In what is becoming a trend, more and more businesses in Pennsylvania’s restaurant and hospitality industry are receiving what are known as “litigation hold letters.” While litigation hold letters are sometimes sent by the business’s own lawyer, more often such letters are issued when a plaintiff’s lawyer believes that his or her client may have a legal claim against the business. Litigation hold letters instruct the recipient to preserve relevant documents and other information, including electronically-stored information (ESI) such as emails, photos, and security video. At a minimum, this obligation to preserve records includes suspending routine document destruction policies and automatic email deletion.
Failure to abide by the terms of a litigation hold letter can have devastating consequences in the event litigation is initiated. Indeed, if documents are disposed of or emails are deleted after a litigation hold letter is issued, even without a mischievous intent, a court can deem certain facts as established, prohibit the business from relying upon other documents to support a defense, or instruct a jury that an inference should be made that the missing documents would be harmful to the business. Considering these risks, a business should have a plan in the event it receives a litigation hold letter. The following tips will help to potentially minimize the risk in the event a litigation hold letter is received:
- Don’t Ignore It. A common reaction of many businesses to a litigation hold letter is to do nothing. Resist this urge. Even if it appears that the potential claim is frivolous, the risk of ignoring a litigation hold letter simply is too great. The failure of a business to preserve documents identified in a litigation hold letter can quickly transform a frivolous claim into a substantial liability for the business.
- Identify Documents Subject to the Hold. Once a litigation hold letter is received, attention must be paid as to the scope of the request. Sometimes, the litigation hold letter will be very specific as to the scope of the hold. For example, the letter may require the business to retain security video from a particular date and time. Other times, the litigation hold letter can be overly broad and vague. An example of an overly broad request is “any and all documents relating to employee compensation.” If an overly broad request is received, the assistance of counsel should be considered.
- Share the Letter. A business is ultimately responsible for all business-related documents, including email, within the organization. Accordingly, all key employees should be notified in the event a business is served with a litigation hold letter.
- Respond to the Letter. If the business receives a litigation hold letter from a plaintiff’s lawyer, a written response should be provided. The response should acknowledge receipt of the litigation hold letter and identify measures the business is taking to identify and preserve relevant information. Also, the response letter provides an opportunity to potentially limit the parameters of an otherwise overly broad request. If possible, the response letter should be sent by an attorney.
- Consider More Than Just Email. While ESI includes email communications, most litigation hold letters will include a definition of ESI that extends beyond just emails. If necessary, a litigation hold letter may require the business to preserve other types of ESI including calendar entries, data on smartphones, and voice mail messages.
- Preservation Does Not Mean Production. A litigation hold letter requires a business to preserve records only. It does not require the business to provide the records to an attorney. Records should only be produced in response to a validly-issued subpoena or a formal discovery request in the context of litigation. Counsel should be retained in the event the business is requested to produce records.
- Request Assistance. When in doubt, contact an attorney to assist with a litigation hold letter response. Experienced counsel will be able to assist the business with litigation hold letter compliance and interacting with opposing counsel.
In short, receiving a litigation hold letter should not be a cause for panic, but a thoughtful and timely response is critical and may protect your business from increased liability in the future. •
If you have any questions concerning this or other legal issues, please contact Michael E. Rowan (410-825-5223; firstname.lastname@example.org) at Shumaker Williams, PC, PRLA’s General Counsel.