DESIGNING, MAINTAINING, IMPLEMENTING AND RELEASING LEGAL HOLDS

DESIGNING, MAINTAINING, IMPLEMENTING AND RELEASING
LEGAL HOLDS
Browning Marean III – [email protected]
Kathy J. Owen – [email protected]
Bradley M. Smyer
November 2012
I.
INTRODUCTION
This paper addresses various aspects of a legal hold,1 including: (1) when the
duty to preserve attaches; (2) determining the scope of the legal hold; (3) contents of
the legal hold notice; (4) enforcing the legal hold; (5) the preservation letter to your
opponent; and (6) releasing the legal hold. Two appendices follow. Appendix A lists
key cases, and Appendix B is a sample legal hold notice.
Once a party reasonably anticipates litigation, that party has a duty to preserve
information relevant to that litigation. A legal hold can satisfy that duty. A legal hold
suspends current document destruction policies, and informs certain persons that they
must preserve relevant information.
It is becoming more and more common that when a party is not succeeding in
developing the merits in litigation, the party will turn its focus from the merits towards
claims of destruction or spoliation of evidence. Proper implementation, documentation
and enforcement of a legal hold is a strong mechanism for defending against spoliation
claims.
II.
When the duty to preserve attaches
The duty to preserve attaches when litigation or an investigation is reasonably
anticipated.2
Whether a party reasonably anticipates litigation3 is a good faith
1
This white paper updates the “Designing, Implementing, Maintaining and Releasing Litigation Holds” white paper by
Marean, Owen and Vogel dated April 14, 2009. That white paper referred to “litigation holds.” However, since the
duty to preserve extends beyond litigation, the authors now refer to instructions regarding preservation as “legal
holds” rather than litigation holds.
2
Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (Zubulake IV) (S.D.N.Y. 2003). Note that the reasonablyanticipated rule only applies under common law. See Keithley v. Homestore.com, Inc., No. C-03-04447 SI (EDL),
2008 WL 3833384, at *5 (N.D. Cal. Aug. 12, 2008). See generally The Sedona Conference, The Sedona Conference
Commentary on Legal Holds: The Trigger & the Process, 11 SEDONA CONF. J. 265 (2010) [hereinafter SEDONA
LEGAL HOLDS].
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evaluation based on the individual facts and circumstances of the case as they are
known at the time.4
Whether a duty of preservation attaches depends on the likelihood of future
litigation.
While a vague rumor or mere disagreement does not trigger a duty to
preserve, stronger signs of impending litigation can trigger a duty of preservation.5 “The
future litigation must be ‘probable,’ which has been held to mean ‘more than a mere
possibility.’”6 For example, pre-litigation correspondence with an opposing party with
unequivocal threats of litigation, receiving a summons or a complaint, notice of an
administrative complaint, an inquiry from the government, initiation of a government or a
third-party subpoena for documents, can all result in reasonably anticipated litigation
and trigger a duty of preservation. Other triggers are more amorphous but still require
an analysis of whether litigation is reasonably anticipated.
These triggers include
internal grievances, compliance questions, pre-litigation communication with the
opposing party involving non-specific threats of litigation, or litigation involving similar
products.
Depending on the facts, any of these events could trigger a legal hold.
Whether a duty of preservation is initiated is a fact-intensive determination.
3
As stated, a duty to preserve can be triggered when litigation or an investigation (internal or external) is anticipated;
it is not limited to litigation. However, for simplicity, the triggering event is referred to as “litigation” in this white paper.
4
See Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598, 613 (S.D. Tex. 2010) (stating that although
the general rules regarding the duty to preserve are not controversial, “applying them to determine when a duty to
preserve arises in a particular case and the extent of that duty requires careful analysis of the specific facts and
circumstances”). A sampling of factors to be evaluated in determining if there is a duty to preserve is listed in SEDONA
LEGAL HOLDS, supra note 2, at 276.
5
See Cache La Poudre Feeds, LLC v. Land O’Lakes, Inc., 244 F.R.D. 614, 621 (D. Colo. 2007) (“[T]he duty to
preserve relevant documents should require more than a mere possibility of litigation.”); see also Spanish Peaks
Lodge, LLC v. Keybank Nat’l Ass’n, Civil Action No. 10-453, 2012 WL 895465, at *1 (W.D. Pa. Mar. 15, 2012) (stating
that a duty of preservation arises “when an organization is on notice of a credible probability that it will become
involved in litigation”) (citing SEDONA LEGAL HOLDS at 271).
6
Keithley, 2008 WL 3833384, at *5 (citations omitted).
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The experience and knowledge of a defendant is a key factor in determining
whether a potential triggering event would result in a duty to preserve. If a party is
aware of events that usually result in litigation—or of actual litigation—and that certain
evidence is routinely requested in that litigation, the party has a duty to preserve that
evidence.7 For corporate defendants, timing may hinge on which agent was aware of
the claim or events. For example, the duty might attach sooner if corporate counsel
was aware of the claim or events, or similar claims in the industry, because they may be
better situated to anticipate which claims will evolve into full litigation.8 Conversely, if a
company’s experience is that a particular type of demand never results in litigation,
when it receives another of the same demand, there likely would not be a need to issue
a legal hold. For example, if a company had received 200 claims that its chocolate chip
cookies were stale and none of those claims had ever resulted in litigation, it may be
reasonable for the company to conclude, when it received the 201st claim of stale
cookies, that the claim would not result in litigation and that it need not issue a legal
hold. However, to defend the decision not to issue a legal hold for the stale cookie
complaint, it would be helpful if the company had written records of what demands did
and did not result in litigation. That way, if the 201st claim did result in litigation, the
company could defend its decision of not issuing a legal hold.
7
See Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456, 466
(S.D.N.Y. 2010), abrogated by Chin v. Port Auth. Of New York & New Jersey, 10-1904-CV L, 2012 WL 2760776 (2d.
Cir. July 10, 2012).
8
See, e.g., Phillip M. Adams & Assocs., LLC v. Dell, Inc., 621 F. Supp. 2d 1173, 1191 (D. Utah 2009) (concluding
that preservation duty triggered when defendant’s industry was “sensitized to the issue” in the case and discussing
importance of centralized document retention policies).
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Plaintiffs also have a duty of preservation once the plaintiffs reasonably
anticipate litigation.9 The duty of a plaintiff “is more often triggered before litigation
commences, in large part because plaintiffs control the timing of litigation.”10 A plaintiff’s
duty of preservation may attach when the plaintiff decides legal action is appropriate,11
articulates a time frame and strategy for litigation,12 or when they retain counsel in
connection with potential litigation and have not yet identified a cause of action.13
Moreover, once a party—plaintiff or defendant—anticipates litigation, “he still has an
obligation to give the opposing party notice of access to the evidence or of the possible
destruction of the evidence.”14 Therefore, plaintiffs may have an additional duty to warn
possible defendants about destructible evidence.15
Because the time a duty of preservation attaches is based on subjective
concepts like reasonableness and good faith, it is important to document and record
