Preservation Letters, Spoliation Risks and Evidence Safeguards in Hospitality Litigation

In restaurant and hospitality litigation—particularly in high-volume jurisdictions like New York City, Los Angeles, and Chicago—preservation letters and immediate evidence safeguards are not optional. They are cost-effective risk-management tools that protect venues from spoliation claims, sanctions, and devastating verdicts. This article explains preservation letters, spoliation risk under federal rules, and practical, budget-conscious steps hospitality operators and their defense teams should take to protect evidence and limit exposure.

Why preservation letters matter for restaurants and hotels

• Hospitality operations generate large volumes of potential evidence: point-of-sale records, surveillance video, employee schedules, third‑party delivery logs, reservation platforms, and smartphones.
• A timely preservation letter creates a documented duty to preserve and often prevents accidental deletion or overwriting of data.
• Courts view good-faith preservation efforts favorably; failure to preserve can lead to sanctions under Rule 37(e) of the Federal Rules of Civil Procedure. See the rule for federal spoliation standards: https://www.law.cornell.edu/rules/frcp/rule_37

What is a preservation letter (litigation hold)?

A preservation letter (or litigation hold notice) is a written direction from counsel to an opposing party, vendor, or internal custodian instructing them to preserve documents and electronically stored information (ESI) potentially relevant to foreseeable litigation. For hospitality defendants, this typically includes:

• Surveillance and POS video (timestamped)
• Electronic payments, receipts, and transaction logs
• Booking/reservation records (OpenTable, Resy, hotel PMS)
• Employee timecards, schedules, and incident reports
• Third-party vendor/contractor communications
• Social media posts and customer communications

Core components of an effective preservation letter

• Clear identification of anticipated claims and relevant categories of documents/ESI
• Names/roles of custodians (managers, security staff, kitchen staff)
• Preservation timeframe (e.g., “preserve all records from Jan 1, 2024–Mar 31, 2024”)
• Instructions for third‑party vendors (camera vendors, POS providers, delivery platforms)
• Contact information for the requesting counsel and a deadline for acknowledgement

Spoliation risks and legal consequences

Spoliation allegations can arise from negligent or intentional destruction of evidence. Under FRCP 37(e), courts may impose remedial measures if ESI that should have been preserved is lost and cannot be restored. Remedies range from:

• Adverse inference instructions to juries
• Monetary sanctions (attorneys’ fees, fines)
• Evidence preclusion or dismissal in extreme cases

State courts (e.g., New York CPLR §3126) have analogous spoliation doctrines and can impose severe sanctions for destruction of evidence. The hospitality sector faces heightened exposure because routine retention policies (auto-delete of surveillance after 30 days, overwriting POS logs) often conflict with preservation duties.

Practical evidence-safeguard checklist for hospitality defendants (NY & CA focus)

Immediate steps after notice of an incident or claim:

1. Issue a written litigation hold within 24–72 hours (or have counsel send one).
2. Identify custodians and data sources: managers, cameras, POS, reservations, third-party platforms.
3. Collect and image volatile sources within 48–72 hours: preserve surveillance footage and device images (avoid letting vendors auto-overwrite).
4. Suspend routine deletions (camera auto-purge, log-rollover, cloud retention) and document the suspension.
5. Create a defensible collection log documenting dates, devices, and personnel who handled evidence.
6. Use forensics when needed for smartphones, servers, or cloud collections.
7. Train staff on immediate steps (who to call, how to save video, where to store physical evidence).

For guidance on discovery steps that directly intersect with preservation activities, see: Discovery Best Practices in Restaurant and Hotel Cases: Documents, Electronically Stored Information and Depositions.

Cost considerations: realistic budgets and vendor options

Costs vary by jurisdiction and size of the matter. Typical ranges for a single-location hospitality claim in NYC or LA:

• Drafting a preservation letter and initial counsel consultation: $400–$2,000 (depending on firm hourly rates; average attorney hourly rates in the U.S. frequently range from $200–$400+ per hour—see market reports such as the Clio Legal Trends Report: https://www.clio.com/resources/legal-trends/).
• Forensic collection of a device or server: $1,000–$6,000 per device (depending on complexity).
• Short-term evidence retention and collection (video, POS exports): $500–$5,000.
• Full eDiscovery for moderate-volume cases (10–50 GB): $10,000–$75,000.
• Enterprise/high-volume matters (100+ GB): $75,000–$500,000+.

Vendor examples and pricing posture:

• Logikcull — a self-serve eDiscovery and preservation tool with public pricing and pay-as-you-go plans for small-to-mid matters; useful for quick ingestion and review. See pricing and tiers: https://www.logikcull.com/pricing
• Relativity — enterprise-class eDiscovery (RelativityOne); typically sold through customized enterprise pricing, suitable for large or multi-defendant cases (contact vendor for quotes).
• Epiq/Consilio — full-service discovery and forensic vendors offering bespoke pricing for collection, processing, and review for large hospitality chains.

Summary comparison table

(Estimated ranges reflect typical U.S. market practice; exact pricing depends on matter complexity, vendor contracts, and location.)

Defense best practices — protocol for multi-site hospitality operators

• Maintain a written, up-to-date evidence retention policy aligned with litigation needs (e.g., extend camera retention to 90 days where feasible).
• Pre-negotiate vendor SLAs to control retention and export costs (sound ordering language for camera and POS vendors).
• Appoint a litigation response team: in-house counsel, general manager, IT lead, and outside defense counsel.
• Centralize incident reporting with a standardized intake form (time, date, persons involved, immediate actions).
• Regularly train staff and run tabletop drills for evidence preservation and witness identification. For staff deposition preparation, see: Preparing Staff for Deposition and Trial Testimony: Practical Tips for Hospitality Employers.

Pretrial tactics and motion practice tied to preservation

Early, well-documented preservation can blunt spoliation motion practice. If spoliation issues arise, effective defense moves include:

• Demonstrate reasonable preservation steps and a documented retention policy.
• Show timely notification to third-party vendors and custodians.
• Move to limit remedies under FRCP 37(e) by showing the absence of bad faith.
• Consider early motions in limine to exclude speculative evidence if spoliation prejudiced the defense.

For tactical approaches to short-circuiting claims via motion practice, see: Motion Practice and Pretrial Tactics That Can Short-Circuit Hospitality Claims.

Final checklist for immediate implementation (NYC & LA focus)

• Send or obtain a written preservation letter within 48–72 hours.
• Suspend auto-deletes on surveillance and POS systems; document who ordered the suspension.
• Export and securely store relevant surveillance video with metadata.
• Image key devices if there’s any chance of alteration or loss.
• Use defensible chain-of-custody logs and preserve communications with vendors in native form.
• Budget for predictable eDiscovery costs early and consider self-serve tools (Logikcull) for small-matter efficiency while reserving enterprise vendors for large, multi-party litigation.

Preservation is cheap relative to sanctions and large verdicts. For hospitality defendants operating in high-claim cities like New York and Los Angeles, the cost of a defensible preservation program is a fraction of trial exposure—invest early, document everything, and coordinate swiftly with defense counsel to minimize risk.

External resources

• Federal Rule on spoliation (FRCP 37(e)): https://www.law.cornell.edu/rules/frcp/rule_37
• Logikcull pricing (self-serve eDiscovery/preservation): https://www.logikcull.com/pricing
• Clio Legal Trends & attorney market data: https://www.clio.com/resources/legal-trends/