Information Governance for Enhanced Legal Hold Process and Improvement

By Phil Favro, Contributing Author for HaystackID

When there is discussion about legal hold process and improvements, there is often a sense that preservation issues are simple problems that can be addressed through correspondingly easy solutions. When looking at legal hold failures, commentators—enjoying the benefit of hindsight—suggest a simple fix here or there to solve the breakdowns that resulted in preservation failures and (often) sanctions. But there is nothing simple about legal hold process and improvement, especially for corporate litigants. A good hold notice requires effort and nuance. Identifying the right custodians is frequently painstaking, especially for parties who do not want holds to be over-inclusive or under-inclusive. Follow-up—while conceptually simple—is often difficult to standardize, particularly in cases with several custodians who are tiered based on the importance of the information they hold for a particular matter.

Legal Holds, Information-Related Policies, and Device Return Procedures

Another complexity with developing an effective legal hold process is the interplay of enterprise information policies. To be sure, it’s important to have a litigation hold policy that works in conjunction with an organization’s document retention policy and corresponding records retention schedule. But often there are other policies that must be addressed. For example, acceptable use policies—either memorialized in employee handbooks or as standalone protocols—may address the use of company communications tools, along with preservation-related considerations. Companies often have “bring your own device” policies, which add complexity in terms of whether a company can or should be taking steps to identify and preserve discoverable information like text messages found on employee devices.

Beyond these obvious policies, there is another information-related procedure that should be factored into the legal hold process: how enterprises will handle the return, recycling, disposal, and re-use of company-issued devices like phones, tablets, and laptops. With employee turnover being a reality for every organization, basic information governance principles suggest that enterprises consider implementing device return policies that delineate the process for taking possession of previously issued employee devices. An effective device return policy, enforced by reasonable practices, can help companies circumscribe the circulation of confidential and proprietary data, better ensure the return of costly hardware, and satisfy other transactional factors.

Beyond those considerations, there is also the issue of ensuring that company-issued devices for departing employees who are on legal hold will be maintained and not disposed of prematurely. This is not really an optional consideration for a defensible legal hold process. Enterprises that have not yet implemented an effective method for obtaining the return of employee-issued devices could be vulnerable to losing discoverable information for reasonably anticipated or pending litigation.

This is more than a mere hypothetical, as evidenced by the recent case of In re Local TV Advertising Antitrust Litigation. In Local TV, the lack of an effective policy and reasonable practices regarding the return and tracking of mobile devices resulted in the loss of relevant text messages and the imposition of monetary sanctions.[1] Local TV highlights the importance of preparing a device return policy, integrating that policy into the legal hold process, and developing reasonable practices—such as tracking employees the company has placed on legal hold who possess phones or other company-issued mobile devices—to strengthen the defensibility of the overall preservation process.

Local TV and Device Return Policies

The Local TV case is a long-running antitrust lawsuit involving claims that several television broadcasters agreed to fix prices for the cost of certain television advertising.

Sinclair’s Legal Hold Notices

A federal government investigation into allegations of price-fixing by defendant Sinclair Broadcast Group (“Sinclair) immediately led to the company’s first legal hold notice in February 2018. The hold notice directed that documents relating to the investigation—including text messages—be preserved.

The company issued a second hold notice the following month. That notice also directed that recipients preserve relevant text messages. In addition, the notice included a requirement that custodians contact “the Director of Technical Operations prior to replacing or disposing of any laptop, tablet, or mobile device that might contain responsive data.” That hold was reissued in November 2018 and then updated and reissued again in April 2021.

After litigation formally commenced, the parties negotiated for years over the scope of discoverable ESI. While plaintiffs sought the production of text messages, defendants declined to produce texts, arguing that the burden of producing the information was disproportionate to the needs of the case. In the meantime, Sinclair produced millions of relevant emails and other electronic documents.

Missing Text Messages

The text message production issue arose again after certain depositions, which—from plaintiffs’ perspective—made clear the need for Sinclair to produce relevant text messages in discovery. While the parties were negotiating the nature and scope of a text message production from three different custodians, Sinclair determined that it could not identify “backup data” for those custodians’ phones, suggesting that text messages were apparently lost.

After conducting a broader search for relevant text messages among the 160 custodians on legal hold, Sinclair concluded that it had issued phones to 81 of those custodians. However, text messages for just 26 of the 81 custodians had been preserved. Of the 55 custodians whose text messages were lost, the court observed that “some custodians who were former Sinclair employees had left the company without notifying Corporate IT of the litigation hold on their employee-issued devices, and as such, their data was not preserved.”

Sinclair ultimately collected 41,420 text messages from the 26 preserved custodian phones and determined that a small percentage, 0.5% or just 233 messages, were “responsive.”

