A Closer Look: When the Duty to Preserve Evidence Arises
By Warner Norcross & Judd LLP
Jan 11, 2019
When the focus turns to spoliation of electronically stored information (ESI) in federal court, all eyes turn to Federal Rule of Civil Procedure 37(e). The rule was amended in December 2015 to provide a uniform standard for the imposition of ESI spoliation sanctions. However, the amended rule provides no guidance on the threshold question of when the alleged spoliator’s duty to preserve evidence arises. In that regard, the Advisory Notes state: “Many court decisions hold that potential litigants have a duty to preserve relevant information when litigation is reasonably foreseeable. Rule 37(e) is based on this common-law duty; it does not attempt to create a new duty to preserve.” So, litigants are left to pre-amendment case law to determine the contours of the duty to preserve evidence.
Every jurisdiction uses a similar test for determining when the duty to preserve evidence is triggered. In Michigan, for instance, the Sixth Circuit Court of Appeals has held that “[t]he obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Fujitsu Ltd v Federal Express Corp, 247 F3d 423, 436 (6CA 2001). The court later adopted the same test with respect to ESI. John B v Goetz, 531 F3d 448, 459 (6CA 2008).
Once litigation is filed, there is no question the litigant’s duty to preserve arises. But what about prior to the filing of litigation? What circumstances should lead a party to conclude prior to the filing of litigation that it should be preserving evidence? The more broadly that question is answered, the further back in time the duty to preserve can arise, and the greater the risk of spoliation sanctions becomes.
There is general agreement that certain events trigger the duty to preserve evidence prior to the filing of litigation. See, e.g., Bagley v Yale University, Civ. No. 3:13-CV-1890 (D Conn Dec 22, 2016) (duty arose before filing of suit and arguably when university staff exchanged emails noting plaintiff’s threat of legal action); Rimkus Consulting Group, Inc v Cammarata, 688 F Supp 2d 598, 612-613 n 7 (SD Tex 2010) (duty arose for defendants when they were planning to institute a related legal action); Jones v Bremen High Sch Dist 228, No. 08-CV-3548 (ND Ill May 25, 2010) (duty to preserve documents arose when party received EEOC charges); D’Onofrio v SFZ Sports Group, Inc, No. 06-687 (DDC Aug 24, 2010) (duty to preserve evidence triggered on receipt of letter stating that sender intended to initiate litigation and requesting preservation of electronic documents); but cf. Cache La Poudre Feeds, LLC v Land O’Lakes, Inc, 244 FRD 614 (D Colo 2007) (no duty to preserve evidence where letters regarding dispute did not contain “unequivocal threat” of litigation).
A recent case rejected an attempt to broadly interpret the duty to preserve evidence and trigger the duty to preserve 14 years prior to the filing of litigation.
In Re Abilify (Aripiprazole) Products Liability Litigation, 2018 WL 4856767 (ND Fla Oct 5, 2018) concerns a side effect of Abilify, an antipsychotic drug prescribed to treat certain mental/mood disorders and in combination with other medication to treat depression. In the lawsuit patients alleged that using Abilify resulted in them becoming compulsive gamblers.
Plaintiffs sought emails from the 2002-2006 timeframe from defendant, but these emails were deleted pursuant to the defendant’s document retention policy in place at the time. Plaintiffs moved for spoliation sanctions against defendant claiming that defendant’s deletion of the emails violated its duty to preserve. Plaintiffs argued that defendant’s duty attached based on:
The court rejected each of the plaintiffs’ arguments and denied their motion for sanctions. The court first noted that the duty to preserve “‘arises once litigation is pending or reasonably foreseeable.’” In re Abilify, at *2. The court referred to the Sedona Conference principle which states that a “reasonable anticipation of litigation” arises only when “an organization is on notice of a credible probability that it will become involved in litigation, seriously contemplates litigation, or when it takes specific actions to commence litigation.” Id., at *3.
With regard to the industry-wide knowledge argument, the court found that it would take a “quantum leap” to find defendant’s duty to preserve had been triggered based on scientific literature and litigation concerning a different drug prescribed for a different condition. The theory “improperly places too much emphasis upon events other than those generated by the plaintiff or those who are similarly situated to the plaintiff.” In re Abilify, at *3. In this case, neither plaintiffs nor their counsel took any action prior to 2013 that would have alerted defendant to the threat of litigation.
