In the ever-evolving landscape of eDiscovery, the privilege surrounding legal hold notices is increasingly being scrutinized. A recent decision in FTC v. Amazon.com, Inc. (July 9, 2024) brings this issue to the forefront, highlighting what happens when a preliminary showing of spoliation challenges the privileged status of these notices. This case offers crucial insights for legal professionals navigating similar issues in their practice.
Background
The case involves the Federal Trade Commission (FTC) accusing Amazon of monopolistic practices, alleging that Amazon uses anti-competitive strategies to maintain its market dominance. The FTC sought to compel the production of document preservation notices and instructions regarding the use of ephemeral messaging applications like Signal and Wickr. Amazon, citing attorney-client privilege and work-product doctrine, refused to produce the notices.
The FTC’s requests for production included litigation holds dating back to June 2019, linked to various stages of the FTC’s investigation. This investigation spanned four years before the complaint was filed in September 2023.
Court’s Analysis
The Court’s analysis was straightforward yet impactful. It began by acknowledging that litigation hold notices could be relevant to the FTC’s spoliation claims, but also emphasized the standard principle that such notices are generally protected by attorney-client privilege and the attorney work-product doctrine unless there is a preliminary showing of spoliation.
Amazon argued that the appropriate response was a 30(b)(6) deposition vs. production, allowing the FTC to question an Amazon representative about the details of the legal hold notices. The Court agreed, ordering Amazon to provide a 30(b)(6) witness within 30 days to answer questions regarding:
- The recipients and timing of the litigation hold notices.
- The categories of information and data employees were instructed to preserve.
- The specific actions employees were instructed to take to preserve data.
The Court denied the FTC’s motion without prejudice, allowing the FTC to renew its motion if the deposition did not yield sufficient information.
Key Takeaways
Increased Scrutiny on Legal Hold Notices
There is a growing trend where parties are challenging the privileged status of legal hold notices. This case, along with others like Uber Technologies, shows that courts may order the production of such notices if there is a preliminary showing of spoliation. Legal professionals must be prepared for this possibility and take steps to consider the information in a hold, as well as preparing a 30(b)(6) witness thoroughly to provide answers to reduce the need for production of the notices themselves.
Importance of Early and Direct Communication
Early and clear communication with custodians about their preservation obligations is crucial. Sending an email notice is not enough; follow-up conversations to ensure understanding and compliance are essential. This proactive approach can help mitigate risks and address potential spoliation issues before they become problematic.
Ephemeral Messaging Applications
The use of ephemeral messaging applications like Signal and Wickr adds complexity to data preservation. Legal holds must explicitly address these applications, and companies should have clear policies on their use and data retention. Understanding the default settings and potential for data loss in these applications is critical for compliance.
Conclusion
The decision in FTC v. Amazon.com, Inc. underscores the delicate balance between protecting privileged communications and addressing potential spoliation. As legal hold notices come under increasing scrutiny, legal professionals must adopt proactive and comprehensive preservation strategies. Early planning, clear communication, and detailed documentation are key to navigating these challenges effectively.
This case serves as a reminder that the principles applied in high-profile cases can filter down to other litigation contexts. Staying informed and prepared is essential for legal professionals aiming to safeguard their practices and clients from the pitfalls of inadequate data preservation.
As we continue to see these issues unfold in eDiscovery, it’s crucial to remain vigilant and adaptable. The landscape is constantly changing, and staying ahead of these developments can make a significant difference in your legal strategy and outcomes.
She is a co-author of Electronic Discovery and Records and Information Management, and host of Case of the Week at eDiscovery Assistant. As Principal at ESI Attorneys, Kelly manages the boutique eDiscovery and information law firm that acts as operational business partners with its clients to advise law firms, corporations, and municipalities on all areas of electronic information including eDiscovery, privacy, cybersecurity, and information governance.
Kelly is also the CEO of eDiscovery Assistant — a SaaS-based practical resource for litigators handling eDiscovery — that curates discovery decisions, rules, and additional content. She is developing an online academy to provide on-demand education for lawyers and legal support professionals to stay abreast of changes in the law and technology that affect litigation and clients’ obligations to respond.
You can reach Kelly at [email protected], join her Facebook community group at Let’s Talk eDiscovery, or connect with her on Twitter @kellytwigger.