TODAY’S GENER AL COUNSEL WINTER 2020
privilege or work product doctrine protects legal hold notices from discovery unless the adversary makes a prima facie showing of evidence spoliation. If the adversary meets that threshold, then courts find that the privilege evaporates and order the notice’s production. The privilege generally does not protect other legal hold information, such as identifications of the notice’s recipients, the categories of information preserved and measures the company took to prevent evidence deletion. A federal district court in New Jersey, for instance, ordered production of the defendant governmental entity’s legal hold notices because it found that the plaintiff made a preliminary showing of spoliation of archived emails. The court noted that, generally, the privilege and work product doctrine protect legal hold notices. But it followed the “prevailing rule” that notices are discoverable when spoliation occurs. Unfortunately, many courts do not provide a satisfactory analysis of why the privilege — which is absolute once established — expires upon a prima-facie showing of spoliation where the spoliation allegations fall short of invoking the privilege’s crime-fraud exception. Some commentators posit that the at-issue waiver doctrine removes the privilege because the in-house counsel’s spoliation prevention actions are relevant, but otherwise the reasoning is inconsistent. To be sure, some companies may choose to waive the privilege and produce the legal hold notice to demonstrate robust compliance with evidence-preservation requirements. But if a company wants to protect its privileged notice, even in the face of a spoliation challenge, it should have the better side of the argument. RELEVANT COURT DECISIONS
Regardless of the courts’ bases, one can argue that this privilege and work product treatment is indeed the “prevailing rule.” But that concept may provide false comfort. Other courts apply the privilege analysis more critically by comparing the notice’s specific content to the privilege
and work product’s foundational elements. An opinion from Connecticut’s federal district court, for example, focused on the privilege’s legal advice element. In that employment discrimination case, the defendant’s in-house attorney sent 65 employees a legal hold notice that identified the plaintiff, a summary of her claims and an instruction to preserve, and not delete, information related to the matter. The plaintiff believed that the defendant failed to preserve relevant evidence and moved to compel production of the defendant’s legal hold notices. The defendant — citing the prevailing rule — argued that the privilege and work product doctrine protected the notices from discovery and that, in any event, the plaintiff must first prove that evidence spoliation occurred before obtaining privileged notices. Noting that the defendant’s privilege argument “was a stretch,” the court’s analysis began and ended with the privilege’s elements. Here, the court focused on the legal-advice element, ruling that the defendant must prove that the legal hold notice’s predominant purpose was to render or solicit legal advice. The court reviewed the notice and found that its predominant purpose was to give the recipients “forceful instructions” about what to do rather than legal advice about what they might do. And the court quickly dismissed the work product protection, simply stating that the notice did not reveal the in-house lawyer’s mental impressions. Similarly, the D.C. federal district court, in an admittedly “close decision,” ordered production of an in-house lawyer’s legal hold notice—marked “privileged and confidential” — because it did not meet the privilege and work product elements. In this qui tam case, the defendant company’s CEO and VP of the Legal Department sent a legal hold notice to a large group of employees. Counsel’s follow-up notices to an equally broad group contained instructions to share the notices with others. The court stated that the “privileged
and confidential” moniker did not end the privilege analysis; rather, the company had to prove that the notice met the privilege’s elements. Here, the court ruled that the privilege’s confidentiality element requires companies to limit distribution of privileged information to those necessary to implement the legal advice or, stated differently, to those who need to know. Although calling the question here a “close one,” the court found that the notice’s broad dissemination and instruction to share the notice further failed the confidentiality test. And with no confidentiality, no privilege. The court’s work product analysis presented an even closer call. In reviewing the notice, the court found that it simply relayed the company’s document-retention practice and did not contain the in-house lawyer’s thoughts and opinions developed in preparing for the litigation. The takeaway is that courts are generally receptive to the concept that the attorney-client privilege and/or the work product doctrine protect an inhouse lawyer’s legal hold notice from discovery, but one should not assume protection. Rather, counsel should ensure that their legal hold notices meet the privilege’s elements in the first instance. To increase the chances of securing protection, counsel should mark them as “privileged and confidential,” send them to necessary custodians (but only those custodians), and instruct recipients not to disseminate or discuss the notice’s content without counsel’s authorization. The notice should explain the company’s evidence-preservation duties in legal advice terms rather than as a directive without a purpose. Counsel must remain cognizant that, despite taking these protections, a court may order the notice’s production if an adversary shows spoliation of evidence. If the legal hold notice becomes relevant to an adversary’s spoliation challenge, seek redaction of privileged language even if a court orders production of the remaining content.
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