As for the FDA regulation and the Pharmacovigilance agreement, the court found that any duty to retain documents created by either did not apply to plaintiffs. The duty under the regulations applied to the FDA, and the duty under the agreement applies to the other party thereto. The only obligation owed to plaintiffs was “the duty to reasonably preserve documents once litigation [became] foreseeable.” In re Abilify, at *6.
How would this case play out in Michigan? The Sixth Circuit Court of Appeals has not addressed the “industry-wide” theory, but a recent district court decision suggests that under circuit law, the outcome would be the same. In a products liability action, the District Court for the Western District of Kentucky recently held that knowledge of substantially or reasonably similar incidents involving a defendant’s products is not the same as knowledge of an alleged defect that would reasonably lead to anticipation of litigation. Jackson v E-Z-GO, 2018 WL 3721385, at *4 (WD Ky Aug 3, 2018).
The Sixth Circuit has addressed the impact of regulations on the duty to preserve evidence. In Johnson v Metropolitan Gov’t of Nashville, 502 Fex Appx 523 (6CA Oct 18, 2012), the court held that deleted employment records should have been preserved under EEOC regulations. Does this mean that all record retention regulations create a duty to preserve evidence? Probably not. The EEOC regulations in the Johnson case have long been interpreted to inure to the benefit of employees in employment discrimination cases. See, e.g., Hicks v Gates Rubber Co, 833 F2d 1406 (10th Cir. 1987). As recognized by the Abilify court, the purpose behind the record retention regulation will determine if it creates a duty to preserve within the litigation context.
Finally, with respect to a contractual duty to preserve, no known cases within the Sixth Circuit address this issue. In a case where the litigant claiming the benefit of a contractual record retention obligation is not a party to the contract, presumably they would have to show intended third-party beneficiary status. Under Michigan state law, to be an intended third-party beneficiary, the contract must directly refer to the person or class of persons to be benefitted. The public at-large cannot qualify for intended third-party beneficiary status. Johnson v Doodson Ins Brokerage, LLC, 793 F.3d 674, 679 (6CA 2015). It would be a rare occurrence for a litigant to establish intended third-party beneficiary status.
Case law illustrates that the earlier in time the duty to preserve evidence is imposed, the greater the risk of spoliation. It makes sense to agree on a trigger date when possible. When not possible, assemble the evidence to establish the most favorable date for when litigation became “reasonably foreseeable.”
Every jurisdiction uses a similar test for determining when the duty to preserve evidence is triggered. In Michigan, for instance, the Sixth Circuit Court of Appeals has held that “[t]he obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Fujitsu Ltd v Federal Express Corp, 247 F3d 423, 436 (6CA 2001). The court later adopted the same test with respect to ESI. John B v Goetz, 531 F3d 448, 459 (6CA 2008).
Once litigation is filed, there is no question the litigant’s duty to preserve arises. But what about prior to the filing of litigation? What circumstances should lead a party to conclude prior to the filing of litigation that it should be preserving evidence? The more broadly that question is answered, the further back in time the duty to preserve can arise, and the greater the risk of spoliation sanctions becomes.
There is general agreement that certain events trigger the duty to preserve evidence prior to the filing of litigation. See, e.g., Bagley v Yale University, Civ. No. 3:13-CV-1890 (D Conn Dec 22, 2016) (duty arose before filing of suit and arguably when university staff exchanged emails noting plaintiff’s threat of legal action); Rimkus Consulting Group, Inc v Cammarata, 688 F Supp 2d 598, 612-613 n 7 (SD Tex 2010) (duty arose for defendants when they were planning to institute a related legal action); Jones v Bremen High Sch Dist 228, No. 08-CV-3548 (ND Ill May 25, 2010) (duty to preserve documents arose when party received EEOC charges); D’Onofrio v SFZ Sports Group, Inc, No. 06-687 (DDC Aug 24, 2010) (duty to preserve evidence triggered on receipt of letter stating that sender intended to initiate litigation and requesting preservation of electronic documents); but cf. Cache La Poudre Feeds, LLC v Land O’Lakes, Inc, 244 FRD 614 (D Colo 2007) (no duty to preserve evidence where letters regarding dispute did not contain “unequivocal threat” of litigation).
A recent case rejected an attempt to broadly interpret the duty to preserve evidence and trigger the duty to preserve 14 years prior to the filing of litigation.
