Court Declines to “Second Guess” Expert’s Advice on Litigation Hold

Kemper Mortgage, Inc. v. Russell, 2006 WL 2319858 (S.D. Ohio Apr. 18, 2006)

Plaintiff submitted a letter request to the court regarding a litigation hold, and the court heard oral argument on the request by telephone with both parties participating. Plaintiff represented that its computer forensics expert had advised that a “litigation hold” be effected by making a mirror image of plaintiff’s corporate server, laptops, and a branch server, at a cost of roughly $4,000. Plaintiff sought the telephone conference “to discuss the Court’s wishes on the preservation of evidence through the litigation hold, and which party will bear the related costs.”

The court noted that plaintiff had not yet executed the hold recommended by the expert, and that defendant’s counsel had not made a demand on plaintiff for a litigation hold. The court discussed Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003) (“Zubulake IV“) regarding the duty to preserve evidence, but observed that plaintiff had not submitted “any authority for a court to excuse a party from its duty to preserve evidence or to shift the cost of preservation to the other party in litigation.” It further observed:

As the Court perceives the current status of this matter, Plaintiff has received expert advice from its chosen computer forensic expert – combined technical and legal advice – which it has some cost of following — $4,000. The court is essentially being asked to second guess that advice – to tell the Plaintiff that [the computer forensic expert] is being overly cautious – or to shift the cost burden of that caution to the Defendant.

The court believes that it is without authority to do so. Computers have become a standard tool of doing business, with many associated benefits and costs. One of the benefits but also burdens is that it is easier to preserve a great deal of information than it was with paper systems. One of the unexpected costs of using the electronic tool is that it may become costly to abide by one’s duty to preserve evidence, but that is not a cost which can be shifted to the opposing party, at least in the absence of a demand for a litigation hold which seeks court enforcement and/or requests for discovery which can limit the amount of information which needs to be preserved.

The court denied plaintiff’s request for instructions, and encouraged the parties to include plans for electronic discovery in their FRCP 26(f) report to the court.

A copy of the court’s order is available here.