Are Litigation Hold Notices Discoverable?

The debate over discoverability of litigation hold notices continues. I recently wrote on this topic in  When is a Litigation Hold Notice Discoverable? — When a Litigation Hold is Defective and When is a Litigation Hold Notice Discoverable?

A different approach to hold notices was recently suggested in an ABA article by Siobhan Briley, Is It Useful to Protect Litigation Hold Letters from Discovery? (americanbar.org) (ABA Sep. 28, 2021).  That article creatively suggests one more tool for the litigator’s toolbox.

The ABA article cited an article I co-authored with The Hon. Paul W. Grimm, Leslie Wharton, Jeanna Beck, and Conor R. Crowley, “Discovery about Discovery: Does the Attorney-Client Privilege Protect All Attorney-Client Communications Relating to the Preservation of Potentially Relevant Information?,” 37 Univ. Balt. L. Rev. 413 (Spring 2008) (citing cases).

The ABA article suggests that it makes sense to view litigation hold notices as privileged.  However, as an alternative, the article suggests that each party draft the other’s litigation hold notice, after conferences of the parties.  The article suggests:

Because neither side has any input into the contents of the other’s litigation hold letter, it is not possible to ensure that some relevant evidence will be excluded from what is preserved. Further, when something goes wrong and evidence is not preserved, the party whose attorney drafted the instructions for preservation suffers the consequences.

It is always helpful to try to build a better mousetrap and the author should be commended for the suggestion; however, I doubt that suggestion is practical in most situations for several reasons.

First, I prefer to determine the scope of a litigation hold and I think that the suggestion may impinge on the preserving party’s proportionality analysis.

Second, I doubt that, absent a substantial amount of discovery, I have sufficient information to draft a litigation hold notice for an opponent, especially early in the case.

Third, it is routine for an opponent to send a preservation letter and that may fulfill the role of a negotiated legal hold notice.[1]

I think that the University of Baltimore law review article provides a better paradigm.

In the article, we argued that legal hold communications are not privileged.  The argument is that, because the duty to preserve runs to the court, “under  Fisher [v. U.S.,425 U.S. 391, 403 (1976)], those compelled communications are outside the penumbra of the privilege and work product protections.”  Grimm, Berman, et al., “Discovery About Discovery,” 37 U.Balt.L.Rev. at 445-47.

Instead, absent a prima facie showing of spoliation legal hold notices are irrelevant and therefore outside of the scope of discovery.  The litigation hold communications “become relevant and discoverable upon a preliminary showing of failure to preserve  information that should have been preserved.”  Grimm, Berman, et al., “Discovery About Discovery,” 37 U.Balt.L.Rev. at 447.

This alternative approach has many advantages.  Grimm, Berman, et al., “Discovery About Discovery,” 37 U.Balt.L.Rev. at 448, passim.

If implementation communications are viewed as unprivileged, but  conditionally protected from discovery as wholly irrelevant, that  conclusion will have the practical benefit of facilitating the resolution  of discovery disputes.

Id. at 449.  For example, a party could freely disclose the litigation hold notice in negotiations, without fear of waiving a privilege, in order to rebut a potential spoliation claim.

Regardless of which theory is accepted, in drafting a legal hold notice:

[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. It may be advisable to circumscribe preservation discussions and segregate notes regarding the implementation of preservation efforts from substantive communications involving the merits of the dispute. Additionally, all participants in the adversary process need to consider the probability that, even absent a preliminary showing of breach of the duty to preserve, the steps taken by a client to preserve information are likely discoverable, and that discovery may indirectly disclose some information regarding attorney-client communications.

Grimm, Berman, et al., “Discovery About Discovery,” 37 U.Balt.L.Rev. at 454.

UPDATE:  See Unclear Preservation Obligations Leads to Spoilation Sanctions – Exterro citing Safelite Grp., Inc. v. Lockridge, S.D. Oh., Dec. 22, 2022.

Exterro wrote: “While the fact of a legal hold being issued is not privileged, in most cases, legal hold letters are generally considered privileged and not subject to discovery. However, that can change if there is evidence that spoliation may have occurred.”

That is consistent with the article I co-authored with The Hon. Paul W. Grimm, Leslie Wharton, Jeanna Beck, and Conor R. Crowley, “Discovery about Discovery: Does the Attorney-Client Privilege Protect All Attorney-Client Communications Relating to the Preservation of Potentially Relevant Information?,” 37 Univ. Balt. L. Rev. 413 (Spring 2008) (citing cases).

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[1] “Although the terminology is not always consistent, … a ‘preservation letter,’ ‘preservation notice,’ or ‘preservation demand’ is sent to a potential opponent. A ‘litigation hold’ or ‘legal hold’ notice is sent to one’s client.”  M. Berman, et al., eds. “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), 155, citing Sedona, Legal Holds at 348.