Motion To Permit Introduction of Spoliation Evidence At Trial Granted

17 Dec 2021

In In Re: GOLD KING MINE RELEASE IN SAN JUAN COUNTY, COLORADO, No. 1:18-md-02824-WJ (D. NM Aug 6, 2021) before the Court was the Navajo Nation’s and the State of New Mexico’s (“Sovereign Plaintiffs) and Sunnyside Gold Corporation’s (SGC) Motion for Sanctions arising from the EPA’s alleged spoliation of evidence. 

At issue was whether ESI was spoliated by the EPA following a blowout from a gold mine that occurred in August 2015, specifically ESI of the EPA’s On Scene Coordinators (“OSC”), Way and Griswold. Way was the lead OSC for the EPA; Griswold temporarily relieved Way as OSC on August 4 and 5 in 2015, which is when the blowout occurred.

Among the facts considered was that Griswold possessed two iPhones, one of which he used before, during, and after the blowout until the EPA collected it and issued him a second iPhone in May 2016.  EPA made a backup of Griswold’s first phone but since the EPA “forgot” the password, the backup was “inaccessible.”

Griswold’s iPad, which was used “extensively for work related to the Gold King Mine, including to take photos in the field,” had been cleared because the iPad was “reset to factory settings” before turned into the EPA.  The ESI on Way’s iPad was also inaccessible because he forgot his password.

The EPA backed up the OSC’s EPA-issued laptops to Microsoft OneDrive accounts but did not collect ESI from Griswold’s OneDrive account until five years after the blowout. Two folders in his account that contained “around 800 photographs and 120 documents related to Mr. Griswold’s work at the Gold King Mine” were missing.

In August 2015, six days after the blowout, the EPA issued a litigation hold related to the Gold King Mine release. In November, the EPA sent instructions directing custodians to preserve “all messages related to Gold King.” The EPA followed up on the preservation in April 2016 and sought to preserve texts through approximately 500 cell phones.

The EPA created digital backups of Griswold and Way’s phones, but Griswold’s backup was no longer accessible because the password had been forgotten. And, although the Federal Parties consulted with vendors who specialized in password cracking, the attempts were not successful.

In their motion, the Sovereign Plaintiffs asserted that the “contemporaneous communications and documentation from OSCs Way and Griswold could inform the Sovereign Plaintiffs’ tort claims and, more specifically, aid in proving that EPA acted unreasonably.” They also contended that the lost ESI would be the EPA’s primary defense to the Plaintiffs’ tort claims.

Among others, the Sovereign Plaintiff and Sunnyside requested spoliation sanctions and an order precluding the EPA from introducing evidence that Griswold did not intend to open the mine and was only trying to expose the blockage to ready it for site visit.

Spoliation sanctions are proper when “(1) a party has a duty to preserve evidence because it knew, or should have known, that litigation was imminent, and (2) the adverse party was prejudiced by the destruction of the evidence. But if the aggrieved party seeks an adverse inference to remedy the spoliation, it must also prove bad faith.  Plaintiffs also moved for sanctions under Federal Rule of Civil Procedure 37(b), which provides “If a party … fails to obey an order to provide or permit discovery … the court …may issue further just orders.” Fed. R. Civ. P. 37(b)(2).

In its analysis, the Court found that there was no dispute that the Federal Parties knew, or should have known, that litigation was going to occur. The EPA failed to take reasonable steps to preserve Griswold and Way’s ESI until six months after the blowout.

The Court further found that the Sovereign Plaintiffs and Sunnyside were prejudiced by the destruction of the ESI. The Court also found that the lost ESI was relevant to the Sovereign Plaintiffs’ tort claims and the Federal Parties’ defense to the Plaintiffs’ tort claims.

Accordingly, among others, the Court granted Movant’s request for an order permitting the Sovereign Plaintiffs and Sunnyside to introduce evidence of the Federal Parties’ spoliation at trial and granted Movant’s request for an order awarding Plaintiffs and Sunnyside all reasonable attorney fees associated with investigating the spoliation.

The Court, however, denied the Sovereign Plaintiffs’ request for an order precluding the Federal Parties from introducing evidence that Griswold did not intend to open the mine and was only attempting to expose the blockage to ready it for a site visit.  The Court reasoned that such preclusion, while simultaneously allowing the Sovereign Plaintiffs to introduced evidence of the Federal Parties’ spoliation, would undermine the Court’s interest in promoting accurate fact finding by the jury.

The Court also deferred ruling on the Movant’s requests for an adverse inference instruction or presumption that the spoliated evidence would have been unfavorable to the Federal Parties, since the Court could not determine, at the time, whether the Federal Parties “acted with the intent to deprive another party of the information’s use in the litigation.” Fed. R. Civ. P. 37(e).  In doing so, however, the Court found “it striking that so much ESI on the OSC’s electronic devices was spoliated as a result of delay, forgotten passwords and the wiping/resetting of devices” and that there were a number of issues that remained unclear, including what preservation steps the EPA undertook, what happened to certain phone backups, and whether the acts and omissions of the OSCs with respect to ESI could be imputed to the EPA.  The parties were given an opportunity to file supplemental briefing on the adverse inference instruction or presumption.