In the wake of Judge Shira Scheindlin’s 2010 landmark decision in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, defining the extent of the duty to preserve potentially relevant electronically stored information (ESI) for e-discovery has been a hot issue for the courts.
In Pension Committee, Judge Scheindlin, of the Federal District Court for the Southern District of New York, found that the plaintiffs’ failure to implement a legal hold on their ESI constituted gross negligence. The judge ordered further discovery,monetary sanctions and an adverse inference instruction to the jury.
In Steuben Foods, Inc. v. Country Gourmet Foods, a federal judge in the Western District of New York ruled in April that speculation without proof that relevant emails were deleted is not sufficient grounds for sanctions. The defendant argued that the plaintiff’s failure to issue a written litigation hold and produce at least three emails created a presumption that spoliation has occurred. The court reviewed the emails and held that regardless of whether they were lost due to oversight or through negligence, the emails likely were not relevant.
Failure to preserve ESI when litigation is imminent can result in very costly penalties, particularly if the court has other issues with your case.