What is a Navy Legal Hold?
As with most things legal, the navy/DoD world also has its own special terms. Here we will work through what a "Navy legal hold" means and how it’s done.
A legal hold (also known commonly as a litigation hold) is in essence a notice that tells people to preserve certain things may be relevant evidence it pending or existing legal proceeding. When a Navy legal hold is put in place, it also serves as a preservation order . There are a number of reasons that a legal hold will be put in place. It can be at the request of an agency, during an investigation, a lawsuit, or any other legal matter. The idea behind the notice or order is the same: to preserve the evidence that could be related to pending legal matters. Because of the nature of the military’s information and record keeping methods, often this may mean freezing a computer or stopping a records center from discarding certain documents.
Purpose of a Legal Hold
Section 3: Reasons for Implementing a Legal Hold
There are several key circumstances within the Navy in which a legal hold may be put into effect:
- Criminal Investigation: A criminal investigation may arise from an incident or event involving a service member that is under suspicion of a crime. This investigation may result in a legal hold. Information that falls under the jurisdiction and/or review of a Navy official, such as a JAG, during an investigation, is prohibited from being altered, erased or disposed of during the discovery process.
- United States Navy ROE Investigations: Rules of Engagement (ROE) investigations may result from a shooting or other controversial incident that will involve a Navy service member. Outside evidence review may recommend that evidence should be preserved and maintained in connection with a ROE investigation.
- Investigative Agency Requirements: Although legal holds are typically instituted by a Navy official, investigations by other agencies can also trigger the need for one. For example, evidence review by outside agencies might require preservation of evidence that is relevant to the investigation, triggering the need to maintain such evidence for trial.
- Civilian Lawsuits: A civilian lawsuit may arise from an incident where a legal hold may be necessary to prevent the destruction of literary, graphic, photographic or tangible audio material, such as documents or other evidence that may be relied upon in the case.
How to Implement a Legal Hold
When a Navy JAG attorney or the Staff Judge Advocate determines that there is a need for a legal hold to be placed on documents, a DFC (Document Preservation Confirmation) report will be drafted and distributed to the appropriate personnel. The intent of this report is to outline the necessary actions to prevent evidence spoliation and also serve as a written order to preserve. At this point, responsibility for the preservation of documents rests with the Local Record Custodian. The determination does not automatically mean that the legal hold will then directly apply to the Local RCC; it can be directed to the Branch Office level, or even higher levels within the command. In order to assure that the DFC report is received by all parties, it is often distributed through multiple methods. Typically, email is used to convey the contents of the report and ANCC (the command’s network) is used to distribute the report. In many instances the report is also delivered through hard copy form. Once the DFC report is in the hands of the Subordinate Command record managers, there are varying responsibilities assigned to the office and its personnel. For the Local RCC, custodians are responsible for holding the DFC report where it is evident to everyone. The Local RCC is responsible for immediately notifying custodians within its purview that a legal hold has been placed on their files. The responsibility for the implementation of a legal hold lies with the Local RCC. This responsibility also extends to review of the preservation lists drafted by the custodians. The Local RCC is also responsible for monitoring compliance and conducting a thorough review of the documentation when required. Copies of the DFC report should be maintained until the necessity of preserving information passes.
Parties Involved
Once a legal hold is in place, the responsibility of complying with the hold order rests with the member assigned to it, as specified in the legal hold order. The member must fully understand and comply with the details of the order. Such compliance will be monitored by the legal advisor and their staff. Additionally, all members must also fulfill their responsibilities under a TDS, including, as appropriate: when ordered to do so, safeguarding the information, notifying the legal advisor or staff of any new information that might be discoverable and preservation of all devices, in their possession, that may be relevant. Members fulfilling their obligations to a TDS must immediately notify the supporting Staff JAG officer of non-compliance with the order. If research, depositions or records reviews are being conducted in conjunction with the legal hold, a legal advisor should be identified to take the lead in managing the legal hold, as each order requires. All legal advisors have been briefed on their duties and responsibilities under a TDS, and additional guidance can be found in paragraph 5-3 of the JAGINST 5800.1F.
Challenges and Obligations
The most common compliance challenge is preserving the evidence in accordance with the Navy’s policies and procedures. For example, if the custodian of the business record is separated from Active Duty or retired, and is no longer subject to UCMJ, then the custodian is under no legal requirement to preserve the data or provide access to it. An email account may be suspended as a matter of routine HR/IT actions, but if the custodians of the account has been separated, the access will be denied until an AFSPC or Navy JAGC attorney obtains a complete waiver for access to the email account. A custodian who is on departure leave, for example, may still have physical control over the business record or object even though they are separated. But if the custodian is unreachable and has the record or object encrypted on personal storage media, we cannot access it without clearing the encryption. This means that it could take months to reset the password if the custodian does not remember it—or if s/he does not respond at all.
