Attorneys have a duty to preserve evidence when bringing or defending claims.
In many jurisdictions, even accidental losses of evidence can lead to sanctions. For example, last year, an MMA fighter was sanctioned after a bottle of supplements critical to his suit against the manufacturer was lost in transit.[1] The court instructed the jury that it could draw an adverse inference based on the lost evidence.
Courts may also impose these sanctions where evidence is lost before a lawsuit is ever filed, if the litigation was foreseeable. Attorneys must therefore keep this duty to preserve evidence in mind after a dispute arises and remind clients to do the same.
Standards for Spoliation of Evidence
Courts penalize parties for spoliation based on their inherent power to address abusive litigation practices and Federal Rule of Civil Procedure (“FRCP”) 37, or analogous state civil rules.[2] While there is no independent federal claim for spoliation, several states recognize independent tort claims for spoliation.[3]
Spoliation of evidence standards are similar across the country. Before imposing sanctions, courts generally require that (i) a party had control of and responsibility to preserve evidence; (ii) with some level of intent, the party destroyed or lost that evidence; and, (iii) the opposing party was prejudiced by the lost evidence, and now has a more difficult case.[4]
Sanctions for Inadvertent Spoliation
Courts usually consider the responsible party’s level of intent in losing the evidence and the prejudicial impact of the lost evidence when they determine sanctions. Where the prejudice to an opposing party is great, courts are more likely to sanction inadvertent spoliation – negligence or recklessness may suffice. Likewise, where a party destroys evidence in bad faith, sanctions will likely result even if the opposing party is minimally affected.
Some courts will not impose any sanctions for accidental spoliation and instead require the moving party to demonstrate that the responding party destroyed evidence in bad faith and with intent to deprive the moving party of evidence.[5] For example, in 2012, the Third Circuit overturned spoliation sanctions against a plaintiff who failed to produce original doctors’ notes.[6] The court held that although the plaintiff lost the notes and the defendant was prejudiced by the loss, sanctions were inappropriate because there was no evidence the plaintiff intentionally destroyed the notes.
However, many courts will impose sanctions where a party negligently fails to produce evidence and the opposing party is prejudiced.[7] The Second Circuit, for example, held in Residential Funding Corp. v. DeGeorge Financial Corp., that grossly negligent acts that hinder discovery should result in sanctions. There, the plaintiff claimed it could not retrieve certain emails for trial, but in later settlement discussions was able to retrieve the emails.[8] The Second Circuit held that the plaintiffs’ “purposeful sluggishness” could constitute negligent spoliation of evidence and warrant an adverse inference instruction.
Certain other courts impose harsh sanctions – including dismissal – where evidence is negligently destroyed if the opposing party is sufficiently prejudiced.[9] New York courts, for example, may impose severe sanctions where a party negligently destroys evidence if the opposing party effectively cannot bring their claim because of the lost evidence.[10] Still, in Page v. Niagara Falls Medical Center, the New York Supreme Court held sanctions were not appropriate where the defendant hospital had disposed of a medical pump before it became relevant to the plaintiff’s claim.[11]
But the Florida Court of Appeals issued a default judgment against the defendant where a prosthetic hip central to a plaintiff’s claim was destroyed after the defendant shipped it to a third party for analysis.[12]
Sanctions for Spoliation before Litigation Commences
Moreover, courts may impose harsh sanctions where evidence is inadvertently destroyed even before litigation starts, if the litigation was reasonably foreseeable. This is an objective rather than subjective standard, and courts ask whether a reasonable person in the same factual circumstances would have foreseen litigation.[13]
Courts consider whether a dispute existed surrounding the evidence when it was lost, and whether a party previously asked for the evidence while it was in the other party’s control.[14] When a party institutes a litigation hold, that may indicate that litigation is foreseeable.[15]
But where one party begins preparing for litigation, but does not inform the opposing party, this preparation does not make litigation foreseeable to the other party. Courts are also less likely to find that litigation was foreseeable if significant time passes between an event that allegedly gave notice of litigation and the actual litigation starting. For example, the Northern District of Georgia held that a defendant did not foresee litigation after receiving a Civil Investigative Demand from the DOJ, noting that the defendant did not know that the government investigation was preparing for a lawsuit, and that a complaint was not filed until months later.[16]
Practice Pointer
Electronically stored information poses a unique challenge. Deleting files, recycling hard drives, and otherwise disposing materials may be part of a company’s data retention policies, but should be revisited in response to a litigation hold. Sanctions based on lost ESI can be notably severe, even when the evidence was lost inadvertently.[17]
And lawyers should not become complacent even after a litigation hold is placed. In a 2012 New York Supreme Court decision, a plaintiff’s suit was dismissed after several employees’ deleted emails in violation of a litigation hold, and the IT department failed to archive the deleted emails.
