Determining Whether Spoliation Merits An Adverse Inference Instruction

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.

Judge Rosenthal’s decision in Rimkus Consulting Group, Inc., 688 F. Supp. 2d 598 (S.D. Tex. 2010) identifies the elements of a request for an adverse inference instruction due to spoliation as similar, but not identical, to those of spoliation itself. The requesting party must establish that: (a) the party with control over the evidence had an obligation to preserve it at the time it was destroyed; (b) the evidence was destroyed with a culpable state of mind; and (c) the destroyed evidence was “relevant” to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense. Id. at 615-16. Judge Rosenthal noted that courts further divide the “relevance” factor of this analysis into three subparts: (i) whether the evidence is relevant to the lawsuit, (ii) whether the evidence would have supported the inference sought, and (iii) whether the non-destroying party has suffered prejudice from the destruction of the evidence. Id. at 616.

1. Demonstrating The Relevance Of Lost Information

The burden on the innocent party to demonstrate the “relevance” of lost information begs the question: How is this possible, if the information is lost? Often, as in Rimkus, the party seeking discovery can replace some deleted information, or obtain extrinsic evidence of its content. Id. For example, a forensic analysis of Rimkus’ computer system revealed that, three days before his departure from the company, the executive sent a flurry of work documents to his personal e-mail account. Id. at 644. Rimkus was able to mine its own server for these e-mails, which contained income statements for several company offices. Yet, even if Rimkus had been unable to recover the e-mails, the circumstances under which they were sent would probably have satisfied the relevance criterion.

Requiring parties to show that lost information is relevant and prejudicial is an important check on spoliation allegations and sanctions motions. Id. at 616. Still, courts realize the difficulty inherent in demonstrating the nature of something that is missing. Speculative or generalized assertions that the missing evidence would have been favorable to the party seeking sanctions are insufficient. However, sometimes the evidence in the case as a whole sufficiently indicates that the lost information would have helped the requesting party support its claims or defenses. In Pension Committee, the court found that, even for severe sanctions, relevance and prejudice may be presumed when the spoliating party acts in a grossly negligent manner. In Rimkus, because much lost information was recovered or its relevance shown by circumstantial evidence, Judge Rosenthal determined that there was “neither a factual or legal basis, nor need, to rely on a presumption of relevance or prejudice.” Id. at 618.

2. The Role Of Prejudice In Rimkus

The case generated voluminous discovery. Defendants produced some records, Rimkus was able to retrieve many of the deleted records from other sources (such as internet service providers), and deposition testimony was plentiful. Judge Rosenthal concluded that, taken together, these sources of evidence provide sufficient material for Rimkus to present its case, thus mitigating the prejudicial effect of the defendants’ conduct. Id. The court also emphasized the fact that some of the lost information appears to favor the defendants, further reducing the prejudice to Rimkus. Id.

3. The Adverse Jury Instruction In Rimkus

Ultimately, Judge Rosenthal crafted the following adverse inference instruction:

[The jury will] hear evidence about the deletion of emails and attachments and about discovery responses that concealed and delayed revealing the deletions … [The jury will learn that, after a certain date] the defendants had a duty to preserve emails and other information they knew to be relevant to anticipated and pending litigation. If the jury finds that the defendants deleted emails to prevent their use in litigation with Rimkus, the jury will be instructed that it may, but is not required to, infer that the content of the deleted lost emails would have been unfavorable to the defendant. In making this determination, the jury is to consider the evidence about the conduct of the defendants in deleting emails after the duty to preserve had arisen and the evidence about the content of the deleted emails that cannot be recovered.

Id. at 620, 653.

The nature of this inference – permissive rather than mandatory – is consistent with the inferences used in other spoliation cases cited by Judge Rosenthal. See id. at 646 n. 34. Notably, however, the instruction is significantly shorter than the instruction in Pension Committee, in part because the instruction in Rimkus concerns only the favorability of the evidence, whereas the instruction in Pension Committee deals with both relevance and favorability.

The instructions also differ in terms of a defendant’s ability to overcome the negative inference. In Pension Committee, the jury instruction permitted jurors to presume that the lost evidence was both relevant and favorable to the defendants, but then asked jurors to assess whether the individual defendants had successfully rebutted this presumption. If jurors found that a defendant had done so, then they were to discard the negative inference. In contrast, the jury instruction in Rimkus was silent as to the defendants’ ability to rebut the presumption, thereby increasing the likelihood that jurors would apply the negative inference. Neither instruction places the jury in the role of assessing when the duty to preserve arose or the scope of the duty.

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