Case Law

Court Declines to Impose Sanctions for Litigation Hold that Gave Employees Self-Preservation Discretion

New Mexico

N.M. Oncology & Hematology Consultants v. Presbyterian Healthcare Servs., 2017 U.S. Dist. LEXIS 130959 (D.N.M. Aug. 16, 2017) In this antitrust case, the plaintiff moved the court for adverse inference sanctions against the defendants for instituting a litigation hold that was allegedly inadequate, because, in part, it gave the defendants’ employees discretion to decide which emails were relevant. The employees “were directed to retain documents and data ‘that mention or discuss or relate to any of’ an exhaustive list of subjects,” and the employees were also directed to notify the defendants’ counsel if there were other employees that they were aware of who should also be included with the litigation hold. The court, citing FRCP 37(e), declined to impose sanctions, and ultimately held that the inadequacies in the litigation hold did not prejudice the plaintiff. The court explained that the discretion the litigation hold gave to employees was not insufficient because the defendants provided their employees with guidance on how to comply with the hold. The court considered that while there was a “theoretical possibility” that a relevant email would be deleted, the court determined that because of the “overlapping nature of emails” it was “extremely likely” that the email would be ultimately be preserved. Furthermore, the court clarified the best practices for implementing litigation holds: as data storage is inexpensive, there is less justification to allow employees discretion to retain emails, and that “the best approach is to implement a server-side hold on all digital data utilized by key employees and to later use search algorithms to parse relevance.”

Keywords: Adverse Inference, Rule 37(e), Email, Litigation Hold, Spoliation, Custodians, Relevance