Legal Hold Pro

Voom HD Holdings LLC v. EchoStar Satellite LLC, 2012 NY Slip Op 00658 (January 31, 2012)

A unanimous opinion out of a New York state appellate court in the Voom v. EchoStar is the first case at this level to explicitly uphold the standards set forth by U.S. District Judge Shira Scheindlin in Zubulake and Pension Committee. In the opinion, penned by Associate Justice Sallie Manzanet-Daniels of the New York Appellate Division of the Supreme Court, First Judicial Department, the justices upheld a lower court opinion that Echostar was “grossly negligent for failing to implement a litigation hold” and “that an adverse inference charge was an appropriate spoliation sanction.”

The matter commenced in February 2008 when EchoStar ended its $2.5 billion contract with Voom for broadcast rights to Voom’s programming. Voom sought sanctions for spoliation because EchoStar failed to issue a legal hold once litigation could be “reasonably anticipated” and failed to suspend automatic email deletion until four months after the suit was filed resulting in a loss of relevant emails.

Justice Manzanet-Daniels wrote in the opinion which upheld the November 2011 ruling by Manhattan Supreme Court Justice Richard Lowe the following:

This case requires us to determine the scope of a party’s duties in the electronic discovery context, and the appropriate sanction for failure to preserve electronically stored information (ESI). We hold that in deciding these questions, the motion court properly invoked the standard for preservation set forth in [Zubulake and Pension Committee], which has been widely adopted by federal and state courts. In Zubulake, the federal district court stated, “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” (Zubulake, 220 FRD at 218).

The Zubulake standard is harmonious with New York precedent in the traditional discovery context, and provides litigants with sufficient certainty as to the nature of their obligations in the electronic discovery context and when those obligations are triggered.

This case is important for a couple of different reasons. First, EchoStar attempted to argue that Zubulake was “vague and unworkable” not providing guidelines for what ‘reasonable anticipation of litigation’ means. The appellate court unanimously rejected EchoStar’s argument, stating that the standard is already enforced in all four of the federal district courts and that ‘reasonable anticipation’ can be defined as “such time when a party is on notice of a credible probability that it will become involved in litigation.”

The other noteworthy point is that EchoStar had made this mistake and been sanctioned before, in 2005. The courts were aware and took notice that they had failed to correct an unacceptable practice that affected their current situation.

As Jonathan Sablone, et al., of Nixon Peabody wrote in their February 13 recap of Voom v. Echostar:

[T]he EchoStar court brought some long-awaited clarity to e-discovery law in New York State courts when it explained exactly what needs to be included in a “litigation hold.”

This decision by the New York Appeals Court is an emphatic reminder that courts will continue to impose sanctions for failure to preserve electronic data when litigation is imminent. Measures must be taken to have a legal hold process firmly in place and this is standard is continuing to permeate the U.S. judicial system – now to the state level – and the punishment, in this case an adverse inference instruction, can be severe.

Further Reading:

• Pierson, Brendan, “State Panel Adopts ‘Zubulake’ in Faulting Handling of E-Mails,” New York Law Journal, February 2, 2012
• Sablone, Jonathan, Constance Boland, Jacob Herstek and Kevin Sanders, “The Zubulake Preservation Standard Now Applies in the First Department,” Electronic Discovery and Evidence Law Alert, Nixon Peabody, February 13, 2012

IE Discovery just published its 2011 Benchmarking Study of Electronic Discovery Practices for Government Agencies and it seems like “times they are a-changin,’” to quote the inimitable Bob Dylan. In-house legal teams at the Federal level are starting to feel the same pain as their counterparts about the rigors of preservation and electronic discovery.

This is the fifth year that Austin-based IE Discovery has been surveying attorneys, records managers, paralegals and IT professionals are facing “increased workload while moving more work in-house” while their e-discovery burden grew “exponentially.”

