Is custodian-based preservation defensible anymore?
It should comes as no surprise that U.S. courts disfavor a party’s decision to allow the individual custodians to collect whatever that person believes is relevant to a lawsuit. After all, in most cases the very same people who are being asked to determine and collect “relevant documents” are also the people about whom the lawsuit revolves. In other words, the alleged wrong-doer is asked to collect the very documents that can embarrass her or put her job at risk. For example, in Judge Scheindlin’s latest opus – Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of America Sec. LLC, 2010 U.S. Dist. Lexis 4546, at *1 (S.D.N.Y. Jan. 15, 2010) – she found that custodian-based collections warranted a sanction for spoliation of evidence because, among other things, the party relied solely on the document custodians to search for and select what they believed to be responsive documents. For more on this debate, see the ARMA article here, another blog post here and yet another here.
But what is (somewhat) surprising is that custodian-based preservation – i.e., sending out litigation hold notices to all custodians and relying on them to preserve relevant documents - is also being called into question. As the Court in Cache La Poudre Feeds, L.L. C. v. Land O’Lakes, Inc., 244 F.R.D. 614, 630 (D.Colo. 2007) describes, it is improper to simply accept whatever documents or information might be preserved by employees, without preventing them from clearing their computer’s hard drives. This is true since “[m]ost non-lawyer employees, whether marketing consultants or high school deans, do not have enough knowledge of the applicable law to correctly recognize which documents are relevant to a lawsuit and which are not. Furthermore, employees are often reluctant to reveal their mistakes or misdeeds.” Jones v. Breman High School District 228, 2010 WL 2106640, at *1 (N.D.Ill. May 25, 2010).
These decisions throw many corporation’s e-discovery practices into disarray since they can no longer rely on custodian-based preservation of documents described in a litigation hold notice. If this traditional method of instituting a hold is no longer defensible, then the company must either employ a fully proactive method of archiving potentially relevant documents or a system that can electronically hold documents in place so they can be collected within days of the litigation trigger.
Taking this one step further (as plaintiff attorneys are likely to do) – the same arguments could be used to attack enterprise-wide records retention policies based solely on end-user judgment to classify documents. Since many enterprises currently utilize some scheme of selective retention which requires end-users to actively select and drag documents into special retention folders, it seems likely that plaintiff attorneys will soon be deposing witnesses on their document classification procedures in order to show inconsistencies and possible spoliation.
Tags: Discovery, e-discovery, e-discovery search, e-discovery software, early case assessment, EDD. Electronic data discovery, ediscovery, EDRM, electronic records, ESI, FRCP, legal discovery, litigation discovery, litigation software, Preservation, processing, production, records management, review, search