When is a Litigation Hold Notice Discoverable?

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A recent ABA practice point described Radiation Oncology Servs. of Cent. N.Y., P.C. v. Our Lady of Lourdes Mem’l Hosp., Inc., 2020 NY Slip Op 20133, ¶ 2, 69 Misc. 3d 209, 126 N.Y.S.3d 873, 875 (Sup. Ct.) (decided June 9, 2020) (Masler, J.).

In Radiation Oncology, the court addressed when a litigation hold notice is discoverable.  A substantial body of case law addresses that issue.  See, e.g.,  P. Grimm, M. Berman, et al., “Discovery About Discovery:  Does the Attorney-Client Privilege Protect All Attorney-Client Communications Relating to the Preservation of Potentially Relevant Information?,” 37 U.Balt.L.Rev. 413 (2008); Am. Soc’y for the Prevention of Cruelty to Animals v. Ringling Bros. & Barnum & Bailey Circus, No. CV 03-2006 (EGS/JMF), 2008 WL 11388433, at *1 n. 1 (D.D.C. Aug. 5, 2008) (citing article); Richard Esenberg, “A Modest Proposal for Human Limitations on Cyberdiscovery,” 64 Fla. L. Rev. 965, 980 (2012) (citing article); see generally, C. Basri and M. Mack, “eDiscovery for Corporate Counsel” §10;13 (Thomson Reuters Feb. 2020).

This known risk suggests that legal hold notices should be drafted with that potential disclosure in mind.  As such, draconian warnings by counsel to client may be imprudent in such a notice.  For example, preserving counsel’s warning that harsh sanctions including dismissal may be imposed may assist an opponent if the notice is discoverable and that sanction is sought.  Similarly, strategic discussions and opinion work product should not be put in a litigation hold notice for the same reason.

Further, as noted in the law review article, steps taken by a client to implement a legal hold are also discoverable.

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January 28, 2021, update.

For a conforming perspective on Radiation Oncology, see B. Grierson, “Opening Pandora’s Box: A Preliminary Showing of Spoliation May Result in the Compelled Production of a Litigation Hold Notice,” Gibbons Law Alert, Jan. 28, 2021.  Ms. Grierson wrote:  “[A]ttorneys should take caution to avoid including information in the hold notice that might ultimately prejudice their client’s position if the document is disclosed, including comments regarding litigation strategy, the merits of the claim, and confidential material that is not otherwise essential to the purpose of the hold notice.”  I agree; however, in the University of Baltimore Law Review article, we argue that there may be limits to the scope of disclosure.  Nevertheless, that is a known risk and it is best to avoid it.

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January 22, 2021, update.

For a fresh and more detailed perspective, see Josh Gilliland’s excellent bowtielaw.com blog, “PMK Depo or Production of Litigation Hold Letters?,” discussing Thomas v. Cricket Wireless, LLC, 2020 WL 7344742 (N.D.Ca. Dec. 14, 2020).

Given the divergent approaches to discoverability of a litigation hold notice, the practice point is that:

“[C]ounsel and client should be aware, when drafting preservation documents and engaging in implementation discussions, that those documents and discussions may voluntarily or involuntarily be presented to a court for review in connection with a spoliation motion. Prudence suggests, for example, that litigation hold letters should not contain surplus tactical and strategic discussions, and should be no more expansive than necessary to effectively accomplish the preservation task….”

The Hon. P. Grimm, M. Berman, et. al., “Discovery About Discovery: Does the Attorney-Client Privilege Protect All Attorney-Client Communications Relating to the Preservation of Potentially Relevant Information?,” 37 U. Balt. L. Rev. 413, 454 (2008) (emphasis added).

While the Thomas court wrote that litigation hold notices are privileged, neither party disputed that assertion.  Id. at *2.  Instead, the defendant “admitted that certain information from the class period was not retained.” Id. at *2.   Plaintiff argued that its “preliminary showing of spoliation can overcome the privilege and does so here….”

As Josh noted, even on those facts, the Thomas court did not, at least initially, order production of the litigation hold notice and, instead, directed a Rule 30(b)(6) deposition regarding what defendant did to preserve information: “Plaintiffs will have the opportunity to get answers about [defendant’s] document preservation efforts at the upcoming Rule 30(b)(6) deposition.”  Id. at *3.  The court wrote that: “These basic details include (1) when and to whom the litigation hold notices were given, (2) what kinds and categories of information and data [defendant’s] employees were instructed to preserve and collect, and (3) what specific actions they were instructed to take to that end.”  Id.  The court left the door open to more discovery later.

That step-by-step approach has long been accepted:

It is axiomatic that an opponent may routinely obtain discovery of a client’s actions taken to implement the duty to preserve information. … [T]his is no different than the traditional “paper discovery” paradigm of asking a deponent to describe his or her search for responsive paper documents…. It is of no moment that the paper or electronic search was conducted at the direction of counsel. Parties are permitted to inquire into an opponent’s efforts to preserve relevant information through interrogatories and in depositions directed to the opposing client.

Grimm, Berman, et. al., “Discovery About Discovery,” 37 U. Balt. L. Rev. at 425–26 (emphasis added).  Thus, the steps taken by the recipient of a litigation hold notice are generally discoverable.

The privilege question regarding the notice itself often turns on the court’s view of the purpose of a litigation hold notice.

  • Some courts conclude that litigation hold notices are not privileged: “[T]he predominant purpose of that communication was to give recipients forceful instructions about what they must do, rather than advice about what they might do.” Bagley v. Yale Univ., 318 F.R.D. 234, 240 (D. Conn. 2016) (ordering production); accord Grimm, Berman, et al., “Discovery About Discovery,” 37 U.Balt.L.Rev. at 445-46.  However, those courts generally conclude that, in the absence of a prima facie showing of spoliation, litigation hold notices are irrelevant and not discoverable.
  • As Thomas confirms, other courts disagree and consider the notices to be privileged. Grimm, Berman, et al., “Discovery About Discovery,” 37 U.Balt.L.Rev. at 443-44 (collecting cases).  Those courts generally reach the same outcome: “Litigation holds are generally protected from disclosure by the attorney-client privilege or as attorney work product unless a preliminary showing of spoliation is made….”  Radiation Oncology Servs. of Cent. New York, P.C. v. Our Lady of Lourdes Mem’l Hosp., Inc., 69 Misc. 3d 209, 210, 126 N.Y.S.3d 873, 874 (N.Y. Sup. Ct. 2020).

Even if litigation hold notices are not privileged, there are limits on what disclosure may be compelled.  Grimm, Berman, et al., “Discovery About Discovery,” 37 U.Balt.L.Rev. at 450-51. One suggested process, when there is a preliminary showing of breach of the duty to preserve, is:

[T]he investigation into a party’s compliance with its duty to preserve should be a multi-step process that in most situations can go no further than consideration of implementing communications. As illustrated in eBay, the first step is discovery of facts from the client demonstrating how the litigation hold was implemented. If it then becomes necessary or appropriate to proceed more deeply into the nature of attorney-client communications to determine the magnitude of, and prejudice caused by, the failure to preserve, courts may cautiously expand that inquiry and consider some of the routine attorney-client communications involved in satisfying the duty to preserve. This might include when a litigation hold was issued, whether and when a forensic expert was retained, what persons were identified as “key players,” whether outside ESI storage facilities were contacted, whether “janitor” programs were suspended, what key words were searched, what was preserved, what was not preserved, and whether the lost information was unique, relevant, and significant. If, however, counsel advised a client that litigation holds involve decisions as to whether litigation is reasonably anticipated, choice of law, and proportionality considerations, there appears to be no cogent reason for requiring disclosure of that advice, absent application of an exception to the privilege.

Id. at 452-53.

Under any paradigm, as Josh explained, the risk of disclosure is present: “Production of a litigation hold may be ordered upon a preliminary showing of spoliation…. unless the party that had been in control of the destroyed evidence can establish, as a matter of law, that spoliation sanctions are unwarranted regardless of the adequacy of the litigation hold.”  Radiation Oncology, 69 Misc. 3d at 211, 126 N.Y.S.3d at 875.*

Thanks to Josh for his thought-provoking discussion of Thomas in bowtielaw.com blog, “PMK Depo or Production of Litigation Hold Letters?”

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* The Radiation Oncology court wrote that, even upon such a showing, “defendants could preclude production of the litigation hold by establishing, as a matter of law, at least one of the following elements for each item of destroyed evidence: (1) that they had no obligation to preserve the evidence at the time of its destruction; (2) that the evidence was destroyed through no fault or wrongdoing whatsoever, even negligence; or (3) that the missing evidence was not relevant to plaintiffs’ claims.”  Id. at 212–13, 126 N.Y.S.3d at 876.

 

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