facts of when, why and how a hold was implemented. The party or its attorneys should
record the facts known at the time, as well as the decision-making process. Working
from a company-specific set of guidelines that outline when a legal hold is necessary
and the steps to take may be helpful. In most cases, the decisions surrounding the
implementation of a legal hold are made by attorneys and are protected by the attorney
client privilege and work product doctrine.
9
See Rambus, Inc. v. Infineon Tech. AG, 220 F.R.D. 264, 281 (E.D. Va. 2004) (“[O]nce a party reasonably
anticipates litigation, it has a duty to suspend any routine document purging system that might be in effect and to put
in place a litigation hold.”) (emphasis added).
10
Pension Comm. of Univ. of Montreal Pension Plan, 685 F. Supp. 2d at 466.
11
See Milenkamp v. Davisco Foods Int’l, LLC, 562 F.3d 971, 981 (9th Cir. 2009).
12
See Rambus, Inc., 220 F.R.D. at 284-85.
13
See Innis Arden Golf Club v. Pitney Bowes, Inc., 257 F.R.D. 334, 340 (D. Conn. 2009).
14
Silvestri v. General Motors Corp., 271 F.3d 583, 591 (4th Cir. 2001).
15
See id.; see also Andersen v. Schwartz, 687 N.Y.S.2d 232, 234-35 (N.Y. Sup. Ct. 1999) (holding that plaintiffs
should have notified the defendant of the initial and only vehicle inspection).
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III.
Determining the scope of the legal hold
An effective legal hold captures only information that is relevant to the anticipated
litigation.16
The doctrine of proportionality applies to preservation, not just to
production.17 Therefore, only people who possess this relevant information should be
included in the legal hold.18 This includes people with relevant documents, people for
whom the relevant documents were made, and people directly named in the litigation.19
Particularly, concerning corporations, the duty of preservation of relevant material
extends to the “key players” in the potential litigation.20
Persons without relevant
information, but with structural knowledge may need to be included. This includes those
who maintain the information, such as IT and records personnel.21 Analysis should also
be done to determine if third parties to whom a company has outsourced data hosting,
such as “cloud” providers, have data in the custody and control of the company that
would be subject to a data preservation obligation.22
Determining which persons may have relevant documents requires careful
analysis. Knowledge of the company’s personnel structure and document retention
policies at the relevant time is helpful in the analysis. The nature of the litigation will
define the scope of the legal hold.
For example, a product liability action alleging
16
Zubulake IV, 220 F.R.D. at 217 (“[A] party need not preserve all backup tapes even when it reasonably anticipates
litigation.”).
17
Rimkus Consulting Group, Inc., 688 F. Supp. 2d at 613 (noting that “[w]hether preservation or discovery conduct is
acceptable in a case depends on what is reasonable, and that in turn depends on whether what was done-or not
done-was proportional to that case and consistent with clearly established applicable standards”) (emphasis in
original).
18
Zubulake IV, 220 F.R.D. at 217-18.
19
Id. at 218.
20
See Zubulake v. UBS Warburg LLC (Zubulake V), 229 F.R.D. 422, 432 (S.D.N.Y. 2004).
21
Id.
22
The scope of the legal hold is typically much broader than the amount of data that is collected and the amount of
data collected is broader than the data that is eventually produced. It is important to have a legal hold that is
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multiple types of defects could impact individuals in many departments including R&D,
manufacturing, consumer complaints and marketing.
Once specific persons are
identified, a party may need to expand the hold to that person’s administrative
department and supervised employees.
Administrative or lower-level employees may
ghostwrite emails or letters, or discard emails or letters, for their supervisors.
Considering these details will help increase a legal hold’s effectiveness.
Although a company-wide hold will insure that you have identified each person
with relevant information, it does have negative ramifications. A targeted legal hold is
more effective.
Sending every legal hold to every employee in the company may
reduce the effect of legal holds because the warnings become too normalized and
employees will have a tendency to ignore the holds. The employees may assume this
one will not apply because none of the others have.
Another potential negative
ramification of multiple company-wide holds is that employees may preserve everything
not just information subject to legal holds. They may find it is easier to keep everything
rather than perform an analysis to see if it is responsive to any legal hold.
This
becomes very costly to companies as it increases the amount of storage required for
paper documents and electronic data.
Increased storage results in an increased
number of employees to maintain it.
designed to identify and preserve all the relevant information. The scope of discovery is usually narrower than the
data that has been preserved.
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An overly broad hold, either in number of individuals or scope of data to be
preserved will also capture a larger volume of unresponsive documents, thus taking
more time and effort to organize, process and review anything collected. Further, a
targeted legal hold lessens the risk that information about the litigation leaks outside the
company. Tailoring the hold to small groups, however, risks losing relevant information.
An analysis must be done to determine the scope of the information to be
preserved. Preservation obligations often must be determined prior to the Federal Rule
of Civil Procedure 26(f) “meet and confer” conference to discuss the scope of data to be
preserved. As a result, a party must analyze available data sources and determine the
scope. Back-up tapes are one of the areas where a preservation decision could have a
huge impact on the company. Stopping a back-up tape rotation can be cost prohibitive
to a company.
As discussed previously, courts are applying proportionality to
preservation obligations.23 In evaluating whether back-up tapes should be preserved,
one criteria is to determine if they are an active or accessible data source, i.e., are the
back-up tapes used only for disaster recovery or are they used on a regular basis to
obtain data. Generally, a legal hold does not apply to inaccessible back-up tapes,
which can continue to be recycled through the standard back-up tape rotation.24
Another consideration is if the back-up tapes are duplicative of other information. The
court in Zubulake IV stated that a “party or anticipated party must retain all relevant
23
See Rimkus, 688 F. Supp. 2d at 613.
See Zubulake IV, 220 F.R.D. at 217 n.22 (citation omitted). Companies are well-served to set up and enforce
procedures that require treatment of back-up tapes in such a way that they remain as inaccessible data. For
example, if companies allow employees to have data restored from back-up tapes on a regular basis without any
24
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documents (but not multiple identical copies) in existence at the time the duty to
preserve attaches, and any relevant documents created thereafter.”25 If a back-up tape
is the unique and only source of information, then preservation could be warranted.26
Again, the analysis with respect to preservation of back-up tapes (and other data
sources) is fact intensive and the preservation decisions must be reasonable and
documented in writing.27
IV.
Contents of the legal hold notice
The contents of a legal hold notice can vary based upon a number of factors
including the scope of litigation, the way a company stores data, the types of accessible
data in a company, and how types of data should be preserved within a company. The
authors feel that there are certain things that should be included in a legal hold notice
such as:

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An explanation of the preservation obligation and the consequences that can
result from failing to follow the directive.
An explanation that the legal hold notice is privileged and instructions to not
discuss the matter with individuals other than the party’s attorneys.
A description of the matter, including relevant time period.
A description of the scope of data to be preserved.
A description of the types of data to be preserved.
A directive to cease document retention/destruction polices.
Directions to departing employees.
How to handle instant messaging, blogging and social media.
Instructions on who to contact with questions relating to the legal hold.
An acknowledgement that the employee has read, understands and agrees to be
bound by the legal hold.
showing of disaster, then they run the risk of back-up tapes being characterized as “accessible data” and could be
required to preserve them.
25
Id. at 218.
26
Id. at 217.
27
Preservation of back-up tapes can be extremely burdensome and costly if a company is required to cease all backup tape rotations. If it is uncertain whether back-up tapes contain unique information, an option could be to take one
set of back-up tapes out of the rotation and preserve only that set.
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After receiving and reading a legal hold, an employee should be able to easily
comprehend his or her obligations for preservation. The legal hold should be prepared
in layman’s terms.
“Legalese” should be avoided.
An example of a legal hold
memorandum is included as Appendix B.
V.
Enforcing the legal hold
Initiating the legal hold is only the first step. Once the hold is in place, “counsel
and client must take some reasonable steps to see that sources of relevant information
are located.”28 Enforcement requirements depend on the size of the company and the
scope of the hold.
No matter the size and scope, “it is not sufficient to notify all
employees of a litigation hold and expect that the party will then retain and produce all
relevant information.”29
Effective enforcement begins with the initial distribution of the hold. Consider
communicating the hold using a variety of methods. A preferred, but not required,30
method is to send a written memorandum to employees, which can be done by e-mail
distribution, that includes a certification to be signed and returned stating that the
recipient read, understood and agrees to comply with the preservation obligations.
Another option is to issue a web-based survey that contains the hold information that
the individuals can review, print and acknowledge receipt, understanding and
28
See Zubulake V, 229 F.R.D. at 432 (emphasis in original).
Id.
30
See Steuben Foods, Inc. v. Country Gourmet Foods, LLC, No. 08-CV-561S(F), 2011 WL 1549450 (W.D.N.Y. Apr.
21, 2011) (absence of a written legal hold will not necessarily create a presumption that relevant evidence was lost or
destroyed); Chin v. Port Auth. Of N.Y. & N.J., 10-1904-CV L, 2012 WL 2760776 (2d. Cir. July 10, 2012) (“reject the
notion that a failure to initiate a litigation hold constitutes gross negligence per se” and sanctions cannot be issued
based solely on the failure to initiate a litigation hold).
29
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compliance. Parties could also consider a legal hold training program, conference call,
or webinar to explain the legal hold to the employees.
After the initial distribution, parties should issue periodic notices and reminders
about the legal hold.
Solicit ideas from various departments, including IT, Human
Resources, legal, and records, to develop a variety of methods.
Reminders could
include posting the legal hold on the company’s intranet, periodically issuing pop-up
messages on individuals’ work computers, leaving recorded messages on work phones,
or simply reissuing the original legal hold notice.
instructions for departing employees.
The hold should contain specific
Companies could consider placing a brightly
colored label on computers that instructs the IT department to contact the legal
department prior to destroying any data on the computer.
In addition to sending periodic reminders about legal holds, parties should
periodically review the scope of the hold to determine if any people should be added to
or removed from the hold and if the scope should be changed. As stated, the creation
of a legal hold is very fact intensive, so logically as the fact investigation of a matter
proceeds, the scope of the hold could change. For instance, a party may learn of
additional people who have relevant data, and thus, should be added to the hold. A
party may learn that there are people who were included in the original hold who did not
have any involvement related to the anticipated litigation, and thus, should be removed
from the hold. As a result of investigation, it might be determined that the scope of the
data that is being preserved should be changed. Any changes in the scope of the hold,
and the basis for those changes, should be documented in writing.
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VI.
The preservation letter to your opponent
A preservation hold letter formally requests that the opposing party institute a
legal hold to preserve relevant data. This letter is not a discovery request; it is an
attempt to avoid losing data, either through inadvertence, normal computer operations,
normal document retention/destruction policies or even misconduct.31 At a minimum,
the letter should instruct the party to preserve digital evidence relevant to issues in the
case, or evidence that may lead to the discovery of that evidence.32 The letter should
request the suspension of regular document retention/destruction policies, describe the
data to be preserved, and identify possible evidence locations.33 Broad preservation
requests can be returned in-kind, therefore, it may be helpful to carefully tailor the
letter’s document requests, or establish a set scope of discovery. In addition, if you are
the recipient of an overly broad preservation request that would cripple a company, it is
important to respond to the request stating what you are willing to do in response to the
preservation request and offer to “meet and confer.”
31
Stone v. Lockheed Martin Corp., Civil Action No. 08–cv–02522–REB–KMT, 2009 WL 267688, at *2 (D. Colo. Feb.
2, 2009) (describing the contents of a legal hold letter and including references).
32
Id.
33
Id.
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VI.
Releasing the legal hold
A party can release a legal hold when litigation has concluded or is no longer
reasonably anticipated. Litigation is concluded when all parties sign a final settlement
and release, the court enters a dismissal with prejudice as to all parties, or the deadline
for any further appeals has run and the entered judgment is final.34 Determining when
litigation is no longer reasonably anticipated is not as straightforward. Courts look for
whether the party based the release decision on a good faith and reasonable evaluation
of the facts and circumstances known at the time.35 This evaluation involves the same
facts used in determining whether a legal hold was originally triggered, such as potency
of the claim, and the experience and knowledge of the possible defendant.
Legal hold releases have three requirements: (1) documentation; (2) reviving
normal document retention policies; and (3) notification to employees and third-parties.
First, the company should document when and why a release was implemented. Legal
hold decisions are based on subjective concepts like reasonableness and good faith,
and documentation helps demonstrate why the decision was reasonable at that time.
As with legal hold implementation decisions, the company should memorialize in writing
the known facts and the decision-making process.
This documentation process is
typically done by attorneys and may be protected by the work product doctrine and the
attorney-client privilege.
34
Alan M. Anderson, Issuing and Managing Litigation-Hold Notices, 64 BENCH & B. MINN. 20, 23 (2007).
Consol. Aluminum Corp. v. Alcoa, Inc., 244 F.R.D. 335, 345 n.18 (M.D. La. 2006) (referencing The Sedona
Principles: Best Practices Recommendations & Principles for Addressing Electronic Development Production).
35
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Second, the company should revive normal document retention policies. Before
reviving, however, a party should determine whether the held documents are subject to
other holds. If some documents might be relevant to future claims while others are no
longer necessary, a party may decide only to partially release a hold.36 Any documents
previously held may be folded into regular document retention policies and procedures.
For example, if a party usually discards documents after five years and the documents
under the hold are five years old or older, those documents can be discarded
immediately.
Finally, the company should notify all employees and third parties subject to the
hold. These employees could include records management, IT personnel, and any
other department involved in structuring the legal hold. The importance of following the
release should be emphasized. Unnecessarily retaining records can cause inefficiency,
inconsistency, overloaded computer systems, and increased discovery costs.
VII.
CONCLUSION
Proper preservation is one of the most important aspects of responding to
anticipated litigation.
A party’s duty to preserve, which is triggered when the party
reasonably anticipates litigation, can be satisfied by properly implementing and
enforcing a legal hold. If relevant information is not preserved, the focus of litigation
may shift from the merits to spoliation.
36
See id. at 345.
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Courts evaluate preservation and legal hold decisions based on the
reasonableness, proportionality, and good faith of the party’s preservation activities. As
a result, it is important to document the reasoning for those decisions so that, if needed,
a party can demonstrate to a court that the decisions were reasonable and made in
good faith. Once the legal hold has been initiated, it must be monitored and enforced.
As shown in this paper and further illustrated in the cases in Appendix A, properly
implementing, documenting, and enforcing a legal hold is very important in defending
against allegations of spoliation of evidence, so that you can focus on the merits of your
litigation.
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APPENDIX A: KEY CASES
When the duty to preserve arises:

Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998) (duty attaches “when
the party has notice that the evidence is relevant to litigation – most commonly
when suit has already been filed, providing the party responsible for the destruction
with express notice, but also on occasion in other circumstances, as for example
when a party should have known that the evidence may be relevant to future
litigation”).

Testa v. Wal-Mart Stores, Inc., 144 F.3d 173, 177-78 (1st Cir. 1998) (duty attaches
when there is “institutional notice – the aggregate knowledge possessed by a party
and its agents, servants, and employees”).

Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 436 (2d Cir. 2001) (duty attaches
“when the party has notice that the evidence is relevant to litigation or when a party
should have known that evidence may be relevant to future litigation”).

Silvestri v. Gen. Motors Corp., 271 F.3d 583, 591 (4th Cir. 2001) (duty attaches
when the party knows or reasonably should know that the evidence may be
relevant to pending or anticipated future litigation).

Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (Zubulake IV) (S.D.N.Y. 2003)
(noting that duty attaches “at the time that litigation was reasonably anticipated,”
which, in that case, meant when the plaintiff’s former supervisors became
reasonably aware of possible litigation.).

Rambus, Inc. v. Infineon Tech. AG, 220 F.R.D. 264, 281 (E.D. Va. 2004) (“[O]nce a
party reasonably anticipates litigation, it has a duty to suspend any routine
document purging system that might be in effect and to put in place a litigation hold
to ensure the preservation of relevant documents-failure to do so constitutes
spoliation.”).

Stevenson v. Union Pac. R.R. Co., 354 F.3d 739, 746 (8th Cir. 2004) (duty attaches
when party “knew or should have known that the documents would become
material” and “should have preserved them”).

In re Kmart Corp., 371 B.R. 823, 842 (N.D. Ill. 2007) (duty attaches to specific
documents only if “the party controlling the documents has notice of those
documents’ relevance”) (citations omitted).

