Expert Panel Offers Advice On Executing Effective Legal Holds Following Pension Committee, Rimkus and Victor Stanley II At Gibbons Fourth Annual E-Discovery Conference

The failure to properly implement, monitor and refine legal holds can have devastating results, transforming manageable legal issues into high-stakes nightmares. To offer guidance on avoiding this, on Thursday, October 28, 2010, Gibbons P.C. held its Fourth Annual E-Discovery Conference, where it assembled a panel of experts for a roundtable discussion on legal hold best practices after the issuance this year of three must-read decisions on this topic: Pension Committee, Rimkus and Victor Stanley II.

The roundtable discussion focused on identifying proactive measures and creative strategies for companies of all sizes to efficiently and effectively meet their e-discovery obligations. The panel included respected former United States Magistrate Judges for the District of New Jersey Ronald J. Hedges and John J. Hughes. Also offering their expertise were in-house counsel Kevin P. Gallagher, Assistant General Counsel, Host Hotels; Edward O. Gramling, Discovery Counsel at Pfizer; Jonathan M. Remshak, Senior Corporate Counsel at Konica Minolta Business Solutions USA, Inc.; and Korin A. Neff, Group Vice President, Global Privacy, Wyndham Worldwide Corporation. Galina Datskovsky, Senior Vice President of Information Governance at Autonomy and President-Elect of ARMA International, rounded out the panel.

The panelists began by offering an overview of the e-discovery landscape following Pension Committee, Rimkus and Victor Stanley II and discussing the conflicting negligence standards articulated in Pension Committee and Rimkus. The discussion progressed to examine what constitutes negligence in connection with a party’s failure to institute timely written legal holds, as well as the emerging trend of a lack of judicial tolerance for parties who do not understand and take seriously their obligation to preserve evidence.

In attempting to identify solutions for some of the problems companies face in issuing legal holds, the panel probed the difficulties parties encounter in discharging their obligations to preserve data when they have failed to prioritize information governance, establish corporate data maps and develop a consistent records management program.

The panel also examined the issues from the perspective of establishing information management programs and implementing and monitoring legal holds, and offered numerous critical insights. The panel emphasized the absolute necessity of having “buy in” from the most senior levels when attempting to create an information management program. They also identified their successes in creating and implementing solid records management programs and reducing the overall number of places where data can reside.

The panelists further identified some of the challenges of managing legal holds when there are numerous holds in place at any given time, including identifying the appropriate custodians to receive the hold notice, tracking down data when the custodians move or change positions in the company and timely releasing holds when the matter is concluded.

The panel also explored how having a solid understanding of one’s duty to preserve information can be effectively leveraged to achieve proportionality in appropriate cases. For example, they noted that in smaller cases that do not justify spending “big dollars” on data collection, processing and review, they have had some success by taking a straightforward and transparent approach to the identification of custodians whose data will be searched and produced. When this is explained to the adversary and the court at the outset of the case, quite often, courts go along with that proactive approach. The panelists agreed that efforts should go beyond implementation of the legal hold, and extend to conducting follow-up with explanations of what must be preserved, as well as monitoring compliance with periodic compliance checks.

Finally, the panel expressed the consensus that that there are many critical issues to consider in crafting and implementing effective legal holds, but essential components include:

  • timely issuance of written legal hold notices;
  • follow-up with custodians to ensure that they understand what must be preserved;
  • document custodian interviews;
  • assistance in data collection where necessary;
  • re-issuance of the hold from time to time with updates and reminders; and
  • documentation of preservation efforts to enable litigants to make a showing as to their good faith efforts to discharge their preservation obligations to any reviewing court.
Philip J. Duffy is a Director on the Gibbons E-Discovery Task Force.
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