Documenting When the Duty to Preserve Potentially Responsive Information Was Triggered

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It may be prudent to document the analysis of the point at which a potential litigant believes that its duty to impose a legal hold, or “litigation hold,” has or has not been triggered.  While it may not be dispositive, documentation may be useful in the event of a subsequent allegation of spoliation.

In the District of Maryland, it is well established that the duty to preserve is triggered by the reasonable anticipation of litigation.  “Once a party reasonably anticipates litigation, it is obligated to implement a ‘litigation hold’ to ensure that potentially relevant evidence under its control is identified, located, and preserved for use in the anticipated litigation.”  Cognate BioServices, Inc. v. Smith, 2015 WL 5158732, at *2 (D. Md. Aug. 31, 2015); Eller v. Prince George’s Cty. Pub. Sch., 2020 WL 7336730, at *3 (D. Md. Dec. 14, 2020); U.S. Equal Employment Opportunity Comm’n v. MVM, Inc., 2020 WL 6482193, at *2 (D. Md. Nov. 2, 2020); Cleary v. Fager’s Island, Ltd., 2020 WL 4547951, at *13 (D. Md. Aug. 6, 2020), reconsideration denied, 2020 WL 5500166 (D. Md. Sept. 10, 2020); Brittney Gobble Photography, LLC v. Sinclair Broad. Grp., Inc., 2020 WL 1809191, at *8 (D. Md. Apr. 9, 2020); Peppers v. Moubarek, 2020 WL 263491, at *2 (D. Md. Jan. 17, 2020); Equal Employment Opportunity Comm’n v. Performance Food Grp., Inc., 2019 WL 1057385, at *3 (D. Md. Mar. 6, 2019); Goodman v. Praxair Servs., Inc., 632 F. Supp. 2d 494, 509 (D. Md. 2009); Thompson v. U.S. Dep’t of Hous. & Urban Dev., 219 F.R.D. 93, 99 (D. Md. 2003).  This standard was established in Silvestri v. Gen. Motors Corp., 271 F.3d 583, 591 (4th Cir. 2001) (“The duty to preserve material evidence arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation.”); see Triggering the Duty to Preserve ESI.

The standard is objective.  Genuine Dubmax, Inc. v. Greektown LLC, 2012 WL 1664067, at *3 (D. Md. May 10, 2012); Johns v. Gwinn, 2020 WL 7138635, at *7 (W.D. Va. Nov. 30, 2020).  It is also fact specific.  Gwinn, 2020 WL 7138635, at *7.

The Sedona Conference states that reasonable anticipation includes a credibility factor. It has written: “Accordingly, the law has developed rules regarding the way information should be treated in connection with litigation. One of the principal rules is that when an organization reasonably anticipates litigation (as either the initiator or the target of litigation), the organization has a duty to undertake reasonable actions to preserve paper documents, electronically stored information (ESI), and tangible items that are relevant to the parties’ claims and defenses and proportional to the needs of the case.” The Sedona Conference, “Commentary on Legal Holds, Second Edition: The Trigger & the Process,” 20 Sedona Conf. L.J. 341, 366 (2019).  The touchstone is “reasonable anticipation” or “reasonably foreseeable.” Id. at 354.

Sedona Guideline 1 states:

A reasonable anticipation of litigation arises when an organization is on notice of a credible probability that it will become involved in litigation, seriously contemplates initiating litigation, or when it takes specific actions to commence litigation.

Id. at 370, passim (emphasis added).  Sedona states that “there are circumstances when the threat of litigation is not credible, and it would be unreasonable to anticipate litigation based on that threat.”  Id. at 372.  As such:

This guideline provides that a duty to preserve is triggered only when an organization concludes (or should have concluded), based on credible facts and circumstances, that litigation or a government investigation is probable. Whether litigation can be reasonably anticipated should be based on a good faith and reasonable evaluation of the facts and circumstances as they are known at the time.

Id. Sedona states that a threat that is not credible does not trigger the duty: “A lack of credibility may arise from the nature of the threat itself, past experience regarding the type of threat, the person who made the threat, the legal basis upon which the threat is purportedly founded, or any similar facts.”  Id. at 374.Guideline 4 states that this is an objective determination.

“Credible probability” may differ from reasonable anticipation: “[T]he point at which litigation becomes probable does not necessarily correspond with when a party anticipated, or reasonably should have anticipated, litigation.”  Goodman v. Praxair Servs., Inc., 632 F. Supp. 2d 494, 510 n. 7 (D. Md. 2009) (citation and quotation omitted); accord Huggins v. Prince George’s Cty., Md., 750 F. Supp. 2d 549, 560 (D. Md. 2010), aff’d, 683 F.3d 525 (4th Cir. 2012).

“The clear weight of Fourth Circuit precedent places the point of the obligation’s creation somewhere between knowledge of the dispute and direct, specific threats of litigation.”  Huggins, 750 F. Supp. 2d at 560.

Maryland State courts have used different language. See, e.g., Maryland’s Spoliation Standard.   Some decisions peg the trigger as the point when filing a suit has been “fairly perceived as imminent.” M. Berman, et al., “Electronically Stored Information in Maryland Courts,” (Md. State Bar Ass’n. 2020), 152-53.  This standard likely leads to the same result as the “reasonably anticipated” standard. Id. at 153.  In fact, Anderson v. Litzenberg, 115 Md.App. 549, 558 (1997), used the anticipation standard.  Id. at 154.  An argument has been presented that “reasonable anticipation” has been sub silentio recognized by Maryland courts.  Id.

Because the point at which the duty to preserve has been triggered is central to any subsequent spoliation issue, it may be prudent to document why a party concludes that its duty has not been triggered or was not earlier triggered.