Spoliation & the Duty to Preserve Evidence

Question 1

Duty to Preserve Evidence

Answer 1

A party to a lawsuit has a duty to preserve evidence that the party knows or reasonably should know is relevant to existing OR reasonably anticipated litigation.

Question 2

Spoliation

Answer 2

Is the destruction or material alteration of evidence, or the failure to preserve property for another’s use as evidence, in pending or reasonably foreseeable litigation.

Spoliation is sanctionable conduct. Sanctions imposed must be proportional to the severity of the offense, and should be no more severe than necessary.

• For example, if the spoliation was deliberate and willful, a greater sanction will be imposed than if the spoliation was accidental and negligent.
• In determining the appropriate sanction, the court will consider not only the conduct of the offending party, but also the prejudice to existing parties due to the loss or absence of the evidence.

Question 3

Spoliation in the Corporate Context:

Answer 3

Preservation of evidence is more challenging for a corporate party than for an individual because the corporation is responsible to ensure the preservation of evidence that may be in the custody or control of many different employees. The corporate party must ensure that all employees who are in a position to destroy or alter evidence relevant to a lawsuit are aware of the need to preserve that evidence.

• The existence of electronically stored information complicates the preservation requirement. Electronic communications ARE documents – this includes emails, text message, Facebook posts, Twitter messages.
• Once the preservation obligation arises, the corporation must ensure that all documents, including electronic documents, emails, etc., are retained.
• The corporate party must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure preservation of relevant documents. This would include preservation of “back-up tapes” on which email or electronic documents may be stored.
• “Litigation hold” means that a “hold” is place on all documents likely to be relevant to the anticipated or pending litigation. The litigation hold must be communicated to key players in the litigation and to the information technology folks.

Failure to preserve relevant evidence despite the obligation to do so can result in sanctions not only on the client, but also on the client’s lawyer. To comply with preservation obligations, an attorney for a corporate party must:

• Implement a “litigation hold” and monitor his client’s efforts to retain and produce relevant documents.
• Ensure that all sources of potentially relevant information are identified and placed “on hold.”
• Become fully familiar with client’s document retention policies and data retention architecture, which will require speaking to information tech people to understand company’s backup procedures and data base recycling policy.
• Need to make sure that electronic evidence isn’t inadvertently lost because of automatic computer functions, like deleting emails when they reach a certain number in a person’s inbox.
• Speak to key players in the litigation to understand how they store information.

Question 4

Counsel’s steps to ensuring compliance with preservation obligation:

Answer 4

1. Issue a “litigation hold” at the outset of the litigation, or upon reasonable anticipation of litigation. Reissue the litigation hold periodically so that new employees are aware of it and so that it is fresh in the minds of all employees.
2. Communicate directly with key players in litigation regarding the preservation obligation and litigation hold. Periodically remind key players of the litigation hold.
3. Instruct all employees to retain and produce electronic copies of their relevant active files. Working with information technology personnel, ensure that all backup media that the party is required to retain is identified and stored in a safe place.
   * Note – need to work with the IT folks at the outset to make sure they stop any automatic document destruction activities that could destroy relevant information.

Question 5

FRCP 37(e): Remedies for Loss of Electronically Stored Information

Answer 5

• Rule 37(e) authorizes measures a court may employ if electronically stored information that should have been preserved is lost, where the party failed to take reasonable steps to preserve it.
• The rule is inapplicable when the loss of information occurs despite the party’s reasonable steps to preserve.
• When a party fails to take reasonable steps to preserve electronically stored information, and the information is lost as a result, Rule 37(e) directs that the initial focus should be on whether the lost information can be restored or replaced through additional discovery. If the information is restored or replaced, no further measures should be taken.
• FRCP 37(e) is limited to electronically stored information (ESI), and provides:

If ESI that should have been preserved is lost due to party’s failure to take reasonable steps to preserve it, and it can’t be restored or replaced through more discovery, the court may:

1. Order measures no greater than necessary to cure the prejudice caused by loss of the ESI (note that action can be taken only if the court finds that the loss in fact caused prejudice); OR
2. If the court finds the party acted with intent to deprive another party of the ESI:

• Presume the lost ESI was unfavorable to the party;
• Instruct the jury to presume the ESI was unfavorable to the party; OR
• Dismiss the action or enter a default judgment.
• NOTE: Finding an intent to deprive another party of the lost information’s use in the litigation does not require a court to adopt any of the measures listed in 2, above. The remedy should fit the wrong, and the severe measures authorized by this subdivision should not be used when the information lost was relatively unimportant or lesser measures would be sufficient to redress the loss.

Question 6

Pre-Trial Case Management

FRCP 16

Answer 6

authorizes the court to conduct pretrial conferences, and outlines the parameters and objectives for such conferences.

• A court can convene pretrial conferences at various points during the litigation.
• The court will often hold a “scheduling conference” after the parties’ 26(f) conference and after the parties’ discovery plan has been submitted, which will result in the Scheduling Order.
• The court can also hold subsequent pretrial conferences – as many as it wants – for a variety of reasons, such as:
• To define and simplify contested facts, theories, and issues;
• Eliminate frivolous claims or defenses;
• Address discovery issues;
• Discuss pending issues –e.g., motions, trial matters;
• Discuss the possibility of settlement
• Court is required to issue pretrial orders detailing any court action taken at any pretrial conference.
• Who must attend? Rule 16 authorizes the court to order both attorneys and parties to attend pretrial conferences. For most conferences, however, the court will require only the attorneys to attend.
• Sanctions: Under Rule 16(f), a court may, on a motion or on its own initiative, impose sanctions to force parties to comply with scheduling or pretrial orders, and to compensate a party for expenses caused by an opposing party’s noncompliance with such orders. Sanctions are appropriate where party or attorney:
• Fails to appear at the pretrial conference;
• Is substantially unprepared to participate – or does not participate in good faith – in the conference.
• Fails to obey a scheduling or other pretrial order.

Question 7

The Final Pretrial Conference [Rule 16(e)]

Answer 7

this is usually held after the close of discovery, after the court’s ruling on any summary judgment motions, and is the last conference before trial.

• At this conference, the court will set the trial date, set the schedule for any remaining motions, take one more stab at trying to settle the case. May resolve evidentiary issues and settle on jury instructions.
• Parties are typically required to prepare a pretrial statement (or pretrial memorandum) prior to the Final Pretrial Conference. This “pretrial statement” often consists of the parties’ joint attempt to draft what will become the Final Pretrial Order.
• Local rule or court order defines what will be in the pretrial statement. Usually, parties are required to:
• State their legal theories or defenses.
• Provide a list of witnesses and exhibits to be presented at trial.
• Describe legal or evidentiary issues likely to arise at trial.
• Identify uncontested issues and stipulations of fact.
• The order resulting from Final Pretrial Conference is called the Final Pretrial Order. This order addresses trial issues and becomes the court’s and the parties’ “roadmap” for trial.
• The Final Pretrial Order is binding on the parties, and it is usually based on the final pretrial statement. It supersedes previously filed pleadings and controls the subsequent course of the case.
• Evidence or legal theories that are not at least implicitly raised in the Final Pretrial Order will likely be barred at trial.
• The Final Pretrial Order CAN be modified to add an issue, claim, or defense, or whatever a party claims was left out that should be included, so as to permit that issue to be raised at trial – but such modification can be made only to “prevent manifest injustice.”
• In deciding whether “manifest injustice” exists warranting amendment of Final Pretrial Order, the court considers:
• Prejudice or surprise to party opposing the amendment;
• The ability of that party to cure any prejudice; and
• Whether there was bad faith on the party of the party seeking to modify the order.