Here are a few of the highlights from this year’s survey:

• Budget constraints are lessening with only 15 percent of respondents reporting this as a top concern compared to 30 percent last year.
• Confidence is growing surrounding electronic discovery processes as 60 percent of those surveyed feel more confident about their ability to respond compared to the year before.
• Over 70 percent feel like they work well with their IT departments.
• Forty five percent of e-discovery projects are handled in-house.
• More than 30 percent said their electronic discovery burden grew exponentially.
• Agencies are moving towards cloud-based platforms.

The results of the Benchmarking Study survey build a strong case for implementing a cloud-based litigation hold and preservation workflow management tool like Legal Hold Pro.  Agencies are beginning to look at technology solutions to maximize employees’ efficiency and more defensibly handle the larger caseload in-house. Even though budget pressures may be easing, Legal Hold Pro is priced to be accessible in order to help free up employees to work on other projects.

If you work in the public sector, contact us at info@legalholdpro.com so we can show you a brief online demonstration so you can better understand how Legal Hold Pro can improve your agency’s processes.

Last week we celebrated the annual rite of passage that is LegalTech New York. By all accounts it was a successful year with record attendance, bustling Exhibit Halls and non-stop presentations.

Leading up to the conference, Law Technology News wrote about the expected buzzwords which pointed to “predictive coding” (a.k.a. “technology assisted review”), “social discovery,” and “Big Data.”  Hardly a presentation was heard that didn’t include these buzzwords being liberally sprinkled throughout.

Yet it’s interesting to think back just two short years to LegalTech 2010. Pension Committee had just been issued, reaffirming the importance for a robust legal hold process. Judge Scheindlin, and numerous jurists since, reminded the legal community of the need for and rationale of sound litigation holds.

With all the hype around this year’s buzzwords, it’s crucial that we not regress into thinking data preservation is no longer a concern.  In fact, all the “predictive coding” in the world won’t protect you from the corresponding sanctions (self-imposed or otherwise) that result from inadequate or ill-informed preservation practices.

So, with that as a backdrop, let’s look at

Four Reasons Why Predictive Coding Isn’t for Everyone:

Reason 1 – Having an effective preservation strategy will save you more than predictive coding.

Organizations spend too much, too early in the e-discovery process. As described at the Dallas Mini-Conference in September, GCs are over-preserving due to the “reputational fear of being sanctioned or even accused of spoliation.” By putting a solid legal hold and preservation process in place that is defensible, it provides more leverage at the Rule 26(f) ‘Meet and Confer’ to limit the scope of discovery. Further, a manual legal hold takes three times the amount of staff time as an automated legal hold process.

Reason 2 – Focusing on defensible litigation holds will make you thinner than predictive coding.

To be fair, it will make your collections thinner. As one GC noted in Dallas, “we are overdoing it by 90 percent.” With a sound preservation strategy, which Craig Ball refers to as “preserving carefully,” companies can right size their collections efforts to minimize the amount of data that requires subsequent handling, processing and production. At $500 or more per gigabyte, the less data the better.

Reason 3 – Courts haven’t punished anyone for bad “predictive coding” practices.

That’s not an apples-to-apples comparison, obviously, but the point is courts are demanding better preservation. Predictive coding still needs its day in court; whereas preservation practices no longer enjoy that reprieve and are scrutinized and frequently challenged. Read about recent cases here.

Reason 4 – Number of trigger events requiring a legal hold: 100%. Number requiring review: Less than 10%.

The number of reviews that seriously need “technology assisted review” remains minimal. For litigants facing large discovery data volumes, such advances in technology will undoubtedly help produce the most prescient information in less time and at less cost. Yet every company involved in litigation, regardless of size or frequency, must be familiar with and implementing preservation best practices (written holds, reminders, custodian acknowledgment, etc.)

While we’re trying to be somewhat lighthearted to make a point, the facts are that most legal teams still need to make strides toward fortifying their preservation practices. The bar is high and the courts are clearly impatient when dealing with possible spoliation. If you aren’t confident in your process, make 2012 the year you get your legal hold “house” in order.

To learn more, you may want to review “Intelligent Preservation” which suggests new approaches to lowering electronic discovery costs.

