Generally, litigation hold notices are privileged, protected by the attorney-client privilege or work product doctrine. See, e.g. Gibson v. Ford Motor Co., 510 F. Supp. 2d 1116, 1123 (N.D. Ga. 2007). However, the privileged nature of litigation hold letters may be lost if a party spoliates evidence (destroys evidence) or fails to observe appropriate litigation hold procedures.
What is a Litigation Hold?
Litigation holds (also called “legal holds”) are used to prevent spoliation of evidence. Litigation holds are generally put into motion when an attorney directs a client to preserve evidence relevant to a legal dispute. Frequently, the lawyer implementing the legal hold is in-house counsel for a company and the “clients” are company employees. Litigation hold letters are sent to the clients notifying them of the duty to preserve evidence. The obligation to preserve relevant information applies to both paper documents and electronically stored information (“ESI”). Often, recipients of legal hold notices are directed to halt document destruction policies.
The obligation to institute a legal hold arises when litigation is reasonably anticipated, not just when litigation is actually filed. Zublake v. UBS Warburg, LLC., 220 F.R.D. 212 (S.D.N.Y. 2003).
Litigation Hold Notices are Generally Protected by the Attorney-Client Privilege
Litigation hold letters are not discoverable in litigation if they include information protected by the attorney-client privilege. See, e.g, Muro v. Target Corp., 250 FRD 350, 360 (N.D. Ill. 2007)(finding a litigation hold notice privileged because it was a communication “of legal advice from corporate counsel to corporate employees regarding document preservation….”). Although information in litigation hold letters may be protected, courts often permit discovery of the date of issue, the recipients, and steps taken to preserve evidence. Cannata v. Wyndham Worldwide Corporation, Case No. 2:10-cv-00068-PMP-VCF (D. Nev. Aug 16, 2012).
The Attorney Work Product Doctrine May Also Protect Litigation Holds
In Gibson v. Ford Motor Co., noted above, the court considered litigation hold letters attorney work product and not subject to discovery because the notices related to litigation, were created after a dispute arose and existed solely to assure compliance with discovery obligations that might arise in litigation. The court believed that compelling production of legal hold notices could dissuade other businesses from issuing such instructions in the event of litigation.
Evidence Spoliation May Cancel Privileged Nature of Litigation Hold Notices
Even when litigation hold letters are privileged, evidence spoliation may cause loss of the privilege. For instance, in Major Tours Inc. v. Colorel, Civil No. 05-3091 (D. N.J. Aug. 4, 2009), the court ordered production of litigation hold letters after likely spoliation of evidence. In that case, despite having knowledge of a potential legal dispute in 2003, the defendant failed to send legal hold notices until 2007. The court determined that the duty to preserve evidence began in 2003 when litigation was reasonably anticipated and as a result of the failure to timely implement a litigation hold, the court believed evidence was likely lost and therefore the litigation hold letters should enjoy no privilege.
Failure to Observe Proper Litigation Hold Procedures May Support Discovery of Litigation Hold Notices
In United States ex rel. Barko v. Halliburton Co.,Case No. 1:05-CV-1276 (D.D.C. Nov. 20, 2014), the court concluded that litigation hold letters sent to company employees were unprivileged. Among other reasons, the court held the litigation notices were not protected from discovery because the letters did not advise employees to keep them confidential, and, in fact, instructed recipients to share the letter with others who had not received it.
The general rule that litigation hold letters are protected by the attorney client privilege and the work product doctrine is not a guarantee and, when implementing litigation holds, attorneys should take precautions to protect against circumstances that might limit the privileged nature of legal hold notices.