When Deletion Of Evidence Becomes Spoliation

We are blogging on “Non-competes, Trade Secrets, Fiduciary Duties, and the Inevitable Disclosure Doctrine.” Mark Oberti has prepared a detailed paper on all of these issues, which can be found here.

What Is Spoliation

Spoliation is the destruction or the significant and meaningful alteration of evidence. Rimkus Consulting Group, Inc., 688 F. Supp. 2d 598, 612 (S.D. Tex. 2010). The routine deletion of electronically stored information transforms into spoliation when three elements are present: (a) the duty to preserve the information, (b) a culpable breach of that duty, and (c) resulting prejudice. Id.

1. Duty To Preserve Information

A party has a duty to preserve information when that party “has notice that the evidence is relevant to litigation, or . . . should have known that the evidence may be relevant to future litigation.” Rimkus Consulting Group, Inc., 688 F. Supp. 2d 598, 62 (S.D. Tex. 2010). The duty to preserve information encompasses documents or tangible things by or to individuals “likely to have discoverable information that the disclosing party may use to support its claims or defenses.” Id. This articulation makes clear that the scope of the preservation duty is directly proportional to the matter at hand and not an abstract, unbounded duty.

2. A Culpable Breach Of The Duty To Preserve Information

A “culpable” breach of a duty is one that is blameworthy – in other words, not an innocent mistake. Judge Rosenthal specifically notes that mere negligence in most courts is generally not enough to warrant an instruction on spoliation. Id. at 614. Also, Judge Rosenthal observes that in most circuits, courts do not impose the severe sanctions of granting default judgment, striking pleadings, or giving adverse inference instructions unless there is evidence of “bad faith.” Id. Judge Rosenthal further notes that her analysis and conclusions are, in part, at odds with the framework established in Pension Committee due to the rubric of case law developed in the Second Circuit. Id. at 615.

3. Resulting Prejudice

The third element of spoliation, “resulting prejudice,” is important because not all destruction or alteration of evidence negatively impacts the other party’s ability to present its case. Both “culpability” and “prejudice” are case-by-case determinations, in which notions of reasonableness and proportionality are paramount. Id. at 616-17. Thus, Judge Rosenthal’s opinion provides guidance to courts deciding a spoliation claim to consider the nature of the case, the amount in controversy, and the degree to which the conduct in question actually impairs the innocent party’s ability to present its case.

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