The Second Circuit's recent decision in Chin v. Port Authority, Nos. 10-1904-cv(L), 10-2031-cv(XAP), 2012 U.S. App. LEXIS 14088 (2d Cir. July 10, 2012), appears to have overruled the 2010 opinion from the Southern District of New York in The Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities, et al, 685 F. Supp. 2d 456 (S.D.N.Y. 2010).
The Pension Committee decision, written by Judge Shira Scheindlin, was one of the first cases to recognize the importance of issuing written litigation holds. In Pension Committee,the court recognized that the failure to issue a written litigation hold constitutes gross negligence per se. See id. at 465 (citing Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004)). Although some of the plaintiffs in the case issued a written litigation hold, they did not do so until almost three years after commencing their action. Pension Commitee,685 F. Supp. 2d at 476-477. Moreover, the litigation hold was not issued until years after the Zubulake decision, in which the Southern District of New York articulated the necessity to issue written litigation holds. See id. Based on the conduct of these plaintiffs, the court noted that a jury could infer that any missing documents were relevant, and that the defendants were prejudiced due to their absence. See id. at 478.
In contrast, in Chin, the Second Circuitrejected the idea that failure to issue a litigation hold necessarily constitutes gross negligence per se,although the decision does not articulate whether the litigation hold at issue was written or oral. Consequently, the Chin decision places less of a burden on litigants to issue litigation holds.
Nevertheless, because of the potential benefits they provide, parties would be well served to continue to issue written litigation holds. Among the benefits of issuing a written litigation hold are avoiding spoliation issues and ensuring that key evidence is preserved. Further, the time, effort, and cost required to issue a written litigation hold is minimal. In addition, written litigation holds will help to protect those parties litigating in courts outside of the Second Circuit, which have not yet addressed the issue.
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