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E-DISCOVERY FAILINGS THAT AMOUNT TO GROSS NEGLIGENCE

The court identified the following e-discovery failures as sufficient to show gross negligence:

1. Failure “to issue a written litigation hold” at the time when the duty to preserve documents first attached

Despite the well-settled law that the duty to preserve evidence arises from the time that a party reasonably anticipates litigation, the plaintiffs in Pension Committee made no effort to preserve and collect relevant documents until they retained joint counsel. The court observed that the sophisticated plaintiffs in Pension Committee were presumptively aware of prospective litigation six months before joint counsel’s retention, and 10 months before the action was filed, and that their duty to preserve had arisen at that time.

Moreover, the joint counsel’s communications with plaintiffs were held insufficient to constitute an adequate litigation hold because:

• The communications did not direct the preservation of documents or instruct plaintiffs not to destroy records;

• The communications gave employees the discretion to search and select relevant documents without supervision; and

• The communications did not create a mechanism for collection and production of documents. ?

2. Failure “to identify the key players and to ensure that their electronic and paper records are preserved”

The court found that five of the six plaintiffs found grossly negligent had excessively limited the group of individuals from whom documents were preserved and collected. The court in particular noted these plaintiffs’ failure to have requested documents:

• from individuals who, while not the central actors, were nevertheless involved in the matter that was the subject of litigation;

• from individuals who were in a supervisory position, such as members of a board of trustees; and

• from individuals to whom certain work may have been delegated. ?

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