Keithley v. Homestore.com, Inc., No. C-03-04447 SI (EDL), 2008 WL 3833384, at
*5 (N.D. Cal. Aug. 12, 2008) (“A preservation obligation may arise from many
sources, including common law, statutes, regulations, or a court order in the
case.”).
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
Goodman v. Praxair Services, Inc., 632 F. Supp. 2d 494, 511 (D. Md. 2009)
(“[T]he letter openly threatens litigation, then the recipient is on notice that litigation
is reasonably foreseeable and the duty to preserve evidence relevant to that
dispute is triggered.”).

Innis Arden Golf Club v. Pitney Bowes, Inc., 257 F.R.D. 334, 340 (D. Conn. 2009)
(“working to identify the parties responsible . . . then to pursue recovery of costs
establishes that litigation was reasonably anticipated from the very beginning of the
investigation and remediation process” initiates a litigation hold).

Phillip M. Adams & Assocs., LLC v. Dell, Inc., 621 F. Supp. 2d 1173, 1191 (D. Utah
2009) (preservation duty triggered when defendant’s industry was “sensitized to the
issue” in the case; also discusses importance of centralized document retention
policies) reaffirmed by Phillip M. Adams & Assoc., LLC v. Windbond Elecs. Corp.,
2010 WL 3767318 (D. Utah Sept. 16, 2010) (the defendants’ duty to preserve was
triggered by the fact that “[i]n late 1999 the entire computer and component
manufacturer’s industry was put on notice of a potential for litigation regarding
defective floppy disk components (“FDCs”) by the well-publicized settlement in a
large class action lawsuit against Toshiba.”).

Siani v. State Univ. of New York at Farmingdale, No. CV09–407 (JFB)(WDW), 2010
WL 3170664 (E.D.N.Y. Aug. 10, 2010) (claims of work product may trigger the duty
to preserve).

Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598, 613 (S.D. Tex.
2010) (a party “about to ‘preemptively’ sue . . . had an obligation to preserve
documents and information—including electronically stored information—relevant to
these disputes”).

In re Semrow, Civil Action No. 3:09–cv–1142 (VLB), 2011 WL 1304448, at *3 (D.
Conn. March 31, 2011) (“litigation likely if not certain” initiates a duty of
preservation).

Haraburda v. Arcelor Mittal U.S.A., Inc., Civil No. 2:11 cv 93, 2011 WL 2600756 (D.
Ind. June 28, 2011) (duty to preserve attaches prior to the Rule 26(f) conference).

Pippins v. KPMG, No. 11 Civ. 0377 (CM) (JLC), 2011 WL 4701849, at *1, 5
(S.D.N.Y. Oct. 7, 2011) (duty of preservation attaches to all “key players” of
corporation if they hold relevant information even if they are entry-level employees).

Cedar Petrochemicals, Inc. v. Dongbu Hannong Chem. Co., Ltd., 769 F. Supp. 2d
269, 289 (S.D.N.Y. 2011) (“given that the condition of the phenol [chemical
samples] . . . is the central issue in this case, the duty to preserve samples of that
phenol was plain from the very first moment that a dispute over liability for the
phenol’s corruption arose”).
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
E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 803 F. Supp. 2d 469, 506
(E.D. Va. 2011) (six days to send legal hold notice was too long and it needs to be
in the native language of the recipients).

Voom HD Holdings LLC v. EchoStar Satellite LLC, 93 A.D.3d 33, 43 (N.Y. App. Div.
Jan. 31, 2012) (a preservation duty arises at “such time when a party is on notice of
a credible probability that it will become involved in litigation.”)

Apple Inc. v. Samsung Elecs. Co., ---F. Supp. 2d ---, 2012 WL 3042943 (N.D. Cal.
July 25, 2012) (sending a pre-litigation hold notice may be deemed an admission
that litigation is reasonably anticipated; judge imposed an adverse jury instruction
against defendant Samsung after finding that relevant emails were lost because
Samsung did not take adequate steps to avoid spoliation in an eight-month period
between issuance of its initial hold notice and the filing of Apple’s complaint;
Samsung’s pre-litigation hold went to 27 recipients and its post-litigation hold went
to 2,841 recipients).

Hynix Semiconductor v. Rambus, No. C–00–20905 RMW, 2012 WL 4328999 (N.D.
Cal. Sept. 21, 2012) (Upon remand, the court found that hosting shred days after
litigation was reasonable foreseeable was “spoliating evidence in bad faith or at
least willfully.” The evidence did not support the conclusion that Rambus
intentionally shredded documents it knew to be damaging, but “Rambus
nonetheless spoliated evidence in bad faith or at least willfully.” The sanction
issued by the court was that is struck from the record Rambus’ evidence supporting
a royalty in excess of a reasonable, non-discriminatory royalty.).

