A PURE HEART AND AN EMPTY HEAD: A guide to the “little guy” in a big document case
By: Susan Stewart Rich, B.A, J.D
If you are the “David” up against a “Goliath” in a legal dispute, you are not defenseless against your corporate employer, a multi-billion dollar car company defendant or a zealous prosecutor when it comes to the discovery process. Many well-intentioned fiduciaries, including sophisticated lawyers and corporate moguls, have inadvertently and even knowingly deleted (or allowed the deletion) of relevant evidence after litigation was reasonably anticipated and have been harshly sanctioned for it.
We live in a world where children under the age of two operate various types of electronic devices. For certain individuals, agencies, and business entities, including your opponent “Goliath Inc.”, the luxury of ownership and usage of the myriad electronic devices available to them is coupled with a burden of knowing how they operate – specifically where relevant evidence may be stored on such devices and how to prevent it from being destroyed. For the “little guy”, the fact that a sophisticated opponent and his minions deleted or lost relevant evidence will be imperative in succeeding against such a towering opponent. Your discovery attacks may allow you to either finally tell your side of the story to the judge (e.g., I lost a leg because defendant’s car malfunctioned) or deflate an unflattering story that has been or may be revealed to the judge (e.g., the criminal defendant’s prior felony convictions). Your opponent may try a number of tactics to intimidate you or “lawfully” stifle the litigation process. You can overcome this by knowing what their duties and obligations are and showing the court they failed to comply.
II. Spoliation and the Duty to Preserve
A duty to preserve evidence is triggered when a reasonable anticipation of litigation arises. The Sedona Conference® Commentary on Legal Holds: The Trigger & The Process, 11 Sedona Conf. J. 265, 271-274 (2010). A reasonable anticipation of litigation arises when an organization is on notice of a credible probability that it will become involved in litigation, seriously contemplates initiating litigation, or when it takes specific actions to commence litigation.” Id. Spoliation is the destruction of evidence or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation. Pension Committee of the University of Montreal Pension Plan, et. al., v. Banc of America Securities, LLC, et. al., 685 F. Supp. 2d 456, 495 2010 U.S. Dist. LEXIS 1839 (S.D.N.Y. 2010).
One of the leading cases on spoliation and the duty to preserve is Pension Committee of the University of Montreal Pension Plan, et. al., v. Banc of America Securities, LLC, et. al., which has been followed by district court judges in the 2nd, 3rd, 7th, 10th and 11th circuits. In Pension Committee, the court determined plaintiffs’ conduct was at least negligent if not grossly negligent because they failed to execute a comprehensive search for documents and/or failed to sufficiently supervise or monitor their employees’ document collection. Id. at 476-77. For those plaintiffs who were grossly negligent, the court imposed the sanction of an adverse inference instruction and referred to the following conduct as the basis for its decision: (1) failure to institute a timely written litigation hold, (2) failure to collect or preserve any electronic documents during a two-year period following the “commencement” of litigation, (3) the continued deletion of electronic documents after the duty to preserve arose, (4) the failure to request documents from key players, (5) management’s failure to supervise delegated search efforts, (6) the destruction of backup data potentially containing responsive documents of key players that were not otherwise available, and (7) the submission of misleading or inaccurate declarations. See Id. at 479-80.
Based on plaintiff’s conduct, the court presumed that responsive documents were lost or destroyed and that the lost or destroyed documents were relevant and such loss and destruction was prejudicial. Id. Based on the plaintiffs’ conduct listed in Pension Committee, it is reasonable to infer that a finding of gross negligence may be based on potentially several factors unlimited in variety – a benefit to those parties who seek to attack a towering and stalling opponent. A bigger, more powerful opponent likely has more employees, more devices, and more opportunities to breach its duty. The smaller opponent can take advantage of its opponent’s size. In the current economic world, where “too big to fail” seems eerily true, in the world of discovery, “too big to preserve” is likely a reality for many of the largest legal opponents. During this critical transitory phase when the discovery process is moving from paper to digital evidence, the potential for mistakes is likely at its highest. Taking advantage of the weakened conditioned of your opponent during this transitory phase is critical.
III. The Standard of Care
Pension Committee stated it eloquently (if not harshly) – a “pure heart and an empty head” will not protect practitioners, responsible fiduciaries and other obligated parties in their duty to preserve evidence. Id. at 464. Pension Committee does not present “egregious examples” of purposeful spoliation. Id. at 463. Responsible managers and officers were not frantically running around shredding documents or scrubbing hard drives in a painstaking effort to get rid of anything and everything when litigation was clearly on the rise (i.e., Arthur Anderson). Pension Committee is a case “where plaintiffs failed to timely institute written litigation holds and engaged in careless and indifferent collection efforts after the duty to preserve arose.” Id. Consequently, Pension Committee is a case that should be well understood by anyone who intends to engage in the discovery process but especially those who find themselves up against a behemoth opponent with unlimited resources. If a large corporation, like those in Pension Committee, with virtually unlimited resources failed in its attempt to preserve evidence to the extent it was found to be “grossly negligent”, it is likely that your opponent is capable of breaching its duty as well. See Id. at 477.
IV. Sanctions – When the Imposition of an Adverse Inference Instruction is Proper
The burden of proof required by the party alleging spoliation depends on the type of sanction sought. Pension Committee, 685 F. Supp. 2d 456 at 467. Primarily, the severity of the sanction depends on the conduct of the spoliator (i.e., did the spoliator knowingly throw a computer off the edge of the Grand Canyon or simply delete one email by accident). However, the severity of sanctions increases if the missing evidence is deemed relevant and the innocent party suffered prejudice as a result of the loss. See Id.
The district courts have discretion to determine proper sanctions, as they know the extent of discovery and how well each party has complied and courts will determine sanctions on a case-by-cases basis. Id.
Often those seeking sanctions request the court impose an adverse inference instruction on the jury, a sanction particularly beneficial to the requesting party because the jury may infer that the evidence that was destroyed or lost would be favorable to the non-spoliating party. In United States v. Suarez, the adverse inference instruction proved especially beneficial to the defendant charged with a felony. United States v. Suarez, No. 09-932, 2010 WL 4226524 (D.N.J. Oct. 21, 2010). The court sanctioned the government by imposing an adverse inference instruction and the jury returned a verdict of Not Guilty, resulting in a Judgment of Acquittal. When a party seeks an adverse inference instruction based on spoliation of evidence, it 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.
Orbit One Communications, Inc. v. Numerex Corp., 271 F.D.R. 429, 436 (S.D.N.Y. 2010). Clearly, the failure to preserve evidence may have serious consequences, good or bad, depending on whether you are the spoliator or the spoliatee. It may be that in your case, the best defense will be a “failure to preserve” offense, as Suarez nicely illustrates. For Suarez, the stakes were extremely high – the defendant’s liberty interest was on the line. The “failure to preserve” offense was likely the reason the defendant was sent home to his family and not the prison. See Id. Regardless of your position, you should be ready to attack your opponent’s failure to comply with its discovery obligations at every stage of the discovery process up to and during trial. See Id.
Although Pension Committee is not binding precedent, it is highly persuasive. The area of law is emerging and many district court judges are currently reviewing the issues of spoliation and preservation for the first time. Judge Scheindlin, the author of Pension Committee, provides years of experience and a distinguished expertise on the subject. Many district court judges have followed Pension Committee including those in the 2nd, 3rd, 7th, 10th and 11th circuits. Pension Committee’s findings may seem harsh to those who have engaged in the discovery process for years and those new to the practice. However, its conclusions are reasonably founded. Our society has embraced technology with reckless abandon and responsible fiduciaries and managers either possess or are capable of possessing the requisite knowledge to prevent the destruction of relevant evidence despite the exabytes of data its entities, employees or witnesses may have produced. A pure heart and an empty head may have been acceptable in 2003, but not in 2010. Rather than cower under the overwhelming size and power of your opponent, focus squarely on the fact that its size and power may be the very reason it is unable to fully comply with its discovery obligations.
Susan is a Litigation Discovery Consultant for ILS. Before earning her law degree, Susan had over 10 years of experience as a legal professional. Her breadth of experience stems from her exposure to discovery in a variety of legal settings. Susan has identified and resolved discovery issues for private corporations subject to federal regulatory investigations, capital habeas claimants, white-collar defendants and a number of clients with complex civil litigation matters. Consequently, she is familiar with the practical and legal issues discovery presents to both the civil and criminal practitioner.
As a consultant, Susan assists clients with discovery strategies, particularly focusing on how to apply the principles underlying the rules of civil procedure in criminal defense cases in order to obtain ESI discovery from the government. Additionally, she focuses on identifying defenses generated by the unavailability, inaccessibility or destruction of ESI discovery.
Susan’s experience designing and building databases combined with her legal education allows her to provide specific and detailed solutions catered to each client’s case and data. Susan’s knowledge of the products and their underlying technology allows her to negotiate with opposing counsel to obtain information that might seem irrelevant to those focused on non-ESI related issues in preparation for, trial, sentencing, and the appeals process.
 Although U.S. vs. Suarez is a criminal case, it is relevant because it establishes the scope of the court’s sanctioning power. The government is not immune from the same type of sanctions that are imposed upon civil practitioners even though “good faith reliance” is often a presumption the defendant must overcome when the government’s conduct is in question. Additionally, despite it being a criminal case, the court uses the same test it applies in civil cases to determine whether an adverse inference should be imposed.
 Judge Shira A. Scheindlin authored the groundbreaking opinions Zubulake I, III, IV and V and is co-author of the textbook Electronic Discovery and Digital Evidence.