A few days later, when the terror caused by the executions had died down, some of the animals remembered — or thought they remembered — that the Sixth Commandment decreed “No animal shall kill any other animal.” And though no one cared to mention it in the hearing of the pigs or the dogs, it was felt that the killings which had taken place did not square with this. Clover asked Benjamin to read her the Sixth Commandment, and when Benjamin, as usual, said that he refused to meddle in such matters, she fetched Muriel. Muriel read the Commandment for her. It ran: “No animal shall kill any other animal WITHOUT CAUSE.” Somehow or other, the last two words had slipped out of the animals’ memory. But they saw now that the Commandment had not been violated; for clearly there was good reason for killing the traitors who had leagued themselves with Snowball.
George Orwell, Animal Farm
George Orwell’s classic tale recounts a methodical power-grab and reign of terror over a barnyard by some clever pigs and their trained dogs. Their community had been founded upon principles of “Animalism,” which were codified in the Commandments painted on the barn wall. But, from time to time, in order to maintain their power and preserve their privileged-class lifestyle, the pigs would get out a paintbrush and – while no one was looking – simply change the rules. The killing of the other animals was excused, for instance, so long as the pigs could point to a good reason for it.
This post is the third installment in a series related to the proposed amendments to the FRCP. As described in my last post, the amendment to FRCP 37(e) would change the rules regarding spoliation and sanctions. The amendment would legalize the destruction of relevant evidence, declaring sanctions unavailable when the perpetrators can make their conduct look like a good faith mistake. Big corporations and their big law firms have their paintbrushes poised.
Support for the amendment centers around one particular piece of propaganda issued by corporate interests: that courts around the country have come to treat spoliation and sanctions very differently; that this uncertainty results in mass over-preservation, increasing costs; and that the amendment is therefore necessary to establish uniformity. As a result, the Advisory Committee Note to Proposed Amendments states (p. 272): “A central objective of the proposed new Rule 37(e) is to replace the disparate treatment of preservation/sanctions issues in different circuits by adopting a single standard.” Of course, the propaganda isn’t exactly accurate.
The best known among them was a small fat pig named Squealer, with very round cheeks, twinkling eyes, nimble movements, and a shrill voice. He was a brilliant talker, and when he was arguing some difficult point he had a way of skipping from side to side and whisking his tail which was somehow very persuasive. The others said of Squealer that he could turn black into white.
George Orwell, Animal Farm
In truth, rules providing remedies for spoliation have been around for centuries. The imposition of sanctions for the failure to preserve evidence dates to the 18th century case of Armory v. Delamirie. While going about his duties, a chimney sweep apprentice happened upon a bejeweled ring, which he took to a goldsmith for appraisal. The goldsmith returned the ring minus the jewel, and the boy sued for its value. The goldsmith failed to produce the jewel at trial.
As to the value of the jewel several of the trade were examined to prove what a jewel of the finest water that would fit the socket would be worth; and the Chief Justice directed the jury, that unless the defendant did produce the jewel, and shew it not to be of the finest water, they should presume the strongest case against him, and make the value of the best jewels the measure of their damages: which they accordingly did.
Didn’t matter whether he concealed it, or his discovery vendor lost it, or his dog ate it. The evidence had been in his possession, he had a duty to preserve and produce it at trial, and he failed to do so, to the detriment of the opposing party. The adverse inference instruction was given to remedy the prejudice.
The concept is alive and well today. Generally speaking, courts nationwide evaluate if and how to impose sanctions for spoliation by asking three questions: (1) Was evidence was lost or destroyed while a party in control of it had an obligation to preserve it? (2) What was the culpable state of mind of the perpetrator? and (3) Was the evidence relevant to the claims and defenses in the action such that the victim is prejudiced? Generally speaking, in courts nationwide, the availability and severity of sanctions increases in direct proportion to the culpability of the behavior and the extent of the prejudice to the opposing party. A good survey of law is available in Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497, 520-521, 2010 U.S. Dist. LEXIS 93644 (D. Md. 2010).
There may be slight differences between circuits on tangential matters, such as the extent to which “control” extends to ESI in the hands of third parties. Also, some circuits reserve particular forms of sanctions (e.g. adverse inference instructions) for situations involving bad faith conduct. But the simple core principles are the same all over. If you commit or permit the destruction of relevant evidence under your control during a period of preservation obligation, sanctions commensurate with your culpability are available to remedy resulting prejudice. If you don’t, they aren’t. Duh. Is there something surprising or uncertain about that?