Brigham Young Univ. v. Pfizer, Inc., 282 F.R.D. 566, 572-73 (D. Utah 2012)
(“Clearly there is a duty on a party to preserve evidence when it is anticipating
litigation, yet such a duty cannot prevent the inadvertent destruction or
misplacement of evidence that can occur before such a duty arises. Nor can it
prevent the fading of human memories.”).
Scope of duty of preservation:
 Concord Boat Corp. v. Brunswick Corp., No. LR-C-95-781, 1997 WL 33352759, at
*4 (E.D. Ark. Aug. 29, 1997) (“[T]o hold that a corporation is under a duty to
preserve all email potentially relevant to any future litigation would be tantamount to
holding that the corporation must preserve all email.”).
 Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 324 (Zubulake I) (S.D.N.Y. 2003)
(plaintiff is entitled to all relevant electronic documents, including backup tapes;
because of the burden and expense of restoring inaccessible backup tapes, a costshifting analysis is appropriate).
 Mosaid Techs. Inc. v. Samsung Elecs. Co., 348 F. Supp. 2d 332, 336 (D.N.J. 2004)
(a litigant is under no duty to keep or retain every document in its possession, but it
must preserve what it knows, or reasonably should know, will likely be requested in
foreseeable litigation).
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 Qualcomm Incorporated v. Broadcom Corp., No. 05cv1958-B (BLM), 2008 WL
66932, at *7 (S.D. Cal. Jan. 7, 2008) (demonstrating need for proactive discovery
plan and discussing discovery rules) vacated in part by Qualcomm Inc. v.
Broadcom Corp., 2008 WL 638108 (S.D. Cal. Mar 05, 2008).
 Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354 (D. Md. 2008) (discussing
federal discovery rules and lawyers’ discovery responsibilities).
 Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251, 259-64 (D. Md. 2008)
(discussing evidence search and retrieval methodology).
 Gaffield v. Wal–Mart Stores East, LP, 616 F. Supp. 2d 329, 337 (N.D.N.Y. 2009)
(party “had ample opportunity in the nearly two years between the accident and the
filing of the complaint” to inspect evidence so adversarial party no longer has a duty
of preservation).
 In re Delta/Air Tran Baggage Fee Antitrust Litig., 770 F. Supp. 2d 1299, 1308 (N.D.
Ga. 2011) (“unwilling to conclude that upon service of a DOJ-issued CID ([civil
investigative demand], a duty to Plaintiffs to preserve documents devolved . . . even
though Plaintiffs did not file this action until three months later.”).
 Geiser v. Simplicity Inc., No. 5:10CV21, 2012 WL 174951, at *6 (N.D. W. Va. Jan.
20, 2012) (litigant not under duty of preservation of evidence if litigant is under
severe emotional distress).
 Spanish Peaks Lodge LLC v. Keybank Nat’l Ass’n, No 10-453, 2012 WL 895465, at
*2. (W.D. Pa., Mar 15, 2012) (duty of preservation attaches if party is “on notice of a
credible probability that it will become involved in litigation” and internal
conversations of possible litigation without more do not initiate a litigation hold).
 Margolis v. Dial Corp., Civil No. 12-CV-0288-JLS (WVG), 2012 WL 2588704 (S.D.
Cal. July 3, 2012) (a preservation order was not required for voicemail and instant
message where the defendant had already taken reasonable steps to preserve
such messages).
 Scentsy Inc. v. B.R. Chase LLC, Case No. 1:11-cv-00249-BLW, 2012 WL 4523112
(D. Idaho Oct. 2, 2012) (“Generally not deleting documents, and orally requesting
certain employees to preserve relevant documents concurrently with filing a lawsuit,
is completely inadequate. It is very risky – to such an extent that it borders on
recklessness.”).
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Sanctions relating to duty to preserve:
 QZO, Inc. v. Moyer, 594 S.E.2d 541 (S.C. App. 2004) (answer stricken).
 United States v. Philip Morris, USA, Inc., 327 F. Supp. 2d 21 (D.D.C. 2004)
($2,750,000 fine and barring witness testimony).
 Paramount Pictures Corp. v. Davis, 234 F.R.D. 102 (E.D. Pa. 2005) (spoliation
inference).
 Wachtel v. Health Net, Inc., 239 F.R.D. 81 (D.N.J. 2006) (deeming facts admitted,
precluding evidence, striking privilege claims, striking trial witnesses, and fine).
 In re September 11th Liability Ins. Coverage Cases, 243 F.R.D. 114 (S.D.N.Y.
2007) (sanction of $1.25 million).
 Conner v. Sun Trust Bank, 546 F. Supp. 2d 1360 (N.D. Ga. 2008) (adverse
inference instruction).
 Ingoglia v. Barnes & Noble College Booksellers, 852 N.Y.S.2d 337 (N.Y. A.D. 2008)
(dismissal).
 Acorn v. County of Nassau, No. CV 05–2301(JFB)(WDW), 2009 WL 605859, at *4
(E.D.N.Y. Mar. 9, 2009) (awarding motion costs and attorney’s fees for failure to
implement a legal hold; holding that “the failure to implement a legal hold at the
outset of litigation amounts to gross negligence.”).
 Olson v. Sax, No. 09-C-823, 2010 WL 2639853 (E.D. Wis. June 25, 2010) (even
with a duty to preserve, evidence of bad faith destruction is a “prerequisite to
imposing sanctions for the destruction of evidence”).
 Siani v. State Univ. of New York at Farmingdale, No. CV09-407 (JFB)(WDW), 2010
WL 3170664 (E.D.N.Y. Aug. 10, 2010) (moving party should show relevance of lost
documents in order to be entitled to receive sanctions).
 Booker v. Mass Dep’t of Health, 612 F. 3d. 34 (1st Cir. 2010) (holding trial court has
wide discretion in giving an adverse inference instruction, but must be some
evidentiary foundation for an adverse inference instruction).
 Orbit One Commc’ns v. Numerex Corp., 271 F.R.D. 429, 441 (S.D.N.Y. 2010)
(“rather than declaring that the failure to adopt good preservation practices is
categorically sanctionable, the better approach is to consider such conduct as one
factor” in determining whether to issue sanctions).
 Victor Stanley v. Creative Pipe, Inc., 269 F.R.D. 497 (D. Md. 2010) (As sanction for
breach of duty of preservation a court may award a default judgment, adverse
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inference instruction, or civil penalties such as increased discovery costs or
attorney fees). Victor Stanley, Inc. v. Creative Pipe, Inc., No. 8:06-cv-02662, Doc.
448 (D. Md. Jan. 24, 2011) (ordering defendants to pay an additional $712,053.67
for attorney’s fees and costs, making the total assessment more than $1 million).
 Fed. Trade Comm’n v. First Univ. Lending, LLC, No. 09-82322-CIV, 2011 WL
673879 (S.D. Fla. Feb. 17, 2011) (spoliation sanctions not imposed for destruction
of data because of a mistaken belief by a non-party that data had been preserved).
 Rosenthal Collins Grp., LLC v. Trading Techs. Int’l, No. 05 C 4088, 2011 WL
722467 (N.D. Ill. Feb. 23, 2011) (serious spoliation sanctions can be leveled where
a party knew or should have known its agent was destroying evidence; actual
knowledge is not required).

Steuben Foods, Inc. v. Country Gourmet Foods, LLC, No. 08-CV-561S(F), 2011
WL 1549450 (W.D.N.Y. Apr. 21, 2011) (absence of a written legal hold will not
necessarily create a presumption that relevant evidence was lost or destroyed).

