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HomeMy WebLinkAbout2014-09-09; City Council; 21723; Adoption of City Council Policy: Litigation HoldsCITY OF CARLSBAD - AGENDA BILL AB# MTG. DEPT 21,723 0?-O^-14 City Atty. ADOPTION OF A NEW CITY COUNCIL POLICY: LITIGATION HOLDS DEPT. DIRECT! CITY ATTY CITY MGR. RECOMMENDED ACTION: 2014-215 approving a new City Council Policy regarding litigation Adopt Resolution No. holds. ITEM EXPLANATION: When a civil lawsuit is filed, the parties engage in a pre-trial process called "discovery" whereby each party to the lawsuit may request records, documents and other tangible evidence (collectively "evidence") from the other parties to the lawsuit. Potential relevant evidence as well as any evidence that may be reasonably calculated to lead to admissible evidence at trial may be subject to a discovery request. Recent rule changes and case decisions have codified a party's duty to preserve evidence. This duty arises at the point in time when litigation is reasonably anticipated, whether the organization is the initiator or the target of litigation. The duty arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation. Whenever litigation is reasonably anticipated, threatened, or pending against the city, CMWD, or any other city entity, city official, or city employee, the city must take reasonable and good faith steps to preserve potentially relevant and discoverable information and tangible evidence. The duty to preserve (and ultimately, to produce) evidence requires a party to identify, locate, and maintain information, including electronically stored information ("ESI") and tangible evidence that is relevant to specific and identifiable litigation. Discoverable evidence may include paper documents from file folders and file cabinets, tangible evidence (such as a stop sign or piece of corroded pipe), or ESI. ESI is essentially any electronic information that could serve as evidence in civil litigation. Example of current ESI devices include local hard drives, network hard drives, portable hard drives, "cloud" storage, e- mail, shared storage, backup systems, mobile devices (e.g. smartphones, tablets, etc.) and removable media (e.g. CDs, DVDs, flash drives, etc.). This list may expand as new storage devices and media are invented. DEPARTMENT CONTACT: City Attorney Celia Brewer 760-434-2891 FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC • DENIED • CONTINUED TO DATE UNKNOWN • WITHDRAWN • RETURNED TO STAFF • AlVIENDED • COUNCIL RECEIVED THE • REPORT/PRESENTATION OTHER-SEE MINUTES • Page 2 Courts have imposed severe monetary or other sanctions, including sanctions that affect a party's ability to defend its interests at trial, if relevant information is not preserved and produced as required by law. It is a best practice for public entities to adopt a litigation hold policy that establishes procedures for retaining relevant evidence and makes clear to staff what their obligations are in preserving that evidence. The City Attorney has developed the Litigation Holds policy (attached as Exhibit A to Exhibit 1) and requests that the council formally adopt it as Council Policy (#__?1__) to fill this need. The City Attorney has also prepared a proposed Administrative Order (# 76 ) outlining the litigation holds procedures that should be followed in the event litigation is reasonably anticipated or actually commenced (Exhibit 2). The City Attorney has also prepared a Litigation Hold Notice that will be sent to relevant department personnel when litigation is anticipated or commenced (Exhibit 3). FISCAL IMPACT: There are no significant fiscal impacts to the City other than staff costs associated with preservation of the tangible evidence and ESI discovery and devices. ENVIRONMENTAL IMPACT: Pursuant to Public Resources Code section 21065, this action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. EXHIBITS: 1. City Council Resolution No. 2014-215 Adopting City Council Policy - Litigation Hold No. 82 (identified and attached to the Resolution as Exhibit A) 2. Proposed Administrative Order No. 76 on Litigation Hold Procedures 3. Litigation Hold Notice 1 RESOLUTION NO. 2014-215 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ADOPTING A NEW CITY COUNCIL POLICY REGARDING LITIGATION HOLDS 4 5 The City Council of the City of Carlsbad does hereby resolve as follows: 6 7 8 9 10 11 WHEREAS, the failure to implement a litigation hold to preserve potentially relevant 12 evidence can result in serious civil litigation consequences such as monetary or procedural sanctions, adverse inference instructions, vicarious liability for responsible senior management and potential default; and WHEREAS, it is a best practice to adopt a litigation hold policy in order to ensure that 19 20 21 22 23 24 25 26 27 28 WHEREAS, whenever litigation is reasonably anticipated, threatened, or is pending against the city, CMWD, or any other city entity, its officials or employees, the organization has a duty to preserve potentially relevant evidence, including electronically stored information; and 13 14 15 16 jy City staff is knowledgeable ofthe process for initiating, implementing, monitoring and releasing 18 litigation holds. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows that: 1. The above recitations are true and correct. 