As was recently reported in the New York Law Journal, one of the issues for discussion at the recent annual meeting of the New York State Bar Association this January was the need for more uniformity, and possibly even a bright-line rule, to govern issues of document preservation. This was the focus of a panel including two New York State Supreme Court justices and three federal judges from the Southern District of New York – District Judge Shira Scheindlin and Magistrate Judges Andrew Peck and James Francis.
The panel noted that, while there has been much guidance on the topic of litigation holds in the context of ongoing lawsuits, the waters surrounding the scope of a party or prospective party’s duty to preserve relevant evidence are far murkier. Judge Scheindlin, author of the seminal Zubulake and Pension Committee e-discovery opinions, commented that a rule governing document preservation should ideally address several issues, including when the preservation obligation is triggered, the scope and duration of the preservation obligation, the form of litigation holds and potential protection of same as work product, available sanctions and the burden of proof with respect to spoliation. Much of the discussion focused on a rule proposed by professor A. Benjamin Spencer of Washington & Lee University Law School, which would address some of the above topics. Professor Spencer’s proposed rule would:
- allow a prospective litigant to petition the court for a preservation order before commencing a formal lawsuit assuming the petitioner could satisfy the court regarding the subject matter of the potential action, its interest in the action, facts which the petitioner would seek to establish and identification of expected adverse parties. The court could then issue an order which would bind potential adverse parties as long as suit was filed within 60 days of the order.
- identify four exclusive circumstances that would constitute “reasonable anticipation of litigation” and trigger the preservation obligation: (1) receipt of a preservation order; (2) receipt of written notice raising the prospect of litigation or requesting preservation; (3) notice of an act or occurrence of “sufficient magnitude to make related litigation probable”; or (4) steps in anticipation of asserting or defending against a claim.
- create a rebuttable presumption of culpability in the event of spoliation, but excuse even intentional spoliation where substantially justified, such as where a party can show that the costs of preservation are not proportional to the stakes in the dispute.
The proposed rule is not without some criticism. Although adverse parties would theoretically be able to move to vacate or modify the order, some of the panelists expressed concern with binding potential parties over whom jurisdiction has not yet been established, and requiring them to seek redress from the Court before having even been sued. Also, the proposed rule leaves gray areas as to what constitutes an occurrence of “sufficient magnitude to make related litigation probable” or whether a party’s actions were taken in anticipation of asserting or defending against a claim. Judge Peck posited that the rule would increase the burden on courts, which would need to address preservation issues before litigation even began.
While there are no easy answers, most judges and litigators agree that steps should be taken towards establishing some uniformity and predictability in the area of document preservation. The devil, of course, is in the details, and we can expect the debate on how to best address these issues to continue for some time.