Shapiro, Lifschitz & Schram

“The firm gets personally involved with their clients and their work to achieve the most successful outcomes.”

Robert G. Hisaoka – President, RRR, LLC

FAILURE TO ISSUE A LITIGATION HOLD IS NOT NEGLIGENCE PER SE

The U.S. Second Court of Appeals in Chin v. Port Authority of New York and New Jersey, 2012 U.S. App. (2d Cir. July 10, 2012) has recently held that the failure to institute a litigation hold will not establish per se gross negligence giving rise to sanctions for spoliation of evidence.

This Chin court decision is significant because it disagrees with the heavily cited Judge Shira Scheindlin who in 2010 held that "the failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information."  Pension Committee v. Bank of America Securities, 645 F. Supp. 2d 456 (S.D.N.Y. 2010).  Judge Scheindlin is widely recognized in the electronically stored information management and electronic discovery fields having co-authored books on the subject and the landmark e-discovery sanctions decision in Zubulake v. UBS Warburg.

The Plaintiffs in Chin v. Port Authority, an employment discrimination case, argued that the lower district court should have sanctioned the defendant Port Authority with an adverse inference instruction due to its destroying various file folders that related directly to the events surrounding Mr. Chin's non-promotion and resulting discrimination action, and that had a litigation hold been issued, such destruction of evidence would have been avoided. 

The court rejected the idea that the failure to issue a litigation hold established negligence per se.  It held, that "the better approach is to consider [the failure to adopt good preservation practices] as one factor in the determination of whether discovery sanctions should issue . . . we have repeatedly held that a case-by-case approach to the failure to produce relevant evidence, at the discretion of the district court, is appropriate.”

The court found that there was ample evidence regarding the plaintiff's promotion qualifications and that the destroyed files played a "limited role" in ascertaining the promotion process.  Therefore, the court concluded that, under these circumstances, the lower court was correct in not giving an adverse inference instruction.

The defendant  in Chin v. Port Authority was able to avoid the adverse inference instruction, however, it is still very important to work with in-house or ESI-Counsel when litigation is on the horizon and issue a litigation hold to preserve evidence and avoid this type of "E-Trouble" all together.

Did You Know . . .

Members of the SLS trial group have tried in excess of 50 jury trials and 75 bench trials?

The SLS construction group has worked on sports stadiums across the country including Orioles Park in Baltimore and Paul Brown Stadium in Cincinnati?

The SLS construction group has worked on power plant projects across the country?

In 2007 SLS was selected for an Honorable Mention as one of the Best Places To Work in Washington DC?

Ron Shapiro, Steve Schram and Judd Lifschitz have all been selected as SuperLawyers by Law and Politics?

The SLS office building is an historic townhouse constructed in the late 1800s?

SLS has been selected by Martindale-Hubbell as a Preeminent Law Firm?

SLS trial lawyers have argued appeals in the U.S. Circuit Courts of Appeal for the 4th, 5th, 9th, D.C. and Federal Circuit?

SLS trial lawyers have been lead trial counsel in cases in Arizona, California, District of Columbia, Florida, Louisiana, Maryland, New Jersey, New York, North Carolina, Oregon, Texas, and Virginia, - to name just a few?

Virtually all the cases that SLS trial lawyers mediated have been favorably settled at mediation?

The transactional group at SLS was lead counsel on one of the largest, most complex mixed-use projects in downtown Washington, DC involving 4 lenders and 6 property owners?

In appreciation for the outstanding efforts of each of its employees during 2007, SLS gave everyone (attorneys, paralegals, and staff) a 4 day/3 night expense paid trip to Key West, Florida?

The transactional group at SLS has represented tenants in more than 200 retail leases in the Mid-Atlantic region?

Every attorney in the transactional group at SLS has at least 15 years experience?

The transactional group at SLS has represented developers in the purchase, construction, financing and/or sale of more than 75 multi-family apartment projects?

The transactional group at SLS has represented real estate investors and developers with respect to property in Pennsylvania, West Virginia, Delaware, Maryland, the District of Columbia, Virginia, North Carolina, South Carolina, Georgia, Florida, Texas, Tennessee, Michigan and the U.S. Virginia Islands?

Attorneys in the transactional group at SLS have represented eight national banks in commercial real estate loans?

Attorneys in the transactional group at SLS have represented the FDIC, the Resolution Trust Corporation and several banking institutions in loan workout transactions throughout the Mid-Atlantic region?

The transactional group at SLS has represented homebuilders and commercial real estate developers in work-outs of individual loans and also for work-outs of large portfolios involving dozens of properties in several states?

The trial lawyers of SLS have numerous reported decisions to their credit?