Is a Failure to Institute a Litigation Hold Considered Negligence Per Se?

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Chin v. Port Authority of New York and New Jersey, Nos. 10-1904-cv(L), 10-2031-cv(XAP), 2012 U.S. App. LEXIS 14088 (2d Cir. July 10, 2012)

The vast majority of precedents in the electronic discovery arena have been established at the federal district court level.  Chin is one of the rare precedents set at the appellate level, and is even more noteworthy in its holding contrary to one of the leading judicial authorities in the area.

In Pension Committee v. Banc of America Securities, 645 F. Supp. 2d 456, 465 (S.D.N.Y. 2010), Judge Scheindlin had 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.”    Based on this holding, plaintiff Howard Chin had argued that the destruction by the Port Authority of several folders containing information regarding his promotion in his Title VII discrimination action justified an adverse inference instruction.  Chin argued that the failure by the Port Authority to issue any litigation hold constituted gross negligence.

The court rejected the notion that the failure to issue a litigation hold was gross negligence per se. “Rather, we agree 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.”  In this case, the district court had found that the destroyed folders played a “limited role” in the promotion process, and the plaintiffs had been able to produce “ample evidence” regarding their qualifications vis-à-vis the employees actually promoted.  Thus, the court concluded that, under these circumstances, an adverse inference instruction was inappropriate

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