We have exciting news! Legal Hold Pro can now initiate and track collection tasks associated with a legal hold. After notifying custodians of a duty to preserve, a legal team often needs to take additional steps such as suspending auto-deletion in an email archive or triggering a data collection. With this new capability, Legal Hold Pro enables hold managers to proactively issue preservation or collection requests and track results.

The new functionality supports defining any number of detailed tasks, with assigned resources such as IT personnel or records managers being able to report progress on each task. Hold managers can monitor in real-time both custodian compliance and collections progress, and retain a complete history of all actions taken.

Legal Hold Pro has become the fastest growing legal hold management system by helping corporate legal teams and law firms implement defensible preservation efforts. The on-demand system is intuitive to operate and can be used immediately without the need to install, configure or maintain software.

“The mission of Legal Hold Pro is to be the most straightforward path for organizations to get their data preservation process more than just under control, but streamlined and efficient,” said Brad Harris, Vice President of Legal Products, Zapproved. “With this latest release, our customers can ensure that both legal hold notifications and associated data preservation and collection tasks are effectively managed throughout the life of a matter.”

Legal Hold Pro has been embraced by Fortune 500 companies, leading law firms and government agencies because it reduces risks of adverse outcomes in litigation. The proven compliance platform also offers significant savings by reducing labor costs associated with legal holds by more than 75 percent which delivers an ROI of more than 260 percent in the first year.

To schedule a time to view a demonstration, send an email to info@legalholdpro.com or call (888) 376-0666.

Last week at LegalTech NY, we introduced a set of new features so law firms can work with clients to deploy the fastest growing legal hold notification and compliance tracking system. Since Legal Hold Pro is web-based, law firms can immediately utilize the tool with clients without the need to install, configure or maintain software.

The Legal Hold Pro Law Firm Advantage Edition supports a level of collaboration that has not been available until now. Outside counsel can work side-by-side in the system with clients to ensure the legal hold and preservation process is being managed in a defensible and “good faith” manner. The Law Firm Advantage Edition allows a firm to manage and monitor multiple clients with a single login, including drafting and sending legal hold notices. The law firm can also respond directly to custodian questions and distribute preservation questionnaires.

A key element to the new edition is that Law Firm Advantage supports the ability to pass through the costs on a client-by-client basis so billing accurately reflects the usage for each client. The affordable service makes using it a powerful and globally-accessible tool for clients of every size.

“Legal Hold Pro Law Firm Advantage has been developed with guidance from a great number of law firms working with clients to meet the standard that the courts now expect,” said Brad Harris, Vice President of Legal Products, Zapproved. “Our team responded with new features for managing preservation collaboratively while still maintaining our ease-of-use which is a hallmark of Legal Hold Pro. The courts have been clear that outside counsel must be actively engaged in the preservation efforts of their clients, so this edition is a way to do that right away.”

To schedule a time to view a demonstration, send an email to info@legalholdpro.com or call (888) 376-0666.

We are proud to announce that  our Board of Directors has voted to appoint Hon. Robert J. Cindrich (Ret.) to the Board. Cindrich served as a Federal judge in the U.S. District Court for Western Pennsylvania for 10 years and currently serves as Senior Advisor to the Office of the President at the University of Pittsburgh Medical Center (UPMC), one of the leading nonprofit health systems in the United States. He had formerly served from 2004 to 2011 as UPMC’s Senior Vice President and Chief Legal Officer. Cindrich currently serves on the Board of Directors of Mylan Inc. (Nasdaq:MYL), a leading diversified generic and specialty pharmaceutical company. Cindrich joined the Board of Directors beginning January 2012. For a more detailed biography, please visit http://www.zapproved.com/AboutUs#bod.

“We are excited to add Mr. Cindrich’s expertise to our Board of Directors. He has a rare combination of experience from leading corporate legal and compliance teams to his perspective from serving 10 years on the bench as a highly respected Federal judge,” said Monica Enand. “His counsel will be critical as we continue to grow the market presence of our industry leading Legal Hold Pro™ product and expand into new areas where corporations need help managing their compliance obligations.”