Last year’s landmark opinion in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, 685 F.Supp.2d 456 (S.D.N.Y. 2010) was heralded as an eDiscovery gold standard. Following the Zubulake cases, Pension Committee established bright line rules on data retention, litigation response efforts and sanctions. Such rules, in turn, strengthened the call for additional eDiscovery standards that were not addressed by the 2006 amendments to the Federal Rules of Civil Procedure.
Despite the impact of Pension Committee on eDiscovery practice and jurisprudence, subsequent case law reveals the difficulty in crafting national eDiscovery standards. Several courts have declined to follow the Pension Committee rubric, particularly as it relates to litigation holds. Indeed, over the past three weeks, three different courts have distinguished the sweeping Pension Committee rule that a litigant’s failure to issue a written hold constitutes gross negligence.
For example, in Steuben Foods, Inc. v. Country Gourmet Foods, LLC (W.D.N.Y. Apr. 21, 2011), the court refused to sanction the plaintiff despite its failure to issue a written litigation hold. Relying on Pension Committee, defendants argued that plaintiff’s oral hold instruction was inadequate and grounds for terminating sanctions. The court rejected that argument, explaining that an oral hold instruction was sufficient in this instance given the discreet number of players involved and that plaintiff was a small enterprise. Pension Committee was therefore inapposite.
This same theme was emphasized last week when an Arizona district court declined to follow Pension Committee’s rigid written hold rule. In Surowiec v. Capital Title Agency, Inc. (D. Ariz. May 4, 2011), the court reasoned that “per se rules” were often too inflexible to address the factual complexities surrounding eDiscovery sanctions motions. Though it refused to follow the Pension Committee rule, the court nonetheless issued an adverse inference jury instruction to address what it characterized as a grossly negligent litigation response effort. Such a sanction was warranted in this instance since defendants failed to implement any hold until six months after the duty to preserve attached, causing the destruction of key emails.
And just this week, a magistrate from the Southern District of New York (Centrifugal Force, Inc. v. Softnet Communication, Inc. (S.D.N.Y. May 11, 2011)) – Pension Committee’s court of origin – chose not to sanction some defendants who failed to issue a written litigation hold immediately after the duty to preserve attached. Relying on Pension Committee, the plaintiff argued that defendants’ oral hold was insufficient and that their later written hold was tardy. Noting that “some case law” supports that point, the Centrifugal Force court instead determined that defendants’ hold efforts were sufficient in this particular instance.
These decisions are the latest to distinguish the Pension Committee rules as being too inflexible to address the factual nuances of eDiscovery. And more than just diluting the effect of Pension Committee, this trio of cases makes clear the difficulty of establishing a national standard to address the factual complexities of many eDiscovery issues. See also Orbit One Communications, Inc. v. Numerex Corp., 271 F.R.D. 429 (S.D.N.Y. 2010) (reasoning that other factors, such as whether discovery-relevant evidence was actually destroyed, may be more instructive in addressing the adequacy of data preservation efforts than strict compliance with preservation rules).