5 - Major Event
Action: Cross-functional effort to modify corporate policies required ASAP

Details: U.S. District Court Judge Shira Scheindlin of the Southern District of New York (yes, the same judge of Zubulake fame) issued an opinion in Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities, LLC, et al., 05 Civ. 9016, 2010 U.S. Dist. LEXIS 1839 (S.D.N.Y. Jan. 11, 2010). This is the first major eDiscovery opinion in 2010 and is a good early candidate for most remembered case of 2010.

Judge Scheindlin’s opinion in Pension Committee details the data preservation efforts of the numerous plaintiff investors who joined an action to recover an alleged half-billion dollars in losses from the liquidation of two British Virgin Islands-based hedge funds. In particular, the opinion details the dearth of plaintiffs’ preservation efforts and ultimate held that that seven of the plaintiffs acted negligently and six of the plaintiffs acted with gross negligence.  The results of these preservation failures was the probable loss or destruction of relevant data requiring further discovery, monetary sanctions, and a carefully-crafted spoliation instruction to the jury.

The Pension Committee case is a good reminder that spoliation and failure to produce are not just defendant issues. 

How Does This Affect My Enterprise?

There are definitely some lessons learned in the Pension Committee case that counsel should consider when reviewing their company’s own eDiscovery response plans:

• Once the duty to preserve is triggered, counsel should (i) suspend any automatic deletion of potentially relevant and responsive ESI; (ii) ensure preservation efforts take departed employees into consideration; and (iii) take reasonable steps to ensure preservation of relevant ESI under the litigating party's control and in the custody of third parties.
• When a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a “litigation hold” (also known as a “legal hold”) to secure the preservation of relevant and responsive documents.
• Consider the defensibility and risks posed by relying custodian self-collection.  While it can be defensible with the appropriate documentation, monitors and supervision, it is important to understand the technology, parameters and processes used by custodians to collect.  Most importantly, action and decision points should be documented early and often.