Are Attorneys Obligated to Monitor Their Client as a Parent Would Watch a Child?
LACBA Update, February 2006

By Louisa Lau, vice chair, LACBA Professional Responsibility & Ethics Committee. Lau is a senior counsel with State Compensation Insurance Fund. She is a former member of the California State Bar Committee on Professional Responsibility and Conduct. The opinions expressed are hers solely.

In the October 2005 issue of County Bar Update, Joel A. Osman discussed an attorney's ethical obligation in maintaining the client's confidence in this electronic era. (J. Osman, Technology and the Challenge of Maintaining Client Confidences, County Bar Update (L.A. County B. Ass'n, Los Angeles, Cal.), Oct. 2005.) Now let's examine an attorney's ethical duty to act competently (California Rule of Professional Conduct 3-110) in connection with the obligations to preserve and produce relevant electronic information in discovery.

A federal opinion from the District Court for the Southern District of New York imposes on not only the party but the party's attorney as well the obligations to ensure that relevant electronic information is preserved and produced in response to discovery requests. (Zubulake v. UBS Warburg (2004) 229 F.R.D. 422.)

The general rule, according to Zubulake IV (Zubulake IV, 220 F.R.D. at 218), is that once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold to ensure preservation of relevant documents. That litigation hold does not apply to inaccessible backup tapes (e.g., those typically maintained solely for the purpose of disaster recovery), which may continue to be recycled on the schedule set forth in the company's policy. On the other hand, if backup tapes are accessible (i.e., actively used for information retrieval), then such tapes likely would be subject to the litigation hold.

In granting plaintiff Zubulake's motion to sanction defendant UBS, the court found, among other things, that the UBS attorney failed to communicate the litigation hold to all the litigation's key players, failed to ascertain each of the key player's document management habits, failed to request retained information from one key employee, and had not taken all necessary steps to guarantee that relevant data was both preserved and produced. The UBS attorney did give UBS instruction regarding a litigation hold. However, the court opined that a party's discovery obligations do not end with the implementation of a litigation hold—to the contrary, that's only the beginning. Counsel must oversee compliance with the litigation hold, monitoring the party's efforts to retain and produce the relevant documents. Counsel must properly communicate with the client to ensure (1) that all relevant information (or at least every source of relevant information) is discovered, (2) that relevant information is retained on a continuing basis, and (3) that relevant nonprivileged material is produced to the opposing side. (229 F.R.D. at 432.)

It appears, at least in the context of federal litigation, a standard has been established for attorneys. Although there is no reported California state court opinion on the same issue, it does not mean that a California court will not adopt a similar standard. These requirements may implicate an attorney's ethical responsibility, among others, to act competently (Rule 3-110). However, since Rule 3-110(A) requires "intentional, repeated or reckless" conduct to be applicable and does not make negligent conduct disciplinable (see, for example, Call v. State Bar (1955) 45 Cal.2d 104, and In the Matter of Ward (1992) 2 Cal. State Bar Ct. Rptr. 47, 51 [failure to bring matter to trial within five-year period not disciplinable]), the failure to comply with the holding in Zubulake would not rise to the level of a 3-110(A) violation unless it could be shown that counsel did so intentionally, recklessly (i.e., grossly negligently) or on more than one occasion. (Other ethical duties that may be implicated but are not discussed here due to the limited length of this article include duty to keep client reasonably informed about significant developments of the case (Rule 3-500); duty not to suppress any evidence that counsel or counsel's client has a legal obligation to reveal or produce (Rule 5-220, Bus. & Prof. Code Secs. 6106, 6077); and/or duty not to advise the violation of any law, rule, or ruling of a tribunal (Rule 3-210).)

To act competently with respect to discovery of electronic information, counsel must take all necessary steps to guarantee that relevant data was both preserved and produced. Counsel must give clear instructions to the client to ensure all sources of potentially relevant information are identified or placed on hold. The court recognized, to do this, "counsel must become fully familiar with her client's document retention policies, as well as the client's data retention architecture." (Id. at 432.)

Although the court also acknowledged "the requirement must be reasonable. A lawyer cannot be obliged to monitor her client like a parent watching a child. At some point, the client must bear responsibility for failure to preserve. At the same time, counsel is more conscious of the contours of the preservation obligation; a party cannot reasonably be trusted to receive the 'litigations hold' instruction once and to fully comply with it without the active supervision of counsel." (Id. at 433.) Thus, to act competently, counsel needs to engage in active supervision, taking reasonable affirmative steps to monitor compliance, as the court put it.

In sum, (1) Zubulake imposes on counsel a duty to effectively communicate to the client its discovery obligations so that all relevant information is discovered, retained, and produced.

(2) In particular, once the duty to preserve attaches, counsel must identify sources of discoverable information. This will usually entail speaking directly with the key players in the litigation as well as the client's information technology personnel.

(3) When the duty to preserve attaches, counsel must put in place a litigation hold and make that known to all relevant employees by communicating with them directly.

(4) The litigation hold instruction must be reiterated regularly, and compliance must be monitored.

(5) Counsel also must call for employees to produce copies of relevant electronic evidence and must arrange for the segregation and safeguarding of any archival media (e.g., backup tapes) that the party has a duty to preserve.

The court even went so far as to advise that counsel take physical possession of backup tapes in cases involving a small number of relevant backup tapes, and in other cases to segregate and place backup tapes in storage. Although the court stated that you do not have an obligation to monitor your client like a parent watching a child, nevertheless—with such an imposing standard—it would be prudent to do so.