This is the fourth column in a series addressing the challenges and opportunities presented by litigating in forums with no e-discovery rules. Read parts one, two, and three. This column considers how your company can use an early preservation demand to lay the foundation for later motion practice against an adversary who fails to take reasonable measures to preserve electronic evidence.
In last month’s column, we considered strategies for piercing the “veil of secrecy” that can impede effective e-discovery in some state courts when counsel use vague claims of privilege and work-product protection to avoid disclosing the scope of a party’s litigation hold. In this month’s column, we consider how to draft a preservation demand letter that will lay the foundation for more effective motion practice against an adversary who is refusing to provide a reasonable level of transparency and cooperation.
Although preservation letters are a routine checklist item for complex litigation, many litigators give the content of these letters too little attention. A well-crafted preservation demand will address in detail the specific steps your company’s counsel requests that the opposing party undertake to preserve relevant evidence. Instead, many attorneys use the same form letter for all cases, changing only the party names. A boilerplate preservation letter squanders a valuable opportunity to frame discovery at the outset of the litigation and also poses significant blow-back risk.
1. Your company’s counsel already should have a general strategy for discovery at the outset of the litigation and should be able to identify at least some of the categories of documents and electronically stored information (ESI) and custodians most likely to be the focus of your company’s discovery. Counsel should be able to identify by position, if not by name, some of the most likely custodians. The same factual investigation that forms the basis for the complaint should be sufficient to identify the key categories of documents.
Some attorneys will argue that a vague preservation letter is preferable because of the risk that counsel may overlook some highly relevant but unknown category of documents or group of custodians at the outset of litigation. Of course, the preservation letter must include language that qualifies the requests contained in the letter as the results of only a preliminary investigation and that reminds opposing counsel of her burden to make an independent inquiry to identify relevant custodians and categories of documents.
The minimal additional effort required to draft a targeted set of preservation requests will be well rewarded by both reducing the risk of losing key evidence and signaling to your company’s adversary the sort of assertive litigation posture that may enhance the prospects for early resolution.
2. Sending a boilerplate preservation letter also runs the risk that your counsel may inadvertently make onerous preservation demands that are unsuitable for your company’s position in the litigation. I have seen many preservation demands that include ridiculously broad preservation requests. The preservation letter that your company’s counsel directs to your adversary should demand no more than what your company can reasonably undertake to preserve its own relevant data.
When litigating in state courts that offer little guidance on the preservation of ESI, the preservation letter is especially important because it places your adversary on notice that affirmative measures may be immediately necessary to prevent the loss of relevant evidence. There is now a well-developed body of precedent in the federal courts addressing the inadequacy of a preservation plan that relies solely on the blast distribution of a litigation hold notice with no follow up by counsel, but most state courts have no published decisions on this issue.
Thus, in state court matters, it is especially important to articulate in the preservation demand letter the risk that your adversary’s information management systems may purge relevant data in the ordinary course of operation and counsel’s obligation to make specific inquiry into the operation of these systems to ensure that any automatic purging of data has been suspended.
Many boilerplate letters also include a request that the opposing party promptly acknowledge full compliance by written response. Whether to demand a written response confirming your adversary’s agreement to comply requires careful strategic consideration. This request means that your company cannot treat silence as assent and may have no viable alternative but to proceed immediately with a motion for a preservation order if your adversary refuses to give at least some minimally adequate written assurance. In some instances, it may be to your company’s advantage to proceed immediately with a motion for a preservation order, but this is certainly not true in all cases.
In e-discovery disputes, a party often achieves the greatest leverage against its adversary in the uncertainty that exists before the court has ruled on a discovery dispute. In many cases, your company may be best served if your counsel uses the adversary’s failure to comply with the preservation demand as the basis for negotiating a favorable compromise.
Running into court immediately to seek an order clarifying preservation obligations, when the assigned judge may have no prior exposure to the litigation and no prior opportunity to form any views about the parties or their counsel, could easily result in an unfavorable decision that leaves the court with a negative impression of your trial counsel and that undercuts your company’s bargaining leverage in future discovery conferences with opposing counsel.
Preservation disputes can make an important contribution to your company’s successful litigation strategy but especially at the outset of litigation are double-edged swords that must be managed carefully. A hasty motion before an ill-prepared judge can result in an unfavorable ruling that gives your adversary the necessary cover for purging potentially relevant evidence.
3. A final observation that should be obvious from this discussion is that preservation demands are not the sole province of plaintiffs. When the plaintiff has made a preservation demand on your company as defendant, then certainly your company's counsel should consider making a responsive demand that creates a level playing field for discussions between counsel in subsequent discovery conferences.
Even if the plaintiff has no made preservation demand, your counsel should consider making the first communication regarding preservation if there may be important documents for your company’s defense in plaintiff’s possession. Plaintiff’s silence may be strategic or simply the product of inattention, but in either case your company’s counsel should consider a preservation demand that lays the groundwork for counsel later to focus attention on the adequacy of your adversary’s preservation of ESI.