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Creating a Safe Harbor After a Legal Hold Notice

The Federal Rules of Civil Procedure provide a "safe harbor" against sanctions for the deletion of electronically stored data (ESI). Rule 37(e) states, "Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system."

However, when the threat of a lawsuit occurs, the duty to preserve relevant data with a written legal hold notice is triggered. The duty extends to "relevant documents or tangible things," defined by Federal Rule of Civil Procedure 34.

Jennifer Young, a partner at Milberg, suggests that in-house counsel can create their own safe harbor.

"In the event a company chooses not to preserve certain information due to burden or cost, the company should document this decision and consider disclosing it to the adversary while the information is still available," she says. "If the adversary doesn't object, he may be precluded from raising the issue later."

Michael Kozubek

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