Attorneys and Law Firms
Amy Christine Mitchell, Robert Thomas Dunlevey, Stephen Alan Watring, Dunlevey, Mahan & Furry, Dayton, OH, for Plaintiff.
Steven Owens Dean, Jonathon L. Beck, Young & Alexander Co., LPA, Dayton, OH, for Defendant.
ORDER REGARDING PLAINTIFF'S LITIGATION HOLD
MICHAEL R. MERZ, Chief Magistrate Judge.
*1 This case is before the Court on Plaintiff's Letter Request regarding a litigation hold (Doc. No. 45). During the week of April 10, 2006, the Court heard oral argument on the request by telephone with counsel for both parties participating.
Plaintiff's counsel represented to the Court that they had been advised by retained computer forensics experts at Vestige Ltd. to effect a “litigation hold” by “mirroring” Plaintiff's corporate server and laptops and its Dayton branch server, a process which would cost approximately $4,000, an amount Plaintiff believes Defendant should pay. Plaintiff therefore requested the telephone conference “to discuss the Court's wishes on the preservation of evidence through the litigation hold, and which party will bear the related costs.” (Letter, Doc. No. 45, at 1).
The Declaration Related to Litigation Hold prepared by Vestige and filed with the Letter Request describes a litigation hold designed to avoid spoliation as described in Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y.2003)(conventionally and hereinafter referred to as “Zubulake IV”
), as if that litigation hold had already been put in place. However, the Court understands from the Letter Request that Plaintiff has not yet executed the hold recommended by Vestige.
During the conference, Defendant's counsel indicated they had not made a demand on Plaintiff for a litigation hold. The Letter Request indicates the parties have been unable to agree on a protocol for a litigation hold and during the discovery prior to the preliminary injunction hearing, Defendant's counsel advised the Court that Defendant had decided not to proceed with mirroring Plaintiff's computers because of the cost involved.
While Judge Scheindlin's decision in Zubulake IV
is not technically binding on this Court, it has received wide recognition at the federal bar as authoritative. See, e.g., Committee Note to Proposed Federal Rule of Civil Procedure 26(f). In the absence of cited authority or persuasive argument to the contrary, the Court is inclined to follow Judge Scheindlin. In Zubulake IV,
the court concluded that “The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Zubulake IV
at 216, quoting
Fujitsu Ltd. v. Federal Express Corp., 247 F.3d 423, 436 (2d Cir.2001). While that obligation may be enforced by court order or by a later sanction for spoliation, obviously the duty arises independent of any court declaration of the duty and indeed long before a court is available to make a declaration in the particular case
also discusses the scope of the duty to preserve:
What is the scope of the duty to preserve? Must a corporation, upon recognizing the threat of litigation, preserve every shred of paper, every e-mail or electronic document, and every backup tape? The answer is clearly, “no”. Such a rule would cripple large corporations, like UBS, that are almost always involved in litigation. As a general rule, then, a party need not preserve all backup tapes even when it reasonably anticipates litigation. See, e.g., The Sedona Principles: Best Practices, Recommendations & Principles for Addressing Electronic Document Discovery cmt 6.h (Sedona Conference Working Group Series 2003) (“Absent specific circumstances, preservation obligations should not extend to disaster recovery backup tapes....”).
*2 At the same time, anyone who anticipates being a party or is a party to a lawsuit must not destroy unique, relevant evidence that might be useful to an adversary. “While a litigant is under no duty to keep or retain every document in its possession ... it is under a duty to preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery and/or is the subject of a pending discovery request” quoting
William T. Thompson Co. v. General Nutrition Corp., 593 F.Supp. 1443, 1445 (C.D.Cal.1984)).
at 217. Thus the duty to preserve discoverable electronic information and its scope have begun to be developed in the case law. Similarly, the presently proposed amendments to Fed.R.Civ.P. 16, 26, 33, 34, and 45 will help to deal with issues of duty to disclose and allocation of the costs of discovering electronic information.
In contrast, however, Plaintiff has not pointed the Court to any authority for a court to excuse a party from its duty to preserve evidence or to shift the cost of preservation to the other party in the litigation. As the Court perceives the current status of this matter, Plaintiff has received expert advice from its chosen computer forensic expert-combined technical and legal advice-which it has some cost of following-$4,000. The Court is essentially being asked to second guess that advice-to tell the Plaintiff that Vestige is being overly cautious-or to shift the cost burden of that caution to the Defendant.
The Court believes that it is without authority to do so. Computers have become a standard tool of doing business, with many associated benefits and costs. One of the benefits but also burdens is that it is easier to preserve a great deal of information than it was with paper systems. One of the unexpected costs of using the electronic tool is that it may become costly to abide by one's duty to preserve evidence, but that is not a cost which can be shifted to the opposing party, at least in the absence of a demand for a litigation hold which seeks court enforcement and/or requests for discovery which can limit the amount of information which needs to be preserved. It may be that the costs of further electronic discovery in this case will outweigh the benefits for either side.
As might be expected in a case with a temporary restraining order and early extensive preliminary injunction hearing, the cart is somewhat before the horse in management of this case. The case is hereby set for preliminary pretrial conference May 2, 2006, at 8:45 A.M. in open court. The parties shall file their report under Fed.R.Civ.P. 26(f) not later than April 27, 2006, at 5:00 p.m. They are encouraged to include plans for electronic discovery in that report.
In the interim Plaintiff's request for instructions on a litigation hold and apportionment of costs for the hold is denied.
The Court has no information as to how the cost estimate given to Defendant by whichever entity would have done the mirroring for him compares with Vestige's estimate to Plaintiff.
In Zubulake IV,
Judge Scheindlin found the duty was triggered when defendant learned that plaintiff was likely to sue, well before she filed a discrimination charge with the Equal Employment Opportunity Commission.
End of Document.