Legal Hold Best Practices after Victor Stanley II, Pension Committee and Rimkus

Relevance. Scienter. Prejudice. These three themes permeated a roundtable discussion entitled, “Legal Hold Best Practices after Victor Stanley II, Pension Committee and Rimkus” during Gibbons Fourth Annual E-Discovery Conference on October 28, 2010, at Gibbons headquarters in Newark, New Jersey. A distinguished panel discussed legal hold best practices and lessons learned from recent decisions, including proactive measures and creative strategies for companies of all sizes to meet their e-discovery obligations. E-discovery preservation obligations have been a critical issue in employment litigation since Judge Scheindlin’s groundbreaking opinion in Zubulake v. UBS Warburg (in which the defendant/employer was sanctioned for failing to preserve documents in a sex discrimination case brought under Title VII).

The panel began the discussion by highlighting decisions from notable e-discovery cases from around the country, including Victor Stanley II, Pension Committee, and Rimkus. These recent cases currently stand as a litmus test against which litigation-hold policies are balanced.

Stressing the importance of these decisions, one panel member noted that a major step in implementing a successful litigation hold is to first understand where your information is located and how is it accessible. Only once that objective is met, can a company effectively implement a litigation hold that will withstand court scrutiny.

Another member of the panel emphasized that companies need to tailor litigation hold policies to their specific business. The panel member noted that his company, with roughly 200 employees, might have a significantly different litigation hold policy than a company with 100,000 employees. Additionally, the panel stressed the need to continually update litigation hold policies and practices as a company’s business expands and/or changes.

Turning to the specifics of a litigation hold policy, the panel discussed the importance of periodic litigation hold reminders to those individuals who are custodians as defined by the hold. Follow-up on active litigation holds is especially critical for large businesses, where employees may change or transfer jobs frequently within the company. The panel stressed that demonstrating good faith on the part of the company is critical, and that implementing effective reminder procedures will help convince a court that the company’s litigation hold policies are adequate.

Questions from audience members reflected the concerns of corporate and legal counsel about runaway e-discovery costs and the imposition of excessive, unrealistic burdens on parties in connection with electronically-stored-information preservation and collection.

Indeed, the failure to properly implement, conduct, monitor and refine legal holds can have a devastating impact. Nonetheless, the panel’s lengthy discussion gave a comprehensive analysis of preservation and spoliation issues facing every practitioner and corporate litigant.