The Advisory Committee Note goes on to explain what this amendment is really about. It isn’t about guarding against uncertainty or disparate treatment. It is designed to displace the very certain, very real substantive law that exists in most of the country today in order to protect the rights of spoliation victims. “The proposed rule therefore rejects Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99 (2d Cir. 2002), which stated that negligence is sufficient culpability to support sanctions.” Amendments, p.272.
In all of the following circuits, sanctions are available to remedy the negligent destruction of relevant evidence:
1st Bad faith is not essential. If such evidence is mishandled through carelessness, and the other side is prejudiced, we think that the district court is entitled to consider imposing sanctions, including exclusion of the evidence… Trull v. Volkswagen of Am., Inc., 187 F.3d 88, 95, 1999 U.S. App. LEXIS 16909, 52 Fed. R. Evid. Serv. (Callaghan) 1449, CCH Prod. Liab. Rep. P15,589 (1st Cir. N.H. 1999)
2nd Discovery sanctions, including an adverse inference instruction, may be imposed upon a party that has breached a discovery obligation not only through bad faith or gross negligence, but also through ordinary negligence. Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 113, 2002 U.S. App. LEXIS 20422, 53 Fed. R. Serv. 3d (Callaghan) 1105 (2d Cir. Conn. 2002)
3rd Negligent destruction of relevant evidence can be sufficient to give rise to the spoliation inference. If a party has notice that evidence is relevant to an action, and either proceeds to destroy that evidence or allows it to be destroyed by failing to take reasonable precautions, common sense dictates that the party is more likely to have been threatened by that evidence. Canton v. Kmart Corp., 2009 U.S. Dist. LEXIS 59352, 8, 2009 WL 2058908 (D.V.I. July 10, 2009)
4th There are three possible states of mind that can satisfy the culpability requirement: bad faith/knowing destruction, gross negligence, and ordinary negligence… The degree of fault impacts the severity of the sanction… Goodman v. Praxair Servs., 632 F. Supp. 2d 494, 518, 2009 U.S. Dist. LEXIS 58263 (D. Md. 2009)
6th To satisfy the “culpable state of mind” requirement for spoliation sanctions, the innocent party must show that the spoliating party lost or destroyed evidence as a result of (1) bad faith (i.e.,intentional or willful) destruction, (2) gross negligence, or (3) ordinary negligence. In re Global Technovations, Inc., 431 B.R. 739, 780, 2010 Bankr. LEXIS 1948 (Bankr. E.D. Mich. 2010)
7th Findings of wilfulness, bad faith, and fault are all sufficient grounds for sanctions… Fault is defined not by the party’s intent, but by the reasonableness of the party’s conduct. It may include gross negligence of the duty to preserve material evidence. Jones v. Bremen High Sch. Dist. 228, 2010 U.S. Dist. LEXIS 51312, 17-18, 2010 WL 2106640 (N.D. Ill. May 25, 2010)
9th Next, Plaintiffs must show that [defendant] acted with a culpable state of mind. (citing Residential Funding) This factor is satisfied by a showing that the evidence was destroyed “knowingly, even if without intent to [breach a duty to preserve it], or negligently.” Hamilton v. Signature Flight Support Corp., 2005 U.S. Dist. LEXIS 40088, 15, 2005 WL 3481423 (N.D. Cal. Dec. 20, 2005)
10th Defendant was not required to show that plaintiff acted in bad faith in destroying the evidence in order to prevail on its request for spoliation sanctions. 103 Investors I, L.P. v. Square D Co., 470 F.3d 985, 988-989, 2006 U.S. App. LEXIS 30421, CCH Prod. Liab. Rep. P17,641 (10th Cir. Kan. 2006)
For those who like to look at the big picture, here’s a visual aid. The proposed amendment to Rule 37(e) is intended to change existing federal law, significantly impairing the substantive rights of spoliation victims over this general area:
About this time there occurred a strange incident which hardly anyone was able to understand. One night at about twelve o’clock there was a loud crash in the yard, and the animals rushed out of their stalls. It was a moonlit night. At the foot of the end wall of the big barn, where the Seven Commandments were written, there lay a ladder broken in two pieces. Squealer, temporarily stunned, was sprawling beside it, and near at hand there lay a lantern, a paintbrush, and an overturned pot of white paint.
– George Orwell, Animal Farm
Don’t just sit there staring at the writing on the wall. The proposed amendments are in the public comment period. You can submit a comment electronically by clicking here.