionally, the deletion of some responsive emails does not absolve Defendant of its obligation to thoroughly search for still-extant ESI.

Bruner, at *7, referencing Fed. R. Civ. P. 26(b), 26(g).

The Defendant made the [surprising] argument that it “considered but did not implement a litigation hold in reliance on its existing Document Retention Policy (DRP).” Bruner, at *7. The Defendant further made conclusory arguments that issuing a litigation hold would be overly burdensome. Id.

The Court granted the Plaintiff’s motion to compel, which included responding to discovery requests for email, additional searches, and implementing a litigation hold on the email accounts for relevant individuals to the case, which included “designer, engineer, customer service representative, or other employee who may possess any responsive non-privileged email.” Bruner, at *8.

Bow Tie Thoughts:

I think it is an epically bad idea to consider and reject issuing a litigation hold. We have had significant eDiscovery cases over the last 16 years. Lawyers should be on notice that failing to preserve relevant information after being served with a lawsuit can result in Judges being highly peeved at you.

The new Rule 37(e) states the following issuing sanctions for the loss of ESI:

“[E]lectronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court may take certain actions.”

Rule 37(e) further states:

(1) Upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) Only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) Presume that the lost information was unfavorable to the party;

(B) Instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) Dismiss the action or enter a default judgment.

Does a producing party considering and deciding against issuing a litigation hold show the intent to deprive the party of relevant ESI? That will be an interesting question if it ever goes before a court.

Josh Gilliland is a California attorney who focuses his practice on eDiscovery. Josh is the co-creator of The Legal Geeks, which has made the ABA Journal Top Blawg 100 Blawg from 2013 to 2016 and was nominated for Best Podcast for the 2015 Geekie Awards. Josh has presented at legal conferences and comic book conventions across the United States. He also ties a mean bow tie.