Second Circuit Ruling - Failure to Issue a Litigation Hold

Second Circuit Rules That Failure to Issue a Litigation Hold By Itself
Does Not Amount to Gross Negligence

In an employment action, the defendant-employer failed to issue a "litigation hold" regarding the "promotion folders" of employees who brought this discrimination action. In ruling upon a request for an adverse inference instruction, the 2nd Circuit specifically rejected the holding in Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Secs., LLC, 685 F. Supp. 2d 456, 464-65 (S.D.N.Y. 2010) and found "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." citing to the Orbit Comm'ns, Inc. v. Numerex Corp., 271 F.R.D. 429, 441 (S.D.N.Y. 2010) decision. In addition, the Court found that "a finding of gross negligence merely permits, rather than requires, a district court to give an adverse inference instruction."

This is an important case since it essentially refutes Judge Shira A. Scheindlin holding that the failure to issue a legal hold is gross negligence in and of itself gross negliegence. In addition, the Court found that even though documents were destroyed that there was other significant evidence that supported the same issues at trial.

Chin v. Port Auth. of N.Y. & N.J., 2012 U.S. App. LEXIS 14088 (2d Cir. July 10, 2012).