Since the 2006 amendments to Federal Rules of Civil Procedure, legal teams and the courts have struggled defining when the duty to preserve potentially relevant information is actually triggered. The accepted standard under Zubulake, when litigation is reasonably anticipated all parties have a duty to preserve potentially relevant evidence, does not define what “reasonably anticipated" actually means. Case law around this phrasing continues to provide little guidance and varies depending on jurisdiction.
From New York to California
In New York, the court in, re-affirmed the Zubulake standard, stating “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."
While in California, the Ninth Federal Circuit court in, deemed that the lower Northern District of California court too narrowly defined the standard. “It would be inequitable to allow a party to destroy documents it expects will be relevant in an expected future litigation, solely because contingencies exist, where the party destroying documents fully expects those contingencies to be resolved." The court went on to state that facts which show that litigation is not imminent does “not demonstrate that it was not reasonably foreseeable."
On the same day in Delaware, the Third Federal Circuit ruled on the same issue in a companion case of Hynix,. The court ruled that the duty to preserve should be interpreted as an objective standard because it inquires “not whether the party in fact reasonably foresaw litigation, but whether a reasonable party in the same factual circumstances would have reasonably foreseen litigation." This reasonably foreseeable should be treated as “a flexible fact-specific standard which does not require that litigation be “imminent" or “probable without significant contingencies".
Recent California Ruling
This is just a small sample of how courts are defining when a party's preservation duty is triggered. A more recent California ruling under the same Federal Circuit as the Hynix ruling, Vasudevan Software, Inc. v. Microstrategy Inc. (N.D. Ca. April 3, 2013), just adds to the confusion, making it even more unclear if the duty to preserve extends to prior litigation on the same subject matter.
In Vasudevan, the court denied the defendant's motion to compel the plaintiff “to produce its email backup discs for forensic analysis to determine whether spoliation of any emails occurred during this litigation" because the defendant, Microstrategy, provided no case law or evidence that spoliation charges for a failure to preserve evidence extended to other litigation. (*Note - By the time the plaintiff, Vasudevan, brought suit against the defendant, Microstrategy, for patent infringement, Vasudevan already had been litigating against other potential infringers since 2006.)
In Vasudevan, the defendant wanted to decipher if the plaintiff, Vasudevan (VSI), violated its duty to preserve potentially relevant electronically stored information (ESI) by forensically examining the plaintiff's backup email discs. The defendant contended that once the plaintiff “thought about litigating on its patents (in 2006), it had a duty to preserve that every possible party who it later asserted was infringing could claim for the purposes of spoliations." Based on its extended preservation theory, the defendant claimed that the plaintiff's “rampant" deletion of supposedly junk emails after 2006 could have resulted in the spoliation of responsive ESI to this case.
As a result, the defendant requested the plaintiff produce email backup tapes for forensic examination to determine if any potentially relevant emails were deleted. To offset any financial undue burden to the plaintiff, the defendant offered to pay for the forensic examination and have an expert that the plaintiff had previously worked with to perform the analysis. In response, the plaintiff argued that the defendant offered no concrete evidence that should compel the court to grant the defendant's motion to produce the email backup discs for examination.
The court agreed with the plaintiff, rejecting the defendant's motion to produce the plaintiff's email backup tapes. The reasoning behind this was two-fold. One, the defendant offered no case law to support its claims that the preservation duty extended to other litigation. “While Microstrategy aims to stand in the shoes of Oracle, IBM, and companies that VSI sued earlier, it has not provided any case law that it has standing to assert spoliation charges against VSI for its failure to preserve evidence during other litigation," stated the court.
Two, the moving party, the defendant, did not provide compelling evidence to meet the threshold imposed by the court to compel production of email backup discs for forensic examination. According to the court, forensic inspection is warranted when “serious questions exist both as to the reliability and the completeness of materials produced." This type of “extraordinary remedy" requires compelling evidence to support this course of action and without it “the court should not resort to extreme, expensive, or extraordinary means to guarantee compliance." The facts the defendant presented, deletion of junk emails before the initiation of this litigation, were deemed by the court to not warrant a forensic inspection of the plaintiff's email backup discs.
THE E-DISCOVERY BEAT'S TAKE
Beyond the obvious trigger events – complaints, summons, notice of investigation, courts as evidenced from the cases above – all courts have a slightly different interpretation of what constitutes a preservation triggering event. This is especially true for patent litigation, where the trigger events are even more unclear based on the high frequency in which patents are challenged and protected. Do any of these events constitute a trigger event: Filing for a patent, issuance of the patent or filing a patent infringement suit? There are no definite yes or no answers.
Unfortunately, the Vasudevan case provides more questions than answers. If the defendant had provided an analogous case supporting its claim, would the request to produce the plaintiff's backup email discs have been granted? How high is the threshold to compel the court to do something like this? Wouldn't the plaintiff have known whether they would reasonably anticipate suing more companies? If so, wouldn't the burden to preserve apply back to when the initial lawsuit was filed?
Questions like these make you wonder, will there a FRCP rules change in the near future? While most legal teams wait for more clarification, legal teams must be cautious and implement legal hold processes that facilitate clear and fast communication between internal team members, so that when the duty to preserve is triggered, all involved know how to defensibly respond.
To learn more about creating a legal hold process that empowers legal teams with the flexibility and the ability to quickly respond to preservation triggers, download the E-Discovery Beat's latest educational resource, Quick Guide: Legal Hold Management
Mike Hamilton, J.D. is a Sr. E-Discovery Analyst at Exterro, Inc., focusing on educating Exterro customers, prospects and industry experts on how to solve e-discovery issues proactively with technology. His e-discovery knowledge, legal acumen and practical experience give him a valuable perspective on bridging the gap between IT and legal teams. You can find him on Google+, Twitter and Linkedin.