LCJ Amicus Brief Urges Delaware Court to Uphold Preservation “Trigger” and Not to Impose a Per Se Ban on Ephemeral Communications

LCJ’s amicus brief in In Re Santander Consumer USA Holdings Inc. Stockholders Litigation urges the Delaware Chancery Court to uphold the well-accepted “reasonable anticipation or actual notice of imminent litigation” trigger for the duty to preserve information, and not to impose a new per se sanction against the use of ephemeral communications.

LCJ’s brief argues that the Court should follow Delaware law that a duty to preserve ESI can only arise where there is reasonable anticipation or actual notice of “imminent” litigation. Court of Chancery Rule 37(e) expressly articulates that litigation must be “imminent” for the duty to preserve ESI to be triggered.

Businesses are regularly subject to the prospect of litigation. But the existence of the possibility of litigation does not mandate that a universal, permanent litigation hold be placed on a business with respect to every action, decision, or transaction. Even under the federal rules, which lack Delaware’s articulated imminence requirement, conducting business activities that may result in litigation, without more, does not trigger a preservation requirement. Vague or indefinite threats of litigation do not trigger a duty to preserve.

LCJ also urges the Court to recognize that companies have many valid reasons for using ephemeral messaging applications, and that using those systems cannot per se be improper, let alone sanctionable. Under Delaware law, in the absence of imminent litigation, there is no general duty to preserve any messaging of any type, and companies may follow data retention and disposition practices that serve their business goals and protect the security of their communications. In the ordinary course of business (absent a legal duty to preserve being triggered), there is no requirement that companies conduct business in a way that would save or preserve all data, communications, and documents for potential litigation adversaries. Rather, corporations routinely follow records retention and information governance policies, which are based on statutory, regulatory, and business considerations as to what should be retained, and for how long. A critical component of such policies is the destruction or deletion of documents and data that are not within the scope of the records retention policies.

Using ephemeral messaging applications is not by itself evidence of either an intent to destroy evidence or recklessness, and it should not be seen as inherently nefarious. There are valid business reasons for an individual or organization to use ephemeral messaging. In particular, the responsible use of ephemeral messaging “supports information governance best practices by reducing unnecessary data.” The Sedona Conference Commentary on Ephemeral Messaging, 22 Sedona Conf. J. at 454. Importantly, ephemeral messaging facilitates compliance with legal obligations concerning protection and minimization of private personal data. Id.

LCJ’s brief, written by Jonathan M. Redgrave of Redgrave LLP, is available here.

Benjamin A. Smyth and Maliheh Zare of McCarter & English, LLP, served as local counsel.