So you’ve received a litigation hold letter demanding that you cease from destroying any evidence. One of the first questions that comes to mind is – “Do I need to comply?” Essentially, a litigation hold letter requests that the recipient (either an individual or company) cease from destroying any documents, both physical and electronic, that may be relevant to litigation. The litigation may be currently pending or the party may be threatening future action. Compliance with the letter depends upon whether you: (1) are a party to the pending litigation; (2) are a non-party to a pending litigation; or (3) anticipate being made a party to a lawsuit.
If you are a party to a pending litigation, you must comply with the request in order to prevent the destruction of any documents that could be relevant to the pending litigation. Failure to comply with the litigation hold letter may lead to sanctions. See F.R.C.P. 37(b).
Generally, if you are not a party to a pending litigation, then there is no duty to preserve the evidence. Conversely, one would have a duty to preserve the evidence if they anticipated being made a party to a lawsuit. In re NTL Sec. Litig., 244 F.R.D. 179, 194 (S.D.N.Y. 2007). A party or anticipated party must retain all relevant documents in existence at the time the duty to preserve attaches, and any relevant documents created thereafter. Id. at 194. The obligation to preserve evidence arises when the party has “noticed that the evidence is relevant to litigation – most commonly when suit has already been filed” or when a party should have known that the evidence may be relevant to future litigation. Orbit One Commc’n, Inc. v. Numerex Corp., 271 F.R.D. 429, 436 (S.D.N.Y. 2010). Thus, if a party anticipates litigation, then the duty to preserve evidence relevant to the litigation attaches. Accordingly, once litigation is filed, a party in the action who destroyed evidence prior to the issuance of a discovery order may still be sanctioned by the court. See F.R.C.P. 37(b).
In order to determine whether you should comply with a litigation hold letter, it is advised that you consult with an attorney to formulate the necessary response.