[author: Phil Favro]
Editor’s Note: Preserving electronically stored information (ESI) remains one of the most critical, and often misunderstood, elements of the discovery process. As this HaystackID® article by Phil Favro shows, even large organizations like IKEA and the County of Los Angeles can face severe sanctions when their legal hold processes fall short. The lessons from Donofrio and Lee are clear: issuing a litigation hold is not enough without proper identification of custodians and ongoing follow-up to ensure compliance. Courts increasingly expect organizations to demonstrate defensible, repeatable processes for preservation, and breakdowns in oversight can prove costly. By examining these recent rulings, readers gain insight into the real-world consequences of neglecting preservation fundamentals. Most importantly, the cases highlight that proactive process improvements, especially around follow-up, are essential to safeguarding evidence and protecting against sanctions.
Preservation of relevant evidence is one of the most basic steps in the civil litigation process, yet its mastery remains elusive. This is particularly the case when it comes to preserving ESI. eDiscovery jurisprudence is replete with cases in which courts have imposed sanctions against corporate and individual clients who have failed to properly retain relevant ESI.
To be sure, some lawyers and clients may be unaware of the common law duty to preserve. Nevertheless, ESI preservation failures generally arise from a lack of understanding regarding how to handle those duties. For example, counsel and clients may treat preservation as a one-time event rather than an ongoing process requiring supervision and oversight. They may orally issue hold instructions, circulate written litigation hold notices, or even implement a policy or practice designed to notify custodians regarding hold obligations. While useful in an overall legal hold process, these steps—taken alone—may not be reasonably sufficient to preserve relevant ESI. This is especially true where a legal hold process does not include some type of follow-up to ensure compliance.
Recent cases exemplify this point. In Donofrio v. IKEA US Retail, LLC and Lee v. County of Los Angeles, courts imposed sanctions against parties who lost relevant ESI after experiencing fundamental breakdowns in their legal hold processes. Conspicuously apparent was their failure to take reasonable follow-up steps or even issue proper litigation holds to ensure relevant data would be retained for discovery. Donofrio and Lee highlight the need for organizations to examine their legal hold process, identify compliance gaps—particularly on the critical issue of follow-up—and then update their process accordingly.
Donofrio v. IKEA: Hold Issuance Breakdowns
In Donofrio, the court imposed sanctions against the defendant (IKEA) for failing to preserve relevant emails from four employees.1 IKEA’s preservation failures can be tracked back to two crucial mistakes: (1) neglecting to place key players with relevant information on legal hold once a duty to preserve triggered; and (2) failing to ensure a hold was properly issued to the four custodians.
IKEA’s first mistake arose in connection with its decision to issue its initial hold instruction to a limited number of custodians. The initial tranche of custodians did not include those four employees who happened to be key custodians for this age discrimination class action. When one of those employees (Olafsson) left the company—over a year after the initial hold was in place—her Microsoft 365 mailbox was deleted 30 days after her departure pursuant to IKEA’s “standard practice with respect to employees who are not on litigation hold [i.e.] delete their mailboxes approximately 30 days after those employees’ termination of employment with IKEA.”
The second mistake transpired while the other three employees were still with IKEA. Several months after Olafsson left the company, IKEA—in response to spoliation concerns that the plaintiffs raised—finally identified the four custodians at issue for placement on legal hold.2 While IKEA’s outside counsel sent “draft litigation hold notices” to IKEA’s associate general counsel that were intended for those custodians, the hold notices were never sent to the four employees.
That mistake was compounded when IKEA neglected to implement a legal hold that would have preserved the custodians’ emails on its Microsoft 365 server. The IKEA employee designated for handling the implementation of the holds “dropped the ball” and failed to do so. Moreover, IKEA’s associate general counsel did not follow up with her colleague to ensure the emails for the custodians at issue were retained. Without a legal hold in place, the other employees’ Microsoft 365 mailboxes were deleted 30 days after they left the company.
The court found that IKEA was “grossly negligent” in failing to preserve the four custodians’ emails and issued an award of attorney’s fees pursuant to Federal Rule of Civil Procedure 37(e)(1) to remediate the harm resulting from the data loss. Worse, the data loss led to collateral production complications, violation of a court order, and more severe sanctions under Rule 37(b)(2)(A).
Lee v. County of Los Angeles: Process Breakdown
The court in Lee issued a mandatory adverse inference instruction against the Los Angeles County defendants (county) after concluding that they failed to preserve relevant text messages relating to the death of the plaintiffs’ child while in foster care.3 The county’s preservation failures arose from a breakdown in its litigation hold process.
