Spoliation Uncertainty—The Impact of Recent Case Law

A trend in case law is drawing attention to the lack of uniformity around the country in how federal courts are dealing with the loss of discoverable evidence, also known as spoliation. Sanctions for spoliation mainly relating to electronically stored information (ESI) continue to make news after a number of high-profile decisions in 2013.

Since the end of 2012 there have been a number of decisions in federal courts imposing adverse inference sanctions due to spoliation. In the absence of a “bright line,” parties face uncertainty about what they must do to avoid this potentially case-altering penalty. Arising from this already recognized uncertainty was a proposed amendment to the Federal Rule of Civil Procedure Rule 37(e) that would set uniform standards for spoliation sanctions.

This line of case law rose to prominence 10 years ago when U.S. District Judge Shira Scheindlin laid out a framework in her landmark Zubulake decisions for spoliation sanctions of ESI. The Zubulake decisions addressed triggers, key players and litigation holds, all issues with which parties and courts continue to grapple. Judge Scheindlin revisited these issues in Pension Committee about four years ago and expressed her ongoing frustration with how parties address preservation obligations. Recently in Sekisui v. Hart, Judge Scheindlin reiterated the elements of spoliation when imposing adverse inference sanctions.

Control, Culpability and Prejudice

There are three essential elements to any spoliation argument: culpability, relevance and prejudice. How these elements interact is central to any discussion of spoliation and a finding of the requisite state of mind affects the analysis of relevance and prejudice, including which party bears the burden of proof for establishing relevance and prejudice.

The good news is that there is a generally accepted test used to determine if an adverse inference sanction is warranted. That standard was articulated in, for example, the Second Circuit’s Residential Funding, which Judge Scheindlin quoted in her Sekisui opinion:

“[A] party seeking an adverse inference instruction based on the destruction of evidence must establish (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; and (3) that 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.”