2. That City Council Policy No. 82 Litigation Holds is adopted as shown in Exhibit Ato this resolution. // EXHIBIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City of Carlsbad on the 9th day of September 2014, by the following vote to wit: AYES: NOES: Council Members Hall, Packard, Wood, Schumacher, Blackburn. None. ABSENT: None. MATT HALL, Mayor ATTEST: BARBARA ENGLESON, Cit ^ Policy No. 82 CITY OF Date Issued: W /"'Api CRAPi Effective Date: Immediately V.Mr\LODMLy Resolution No. Cancellation Date: Supersedes No. Council Policy Statement Category: Specific Subject: Litigation Holds PURPOSE: To ensure that the city fulfills its duty to preserve evidence whenever litigation is reasonably anticipated, threatened or pending against the city. BACKGROUND: When a civil lawsuit is filed, the parties engage in a pre-trial process called "discovery" whereby each party to the lawsuit may request records, documents and other tangible evidence (collectively "evidence") from the other parties to the lawsuit. Potential relevant evidence as well as any evidence that may be reasonably calculated to lead to admissible evidence at trial may be subject to a discovery request. Recent rule changes and case decisions have codified a party's duty to preserve evidence. This duty arises at the point in time when litigation is reasonably anticipated, whether the organization is the initiator or the target of litigation. The duty arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation. Whenever litigation is reasonably anticipated, threatened, or pending against the city, CMWD, or any other city entity, city official, or city employee, the city must take reasonable and good faith steps to preserve potentially relevant and discoverable information and tangible evidence. The duty to preserve (and ultimately, to produce) evidence requires a party to identify, locate, and maintain information, including electronically stored information ("ESI") and tangible evidence that is relevant to specific and identifiable litigation. Discoverable evidence may include paper documents from file folders and file cabinets, tangible evidence (such as a stop sign or piece of corroded pipe), or ESI. ESI is essentially any electronic information that could serve as evidence in civil litigation. Example of current ESI devices: local hard drives, network hard drives, portable hard drives, "cloud" storage, e-mail, shared storage, backup systems, mobile devices (e.g. smartphones, tablets, etc.) and removable media (e.g. CDs, DVDs, flash drives, etc.). This list may expand as new storage devices are invented. POLICY: 1. When civil litigation is reasonably anticipated the city must suspend its routine document retention/destruction policy and preserve its historical and prospective ESI, paper and other tangible records from destruction (collectively "discoverable evidence"). 2. If litigation is commenced against the city and/or its employees, the city will need to (1) identify and provide a description by category and location of all discoverable evidence in its control Page 1 of 2 EXHIBITA Policy No. 82 (including any vendors or consultants) which may be relevant to the case; and (2) produce and transfer reasonably accessible discoverable evidence in original/native format to a central repository for review and analysis. Discoverable evidence that is privileged or not reasonably accessible must be documented. 3. The City Attorney is responsible for determining when a legal hold should commence or be revoked and for directing the legal process to fulfill the discovery requirements. 4. The legal hold process will be managed by the City Attorney, City Mar\ager, City Clerk, and Information Technology Director (collectively "Executive Team"). The Executive Team will be assisted by the department(s) responsible for record retention and production, as well as personnel associated with the subject matter of the litigation. 5. The City Manager will issue an Administrative Order which outlines the specific procedures associated with a litigation hold and which is consistent with this City Council Policy. Page 2 of 2 CITY OF ^ CARLSBAD Administrative Order No. 76 Date: To: All City Departments From: City Manager Subject: Litigation Hold Policy PURPOSE: In order to implement City Council Policy 82, all City employees and consultants must comply with the following procedures regarding litigation holds. PROCEDURE The legal hold process will be managed by the City Attorney, City Manager, City Clerk, and Information Technology Director (collectively "Executive Team"). The Executive Team will be assisted by the department(s) responsible for record retention and production, as well as all personnel associated with the subject matter of the litigation. Notification of Litigation Hold 1. Upon receipt of a new lawsuit, subpoena, investigation notice, demand letter, or other information regarding potential litigation, the city staff member receiving the information should immediately inform the City Attorney, and forward any relevant documents that he or she has received to the City Attorney for review. If a city staff member has questions as to whether a matter may require the issuance of a litigation hold, he or she should contact the City Attorney to discuss the matter. 2. Upon receiving notice or information of a matter that may result in litigation, the City Attorney will evaluate the information and decide whether or not to issue a litigation hold. When the City Attorney determines that a particular matter requires the issuance of a litigation hold, the City Attorney will issue a Litigation Hold Notice to all relevant city staff members. An example ofthe Litigation Hold Notice that will be issued is attached to this policy as Exhibit A. 3. The Litigation Hold Notice will contain a brief description of the case/matter including, if possible, a date range during which relevant documents may have been generated. The Litigation Hold Notice will inform city staff members of their duty to presen/e relevant documents including electronically stored information ("ESI"). If applicable, the Litigation Hold Notice will include instructions on how and where to preserve relevant paper documents and ESI. Page 1 of 3 Administrative Order No. 76 Staff Response to Litigation Hold Notice 4. Each staff member that receives a Litigation Hold Notice should carefully review the notice, complete the Acknowledgment and Response portion of the notice, and return the signed notice to the City Attorney. 