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Litigation Holds: First Aid for the Thorn in a Corporation’s Side

Blog Post
July 25, 2023

Corporations can retain needless, unstructured data that lack business value. These “redundant, obsolete, and trivial” data, or “ROT,” carry unnecessary cost. Retaining ROT also inhibits many facets of a corporation’s operations, including e-discovery, privacy, and cybersecurity, among others, especially in the event of a litigation hold.

What is a litigation hold?

Under Federal Rule of Civil Procedure 37(e), when an organization becomes involved in a dispute, it must issue a litigation hold to relevant and appropriate custodians to preserve information that may be needed or required to be disclosed during the discovery process of litigation.

What are the implications?

Under Fed. R. 37(e), sanctions are authorized for parties that do not preserve electronically stored information (“ESI”) with their custodians, resulting in lost or destroyed ESI. Sanctions can be avoided for recoverable or altered ESI. While sanctions can vary widely, they are serious in nature and create exposure for the corporation. Sanctions can range from fines to even dismissal or default judgment

What can a corporation do to address and avoid these issues?

Two solutions exist that can act as first aid to ease the nagging pain and discomfort of litigation holds. First, a corporation can utilize data remediation, which acts as a “healing ointment” to recognize, cleanse, organize, and migrate data. This permits an organization to eliminate or minimize risk through a consistent practice.

However, when a litigation hold occurs, this data remediation process must stop, due to the duty to preserve ESI. Data can be stored in many locations, including on cloud storage, servers, local computers, and even various types of mobile devices. In addition to location of the data, the issue can further compound when litigation holds are issued in various legal matters. Data remediation becomes complex. This could create significant financial exposure. 

The second solution addresses these above-mentioned concerns: through effective legal representation, custodian litigation holds can be adjusted throughout the life of a case, which can allow a data remediation process for a corporation to function even within a litigation hold. Strategic legal counsel can interview and assess custodians to develop a strategy both at the outset of a case and as the case proceeds.

Consultation and reliance upon knowledgeable, strategic-minded legal counsel to effectively manage litigation holds can make a multi-million-dollar, positive impact for an organization, even in a single case. BMD has effectively implemented these tactics and navigated litigation holds, resulting in significant cost-savings for its clients while still maintaining compliance with litigation holds and e-discovery protocols in a defensible plan.

If you have any questions regarding litigation holds or how your corporation can prepare for the event of a litigation hold, please contact Angelina Gingo at acgingo@bmdllc.com or Bob Hager at rahager@bmdllc.com.

LitigationLitigation Hold
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