Micron Technology v. Rambus, 645 F.3d 1311 (Fed. Cir. 2011) (Dismissal is a
“harsh sanction” and appropriate only when there is “clear and convincing evidence
of both bad-faith spoliation and prejudice to the opposing party.”).
 Evans v. Mobile Cnty. Health Dep’t, No. CA 10-0600-WS-C, 2012 WL 206141 (S.D.
Ala. Jan. 24, 2012) (adverse inference granted against individual plaintiff that
burned her personal computer after the duty to preserve attached).
 State Nat’l Ins. Co. v. County of Camden, Civ. No. 08-5128 (NLH)(AMD), 2012 WL
960431 (D.N.J. Mar. 21, 2012) (failure to implement a legal hold after being notified
of a lawsuit breaches the duty to preserve, and regardless of lack of actual
spoliation, can lead to the imposition of sanctions in the form of attorneys’ fees and
costs to reimburse the non-breaching party its fees and costs to determine if any
data has been destroyed).
 Tracy v. NVR. Inc., No. 04–CV–6541, 2012 WL 1067889 (W.D.N.Y. March 26,
2012) (to support an order compelling production of an opponent’s legal hold notice
and list of notice recipients, a movant must show the loss or destruction of
documents that should have been preserved).
 Silver v. Countrywide home Loans, Inc., No. 11-12282, 2012 WL 2052949 (11th Cir.
June 8, 2012) (a finding of bad faith is required to warrant sanctions and a
spoliation inference where there was a failure to turn over relevant emails and an
alleged failure to have a proper litigation hold policy in place).
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 Equal Employment Opportunity Comm’n v. Fry’s Elecs., Inc., --- F. Supp. 2d ---,
2012 WL 2576283 (W.D. Wash. July 3, 2012) (intentionally withholding relevant
information and documents can lead to sanctions in the form of striking affirmative
defenses, creating a presumption of admissibility at trial of certain documents and
testimony, requiring monetary payment of $100,000, and appointing a special mater
to review document retention, search, and disclosure activities).
 Chin v. Port Auth. Of N.Y. & N.J., 10-1904-CV L, 2012 WL 2760776 (2d. Cir. July
10, 2012) (“reject the notion that a failure to initiate a litigation hold constitutes gross
negligence per se” and sanctions cannot be issued based solely on the failure to
initiate a litigation hold).
 Pension Comm. of Univ. of Montreal Pension Plan Banc of Am. Sec., 685 F. Supp.
2d 456, 465 (S.D.N.Y. 2010) abrogated by Chin v. Port Auth. Of New York & New
Jersey, 10-1904-CV L, 2012 WL 2760776 (2d. Cir. July 10, 2012) (“failure to
institute a litigation hold constitutes gross negligence because the failure is likely to
result in the destruction of relevant evidence” and sanctions can be issue based on
this failure to initiate a litigation).
 In re NCAA Student-Athlete Name & Likeness Licensing Litig., 2012 U.S. Dist.
LEXIS 110824 (N.D. Cal. Aug. 7, 2012) (“sanctions are appropriate if the
subpoenaing party fails to take reasonable steps to avoid imposing an undue
burden on a third party,” and a showing of bad faith or improper purpose is not
necessary before awarding sanctions under Rule 45).
 Sherman v. Rinchem, 687 F.3d 996 (8th Cir. 2012) (federal law, not state law,
applies to the imposition of sanctions for the spoliation of evidence; federal law
requires a finding of bad faith prior to the imposition of sanctions of summary
judgment or an adverse-inference instruction and bad faith did not exist where an
individual lost rather than intentionally destroyed information.).
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
APPENDIX B: SAMPLE INTERNAL LEGAL HOLD MEMORANDUM
To:
From:
Cc:
.
Date:
Re:
XXXXXX-Related Documents
DO NOT FORWARD
ATTORNEY-CLIENT-PRIVILEGED AND COMPANY CONFIDENTIAL
This memorandum is to [inform or remind] you about the ongoing litigation [or potential
litigation] in connection with ___________________________________________ and
your [continuing] obligation to preserve all documents that relate in any way to
___________________, in accordance with the policy explained to you [previously, and
again] below. We are required by law to preserve all documents and records relevant to
the inquiry in any way. You have been identified as a person who may have relevant
documents and data, and your assistance is required so that we can preserve all
corporate information related to the inquiry. The document retention obligations
described in this memorandum are in addition to obligations to preserve documents in
connection with other investigations and litigation with respect to [company name], all of
which continue to be in effect. [Your responsibilities are similar to those that were
outlined in previous memoranda concerning document retention with respect to the
[describe other matters], but it is important that you review this memorandum and
ensure that you understand and are in compliance with the document retention policies
it describes.]
The directive in this memorandum is extremely important; please read it carefully and
do not forward it without permission of the sender.
1.
Severe consequences of failure to comply with this directive
The failure to preserve relevant documents and data can result in severe sanctions against
_____________________ (the “Company”). Thus, it is of critical importance that you comply
with the instructions below. Please note that you may be called to give testimony about
your document and data preservation efforts. No one is permitted to destroy or delete
relevant evidence that could be helpful to an adversary or support our case and/or defenses.
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
2.
Departing employees
All departing employees in receipt of this memorandum are under an obligation to
inform the legal department about any impending departure from the Company. You
MUST contact [Company Name] Legal Department when you learn of your departure so
that we can arrange for a preservation of your electronic data (from your computer and
other sources) and collection of all relevant hard copy documents. Do not send any
computer to the deployment center without first going through Legal. Please
contact ______________ at __________________ if you are departing.
3.
The matter
[Describe litigation or potential litigation] As a result of this litigation [or potential litigation], the
Company requests that you continue to retain all related documents.
4.
The types of data that you must retain
You must maintain hard copies of documents as well as all e-mail and other
electronically stored information. Electronic information includes e-mail, voicemail, word
processing documents, spreadsheets, databases, calendars, networks, computer
systems (including legacy systems), servers, archives, backup and disaster recovery
systems, tapes, disks, drives, cartridges, other storage media, laptops, internet records,
web pages, personal computers, and other information storage devices. Retain any
copies you have on any storage medium, and do not overlook sources of data such as
portable hard drives, memory cards, “thumb drives,” blackberry, personal digital
assistants, mobile telephones, iPods® and smartphones.
The term “documents” includes handwritten notes, drafts, tabulations, calculations,
summaries, and work papers; it is not limited only to “formal” or “final” documents.
Examples of documents (whether in electronic or hard copy) that should be retained
include letters, correspondence, memoranda, reports, tabulations, calculations,
