In New York, it is widely recognized that the duty to preserve documents arises once a party “reasonably anticipates litigation” (see Voom HD Holdings LLC v EchoStar Satellite, 93 AD3d 33, 41-42 [1st Dept 2012]). And so, issuing timely a litigation hold notice is critical for preserving information relevant or potentially relevant to an actual or threatened litigation.
But, what happens to that litigation hold notice during discovery? Is it a document that one produces? Is it privileged? Ordinarily, hold notices are protected from disclosure by the attorney-client privilege and the attorney work product doctrine. However, a recent New York case illustrates that when there are allegations of spoliation, the privilege a litigation hold normally enjoys may be undermined.
In Radiation Oncology Services of Central New York, P.C., v Our Lady of Lourdes Memorial Hospital, Inc., 2020 WL 3246747 (Sup Ct, Cortland County 2020), involving a contentious contract dispute, the parties engaged in nearly five years of discovery, including countless discovery disputes. In one instance, Plaintiffs identified two emails that Defendants produced in hardcopy but failed to produce electronically. These emails were sent after Plaintiffs informed Defendants that it intended to pursue litigation; and thus, after a litigation hold should have been issued. Believing Defendants spoliated evidence, Plaintiffs filed a motion to compel the production of Defendants’ litigation hold, including all related electronically stored information (“ESI”). In response, Defendants contended there was no spoliation of evidence in either instance because they were able to produce the hard copies of the emails.
The Court was not persuaded by Defendants’ paper production of the emails. Rather, the Court found that “printing paper copies of the emails and permanently deleting the associated ESI potentially deprived the emails of significant evidentiary value.” Moreover, the Court held that Defendants failed to prove, as a matter of law, that its litigation hold should be protected from disclosure. Specifically, (i) Defendants did not dispute its duty to preserve the emails at the time they were destroyed; (ii) Defendants failed to show there was no culpable conduct involved in the deletion of the emails; and (iii) the emails were potentially related to claims in the matter. And so, the Court granted Plaintiffs’ motion to compel.*
This decision reminds us of a few lessons. First, preserving paper copies of ESI that has been deleted will not necessarily defeat a claim of spoliation. Second, within one’s hold notice it is advisable to include a provision outlining the consequences of failing to preserve documents related to the matter and, language that the obligation to preserve includes documents in existence and yet to be created.
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*The Court permitted further submissions on the issue of whether Defendants’ conduct warranted sanctions.
**Thank you to first year associate, James Maguire in the Firm’s Uniondale office, for his research assistance related to today’s blog.
***See previous blog posts discussing legal holds below: