The Duty to Preserve and Spoliation

Presented by:Anthony M. Rainone, Esq.

October 26, 2011

The Duty to Preserve: What is it?

With regard to relevant evidence:

- Don’t destroy it

- Don’t alter it

- Don’t allow it to become inaccessible

Triggering the Duty to Preserve

•Can be a vague determination

•During litigation

•Where “a party should have known that the evidence may be relevant to future litigation.” Bashir v. The Home Depot, 2011 WL 3625707 (D.N.J. Aug. 16, 2011) (citing Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998))

Triggering the Duty to Preserve

Four elements:

(1) Pending or probable litigation

(2) Knowledge

(3) Foreseeability of harm

(4) Relevance

Limits on the Duty to Preserve

- Reasonable steps under the circumstances to preserve the evidence.

- No duty to keep/retain all evidence

- Evidence a party knows/reasonably should know will likely be requested in foreseeable litigation

Spoliation: a refresher

“[T]he destruction or significant alteration of evidence, or the failure to preserve property for another to use as evidence in pending or reasonably foreseeable litigation.”

Mosaid Techs., Inc. v. Samsung Elecs. Co., 348 F. Supp.2d 332, 335 (D.N.J. 2004) (citing Zubulake v. UBS Warburg, LLC, 229 F.R.D. 422 (S.D.N.Y. 2004))

Forms of Spoliation

- Destruction or failure to suspend routine document destruction policies/failure to institute litigation hold

- Alteration

- Concealment

- Rendering evidence inaccessible

Counsel’s Obligation

“What is true in love is equally true at law: Lawyers and their clients need to communicate clearly and effectively with one another to ensure that litigation proceeds efficiently. When communication between counsel and client breaks down, conversation becomes ‘just crossfire,’ and there are usually casualties.”

Zubulake V, 229 F.R.D. 422 (S.D.N.Y. 2004)

Counsel’s Obligation

• Obligation does not end with litigation hold

• Oversee compliance with litigation hold

• Monitor party’s efforts to retain records

• Must understand the document retention policy

Spoliation Sanctions

- Dismissal of claims or defenses

- Suppression of evidence

- Adverse inference jury instruction

- Entry of judgment

- Monetary sanctions and attorneys fees

Purpose of the Sanctions

- Remedial purpose

- Punitive purpose

- Deterrent purpose

Authority for Sanctions

• Inherent judicial authority

• Federal Rules of Civil Procedure

• New Jersey Rules of Court

• Abuse of discretion standard of review

Dismissal and Suppression

• Considered the most drastic sanctions

• Need extraordinary circumstances

• Three prong test to apply

Dismissal and Suppression

Court considers:

(1) Degree of fault

(2) Degree of prejudice

(3) Availability of lesser sanction (i.e., spoliation inference)Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir. 1994)

Spoliation Adverse Inference

• A “lesser sanction” than dismissal

• Permits inference of unfavorable evidence

• Another multi-factor analysis required

Spoliation Adverse Inference

Three factors:

(1) Existence of preservation obligation

(2) Culpable state of mind

(3) Relevance

Byrnie v. Town of Crowmwell, 243 F.3d 93 (2d Cir. 2001)

Spoliation Adverse Inference

As to factor number 2:

• Intentional destruction not necessary

• Negligent destruction is sufficient

• May need intent for drastic sanctions

Spoliation Adverse Inference

As to factor number 3:

- Relevance under FRE 401 not enough

- Proof evidence was favorable to movant

Defenses to Spoliation

- Show destruction was harmless because it was already produced

- Inadvertent destruction

- Accidental loss or destruction

- Accounting for the failure to produce

Fed. R. Civ. P. 26(b)(2)(B)

• Seven factor inaccessible data protection rule

• Protects a party from the cost of producing inaccessible data (i.e., back up tapes)

• Except where party seeking protection rendered the data inaccessible by failing to institute a litigation hold. Major Tours, Inc. v. Colorel, 720 F. Supp.2d 587 (D.N.J. 2010).

Litigation Hold Letter

• Tailored for each matter

• Clear and simple language

• Specific custodians, types of documents, date ranges, and topics

• Follow up follow up follow up

Preservation of ESI

• Legal and MIS/IT must work together

• Preferable to have outside vendor

• Protects client and counsel

• Must document specific steps taken

Anthony M. Rainone, Esq.

• Member of the firm

• Partner in the Employment Group and Litigation Group

• Three time selection to New Jersey Super Lawyers, Rising Stars, for Employment Litigation

• Nationally published author in employment law

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