Magistrate Judge in NY Says Verbal Hold Notice May Be Ok and Questions the Value of Proportionality

It is pretty unusual for a Magistrate Judge to openly disagree with a District Court Judge in their own court, but that is exactly what Magistrate Judge James Francis has done in Orbit One Communications, Inc. v. Numerex Corp., 2010 WL 4615547 (S.D.N.Y., Oct. 26, 2010). He has suggested that verbal hold notices may be appropriate, maybe even better than written hold notices in some circumstances. In so doing he rejects a key holding in Judge Shira Scheindlin’s landmark opinion, Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F.Supp.2d 456, 465 (S.D.N.Y.2010). Perhaps Judge Scheindlin has heard more people lie under oath about what they said and did in the past than Judge Francis. I don’t know. But I do know that writings, by which I of course include ESI, have a good way of keeping witnesses honest. I understand why Judge Scheindlin wanted to provide some specific guidance and bright lines as to what is required in preservation.

Judge Francis’ does not like a rule requiring that preservation notices always be in writing. His argument on this issue in Orbit One is wrapped in strange dicta. The issue of oral versus written notice does not appear to have even been raised in the case . Here are Judge Francis’ words:

Nor are sanctions warranted by a mere showing that a party’s preservation efforts were inadequate. … But, depending upon the circumstances of an individual case, the failure to abide by such standards does not necessarily constitute negligence, and certainly does not warrant sanctions if no relevant information is lost. For instance, in a small enterprise, issuing a written litigation hold may not only be unnecessary, but it could be counterproductive, since such a hold would likely be more general and less tailored to individual records custodians than oral directives could be. Indeed, under some circumstances, a formal litigation hold may not be necessary at all. (emphasis added)

To Continue Reading: Click Here
-------------------------------------------
Source: e-discoveryteam.com
By: Ralph Losey