For legal matters involving the county Department of Children and Family Services (DCFS), the county ostensibly had a process whereby the “Confidentiality Unit” for county counsel would issue a litigation hold notice to DCFS’s “Litigation Unit.” The Litigation Unit would then apparently advise DCFS employees of their preservation duty relating to relevant information.
The county, however, failed to follow its own process. Shortly after the death of the child, the plaintiffs’ counsel sent preservation demand notices to the county counsel’s Confidentiality Unit. Those notices expressly requested that the county preserve relevant text messages. Nevertheless, county counsel failed to notify the DCFS Litigation Unit about the plaintiffs’ preservation demand. The result was that the county failed to issue a hold to two pertinent DCFS social workers, and the contents of their phones were erased once they received phone upgrades.4 It appears that two years may have transpired before the county realized that the texts in question had been deleted, and they finally took steps to notify the plaintiffs and the court.
The court determined that the county failed to take reasonable steps to preserve the social workers’ text messages and concluded that this failure was intentional under Federal Rule of Civil Procedure 37(e)(2).
Process Improvement Leads to Enhanced Defensibility
Both Donofrio and Lee involved breakdowns with the legal hold process that resulted in the loss of relevant information and the corresponding imposition of sanctions. In analyzing these cases, it would be easy to blame the hold notice failures for the lost evidence. To be sure, a hold notice could perhaps have prevented the emails from being deleted in Donofrio. Similarly, in Lee, the county’s failure to issue a timely hold notice resulted in the destruction of the social workers’ text messages. A defensible legal hold process should include a directive to identify the key players involved in a legal matter, develop thorough yet comprehensible hold instructions, and then timely circulate and implement the hold. Ensuring these steps are in place can facilitate preservation and ensure the process is more defensible.
But the bigger issue in Donofrio and Lee was arguably the parties’ failure to conduct any follow-up. In Donofrio, had the associate general counsel followed up with her colleague responsible for issuing the holds, that colleague probably would have done so. Likewise, in Lee, the Litigation Unit potentially would have learned about the need to preserve the deleted texts had someone followed up with the county counsel employee designated to notify DCFS about the plaintiffs’ preservation demand. Donofrio and Lee accordingly teach that parties should establish follow-up protocols in their legal hold process.
Follow-up can take many forms. It can involve automation, such as reminders from legal hold technologies or other applications. Automated reminders could range from alerting hold recipients regarding their ongoing preservation obligations to reminding personnel tasked with different duties in the hold process to execute those responsibilities. The important aspect of automation is to build it into the overall legal hold process and ensure that the reminders will issue so a party can enhance the defensibility of its process.
In some instances, follow-up may require customized communications to better ensure preservation duties are satisfied. Outside counsel and in-house attorneys may need to discuss preservation issues by phone. Data custodians could require a chat message from in-house counsel or an email from outside counsel as a friendly reminder or follow-up on particular questions. Non-custodial data source managers almost certainly require more than a simple legal hold notice to properly execute their role in preserving and collecting relevant evidence. Including prompts in the legal hold process for a human intervention can surely help with the task of preservation.
Nevertheless, many companies do not have the personnel to scale frequent human interventions into the legal hold process. Nor is this always necessary. Preservation should be proportional and reasonable under the circumstances of a case. Neither heroic efforts nor perfection are the standard for preserving relevant ESI.
Beyond these points, organizations and their counsel should periodically audit their legal hold process to determine whether there are any gaps, either in planning or execution. Repeat litigants, such as large corporations and government entities, may consider periodically assessing the performance of their hold process. Exploring successes and failures can lead to process improvement by identifying potential vulnerabilities.
Implementing these considerations and others can enhance process performance and preservation goals. All of which can help organizations and their counsel avoid the problems that plagued the preserving parties in Donofrio and Lee and lead to better results on the merits of litigation.
Assisted by GAI and LLM technologies.
SOURCE: HaystackID
[1] Donofrio v. Ikea US Retail, LLC, No. CV 18-599, 2024 WL 1998094 (E.D. Pa. May 6, 2024).
[2] IKEA was still unaware that it had already eliminated Olafsson’s emails.
[3] Lee v. County of Los Angeles, No. 2:23-CV-06875-GW-MAA, 2025 WL 2505484 (C.D. Cal. Aug. 29, 2025).
[4] The plaintiffs also sent a copy of their preservation demand by first-class mail to a DCFS branch office. According to the court, the county did not respond to the written preservation demand notice. Id. at *12-13.
