The Legal Hold Notice is Privileged, but What About the Process?

The Legal Hold Notice is Privileged, but What About the Process?

     By Dennis Kiker

It is not an uncommon question: is my legal hold notice privileged? I've always contended that it is, and the court in Cannata v. Wyndham Worldwide Corp., 2011 WL 3495987 (D. Nev. Aug. 10, 2011) agreed. However, the question that comes up less often, but was also answered by the court, is whether the legal hold process is privileged. Again, I think the court got it right, but it is a cautionary tale nonetheless.

In Cannata, the sexual harassment and discrimination plaintiffs served the defendant with a Rule 30(b)(6) deposition notice, one of the topics of which was the litigation hold. The defendant sought a protective order limiting the plaintiffs to an interrogatory on the identity of those that received the notice and what they were told to do. The court agreed that where spoliation is not an issue, the legal hold notice itself is generally protected by the attorney-client privilege and work product doctrine. However, the court held that defendant's previously produced summary of its legal hold process was not sufficient, and that the plaintiffs were entitled to know "what has actually happened in this case, i.e., when and to whom the litigation hold letter was given, what kinds and categories of ESI were included in defendant's litigation hold letter, and what specific actions defendant's employees were instructed to take to that end."

Cannata is an excellent illustration of the intersection of law and process. The decision about whether to issue a litigation hold notice is a legal decision, and the communications by which that decision is communicated is generally protected as a privileged communication. However, execution of that decision - the steps a company takes to actually preserve information - is a business process. While I don't agree that such information should be discoverable absent some evidence that information was not, in fact, preserved, this case highlights the importance of having a documented legal hold process, and of documenting the execution of that process.

Although many companies are developing written legal hold processes, often as part of an overall records management program, I venture to say that many more have not. Even those that have often fail to create the tools and templates that ensure that the actions taken in execution of that process are well-documented. As illustrated by Cannata, this is equally important. In my view, the company that has a written legal hold process, and can demonstrate through written documentation that it executed that process in a given case, is much less likely to be challenged in the first place. But, when it is challenged, it will be prepared to respond and redirect the inquiry back to the merits of the case where it belongs.

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