Moreover, parties must take great care whenever shipping evidence to third parties for analysis and should weigh the risk of losing the evidence. Some courts may impose harsh sanctions and even dismiss claims if crucial evidence is lost in shipment. Accordingly, parties should be wary whenever relinquishing control of evidence crucial to their or their opponents’ claims to third parties, as good faith alone may not protect against sanctions.
[1] https://www.law360.com/articles/1190182/lost-evidence-leaves-ny-judge-with-doubts-over-mma-suit
[2]Chambers v. NASCO, Inc., 501 U.S. 32, 45–46 (1991) (recognizing the inherent power of the courts to fashion appropriate sanctions for conduct that disrupts the judicial process); FED. R. CIV. P. 37(b)(2)(C).
[3]See Marinkovic v. Battaglia, 2019 WL 4600207, at *12-13 (W.D. Pa. Sept. 23, 2019); Silvestri v. General Motors Corp., 271 F.3d 583, 590 (4th Cir. 2011) (“Thus, while the spoliation of evidence may give rise to court imposed sanctions deriving from this inherent power, the acts of spoliation do not themselves give rise in civil cases to substantive claims or defenses.”). Alabama, Alaska, Florida, Indiana, Kansas, Louisiana, Montana, New Mexico, Ohio, and West Virginia recognize some independent tort for spoliation. https://www.mwl-law.com/wp-content/uploads/2018/02/SPOLIATION-OF-EVIDENCE-CHART.pdf.
[4]See, e.g.,Jones v. Norton, 809 F.3d 564, 580 (10th Cir. 2015); Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 107 (2d Cir. 2002); Holmes v. Amerex, 180 F.3d 294, 297 (D.C. Cir. 1999).
[5]See, e.g., Bull, 665 F.3d at 79; In re Delta, 770 F.Supp.2d at 1305; Jones, 809 F.3d at 580; Micron Technology, 645 F.3d at 1326.
[6]See, e.g., Bull, 665 F.3d at 78-79.
[7]See, e.g., Residential Funding Corp., 306 F.3d at 108; Silvestri, 271 F.3d at 593.
[8] 306 F.3d 99, 113 (2d Cir. 2002).
[9]See, e.g., Residential Funding Corp., 306 F.3d at 108; Silvestri, 271 F.3d at 593.
[10]See 915 Broadway Assoc. LLC v Paul, Hastings, Janofsky & Walker, LLP, 34 Misc.3d 1229(A), at *7 (N.Y. Sup. Ct. 2012); Silvestri, 271 F.3d at 590 (applying NY law).
[11]Page v Niagara Falls Mem. Med. Ctr., 167 A.D.3d 1428, 1430 (N.Y. Sup. Ct. 2018).
[12]DePuy, Inc. v. Eckes, 427 So. 2d 306 (Fla. Ct. App. 1983).
[13]See Micron Technology, Inc. v. Rambus, 645 F.3d 1311, 1320 (Fed. Cir. 2011).
[14]See Bull, 665 F.3d at 78.
[15]See Micron Technology, 645 F.3d at 1322.
[16]See In re Delta/AirTran Baggage Fee Antitrust Litigation, 770 F.Supp.2d 1299, 1305 (N.D. Ga. 2011)
[17]See, e.g., DuPont De Nemours & Co. v. Kolon Indus., Inc., 2013 WL 458532 (E.D. Va. Feb. 6, 2013) (imposing adverse inference and awarding $4,497,047.50 in sanctions for spoliation); MOSAID Techs. Inc. v. Samsung Elecs. Co., 348 F. Supp. 2d 332 (D.N.J. 2004) (affirming $566,839.97 sanctions award where party “willfully blinded itself” to its obligation to preserve potentially relevant electronic information); Harkabi v. Sandisk Corp., 275 F.R.D. 414 (S.D.N.Y. 2010) (granting motion for spoliation sanctions in part regarding destroying/losing electronic evidence and awarding $150,000 in monetary sanctions, but refusing to impose terminating sanctions).