I'm Responsible To Do What? Counsel's Affirmative Duty To Ensure Compliance With Litigation Holds
A corporate defendant discovers that it will be subject to litigation, yet it actively destroys probative, relevant evidence. Many of us have read, or heard of, opinions where judges have punished a spoliating-defendant by issuing sanctions anywhere from an adverse inference instruction to an entry of default judgment. In recent years, however, it is not only the client that has felt the weight of the responsibility in discovery matters. Starting with Zublake v. UBS Warburg (“Zublake V”), 229 F.R.D. 422 (S.D.N.Y. 2004), courts all over the country have emphasized the duty placed on counsel—both in-house and outside—to ensure that clients comply with their discovery obligations.
Many courts have quoted Zubulake V’s famous line, stating that counsel “must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched.” In Qualcomm Inc. v. Broadcom Corp., 05-cv-1958, 2008 U.S. Dist. LEXIS 911 (S.D. Ca., Jan. 7, 2008), for example, the Southern District of California found Qualcomm’s counsel responsible for a “monumental discovery violation” because counsel “did not conduct a reasonable inquiry into the adequacy of Qualcomm’s document search and production.”
This responsibility is not restricted to outside counsel. In Danis v. USN Communications, Inc., No. 98 C 7482, 2000 U.S. Dist. LEXIS 16900 (N.D. Ill. Oct. 23, 2000), the court recognized that in-house counsel did not establish any meaningful document retention program. In-house counsel failed to: 1) give notice to employees to preserve documents; 2) provide criteria as to what should and should not be saved; 3) review any documents that were being thrown away; and 4) review existing practices related to document retention.
Although both in-house and outside counsel can be, and have been, sanctioned for failing to adequately monitor their clients’ compliance with discovery obligations, the following are some steps that can be taken to avoid this result:
• Be proactive. Identify the triggering events that give rise to the duty to preserve. Once that obligation is triggered, issue a timely and comprehensive litigation hold.
• Communicate effectively and often. Do not assume that employees understand what the litigation entails, what their obligations are under the litigation hold, or what documents may be relevant to the litigation.
• Identify and interview key employees. Focus on employees who are likely to have relevant information to: educate them as to the case; learn about, and preserve, relevant information; and ensure compliance with your litigation hold.
• Contact opposing counsel. Explain your process for collecting relevant information to opposing counsel. If the other side has any issues with your process, it is better to resolve these sooner rather than later.
• Communicate frequently. Do not assume that once you issue a litigation hold, your obligations are fulfilled. Do frequently follow-up to ensure that all employees are preserving potentially relevant documents and data.
• Consider the Court’s involvement. One of the clearest ways to ensure that your clients’ discovery obligations, and yours, are fulfilled is to ask the court to set specific standards with respect to the scope and duration of preservation and how data will be reviewed and produced. Being willing to seek court intervention early on will educate the court as to the volume of information and the cost involved and may lead the court to set limits on ongoing preservation and document production.
The responsibility for compliance with the rules with respect to discovery is shared between the client and their counsel. In-house and outside counsel and the various custodians of potentially relevant information need to work as a team and keep the lines of communication open to ensure that their obligations are fulfilled. This allows all involved to comply with their discovery obligations and to identify key documents—favorable and unfavorable—early on and develop their litigation strategy accordingly.
