‘Safe Harbor’ Protection Gives Way To ‘Legal Hold’

Posted by Gregg Mayer on Monday, March 24th, 2008   

One of the more interesting e-Discovery rules to the Federal Rules of Civil Procedure is Rule 37(e). 

This rule provides that as long as a company follows in good faith its regular document retention policy, then it cannot be sanctioned if electronically stored information (“ESI”) is destroyed, even if that ESI may have been useful in subsequent litigation.  This rule is often called the “safe harbor” rule.

Importantly, however, the “safe harbor” offers no protection if a company allows ESI to be deleted subsequent to a “duty to preserve” – or “litigation hold.” A duty to preserve kicks in when a company reasonably anticipates litigation.

An illustrative way to understand how these two concepts work together is through the case of Doe v. Norwalk Community College.

In Doe, the plaintiff (who was referred to as “Jane Doe” in the lawsuit) sued the college in 2004 after a professor sexually assaulted her. As part of the litigation, the plaintiff wanted to inspect the professor’s computer hard drive.

Before her inspection, the college “wiped” the professor’s hard drive.  Consequently, the plaintiff asked the court to sanction the college.  Specifically, the plaintiff wanted an “adverse inference instruction” in which the court told the jury it could consider the lost ESI in the worst possible light against the college.

In its defense, the college argued the “safe harbor” provision precluded sanctions.  The college argued that the hard drive was wiped as part of the college’s routine deletion practices and it could not be sanctioned for failing to have it on hand.

The court disagreed with the college for two reasons.

First, the college never implemented a legal hold.  The college wiped the hard drive after the plaintiff’s lawyer had sent a demand letter in September 2004.  The demand letter had put the college on notice of the impending lawsuit.  The college should have preserved relevant ESI, including the professor’s hard drive.  As a result, even if the college had a routine deletion practice, a legal hold would have taken priority.

Second, the college failed to routinely follow its own retention policy.  Some email had been backed up for a year, some six months.  The dean acknowledged the college did not follow its retention policy as it relates to hard drives.  Since the college did not have a consistent policy, it could not rely on the safe harbor as a defense.

Litigation holds trump the safe harbor provision.  When a duty to preserve relevant ESI attaches, a company must modify its retention policy to accommodate the change.  Blindly allowing ESI to be deleted after a duty to preserve kicks in is an unacceptable practice.  As the college learned, courts will find spoliation and enter sanctions.

Moreover, once a company has a policy, follow it. It does no good to have a retention policy in writing but actually delete on a different schedule. There is no “safe harbor” protection if a company does not follow in good faith a routine policy.

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