5. City staff members who use or have used a personal home computer to perform City of Carlsbad business must: a. retain all relevant information related to the city's business, b. backup the relevant information from the personal computer and maintain the backups, and c. notify the attorney assigned to the litigation that they have used a personal computer to perform City of Carlsbad business and that it stores relevant information. The Executive Team will decide on a case-by-case basis as to the best way to preserve the city's relevant information while trying to maintain the staff member's personal privacy in his/her personal computer data. The IT department will work with staff in an effort to separate the city's relevant information from any personal non-City of Carlsbad data. 6. If a city computer, laptop, smartphone, or other city electronic device or a personal computer, smartphone, etc., is being replaced (regardless of reason) or decommissioned and it contains relevant information, the staff member responsible for the device must notify the Executive Team before any actions are taken. The city will need to make a copy of the existing relevant information as it existed on the electronic device before the upgrade/replacement ofthe device and will be required to preserve the electronic device until the completion ofthe litigation hold. Information Technology Response to Litigation Hold 7. The Information Technology Director is responsible for creating systems to manage and preserve documents subject to a litigation hold and for stopping any routine deletion of electronic files and emails subject to a litigation hold. 8. If necessary, the Information Technology Director in coordination with the City Attorney and City Manager will set up a repository for all electronic files so that staff members can deposit relevant documents in their native format into the repository for retention during the course of the litigation hold. Revocation of Litigation Hold 9. The City Attorney will determine when a litigation hold may be revoked or released and will inform the Executive Team and all staff members subject to the litigation hold when the hold is revoked. 10. Before any relevant information may be deleted a determination must be made as to whether deleting the relevant information would conflict with any record retention schedules or the need for future city use. Therefore, the original contributor ofthe relevant information will be asked to review the data/information and make a recommendation as to whether it should be deleted or retained and provide a basis for that determination. The Executive Team will review Page 2 of 3 . . Administrative Order No. 76 the recommendation and will give written authorization as to what action is to be taken. Violation of a Litigation Hold 11. Failure to comply with a litigation hold notice may result in disciplinary action including termination. Disciplinary actions are decided on a case by case basis. This order shall be effective immediately DATE: ^^h^of^r- lanager Page 3 of 3 LITIGATION HOLD NOTICE CITY OF CARLSBAD CONFIDENTIAL - MEMORANDUM ATTORNEY-CLIENT PRIVILEGED Date: To: From: , Deputy/Assistant/ City Attorney Subject: Notice Regarding Preservation of Documents and Information [Name of party] has filed a lawsuit against the City of Carlsbad involving claims for [msert description]. Both California and federal law require that the city take steps to preserve potential evidence, or information that may lead to the discovery of potential evidence when a lawsuit has been filed or it is reasonably certain that a lawsuit will be filed. A court may impose monetary and other sanctions, including sanctions that affect the city's ability to defend its interests at trial, if relevant information is not preserved and produced as required by law. The complaint alleges [quantity] causes of action for [//isert theories], based on a claim that [generally describe factual circumstances] or the anticipated litigation will most likely include claims of You may have actual documents, electronically stored information as well as tangible objects related to the allegations or claims Involved in this matter. If so, you must preserve and retain those documents, electronically stored information and discoverable evidence in accordance with City Council Policy # , Litigation Holds and Administrative Order # , Litigation Hold, attached hereto. Failure to timely comply with these procedures may subject you to employee discipline. THIS LITIGATION HOLD ORDER SUPERSEDES ANY REQUIREMENTS IN THE CITY'S DOCUMENT RETENTION POLICY AND ANY OTHER GUIDELINES CONCERNING THE RETENTION OF RECORDS, DOCUMENTS AND OTHER ITEMS. FAILURE TO FOLLOW THIS LITIGATION HOLD ORDER STRICTLY CAN RESULT IN SERIOUS LEGAL AND OTHER CONSEQUENCES. Please notify [City Attorney] ifyou have any questions regarding this Notice. EXHIBIT 3 Matter Name Case No. LITIGATION HOLD ACKNOWLEDGEMENT AND RESPONSE: As soon as you have reviewed this litigation hold, please provide responses to the following, sign and date the acknowledgment below. Please be sure to keep a copy of the completed Notice for your files. A. Identification of City Employees: Please list any city employees you believe may have knowledge, information and/or documents that may be relevant to the above referenced matter. B. Identification of Relevant Documents: Please list any documents and/or data that you believe may be relevant to the above referenced matter. Please also state whether such documents and/or data exist in paper or electronic format. C. Identification of Computer Systems and Applications: Please list any computer system(s) (including personal computers and mobile devices) that you believe contain information and/or documents that may be relevant to the above referenced matter. PLEASE DO NOT COLLECT AND/OR SEND DOCUMENTS TO THE CITY ATTORNEY AT THIS TIME unless you are specifically requested to do so. A process will be established to facilitate collection ofany documents. Please be sure to preserve all original documents and avoid copying or moving documents including electronic documents unless it is necessary for ongoing business operations. If any of the following situations apply, you must contact the City Attorney immediately: • You are notified by the IT Department that you will be receiving a new computer; • You are changing or rotating positions within the city; or • You are planning to retire. We will instruct you regarding the proper steps to ensure that all information from your old computer is retained. I have received and reviewed the foregoing Notice. Signature Date Printed Name . .