Generally, legal hold notices (also called “litigation holds”) 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 legal hold letters may be lost if a party spoliates evidence (destroys evidence) or fails to observe appropriate document and ESI preservation procedures.
Litigation holds are used to prevent spoliation of evidence and are generally put into motion when an attorney directs a client to preserve evidence relevant to a legal dispute. Often, the lawyer implementing the legal hold is in-house counsel for a company and the “clients” are company employees.
Litigation hold letters and document preservation notices 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”). It is also often a legal hold best practice to direct recipients 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 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).
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.
Similarly, the judge in re 3M Combat Arms Earplug Prods. Liab. Litig., Case No. 3:19-md-2885 (N.D. Fla. March 20, 2020) noted that “[u]nlike normal business activities such as paying taxes, record keeping, and calculating accounts receivable, litigation hold notices are prepared because of the prospect of litigation. They are, therefore, textbook work product.”
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.
Similarly, in Radiation Oncology Services of Central New York, P.C., v. Our Lady of Lourdes Memorial Hospital, Inc., Case No. EF15-462 (Sup. Ct. N.Y. June 9, 2020), the court ordered the defendant medical service providers to produce their legal hold notice and “all related ESI.” The court found evidence of ESI spoliation and concluded disclosure of the hold notice appropriate because the defendants acknowledged the obligation to preserve evidence, did not establish that destruction of the ESI was without culpable conduct and the information potentially related to claims in the case. The judge was also not persuaded by the fact hard copies of lost email messages existed. “[P]rinting paper copies of the emails and permanently deleting the associated ESI potentially deprived the emails of significant evidentiary value.”
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.