invoices, vouchers, ledgers, journals, external and internal literature, books, notes,
schedules, worksheets, plans, minutes, bulletins, brochures, catalogs, notices, press
releases, transcripts, calendars, appointment books, diaries, charts, forecasts, and
drafts of all such documents that mention or relate to the subject matter of the
aforementioned investigation. This list is not exhaustive; it is provided by way of
example only, and all documents relating in any way to the topics discussed in this
memorandum must be preserved.
If you use a home computer or personal laptop to perform work on behalf of the
Company, you must preserve any relevant information from that computer as well. If
you use a personal email account to send emails related to work, you must preserve
those emails. If you store hard copy documents in locations other than the office, those
documents also must be preserved.
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
YOU MUST MAKE DILIGENT AND REASONABLE EFFORTS TO PRESERVE
RESPONSIVE DOCUMENTS IN ALL LOCATIONS WHERE THEY MAY BE FOUND.
5.
The categories of documents and data you must retain
Documents you should retain include those that mention or discuss any of the following
subjects with respect to [
]:
•
•
•
•
There may be other categories of documents relevant to this issue. If you are unsure
about the relevance of a document, be cautious and preserve it.
Please do not discard any documents (including email) relating to these topics or any other
aspect of the [
] issue. This request applies to documents now in your
possession, as well as those you create or receive subsequent to this memorandum. We
want to emphasize that normal attorney-client privilege will apply to many documents, so
as with all attorney-client consultations, you should be assured that the document itself
may remain confidential but you must take the ordinary steps to preserve the attorneyclient privilege (e.g., not sharing the document with non-lawyers unless they have a need
to know, not sharing the document with those outside the company).
Your only obligation at this time is to identify and preserve relevant documents. Please do not
sort, categorize, index or summarize any documents—including electronic documents—that
are responsive to this memo, but rather merely identify them and preserve them intact in
the way that they were collected or created and filed in the ordinary course of business (e.g.,
if you created a personal folder in your e-mail, leave it intact and do not try to copy it to a
CD or external drive). Also, please do not mark up any documents or create any new
documents in response to this memo.
6.
“Instant messaging,” text messaging, blogs and social networking sites
[Different language to be used if IM can be saved at server] The instant message/chat
application currently in use at [Company] does not allow for messages to be readily
saved at a Company level. As a result, and in order to comply with the requirements of
this document hold memo, you should refrain from using instant messaging as a means
of communicating information in any way relating to [issue subject to hold] until further
notice. If you find that someone has communicated with you on via instant messaging in
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
any way relating to [issue subject to hold], the document hold requires that you
manually save the entirety of that communication.
Data from text messaging, blogs and social networking sites (e.g., Facebook, Twitter,
LinkedIn, etc.) are not maintained on company servers. As a result, in order to comply
with the requirements of this document hold memo, do not use text messages, blogs
and/or social networking sites to communicate information in any way relating to [issue
subject to hold] until further notice. If you find someone has communicated with you via
text messaging or social networking sites regarding [issue subject to hold] please
contact [Legal Contact].
7.
Suspension of document destruction policies
Please suspend all standard document destruction programs, including programs or
processes that automatically delete electronic information at the conclusion of a set
period of time. [Destruction of backup tapes must be suspended, as well as any
process that overwrites or destroys relevant information - determine how back-ups will
be handled and edit accordingly.] If you are unsure whether some of your electronic
information is subject to routine destruction, please contact [_______________] in the
IT Department at corporate extension [______]. If you are unsure whether you have
any archived hard copy documents, please contact [__________________] in the
Records Department at corporate extension [_____].
8.
Please err on the side of retaining documents, and contact [Legal Contact]
with any questions regarding this memo or document preservation
We understand that these categories of information are broad; however, we do not
know at this time which specific documents or categories of documents may be
requested in the future. As a result, the Company must ensure that all documents of
potential relevance are preserved. If you are not sure whether particular documents or
records should be retained, please err on the side of caution; you must not destroy,
discard, or delete those documents without prior approval from [Company] legal. If you
have questions as to whether particular documents should be preserved, please contact
[Legal Contact]. Further, if you believe that an employee who has documents or records
subject to this directive has not been advised of his or her preservation obligations,
please contact [Legal Contact] with the name of that employee.
9.
General information
We anticipate that you will have questions about this retention effort, including questions
about whether to retain specific documents or about saving email. Please do not
hesitate to contact [Legal Contact] with any questions. In addition, if you believe that
someone else at the Company may have important related material that should be
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
included in this special document retention program, please contact [Legal Contact]
rather than discussing this memorandum with that person.
Please do not discuss the lawsuit or any potential claims or issues with anyone outside
the Company unless specifically directed otherwise. This letter is confidential and its
contents may not be shared or discussed. Do not forward or distribute this
memorandum without the permission of the sender.
We will continue to do our best to minimize inconvenience to you, but the need to
comply with Court rules on this issue is very important. We appreciate your ongoing
cooperation and assistance with this process.
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
Signature Page
Please confirm that you have read, understand and agree to comply with the above
Document Preservation Memorandum dated [__________________] regarding
XXXXXX-Related Documents in its entirety by signing below. If you have any questions
regarding the Memorandum, please contact [Legal Contact].
Return only this page with your signature to [Legal Contact].
Memorandum for your records.
Sign_____________________________
Date__________________________
Print_____________________________
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Please keep the