A Shot Across the Bows

How many document preservation or litigation hold letters have you written, received, or even seen? I have been working in eDiscovery for about sixteen years and I have drafted or seen maybe a dozen. I would venture to guess that even seasoned litigators probably don’t see or write many. Their requirement often arises before the commencement of formal litigation and serves to give “reasonable anticipation of litigation” if such is otherwise lacking. A lot has been written by courts and commentators alike about what a litigation hold letter must say in order to convey that legal action has become, or should be, reasonably anticipated. With this in mind, I would like to take a look at the current war of words between the New York Times and the National Football League. Last month, the NY Times dove into the public discussion about concussions in football and alleging that the NFL skewed data in its favor and had ties to the tobacco industry. A few days later, Politico followed up with an article of its own about the NFL’s reaction to the Times’s front page piece. The interesting part, from an eDiscovery standpoint, is that Politico also published a letter purportedly from the NFL’s attorneys at Paul, Weiss, et al. demanding a retraction and a “request that the Times’s reporters and editors who worked on this story preserve their notes, correspondence, emails, recordings and work papers and all other electronic and hard copy documents generated or received in connection with their work.” The six-page letter contains the words “false”, “falsely”, or “falsity” nineteen times and used the words “defamed” or “defamatory” nine times (including using them in conjunction as “false and defamatory” seven times). Twice, the letter states that the NFL “broadly” reserves its rights and remedies. In its most pointed statement, the letter claims that the Times “recklessly disregarded the truth and defamed the NFL, even under the public-figure Sullivan test” (which established an “actual malice” standard for defamation or libel of public figures). The letter does not specifically state an intent by the NFL to pursue legal action against the Times.

My question is this: If you were General Counsel for the Times, would you perceive the letter from the NFL as triggering reasonable anticipation of litigation? A preservation letter is a tricky thing. It must be specific enough to create reasonable anticipation of litigation and trigger a duty to preserve. Conversely, a generally threatening letter may not, in-an-of-itself, trigger a duty. Further, if the letter creates reasonable anticipation and triggers the duty to preserve on the part of the recipient, the same must be true for the sender. In fact, if the letter triggers a duty for the Times, then the NFL’s duty certainly began earlier. Given that it may be in a position to prove the falsity of the Times’s claims (or the truth of its own), it strikes me that the NFL likely has a lot more to preserve than the Times. The Sedona Conference’s Commentary on Legal Holds highlights this ambiguity by stating, “The degree to which anticipated litigation must be clear and certain is debatable” and contrasts Goodman v. Praxair Services (in which plaintiff sent a letter stating that he had consulted an attorney and thus providing reasonable notice of potential litigation) and Cache La Poudre Feeds v. Land O’Lakes (in which plaintiffs multiple letters to defendant did not give sufficient notice that litigation was likely). I’m not saying that the Times can affirmatively destroy the documents in question, but has a duty to preserve attached? Given that the new FRCP seems to set a higher burden for spoliation sanctions (as discussed in last week’s post) would you issue a litigation hold at the Times?

Can’t We All Get Along? – FRCP 37 Failures and Sanctions

In last week’s post, I discussed changes to the concept of proportionality under the changes to the Federal Rules of Civil Procedure that took effect in late 2015. I’d like to extend on that conversation a bit and talk about the changes to expectations of the parties and, especially, the intended changes to sanctions for failing to live up to those expectations under FRCP 37 et seq. The common thread running through the notes regarding the amendments is that the committee seems intent on bringing clarity to litigants and – at least as far as sanctions are concerned – removing some control from judges. While it seems clear what the committee intended to do, I fear that in some instances, the language of the amendments may not be as clear. In fact, several Federal district courts have already cited the new FRCP when addressing discovery disputes. Coincidentally, these cases have focused on the same two areas as in these posts: Rules 26(b)(1) and 37(e) regarding proportionality and sanctions. I’ve included links at the end of this post to a few cases.

Under the revised FRCP 37, specifically rule 37(e), the revisions attempt to address what the Committee saw as a lack of guidance to the judiciary about when a failure to preserve warrants severe measures. The new rule includes an element of intent in the analysis of a failure to preserve. Now, a court must find that a party acted “with the intent to deprive another party of the information’s use in the litigation” before imposing terminating sanctions or an adverse inference instruction. I find it interesting to note that, in my opinion, this rule seems to give judges less discretion whereas, in one of the cases referenced below, the magistrate expressed the notion that the, “the amendment is in some respects more lenient as to the sanctions that can be imposed for violation of the preservation obligation” and thereby gives the arbiter greater discretion regarding remedies for failure to preserve. The judge also provides extensive citation leading up to why he believes this is so. The case is CAT3 v. Black Lineage, (S.D.N.Y. Jan. 12, 2016). Thus, on its face, FRCP seems to bifurcate the spoliation analysis around the intent of the spoliating party: severe sanctions when a party intended to spoilate evidence, and less severe punishment, “no greater than necessary to cure the prejudice,” without a showing of intent. Any way you slice it, there will have to be more analysis of the facts surrounding preservation efforts of the parties. Vendors, get your forensic data collection kits ready…

Finally, I would like to spend a little time on a small amendment to FRCP 37(a)(3)(B)(iv). The rule now effectively reads that a party may enter a motion to compel when a party “fails to produce documents”. On its surface, this amendment doesn’t have a substantive effect on the abilities of the parties to seek a motion to compel and the Committee note states that the rule “is amended to reflect the common practice of producing copies of documents or electronically stored information rather than simply permitting inspection” and brings the rule in line with the text of FRCP 37(a)(3)(B). I wonder, however, if the ambiguity of the language somehow lowers the bar for when a motion to compel is warranted because there is no guidance as to why the failure to produce occurred. Was the failure due to oversight? Privilege designation? Spoliation? A good faith belief that the documents were not responsive? When combined with the Committee’s expressed desire for greater judicial involvement in discovery, could this small amendment lead to greater motion practice? While it seems possible but unlikely, only time will tell.

Links: CAT3 v. Black Lineage, (S.D.N.Y. Jan. 12, 2016). Gilead Sciences, Inc. v. Merck & Co., Inc., No. 5:13-cv-04057-BLF, 2016 WL 146574 (N.D. Cal. Jan. 13, 2016). NuVasive, Inc. v. Madsen Medical, Inc. et al, No. 3:2013cv02077 – Document 166 (S.D. Cal. 2015).