Legal Hold Basics: Identifying Relevant Information

"Rushing never saved the time and effort that planning did.”

At the prospect of a government investigation or litigation, companies and their litigation counsel may be tempted to rush to identify, collect and produce relevant and responsive information. A hasty process that does not pause to carefully plan how relevant information will be identified and preserved may result in under- or over-preservation, each with its own potentially serious, negative downstream impacts. It may lead to unnecessary delays, increased costs, spoliation risk, sanctions, and reputational harm.

A recent example is DR Distributors, LLC v. 21 Century Smoking, Inc., 513 F. Supp. 3d 839, 865–866 (N.D. Ill. 2021). In that case, the defendants and their counsel were sanctioned for failure to identify, preserve, and produce relevant electronically stored information (“ESI”). The court stated that while it did not require “perfection,” it expected -- and Federal Rules of Civil Procedure 26 and 34 require -- a reasonable investigation to identify, preserve, and produce information that is relevant to the claims and defenses in a case. Therefore, it is important at the outset that companies take the time and make an effort to plan a reasonable investigation to identify relevant information.

Here are some steps that may help companies identify relevant data sources.

Talk with IT

While case custodians likely will not be able to provide a detailed overview of the organization’s network infrastructure, IT personnel can identify the systems and applications used by the organization, how each application is being used, and by whom in the organization. They can also explain how data is stored and backed up, whether there are any automatic deletion functions, and how accessible the data is. If collaboration platforms like Slack, Google Workspace, and Teams are used, IT can provide information about the specific licensing levels for those collaboration platforms. IT can also provide copies of any available data map and folder file trees.

IT personnel can also assist in designing and implementing a litigation hold (e.g., determining preservation options, such as halting backup tape rotation and ceasing autodelete functions if needed).

Have Custodians Complete a Custodian Questionnaire (CQ)

Custodians are likely the most knowledgeable about the information they have and the tools they use to perform their job. While it may be helpful to conduct interviews with some custodians, it can be useful to start by having custodians complete a custodian questionnaire (the “CQ”). A CQ will assist in obtaining details about devices and applications used, the type of data created, and individual storage practices.

The CQ may include questions about: (i) devices used for work (e.g., desktop and laptop computers, tablets, phones); (ii) email and texting/chat accounts used for work purposes; (iii) organization and storage of emails and documents (e.g., folders, network, share drive, thumb drive, hard drive, and external drive); (iv) use of cloud-based and collaboration platforms (e.g., Teams, Slack); and (v) location of hard copy documents (e.g., on-site or off-site storage, maintenance of index for hard copy documents).

The CQ is a fact-finding tool that can be tailored to specific groups or departments, i.e., sales, accounting, human resources, and R&D. For example, if the sales team uses Salesforce or HubSpot, the CQ can include questions about their usage of the customer relationship management (CRM) database.

In addition to being a valuable intelligence gathering tool, the CQ is also a manner of documenting the process followed to identify relevant sources of information. It can be pointed to as evidence of a thorough investigation process if later challenged by an opposing party.

Conduct Follow-Up Custodian Interviews Where Helpful

Although often not necessary, custodian interviews following or in lieu of CQs can be helpful in identifying information that may fall within the scope of the legal hold. Given the responses to CQs, one can approach any follow-up custodian interviews from an informed position. For example, you may learn more about the custodians’ roles and their document retention practices, as well as focus on important aspects of the litigation. Custodians can explain how they use a system and/or application and what reports they create in their daily activities.

Among the questions that may be asked are:

1. Whether the custodian uses and/or stores work-related information in personally owned mobile devices, tablets, laptops, or desktop computers?
2. Whether the custodian uses personally controlled accounts to send and receive work-related communication, including personal email accounts and/or messaging applications (such as WhatsApp and Snapchat)?
3. Whether the custodian stores work-related data on external hard drives, thumb drives, and/or any cloud storage platform (such as Dropbox, Google Drive, Apple iCloud, or OneDrive)?
4. Whether the custodian stores work-related voicemails and videos on personal devices?
5. Whether the custodian uses any notetaking or productivity applications to take notes (such as Evernote, Notability, or OneNote)?

Also, it can be helpful to ask custodians about the terms they use to describe the various issues in the case, as they have direct insight into the terms, lingo, and acronyms used in their job and industry. Custodians’ answers to these questions may help in crafting search terms.

Finally, consider asking custodians to show you their folders on their hard drives, shared drives, and archived folders in their email, as well as hard copy documents – perhaps also consider collecting a small sample or targeted set of relevant documents from them in the interview.

Conducting a thorough custodian interview may help avoid surprises down the road. It would be unfortunate to first learn during a deposition, for example, that a custodian kept responsive information in a place not previously identified and/or that they use a personal email or a texting application to conduct business. These types of surprises may be avoided through planning and investigation.

Documenting the custodian interviews may also be helpful, as they may serve as evidence that a reasonable investigation was conducted if later challenged.

Identify Structured Data Where Relevant

Where structured data—i.e., ESI that resides in a database—may be relevant to the issues in the case, it will likely be helpful to discuss with IT and business personnel to identify potentially relevant structured data sources. In considering structured data, it is important to understand the complexity of accessing the data. Depending on the importance of structured data to the case, one should consider engaging a data expert who can help fashion reasonable search queries and determine the appropriate format for productions.

Identify Third-Party Service Providers If Needed

It can be helpful to inquire whether any third-party vendors may possess relevant information about the company and determine whether they should be put on litigation hold. Third-party vendors may include, depending on the issues in the case, firms that provide marketing and promotional support, auditors, lobbying and regulatory services, clinical studies, public relations, training, distribution services, consultants, and eDiscovery vendors.

Conclusion

Planning and conducting a reasonable investigation to identify sources of relevant ESI and documenting the process undertaken is an excellent investment for a company to make. If a data source is initially missed, documented evidence of a reasonable investigation into the existence and location of relevant data is one of an organization’s best defenses against possible sanctions.

By Ana Cabassa-Torres