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E-Discovery & Legal Ethics – What to Do About It Part 2: ESI Preservation

Image of possession custody controlThis the second in a series of articles examining issues raised in recent legal ethics opinions, such as State Bar of California Opinion CAL 2015-193,  addressing an attorney’s duty of competence as it relates to e-discovery and electronically stored information (ESI).


In sum, the California ethics opinion states that attorneys unfamiliar with e-discovery must either: 1) acquire sufficient learning and skill before handing matters involving e-discovery; 2) associate with or consult with technical consultants or competent counsel; or 3) decline the representation if e-discovery issues are implicated.


The opinion states that lawyers with cases involving e-discovery must be able to handle certain e-discovery tasks either by themselves or in association with co-counsel or e-discovery consultants. The tasks, which are discussed in this series of articles, are:



This article addresses the second task, implementation of appropriate document preservation efforts.



Preservation Efforts Must Start When Litigation is “Reasonably Anticipated.”

The first step in preserving ESI is knowing when to start. As discussed in more detail in this article on legal holds, a litigant’s duty preserve information is triggered when litigation is “reasonably anticipated.” The test for “reasonable anticipation of litigation” varies by jurisdiction, but generally, reasonable anticipation of litigation arises when a party knows there is a credible threat of litigation. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003). Events rising to the level of a credible threat of litigation vary, but may include receipt of a demand letter, formal complaint, records subpoena, or the occurrence of an event that typically results in litigation.


Issue a Litigation Hold Letter

Once the duty to preserve relevant evidence arises, lawyers should issue a litigation hold letter. Litigation hold letters (or “legal hold” letters) instruct recipients to preserve relevant documents and other information. Frequently, the lawyer issuing a legal hold letter is in-house counsel for a company and the “clients” are company employees.


Litigation hold letters should describe the legal matter, offer examples of relevant information requiring preservation, and explain the recipient’s legal obligation to preserve the information. The letter should also provide contact information for questions about the legal hold.


(For further reading on litigation hold notices, a great resource is the Sedona Conference Commentary on Litigation Holds. Additionally, Percipient offers an automated ESI Questionnaire tool that may be used to deliver litigation hold letters and gather information from clients about potentially relevant ESI.)


Suspension of Document Retention Policies

To properly advise a client on e-discovery issues, an attorney must understand the extent and nature of the client’s ESI and also become familiar with the client’s document retention policies. Understanding document retention policies is important because a client’s duty to preserve evidence may require suspension of document destruction protocols.


It is also important to understand the client’s use of software that may generate information relevant to a lawsuit. Such applications may include Software as a Service (“SaaS”) such as popular customer relationship management platforms like Salesforce.com. Understanding what software used by a client is important because records maintained in SaaS platforms, may also need to be preserved.


To Properly Focus Preservation Efforts, Identify Data Custodians

As noted by Judge Shira Scheindlin in Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003), litigants need not “preserve every shred of paper, every e-mail or electronic document, and every backup tape.” Instead, as the Fourth Circuit Court of Appeal observed, a litigant must preserve “only documents that the party knew or should have known were, or could be, relevant to the parties’ dispute.”


To understand what documents and information are potentially relevant to a legal dispute, one of the first and most important steps is identifying data custodians (witnesses) that are likely to possess potentially relevant information. Attorneys must also ensure the custodians are aware of their obligation to preserve evidence and are in fact doing so.


Keep Native Copies

It is generally advisable to ensure preservation efforts include copies of original files in native format with metadata intact. As will be discussed in a later post discussing the protection of ESI integrity during collection, having copies of files in native forms protects against allegations of spoliation and helps limit discovery disputes.


ESI In the Possession of Others, But Under Client’s “Control,” Must Also be Preserved

Civil procedure rules obligate litigants to produce relevant documents in their “possession, custody and control.” As a result, third parties may hold client information under a litigant’s “control” that must be preserved. Examples of third parties potentially possessing information relevant to a client’s legal matter include managed service providers, professional service providers and document storage vendors.


A litigant’s obligation to produce information in their possession, custody or control may also mean that parent companies must confirm subsidiaries preserve information as well as ensuring employees preserve relevant information kept in personal storage accounts.



Even ESI That is “Not Reasonably Accessible” May Need to be Preserved

Also of note is that although litigants must generally only produce documents and ESI that are “reasonably accessible,” comments to Federal Rule of Civil Procedure 26 state that “[a] party’s identification of sources of ESI as not reasonably accessible does not relieve the party of its common-law or statutory duties to preserve evidence.” However, the comments also note that the duty to preserve hard to access data depends on the circumstances of each case.


Additionally, as pointed out in the Sedona Commentary on legal holds the obligation to preserve hard to access ESI

should be read in conjunction with [Federal Rule of Civil Procedure] 37(e), which provides that where data is lost as a result of good-faith, routine operations of electronic systems, no sanctions under the Federal Rules may be levied. . . in the absence of agreement, it is often reasonable to decline to preserve inaccessible sources if the party concludes that the “burdens and costs of preservation are disproportionate to the potential value of the source of data.


Utilize Software to Lessen Preservation Burden

Much of the work preserving potentially relevant ESI may be accomplished with software. Using the right software permits software administrators to suspend document deletion practices, segregate preserved evidence for ease of access and also provides the ability to monitor preservation efforts.


Document the Process

Although litigation hold notices are generally protected by the attorney client privilege and attorney work product doctrine, legal hold efforts should be thoroughly documented so that if preservation efforts are called into question, they may be defended. Information documented should include when preservation began, the person initiating preservation efforts, the scope of information preserved and to whom the preservation notices were directed. Also important to document are amendments to the preservation instructions and efforts used to monitor compliance.


Preservation Efforts Must be Reasonable

Regardless of when and how preservation efforts occur, they must be reasonable. Adoption and compliance with an information governance policy may help demonstrate reasonableness and good faith in meeting preservation obligations as will adoption of an effective and defensible legal hold process. Implementation of these processes will minimize the risk of document spoliation (loss or destruction), sanctions, and even damage to reputation.


For additional information about legal holds and ESI preservation, additional articles may be found here.


Posted on September 7, 2015 in E-Discovery, ESI Collection, ESI preservation, Ethics and Rules of Professional Conduct, Possession Custody & Control, SaaS

About the Author

Chad Main is an attorney and the founder of Percipient. Prior to founding Percipient, Chad worked as a litigator in Los Angeles and Chicago. He is a member of the Seventh Circuit Electronic Discovery Pilot Program Committee and may be reached at cmain@percipient.co.
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