In Re Abilify (Aripiprazole) Products Liability Litigation, 2018 WL 4856767 (ND Fla Oct 5, 2018) concerns a side effect of Abilify, an antipsychotic drug prescribed to treat certain mental/mood disorders and in combination with other medication to treat depression. In the lawsuit patients alleged that using Abilify resulted in them becoming compulsive gamblers.
Plaintiffs sought emails from the 2002-2006 timeframe from defendant, but these emails were deleted pursuant to the defendant’s document retention policy in place at the time. Plaintiffs moved for spoliation sanctions against defendant claiming that defendant’s deletion of the emails violated its duty to preserve. Plaintiffs argued that defendant’s duty attached based on:
- Industry-wide knowledge during the 2002-2006 timeframe regarding potential side effects of drugs arguably in Abilify’s class;
- Federal regulations requiring defendant to maintain records concerning adverse drug experiences; and
- The 2002 Pharmacovigilance agreement requiring the defendant to maintain safety-related correspondence for the benefit of the parties to the agreement.
The court rejected each of the plaintiffs’ arguments and denied their motion for sanctions. The court first noted that the duty to preserve “‘arises once litigation is pending or reasonably foreseeable.’” In re Abilify, at *2. The court referred to the Sedona Conference principle which states that a “reasonable anticipation of litigation” arises only when “an organization is on notice of a credible probability that it will become involved in litigation, seriously contemplates litigation, or when it takes specific actions to commence litigation.” Id., at *3.
With regard to the industry-wide knowledge argument, the court found that it would take a “quantum leap” to find defendant’s duty to preserve had been triggered based on scientific literature and litigation concerning a different drug prescribed for a different condition. The theory “improperly places too much emphasis upon events other than those generated by the plaintiff or those who are similarly situated to the plaintiff.” In re Abilify, at *3. In this case, neither plaintiffs nor their counsel took any action prior to 2013 that would have alerted defendant to the threat of litigation.
As for the FDA regulation and the Pharmacovigilance agreement, the court found that any duty to retain documents created by either did not apply to plaintiffs. The duty under the regulations applied to the FDA, and the duty under the agreement applies to the other party thereto. The only obligation owed to plaintiffs was “the duty to reasonably preserve documents once litigation [became] foreseeable.” In re Abilify, at *6.
How would this case play out in Michigan? The Sixth Circuit Court of Appeals has not addressed the “industry-wide” theory, but a recent district court decision suggests that under circuit law, the outcome would be the same. In a products liability action, the District Court for the Western District of Kentucky recently held that knowledge of substantially or reasonably similar incidents involving a defendant’s products is not the same as knowledge of an alleged defect that would reasonably lead to anticipation of litigation. Jackson v E-Z-GO, 2018 WL 3721385, at *4 (WD Ky Aug 3, 2018).
The Sixth Circuit has addressed the impact of regulations on the duty to preserve evidence. In Johnson v Metropolitan Gov’t of Nashville, 502 Fex Appx 523 (6CA Oct 18, 2012), the court held that deleted employment records should have been preserved under EEOC regulations. Does this mean that all record retention regulations create a duty to preserve evidence? Probably not. The EEOC regulations in the Johnson case have long been interpreted to inure to the benefit of employees in employment discrimination cases. See, e.g., Hicks v Gates Rubber Co, 833 F2d 1406 (10th Cir. 1987). As recognized by the Abilify court, the purpose behind the record retention regulation will determine if it creates a duty to preserve within the litigation context.
Finally, with respect to a contractual duty to preserve, no known cases within the Sixth Circuit address this issue. In a case where the litigant claiming the benefit of a contractual record retention obligation is not a party to the contract, presumably they would have to show intended third-party beneficiary status. Under Michigan state law, to be an intended third-party beneficiary, the contract must directly refer to the person or class of persons to be benefitted. The public at-large cannot qualify for intended third-party beneficiary status. Johnson v Doodson Ins Brokerage, LLC, 793 F.3d 674, 679 (6CA 2015). It would be a rare occurrence for a litigant to establish intended third-party beneficiary status.
Case law illustrates that the earlier in time the duty to preserve evidence is imposed, the greater the risk of spoliation. It makes sense to agree on a trigger date when possible. When not possible, assemble the evidence to establish the most favorable date for when litigation became “reasonably foreseeable.”