Plaintiffs’ Motion for Spoliation Sanctions and Sinclair’s Response

Plaintiffs filed a motion for spoliation sanctions under Federal Rule of Civil Procedure 37(e) against Sinclair. As part of their requested relief, plaintiffs argued that they were entitled to the fees and costs they incurred in connection with trying to redress the lost text messages with Sinclair. Plaintiffs sought additional measures, including “the ability to present evidence of the spoliation at summary judgment and trial and argue the [lost text messages] would have helped Plaintiffs.” Finally, plaintiffs sought jury instructions regarding the spoliated messages and a “prohibition on Sinclair’s ability to argue or defend with reference to the absence of text messages.”

In response, Sinclair maintained that the lost text messages generally were not relevant to the claims or defenses, were cumulative or duplicative of other ESI Sinclair produced in discovery, and did not ultimately impact the antitrust claims at issue in the case.

The Court’s Decision: Factoring in the Lack of a Device Return Policy and Practices

The court concluded that Sinclair failed to properly preserve discoverable text messages from dozens of its custodians despite Sinclair’s legal holds requesting that they do so. From the court’s perspective, a point of failure in the preservation process was the lack of a “tracking system” by which Sinclair could identify the employees to whom it had issued company phones and other mobile devices: “Sinclair appears to have had no standard system for tracking employees’ company-issued mobile devices for years even after the 2018 litigation hold, despite the hold’s requirement that IT be notified prior to the disposal of any cellphone that contains relevant ESI.”

According to the court, “Sinclair should have had a tracking system in place to know which employees had work-issued devices.”  The seeming lack of a device return policy, along with the absence of practices that would have tracked the “who,” “what,” and “when” surrounding the use of those devices, “prevented Sinclair from conducting a reasonable investigation for responsive ESI.” With a device return policy and a tracking system in place, the court reasoned that “Sinclair could have turned on automatic data back-up options for [custodians’] work-issued devices that would have preserved the relevant ESI at little to no cost.” All of this, the court felt, could have safeguarded text messages from being lost.

While the court awarded plaintiffs monetary sanctions so they could be made “whole for the costs of their investigation into the text message issue,” the court declined to order any additional sanctions at that time, given ongoing discovery in the case and the vigorous dispute between the parties over the importance of the lost text messages. While acknowledging that certain text messages were clearly relevant, the court conceded that “text message was not a primary means of communication in support of Plaintiffs’ allegations.” The parties would be permitted to further address the “admissibility of ESI spoliation at the motions in limine stage.”

Considerations for a Device Return Policy and Related Practices

Local TV Advertising spotlights the importance of implementing a device return policy and integrating that policy—along with related practices—into an organization’s legal hold process. While the court did not definitively indicate that Sinclair failed to implement such a policy, its criticism that Sinclair lacked an effective tracking system suggests such a policy (to the extent it existed) was nonfunctional. Moreover, the lack of enabling practices relating to the device return policy—like the tracking system the court referenced multiple times—prominently factored into the preservation breakdown.

From Local TV Advertising, enterprises may evaluate the following considerations for preparing a device return policy and incorporating that policy into their legal hold process:

1. Prepare and deploy a device return policy that reasonably addresses the needs of the organization and its mobile device assets.
2. Include terms in the policy that clearly address the “who,” “what,” and “when” issues. That includes (among other things) the recipients of mobile devices, what device(s) or devices they received, and the conditions and timing for returning employer-issued devices, either for replacement during employment or for return before employment terminates.
3. Ensure the policy is effectively integrated into the legal hold process, with appropriate cross-references in both the device return policy and the legal hold policy.
4. Designate personnel who are responsible for handling hold duties under the device return and legal hold policies.
5. Use technology to automate compliance with policy requirements, including flagging custodians with employer-issued devices who are on legal hold.
6. Reduce self-reporting and other “bottom-up” methods that are over-reliant on employees—particularly departing employees who may not be incentivized to help the enterprise—to handle device accountability questions.
7. Implement training and education programs to ensure employees are aware of their duties relating to devices.

Implementing certain or a combination of these suggestions into the organization’s information governance program can help reduce the risks of data loss that are so prevalent during litigation and other legal actions.

[1] In re Loc. TV Advert. Antitrust Litig., No. 18 C 6785, 2025 WL 3215680 (N.D. Ill. Nov. 18, 2025).

About Phil Favro

Phil Favro is the founder of Favro Law PLLC, where he counsels clients on ESI, AI, and discovery issues and serves as a special master, mediator, and expert witness. Phil is nationally recognized for his expertise on ESI, discovery, and information governance, with courts acknowledging his credentials. See, e.g., Oakley v. MSG Networks, Inc., No. 17-CV-6903 (RJS), 2025 WL 2061665 (S.D.N.Y. July 23, 2025). This background makes Phil particularly well-suited to counsel clients and advise courts on information-related issues. As a special master, Phil is acclaimed for his collaborative approach, working with parties to find stipulated solutions to complex issues. For disputes that require adjudication, he is renowned for the clarity and vigor of his written dispositions, which are available on legal search engines.

About HaystackID®

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