Failure to Implement a Proper Legal Hold Leads to Sanctions

In the State of Missouri a case was conducted and shows a clear reason why a Proper Litigation hold needs to be implemented.

Fidelity Nat. Ins. Co. v. Captiva Lake Invs., 2015 WL 94560 (E.D. Mo. Jan. 7, 2015). In this insurance case, the defendant sought sanctions after alleging the plaintiff spoliated evidence and caused a prejudicial delay in production. The defendant argued that the plaintiff did not implement a legal hold and deleted thousands of potentially relevant emails. The defendant also argued that the plaintiff allowed data in its database to be overwritten, destroying discoverable evidence. The plaintiff asserted that the defendant was not prejudiced by the loss of emails because it still received a substantial amount in the course of discovery. Further, the overwriting of data on the claim database was a routine operation. The court imposed sanctions on the plaintiff, including an adverse jury instruction and attorneys’ fees. The court held that the plaintiff failed to implement a legal hold, deleted emails, and prejudicially delayed the production of documents. However, the court did not sanction the plaintiff for the overwriting of the claim database pursuant to Rule 37(e), as there was no indication that the plaintiff had the ability to keep the system from overwriting files without an extreme burden.

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