Special Report on e-Discovery: Defensible Legal Hold Process

Some in-house counsel may comfort themselves with the idea that they can issue a legal hold notification and present it to a judge with as a showing of good faith. As companies are finding, however, these actions alone merely establish an intention to have custodians preserve potentially relevant information. Unfortunately, intentions are irrelevant.

Establishing good-faith compliance with a duty to preserve requires constant vigilance on the part of the in-house legal team, a vigilance that goes beyond notification. In the recent case Cache La Poudre Feeds, LLC v. Land O'Lakes Farmland Feed, LLC 2007 WL 684001 (D. Colo. Mar. 2, 2007), the court held that simply notifying custodians of a duty to preserve is not sufficient proof that a company has engaged in a defensible preservation effort. Companies cannot assume that employees have the knowledge, ability or intention to locate, preserve and produce all potentially relevant electronically stored data after receiving a litigation hold notice. Counsel has a continuing obligation to ensure that employees have followed the instructions contained within the hold notice and properly preserved the responsive information in their possession, as the defendant in Cache La Poudre Feeds learned. In that case, the judge lambasted the defendant for its counsel's incomplete preservation efforts subsequent to issuing a legal hold notice.