New York State Supreme Court Dismisses Case Due to Spoliation from Ineffective Litigation Hold Process

In a legal malpractice case dating back to 2008, a plaintiff had a $20 million claim dismissed outright due to ESI lost because of a legal hold that was completely ineffective. In 915 Broadway Associates, LLC, v. Paul, Hastings, Janofsky & Walker, LLP, 2012 NY Slip. Op. 50285U (N.Y. Sup. February 16, 2012), the Court determined that even though a legal hold was implemented the party took no affirmative steps by overseeing compliance. We learned about this case from Gibbons’ E-Discovery Director Paul Asfendis in the firm’s May 18 E-Discovery Law Alert.

The complaint stemmed from a real estate transaction gone bad. Due to a lack of oversight, the plaintiff failed to act on a $20-million Letter of Credit before it expired thus forfeiting the opportunity to draw upon it. Nine Fifteen Broadway Associates felt it was their attorney’s responsibility to monitor the deadline so they took him to court for malpractice to recover the full value of the line of credit.

In a promising start, the plaintiff issued a legal hold to its employees on April 1, 2008, instructing them to save files pertaining to the matter and, importantly, to suspend automatic deletion of emails. Clearly, the counsel at 915 Broadway demonstrated an awareness of the need to preserve ESI. Unfortunately, their employees did not share this and the legal team made no effort to monitor compliance.

During that time, emails and other documents were irretrievably lost that were necessary to try the case. The defense showed through testimony of an IT forensics expert that emails were destroyed by the failure to suspend automatic email deletion.

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E-Discovery Leaders Describe Challenges of Getting Preservation and Legal Holds Right

An all-star panel of the e-discovery world gathered at the New York City Bar Association on May 17, 2012, to discuss the challenges faced in different roles when it comes to issuing legal holds and managing preservation.

The event, Four Perspectives on Preservation and Proportionality, was organized by Legal Hold Pro and featured U.S. Magistrate Judge James Francis,  Lynn Dummett, Senior VP and Sr. Counsel at Allianz Global Investors, William Butterfield of Hausfeld, Robert Owen of Sutherland Asbill & Brennan, and Ronald Hedges, a former U.S. magistrate judge who served as moderator. The program’s theme was to compare and contrast the various perspectives of key stakeholders in the preservation process.

Rather than recap the program here, check out the article by Monica Bay of Law Technology News called Coping with Preservation and Proportionality in Legal Holds to read a thorough recap of the program.

For those not able to attend, visit the Four Perspectives on Preservation and Proportionality resource page to see a complete video replay and to access the digital bibliography.

Panel at Four Perspectives on Preservation and Proportionality

From L-R: U.S. Magistrate James C. Francis, Lynn Dummett (Allianz), Robert Owen (Sutherland), and William Butterfield (Hausfeld) speaking on May 17, 2012.


Alabama Opinion Denies Motion for Spoliation Sanctions Due to Defendant's 'Good Faith' Legal Hold Efforts

A recent opinion from the Middle District of Alabama (M.D. Ala.) demonstrates the importance of having a sound litigation hold process in place to avoid sanctions for failure to preserve electronic information. We first read about this case in A Spoliation Ace in the Hole which appears in Cozen O’Connor’s E-Discovery Law Review.

In Danny Lynn Electrical v. Veolia ES Solid Waste, No. 2:09CV 192-MHT, 2012 U.S. Dist. LEXIS 31685, (M.D. Ala. March 9, 2012), the plaintiff filed a motion for sanctions late in the case – a full seven months after entering into their agreement for the method of obtaining emails and only one week before their discovery deadline. U.S. Magistrate Judge Terry F. Moorer denied the motion for several reasons.

In his analysis, Judge Moorer considered both culpability and resulting prejudice.  He questioned whether any intentional destruction or concealment of evidence had actually taken place, finding “no evidence that any of the alleged emails…were permanently deleted” and notes that the defendants had implemented a new backup and software system to archive emails. The Court also did not feel that the defendants acted in bad faith. He states, “the defendants have expended great effort to ensure that the plaintiffs receive information from both their live and archived email system…” and that the degree of prejudice was minimal.  He also reviewed “all of the litigation hold letters provided by the defense” and concluded they had an effective litigation hold process in place.

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More News

Zapproved Partners with Nuix for New Legal Hold Solution

We are excited to announce our new partnership with Nuix to introduce Nuix Legal Hold. Nuix Legal Hold utilizes the Legal Hold Pro platform which has been enthusiastically embraced by Fortune 500 companies and government agencies because it is the fastest and simplest way to manage the legal hold notification and compliance process.

Nuix Legal Hold streamlines the overall process of responding to anticipated litigation and satisfies the duty to preserve relevant information in a defensible, repeatable manner. With Nuix Legal Hold, legal teams now have a fully integrated electronic discovery solution that systematically tracks, notifies and analyzes data from custodians subject to litigation holds.

“Zapproved has developed an effective and efficient system for managing litigation holds and the preservation workflow, and we’re very excited to work together to offer Nuix Legal Hold as a valuable service for our customers,” said Nuix CEO, Eddie Sheehy. “Nuix Legal Hold perfectly complements our existing solutions for managing electronic discovery.”

“Nuix and Zapproved are both committed to introducing powerful solutions into the legal market that our users find simple and easy to use,” said Monica Enand, CEO and founder of Zapproved. “By partnering with Nuix, we are integrating two state-of-the-art solutions in a way that empowers organizations to take on the challenging complexities of managing eDiscovery in-house.”

Nuix Legal Hold is available now. For more information on Nuix Legal Hold visit

Nuix Legal Hold screenshot

Stay Tuned for Upcoming Announcement About Our Conference on Preservation Excellence, Sept. 27-28, 2012

We will be hosting our first annual conference this fall in our hometown of Portland, Oregon and are working diligently on a program filled with nationally recognized leaders in electronic discovery. Our mission is to provide a compelling curriculum that will elevate the discussion around this topic by offering in-depth sessions on how to execute state-of-the-art litigation holds and preservation workflows.

 You'll want to put this event on your calendar. More details coming soon!

New Updates to Legal Hold Pro Contacts Management

Our most recent product update to Legal Hold Pro focused on enhancements to Contacts management, and include:

  • New Contacts page functionality to generate reports for search results, send reminders to a set of contacts and generate CSV files for search results
  • New system-generated tags that are applied to contacts based on hold activity and role
  • A new option for an Include CC List and a change in location for the Include Custodian List
  • A change in how Interview Results questions are sorted

We continuously improve Legal Hold Pro to make it more useful for our users. If you have any questions about these updates or have ideas for new features or reports, please email us at [email protected].

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