Spoliation Law Across The Circuits: Magistrate Judge Paul Grimm’s New Magnum Opus
Via Electronic Discovery Law comes an opinion so thorough and helpful it’s hard to believe you can get it for free.
Magistrate Judge Paul W. Grimm of the District of Maryland has been writing about spoliation and evidentiary concerns for quite some time (see, e.g., Paul W. Grimm, Michael D. Berman, Conor R. Crowley, Leslie Wharton, Proportionality in the Post-Hoc Analysis of Pre-Litigation Preservation Decisions, 37 U. BALT. L. REV. 381, 388 (2008)), and was waiting for someone to pitch him a soft ball.
He got one in Victor Stanley, Inc. v. Creative Pipe, Inc. No. MJG-06-2662 (D. Md. Sept. 9, 2010):
Defendants do not dispute that spoliation took place, relevant evidence was lost, and Plaintiff was prejudiced accordingly; that Defendants’ misconduct was sufficiently egregious to warrant sanctions; and that the sanctions warranted are serious. Nor is this a case where Defendants have claimed or demonstrated that what they did was reasonable and involved effort and expense that were proportionate to what is at stake in the litigation. In such an instance, the Court could be excused for simply acknowledging Defendants’ concessions and applying the applicable law of the Fourth Circuit without considering the broader legal context in which preservation/spoliation issues are playing out in litigation across the country. While justified, such a narrow analysis would be of little use to lawyers and their clients who are forced, on a daily basis, to make important decisions in their cases regarding preservation/spoliation issues, and for whom a more expansive examination of the broader issue might be of some assistance. Accordingly, I will attempt to synthesize not only the law of this District and Circuit, but also to put it within the context of the state of the law in other circuits as well. I hope that this analysis will provide counsel with an analytical framework that may enable them to resolve preservation/spoliation issues with a greater level of comfort that their actions will not expose them to disproportionate costs or unpredictable outcomes of spoliation motions.
And so beginneth a leisurely stroll down spoliation lane, a good companion to Zubulake and Judge Scheindlin’s followup, Pension Comm. of Univ. of Montreal. Judge Grimm even helpfully attaches a chart summarizing his findings on the state of the law across the Circuits. Here, for example, is the law in the Third Circuit:
Scope of Duty to Preserve
Potentially relevant evidence; “‘it is essential that the evidence in question be within the party’s control.’” Canton v. Kmart Corp., No. 1:05-CV- 143, 2009 WL 2058908, at *2 (D.V.I. July 13, 2009) (quoting Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 334 (3d Cir. 1995))
Can conduct be culpable per se without consideration of reasonableness?
No; conduct is culpable if “party [with] notice that evidence is relevant to an action . . . either proceeds to destroy that evidence or allows it to be destroyed by failing to take reasonable precautions” Canton v. Kmart Corp., No. 1:05- CV-143, 2009 WL 2058908, at *3 (D.V.I. July 13, 2009) (quoting Mosaid Techs., Inc. v. Samsung Elecs. Co., 348 F. Supp. 2d 332, 338 (D.N.J. 2004)) (emphasis added).
Culpability and prejudice requirements
For sanctions in general
Bad faith Bensel v. Allied Pilots Ass’n, 263 F.R.D. 150, 152 (D.N.J. 2009).
for dispositive sanctions
The degree of fault is considered, and dispositive sanctions “should only be imposed in the most extraordinary of circumstances,” see Mosaid Techs., Inc. v. Samsung Elecs. Co., 348 F. Supp. 2d 332, 335 (D.N.J. 2004), but a minimum degree of culpability has not been identified.
for adverse inference instruction
Negligence Canton v. Kmart Corp., No. 1:05- CV-143, 2009 WL 2058908, at *2-3 (D.V.I. July 13, 2009). Intentional conduct Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 334 (3d Cir. 1995).
for a rebuttable presumption of relevance
Whether relevance can be presumed has not been addressed.
What constitutes prejudice
Spoliation of evidence that would have helped a party’s case In re Hechinger Inv. Co. of Del., Inc., 489 F.3d 568, 579 (3d Cir. 2007).
Culpability and corresponding jury instructions
Intentional spoliation; permissible inference Mosaid Techs., Inc. v. Samsung Elecs. Co., 348 F. Supp. 2d 332, 334 (D.N.J. 2004).
Litigators should read (or at least skim) Judge Grimm’s opinion before sending off another Litigation Hold, or Notice To Preserve Evidence, or Motion for Sanctions.
It would not do the opinion justice to summarize it here – the opinion simply covers too many areas – but I do want to highlight one issue:
What frustrates courts is the inability to fashion an effective sanction to address the drain on their resources caused by having to wade through voluminous filings, hold lengthy hearings, and then spend dozens, if not hundreds, of hours painstakingly setting forth the underlying facts before turning to a legal analysis that is multi-factored and involved. Adverse inference instructions do not compensate for the expenditure of court resources to resolve a spoliation dispute, nor do awards of attorney’s fees and costs to the prevailing party in the dispute. Further, dispositive sanctions, the appellate courts tell us, are only appropriate where lesser sanctions will not suffice. Silvestri, 271 F.3d at 590 (4th Cir. 2001); West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999). Indeed, it is questionable whether the interests of justice truly are served if a court imposes case-dispositive sanctions for clearly culpable conduct resulting in spoliation of evidence absent a finding that the failure to preserve evidence resulted in the loss of evidence that was relevant, or caused prejudice to the spoliating party’s adversary, notwithstanding the amount of time it took the court to resolve the spoliation issue, or the concomitant “opportunity cost” to the court occasioned by its inability to work on other pressing matters because of the need to resolve the spoliation motion.
Unfortunately, if courts want to stop these sort of problems, they’re going to have to engage in some self-help, since all the reform proposals out there would make the problem worse, not better.
That is to say, we’ll need more orders like Judge Grimm’s:
For the reasons stated herein, Plaintiff’s Motion will be GRANTED IN PART and DENIED IN PART, and it further is recommended that, in addition to the relief ordered by this Memorandum and Order, Judge Garbis enter an Order granting a default judgment against Defendants with regard to Count I of the Complaint (which alleges copyright infringement). Among the sanctions this memorandum imposes is a finding, pursuant to Fed. R. Civ. P. 37(b)(2)(A)(vii), that Pappas’s pervasive and willful violation of serial Court orders to preserve and produce ESI evidence be treated as contempt of court, and that he be imprisoned for a period not to exceed two years, unless and until he pays to Plaintiff the attorney’s fees and costs that will be awarded to Plaintiff as the prevailing party pursuant to Fed. R. Civ. P. 37(b)(2)(C).
That should get obstructionist parties and lawyers’ attention.