New York's First Department, in VOOM HD Holdings LLC v EchoStar Satellite L.L.C.,2012 NY Slip Op 00658, ___ N.Y.S.2d ___, 2012 WL 265833(1st Dept. January 31, 2012), has adopted the federal "Zubulake standard" (Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003), otherwise known as "Zubulake IV"), as follows: "Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold to ensure the preservation of relevant documents ... The preservation obligation is not limited simply to avoiding affirmative acts of destruction. Since computer systems generally have automatic deletion features that periodically purge electronic documents such as e-mail, it is necessary for a party facing litigation to take active steps to halt that process . . . Regardless of its nature, a hold must direct an appropriate employee to preserve all relevant records, electronic or otherwise, and create a mechanism for collecting the preserved records so they might be searched by someone other than the employee. The hold should, with as much specificity as possible, describe the ESI at issue, direct that routine destruction policies such as auto-delete functions and rewriting over e-mails cease, and describe the consequences for failure to so preserve electronically stored evidence ... Where a party is a large company, it is insufficient, in implementing such a litigation hold, to vest total discretion in the employee to search and select what the employee deems relevant without the guidance and supervision of counsel." See also, U.S. Bank N.A. v GreenPoint Mtge. Funding, Inc.,2012 NY Slip Op 01515, ___ N.Y.S.2d ___, 2012 WL 612361(1st Dept. February 28, 2012)(adopting Zubulake cost shifting analysis)
The Zubulake standard places a high burden upon in-house and outside lawyers, often requiring them to guess at whether a particular circumstance warrants implementation of litigation holds and to what degree. This issue will no doubt be heading to the New York Court of Appeals for consideration of the steps required by counsel when faced with possible litigation. In the meantime, counsel must review their internal litigation hold policies, protocols, and safeguards.
The NYSBA's Special Committee on Discovery and Case Management in Federal Litigation and the "Faster, Cheaper, Smarter Working Group" are presently considering these issues. The mandate of these committees is to make recommendations as to the need for rules, if any, that, inter alia, address preservation of documents needed for litigation. In doing so, they are reviewing all relevant topics relating to discovery and inspection, including, but not limited to (a) the impact of increasing electronic communications and electronically stored information ("ESI"), (b) the length of time litigation takes, (c) costs, (d) the definition of "relevancy", and (e) appropriate use of court resources.
These NYSBA committees are focusing upon possible amendments to the Federal Rules of Civil Procedure under consideration by the Civil Rules Advisory Committee of the Standing Committee on Rules of Practice and Procedure of the Judicial Conference of the United States. The Standing Committee develops proposed amendments to the Federal Rules of Civil Procedure which may eventually be presented to Congress under the Rules Enabling Act of 1934, 28 U.S.C. § 2071, et seq. The Civil Rules Advisory Committee (takes a while to load) is currently studying proposals for federal rules concerning preservation and spoliation.
The lack of a federal rule governing preservation complicates the analysis so that courts are often operating within their inherent authority. Consequently, a divergence has arisen in judicial viewpoints analyzing the concepts of preservation and spoliation, particularly in the area of ESI. An amendment of the Federal Rules of Civil Procedure (Rules 26 and 37) is no doubt necessary to ameliorate this lack of uniformity.
For a recent example of the far-ranging application of Zubulake, see the somewhat harsh decision of the Southern District of New York in Pippins v. KPMG LLP, --- F.R.D. ----, 2012 WL 370321 (S.D.N.Y., February 3, 2012)(also takes a while to load); see also, Monique Da Silva Moore, et al. v. Publicis Groupe and MSL Group, Case 11 Civ. 1279 (ALC)(AJP)(S.D.N.Y., February 24, 2012) (first federal judge to order litigants to use predictive coding in document review).
THIS TOPIC WILL BE COVERED HERE:
NYSBA UPSTATE NEW YORK TRI-CITY JUDICIAL SUMMIT - March 7, 2012
If you need a quick refresher on e-discovery issues, see the great primer on the subject recently provided by the NYSBA:
"Best Practices In E-Discovery In New York State and Federal Courts"
NYSBA Bar Journal Article on e-Discovery and Cloud Computing.
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