There are also unique Federal employee communication and employment record rules that prohibit oversight of government devices by Navy JAGC, with the specific exception of protecting the Navy’s interest. By way of example , if the custodian is still serving in a temporary Active Duty capacity after retirement (such as a retired civilian employee called back into a duty status) and has been using his/her personal email account for official business, any oversight or review of those emails is highly discouraged and, in fact, would be illegal.
As part of maintaining a Navy Legal Hold, there are several compliance challenges and hurdles to overcome. One such hurdle is ensuring that the physical protection of a hard copy business record (such as a personnel record) is strict and failsafe. This includes the physical destruction of any business record or object and ensuring that all electronic copies of the business record or object are accounted for. The custodian is responsible for tracking and sequestering the business record or object and any electronic versions of it (for example, the custodian must remove the object from any electronic data server, if applicable). While the custodian is responsible to track and maintain the business record or object, the Navy will issue a Global Record Retrieval Docket (RFD) when the Office of General Counsel (OGC) advises them of a legal hold in which the affected parties must comply.
Consequences for Legal Hold Violation
The failure to subject a legal hold, whether in writing and/or oral, has serious consequences. sanctions and/or criminal consequences may be imposed on individuals and their employers.
An order of preservation and suspension of deletion is a "no-switch rule" against loss or destruction of the information or evidence covered by the order. This "no-switch rule" means that the order requires someone to take affirmative steps to keep that information from being destroyed, deleted, altered, or otherwise lost. A failure to comply with the "no-switch rule," especially where the circumstances of the case involve intermediate stages of various discovery evolutions, is an egregious violation of the law.
The consequences, or sanctions, for violating a legal hold range from a fine; charges of contempt; rules of evidence which favor the introduction of evidence of the party who breached the order; a negative inference (e.g., a jury will infer wrongdoing on the part of the party who breached the order); exclusion of evidence (e.g., any evidence regarding the spoliated evidence may not be admissible before a jury or judge); and/or dismissal of the action.
No matter how one views the legal issues surrounding a violation of a legal hold, in a military setting, the consequences can extend to administrative separation and/or court martial.
Past Experiences and Lessons
Legal holds are a crucial part of maintaining and retaining the evidence that is needed for Navy litigation or investigation. The following examples and case studies illustrate in real-life what can happen if a Navy legal hold is improperly issued or poorly executed, or even worse, not issued at all.
For example, in 2005 the U.S. Department of Justice (DOJ) recovered $391 million in criminal restitution, civil settlements and fines for fraud against the federal government. As part of this effort, the DOJ was able to secure payments from 83 corporations that violated the False Claims Act, as indicated by this chart: The litigation that lead to this recovery was largely dependent on the effective use of legal holds. In 2014, for instance, the Medical Center Region of the Army was able to secure a $77 million settlement from Humana Military Healthcare Services for fraud in their TriCare healthcare system. After the investigation began, it was determined that certain documents needed to be collected or preserved. Legal holds were deployed to stores and servers at the corporate and local levels. Staff at overflow facilities were also sent copies of the legal hold notice and key custodians were placed on legal hold as well. It was eventually determined that all relevant, responsive documents were maintained in its Microsoft Exchange email system.
A similar case study is cited in an article by John McCullough, an Assistant United States Attorney at the U.S. Department of Justice. A few months before he became an Assistant U.S. Attorney, McCullough was involved in preparing a Federal Bureau of Investigation (FBI) investigation of a company suspected of earning profits through illegal means. After determining a criminal probe was needed, the FBI sent subpoenas to the managers and owners. Before the subpoenas arrived, McCullough cautioned the client to not destroy any records, including emails, corporate memos, text messages or similar. He also reminded the client not to relocate any of the corporate records to somebody’s personal computer or home office. McCullough’s advice regarding the retention of documents was reflective of the time, but inappropriate for the situation, and now with the addition of the Federal Rules of Civil Procedures (FRCP) amendments that were passed in late 2015, this referral may also be legally actionable.
Conclusion: Using Legal Holds
Ensuring awareness and compliance with Navy legal holds is of the utmost importance when preserving discoverable information. As soon as you are informed of a hold for potential or ongoing litigation , it is critical to take the necessary steps and ensure your organization is properly safeguarding present and future evidence as early as possible.
While there are no official guidelines currently in place regarding Navy legal holds, proactive business practices will help safeguard data and create an effective preservation and collection strategy that aligns with the ever-evolving data compliance landscape.