The Sedona Conference
Commentary on Legal Holds:
The Trigger & The Process
(2010)
Information is the lifeblood of the modern world, a fact that is at the core of our litigation
discovery system. The law has developed rules regarding the manner in which information is to
be treated in connection with litigation. One of the principal rules is that whenever litigation is
reasonably anticipated or pending against an organization—or an organization contemplates
initiating litigation—that organization has a duty to take reasonable steps to preserve relevant
information. The duty to preserve information includes an obligation to identify, locate, and
maintain information that is relevant to specific, predictable, and identifiable litigation. When
preservation of electronically stored information (“ESI”) is required, the duty to preserve
supersedes records management policies that would otherwise result in the destruction of ESI. A
“legal hold” program defines the processes by which information is identified, preserved, and
maintained when it has been determined that a duty to preserve has arisen.
The basic principle that an organization has a duty to preserve relevant information in
anticipation of litigation is easy to articulate. However, the precise application of that duty can be
elusive. Every day, organizations apply the basic principle to real-world circumstances,
confronting the issue of when the obligation is triggered and, once triggered, what is the scope of
the obligation. Recent court decisions, most notably Pension Committee v. Banc of America Securities,
LLC, 685 F. Supp. 2d 456 (S.D.N.Y. Jan. 15, 2010) and Rimkus Consulting v. Cammarata, 688 F. Supp.
2d 598 (S.D. Tex. Feb. 19, 2010), illustrate the importance of understanding preservation
obligations and the consequences of ignoring them.
This updated 2010 Commentary is intended to provide guidance on those issues and is divided
into two parts: the “trigger” and the “process.” Part I addresses the trigger issue and provides
practical guidelines for making a determination as to when the duty to preserve relevant
information arises. What should be preserved and how the preservation process should be
undertaken including the implementation of legal holds is addressed in Part II. The guidelines
are intended to facilitate reasonable and good faith compliance with preservation obligations.
The guidelines are meant to provide the framework an organization can use to create its own
preservation procedures. In addition to the guidelines, suggestions as to best practices are
provided along with several illustrations as to how the guidelines and best practices might be
applied under hypothetical factual situations.
Guideline 1
A reasonable anticipation of litigation arises when an organization is on notice
of a credible probability that it will become involved in litigation, seriously
contemplates initiating litigation, or when it takes specific actions to commence
litigation.
Guideline 2
Discovery should focus on the needs of the case and generally be obtained from
the most convenient, least burdensome, and least expensive sources.
Guideline 3
Undue burden, expense, or delay resulting from a party’s action or inaction
should be weighed against that party.
Guideline 4
The application of proportionality should be based on information rather than
speculation.
Guideline 5
Nonmonetary factors should be considered in the proportionality analysis.
Guideline 6
Technologies to reduce cost and burden should be considered in the
proportionality analysis.
Guideline 7
Factors that may be considered in determining the scope of information that
should be preserved include the nature of the issues raised in the matter, the
accessibility of the information, the probative value of the information, and the
relative burdens and costs of the preservation effort.
Guideline 8
In circumstances where issuing a legal hold notice is appropriate, such a notice
is most effective when the organization identifies the custodians and data
stewards most likely to have relevant information, and when the notice:
a) communicates in a manner that assists persons in taking actions that are, in
good faith, intended to be effective;
b) is in an appropriate form, which may be written;
c) provides information on how preservation is to be undertaken;
d) is periodically reviewed and, when necessary, reissued in either its original
or an amended form, and;
e) addresses features of relevant information systems that may prevent
retention of potentially discoverable information.
Guideline 9
An organization should consider documenting the legal hold policy, and, when
appropriate, the process of implementing the hold in a specific case, considering
that both the policy and the process may be subject to scrutiny by opposing
parties and review by the court.
Guideline 10 Compliance with a legal hold should be regularly monitored.
Guideline 11 Any legal hold policy, procedure, or practice should include provisions for
releasing the hold upon the termination of the matter at issue so that the
organization can adhere to policies for managing information through its useful
lifecycle in the absence of a legal hold.
The full text of The Sedona Conference Commentary on Legal Holds: The Trigger & The Process is available free
for individual download from The Sedona Conference website at
https://thesedonaconference.org/publication/The%20Sedona%20Conference%20Commentary%20on%20Leg
al%20Holds.
© 2010 The Sedona Conference. Reprinted courtesy of The Sedona Conference.