In a recent decision, Chin v. The Port Authority, 685 F.3d 135 (2d Cir. 2012), a panel of the U.S. Court of Appeals for the Second Circuit expressly rejected a bright-line test that deemed the failure to issue a litigation hold memoranda gross negligence and that arguably mandated the issuance of an adverse jury instruction in such instances for lost or destroyed evidence. Id. at 161-62. On an immediate level, the Chin decision resets the standard for conduct of litigants in the Second Circuit with respect to the preservation of documents and data in litigation. More broadly, however, Chin may reflect a rising level of appellate skepticism about the creation and issuance of hard-and-fast, prospective rules for litigants in the area of e-discovery separated from the facts of individual cases. The implications and the impact of the Chin decision are analyzed and discussed below.
Litigation or Legal Hold Memoranda
In-house counsel continue to face thorny questions, sometimes on a daily basis, regarding whether and when to issue so-called legal hold memorandainstructions from an attorney to her individual or corporate client to preserve potentially relevant data and documents because of actual or potential litigation. Although the common law duty of preservation is both widely accepted and easy to state, determining whether that duty triggers a requirement to take action, particularly in companies that face constant litigation threats or have no history of litigation, remains a very real challenge.
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