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The Duty to Preserve in an Uncertain World
Recent case law has clarified a party's preservation obligations when it believes that litigation is on the horizon. As detailed in The Pension Committee of the University of Montreal Pension Plan et al. v. Banc of America Securities, LLC (S.D.N.Y. 2010), the duty to preserve attaches whenever a party reasonably anticipates litigation.
However, there are other scenarios that have less clear-cut answers. If a CEO happens to find out (either through colleagues, the local newspaper or perhaps even Facebook) that a former business partner is a party to a major lawsuit, then there is a real possibility that her company's documents and electronic data may be of interest. This is especially true if the subject matter of the lawsuit involves the former partner's relationship with the company.
In such a situation, what obligation, if any, does the CEO and the company have to preserve documents and electronic data? Must the company undertake the potentially expensive and burdensome task of immediately suspending its normal document retention policies, like parties to a lawsuit, thereby ensuring any and all potentially relevant evidence is preserved?
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