Oops! Accidental Spoliation or Bad Faith?
POSTED ON September 03

Two phrases send shivers down the spine of anyone in eDiscovery–accidents will happen and good faith’s converse-bad faith.  But what should we consider as we parse these two conditions?

We can all agree that discovery depends on the good faith of the people engaging in it. Sometimes, requested information cannot be turned over because it no longer exists. And missing material often leads to spoliation of evidence claims.

We also can agree that spoliation is a very serious matter, and spoliators face sanctions for destruction of evidence. Sanctions for spoliation aim, at least in part, to deter others who might even consider destroying evidence. In cases in which the spoliation was particularly egregious, courts have gone so far as to strike a party’s pleading (see, e.g., Long Island Diagnostic Imaging, P.C. v. Stony Brook Diagnostic Assoc., 286 A.D. 2d 320, 728 N.Y.S. 2d 781 (2001)). Other sanctions can include instructing the jury that it may infer that the missing evidence would have been unfavorable to the party who destroyed it (see, e.g., Olney v. JOB.com, No. 1:12-cv-01724 (N.D. Cal. Oct. 24, 2014)).

In many situations, however, deterrence is not going to be an issue. Perhaps no one set out to destroy the evidence, but it is gone due to an accident or an unintentional destruction of materials. What happens when evidence is destroyed accidentally?

Courts take varying view on the accidental spoliation of evidence. Some have gone so far as to say that there can be no spoliation claim without a showing of bad faith. In the case of Baron v. Black, 2015 N.Y. Slip Op. 31201 (U) (Jul. 10, 2015), the court refused to impose sanctions when there was no showing that the plaintiffs had acted in bad faith when they destroyed evidence. On the other hand, in Nevada v. Abbott Labs, Inc. (In re Pharmacy Industry Average Wholesale Price Litigation), 2007 U.S. Dist LEXIS 100125 (D. Mass. 2007), the court held that it was proper to sanction a party whose mishandling of evidence was “careless or negligent” and resulted in prejudice to the other party.

Courts differ on what, if anything, to do about negligently destroyed evidence. An important consideration is the degree of fault of the party who altered or destroyed the evidence. But a lack of fault is not a get-out-of-jail-free card for inadvertent spoliation. In the Nevada case, the state negligently failed to preserve key evidence, including e-mails regarding Medicaid reimbursement. The mishandling was unintentional, in that the state did not “fail to preserve” the evidence with the intent to keep it from the requesting parties, but it still deprived the defendants of the ability to examine a key piece of evidence, and the court imposed sanctions.

In the Nevada case, it was apparent that the e-mails should have been preserved (or if not, counsel should have made it clear). The state had reason to anticipate litigation over the Medicaid reimbursement claims. But what about cases where the obligation to preserve is not so obvious? In a complex commercial litigation case, discovery requests may span years of e-mails and memos. In those cases, the needed protective steps may not be apparent until it is too late. Evidence may be deleted accidentally or routinely, without either side’s knowledge, until discovery requests reveal the issue. Or, as happened in Little Hocking Water Ass’n v. E.I. du Pont de Nemours & Co., 2015 U.S. Dist. LEXIS 36917 (S.D. Ohio Mar. 24, 2015), the requested evidence may be unavailable because it was stored on a system that became technologically obsolete, and there is no practicable way of retrieving it.

As with most legal issues, the answer to the question “what happens if my client accidentally destroys evidence?” is “it depends.” Negligent destruction of evidence will not, as a rule, result in sanctions being imposed. There are exceptions, however, such as cases in which it should be clear that evidence needs to be preserved. It really comes down to what was known—or what should have been known—at the time of the destruction.

Our thoughts on the handing of  evidence will change on December 1, 2015 with the implementation of the  new standards in the Federal Rules of Evidence.  If you want to get your feet wet on this topic, please join me for my presentation “How Changes in the Federal Rules of Civil Procedure Affect eDiscovery” at Minnesota CLE at noon on Tuesday, September 8, 2015.

About the Author Chris

Author Avatar Christine Chalstrom is the Founder, CEO, and President of Shepherd Data Services, Trustee, Mitchell Hamline Law School and Adviser, Center for Law and Business. She has spoken widely on the Amendments to the Federal Rules of Civil Procedures, Digital Forensics, and eDiscovery best practices. Her credits include presentations to the American Bar Association, Association of Certified e-Discovery Specialists (ACEDS), Corporate Counsel Institute, MN Association of Corporate Counsel, MN Association of Litigation Support Professionals, MN CLE, Mitchell Hamline School of Law, Upper Midwest Employment Law Institute. She is an attorney, programmer, and forensic examiner.