This blog is intended for informational purposes and does not constitute legal advice.
Legal data preservation is the process of identifying, securing, and maintaining electronically stored information (ESI) and other relevant data when litigation, regulatory inquiry, or internal investigation is reasonably anticipated. It requires organizations to suspend normal data deletion or modification routines and retain all potentially relevant records in their original, unaltered state until the matter is resolved.
When organizations fail to preserve data correctly, the consequences extend well beyond inconvenience. Courts can impose case-dispositive sanctions, adverse inference instructions, and significant monetary penalties. Reputational damage to the legal team and organization often follows. According to the Legal Operations Survey , 68% of legal teams reported that eDiscovery costs had increased year-over-year, with preservation failures identified as a primary cost driver.
The Federal Rules of Civil Procedure (FRCP) Rule 37(e) governs the consequences of failing to preserve ESI. Courts have interpreted this rule with increasing strictness, particularly in cases involving digital communications across platforms such as Slack, Microsoft Teams, and mobile messaging applications.
The challenge has grown as the volume and variety of data sources expand. Modern organizations generate data across dozens of platforms, making a structured litigation hold process and reliable data archiving software more critical than ever.
The duty to preserve arises when litigation is reasonably anticipated, not when a complaint is filed. Courts have found organizations liable for spoliation even at early investigative stages. This makes early identification of potential disputes a foundational responsibility for legal operations leaders.
A litigation hold is a formal directive sent to relevant custodians instructing them to retain all potentially relevant data. Effective holds identify the scope of relevant information, the custodians involved, and specific data types including emails, documents, and digital communications across all platforms used by the organization.
Once a hold is in place, data must be collected in a forensically sound manner. This includes data residing in cloud applications, legacy systems, and collaboration platforms. In-place preservation approaches allow organizations to preserve data within its native environment without disrupting business operations, while maintaining chain of custody.
Preservation is not a one-time action. Legal teams must monitor custodian compliance, track data sources added during the hold period, and address departing employees. Automated data activity monitoring tools help legal and compliance teams maintain visibility into custodian behavior throughout the duration of a matter.
| Preservation Failure | Root Cause | Consequence |
|---|---|---|
| Delayed litigation hold issuance | No defined trigger protocol | Spoliation finding; adverse inference instruction |
| Incomplete custodian identification | Siloed legal and HR data | Missing key evidence; sanctions |
| Auto-delete not suspended | IT and legal misalignment | Permanent data loss; Rule 37(e) penalties |
| No hold on digital communications | Overlooked platforms (Slack, Teams, SMS) | Evidence gaps; credibility damage |
| Failure to monitor hold compliance | Manual, paper-based processes | Custodian non-compliance goes undetected |
| Departing employee data loss | Offboarding gaps | ESI deleted before collection completed |
This landmark case established the foundation of modern preservation obligations. As documented in Zubulake v. UBS Warburg, 220 F.R.D. 212 (S.D.N.Y. 2003), the court found that UBS failed to preserve relevant emails and issued an adverse inference instruction against the defendant. A subsequent ruling 229 F.R.D. 422 (S.D.N.Y. 2004), further clarified counsel's duty to oversee the litigation hold process. Judge Shira Scheindlin's opinions in this series directly shaped the FRCP amendments governing ESI. The core lesson: legal hold obligations must be taken seriously at every organizational level, and IT must be formally engaged as a preservation partner.
In Colonies Partners, L.P. v. County of San Bernardino, 2020 WL 1496444 the court sanctioned the defendant for failing to preserve text messages sent on personal devices. The case illustrated that digital communications software used outside corporate systems, including personal mobile devices and third-party applications, can fall within the scope of the preservation obligation when employees conduct business on them. Organizations without a policy covering personal device usage in business contexts face significant spoliation risks.
In DR Distributors, LLC v. 21 Century Smoking, Inc., 2021 WL 185082, the court issued one of the most severe sanctions rulings in recent eDiscovery history. The defendant's counsel failed to take adequate steps to implement a litigation hold, resulting in the destruction of critical evidence. The court issued a default judgment and ordered monetary sanctions exceeding one million dollars. As noted in eDiscovery Today's analysis of the ruling, the failures included ignoring preservation obligations across more than a decade of ESI.
The practical takeaway: relying on informal or verbal instructions to custodians is not sufficient. Documented, tracked, and repeatable eDiscovery processing workflows are a prerequisite for defensible preservation.
In FTC v. Meta Platforms, Inc., Case No. 1:20-cv-03590 (D.D.C.), regulators and opposing counsel have raised concerns about Meta's handling of messaging data, including the internal use of ephemeral messaging applications. This case reinforces that digital communications software policies, including those governing encrypted or auto-deleting messaging tools, must be addressed explicitly within any preservation framework.
| # | Preservation Readiness Checkpoint |
|---|---|
| 1 | Defined trigger criteria for issuing a litigation hold |
| 2 | Documented litigation hold templates reviewed by counsel |
| 3 | Custodian identification process including HR, IT, and legal |
| 4 | Auto-delete policies suspended upon hold issuance |
| 5 | Coverage of all digital communication platforms |
| 6 | Personal device and BYOD policies aligned |
| 7 | Custodian acknowledgment tracking |
| 8 | Departing employee preservation protocols |
| 9 | Data activity monitoring systems in place |
| 10 | Regular audits and compliance reviews |
The cases outlined above share a common thread: preservation failures that were preventable with the right processes, tools, and cross-functional coordination. Legal operations leaders, compliance officers, and IT teams that invest in structured preservation workflows reduce their exposure to sanctions, adverse rulings, and the operational costs of reactive data recovery.
If your organization is evaluating its current approach to legal data preservation, explore how Onna's platform supports defensible, scalable eDiscovery workflows across modern data environments. From in-place preservation to automated hold management and data activity monitoring, Onna is built for the complexity of today's data landscape.
Connect with a specialist to review your litigation hold process, identify coverage gaps, and learn how Onna supports your compliance and eDiscovery goals. Contact Onna or request a demo to see the platform in action.