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Are legal hold notices immune from discovery?

Why do lawyers write “Privileged & Confidential” at the top of a legal hold notice? Most courts have decided that legal hold notices are immune from discovery, but not because of the header or title.  What generally protects a legal hold notice from discovery is the substantive language used in the notice and the process by which the notice was communicated. A proper notice should be a confidential communication from an attorney (outside counsel or corporate counsel) to only those corporate employees who need to know about it, and it should specifically instruct those employees to preserve information in anticipation of litigation. As more fully explained below, a poorly drafted or poorly communicated legal hold notice may be discoverable – with or without a “Privileged & Confidential” header.

Hold Notices Are Generally Privileged

Absent proof that a company destroyed or deleted relevant information, courts have usually denied requests for discovery of a legal hold notice. See Gibson v. Ford Motor Co., 510 F. Supp. 2d 1116, 1123-1124 (N.D. Ga. 2007): “These instructions are often, if not always, drafted by counsel, involve their work product, are often overly inclusive, and the documents they list do not necessarily bear a reasonable relationship to the issues in litigation . . . Not only is the document likely to constitute attorney work-product, but its compelled production could dissuade other businesses from issuing such instructions in the event of litigation.” However, when “spoliation occurs, the letters are discoverable.” Major Tours, Inc. v. Colorel, 2009 U.S. Dist. LEXIS 68128 (D.N.J. Aug. 4, 2009); see also Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 425 nn.15-16 (S.D.N.Y. 2004) (disclosing the details of counsel’s litigation hold communication after discovering that at least one e-mail had never been produced); Keir v. Unumprovident Corp., 2003 U.S. Dist. LEXIS 14522, 2003 WL 21997747 at *6 (S.D.N.Y. Aug. 22, 2003) (allowing detailed analysis of emails pertaining to defendant’s preservation efforts after finding that electronic records which had been ordered preserved had been erased).

But Not Always Privileged

A recent decision from the United States District Court for the District of Columbia changed the notion that such notices were off limits except in cases of spoliation. See United States ex rel. Barko v. Haliburton Co., Case No. 1:05-CV-1276 (D.D.C. Nov. 20, 2014). In that case, the court held that legal hold notices were discoverable because they were, apparently, shared “more widely than necessary” and were “distinguishable from the generic case.” That decision has caused companies and their counsel to rethink what a legal hold notice ought to say, and to whom it ought to be distributed. See also Oleksy v. GE, No. 06 C 1245, 2013 U.S. Dist. LEXIS 107638, at *23-24 (N.D. Ill. July 31, 2013): “Litigation hold notices and document retention policies are not per se privileged”; “A Shift in Discoverability of Litigation Hold Notices;” “Take Another Look: Is your Legal Hold Notice Discoverable?

Although there is not yet a clear trend that courts are moving toward ordering the production of legal hold notices, it remains a possibility. Companies and their counsel should therefore take precautions to protect against circumstances that might inadvertently destroy the privilege.

Practical Considerations

  • Limit distribution: Limit the distribution of the legal hold notice to only those key individuals or departments who need to know. Unless it is deemed necessary, avoid the temptation to send company-wide notices.
  • Do not forward: Instruct recipients not to forward the litigation hold notice to anyone inside or outside the company. If any recipient is aware of other people or entities who are not listed on the notice, and that may have relevant information, then they should instead contact the designated person identified in the litigation hold notice.
  • Confidentiality statement: Provide a statement in the litigation hold notice such that the recipients understand that the company deems this information to be confidential and it should not be disseminated or transmitted to anyone outside the company without the company’s expressed permission.
  • Create a litigation response team (that includes IT and other key business department heads) that will enable you to identify triggering events that will require a legal hold and help you quickly implement a properly worded and properly distributed notice.

To read more and access the litigation hold series, click here.

— By Kevin M. Colmey, Sullivan & Worchester