Commercial Litigation and Arbitration

Expert Spoliation — Destruction of Notes — No Sanction

The plaintiff’s damages expert in Loveless v. John’s Ford, Inc., 2007 U.S. App. LEXIS 11001 (4th Cir. May 9, 2007), testified as to the plaintiff’s loss of income in this ADEA action. After the expert gathered earnings information by hand from the corporate defendant’s records, he transferred the data to his computer and discarded the notes. The defendant cross-examined the expert on his destruction of the notes, but the District Court refused to preclude his testimony or to grant the defendant’s post-trial motions after a jury verdict for the plaintiff. The Fourth Circuit affirmed, rejecting the defendant’s contention that the expert’s failure to preserve a worksheet underlying his opinions obliged the District Court to grant judgment as a matter of law.

The Fourth Circuit posited that ‛a judicial response to a spoliation of evidence should serve the twin purposes of leveling the evidentiary playing field and … sanctioning the improper conduct“ (quotation omitted). While it acknowledged that dismissal or judgment as a matter of law were sanctions available to the District Court to remedy the misconduct, it emphasized that ‛such a severe sanction should only be imposed when a lesser sanction will fail to serve the foregoing purposes“ and only ‛if the conduct was so egregious as to amount to a forfeiture of the claim, or if the effect of the conduct was so prejudicial that it substantially denied the defendant the ability to defend the claim“ (citations, quotations and brackets omitted).

Because the information contained on the destroyed notes was ‛had been entered into [the expert’s] computer and transformed into a chart used by [the expert] at trial,“ the Fourth Circuit indicated that this ‛situation is a far cry from those instances of spoliation of evidence that could establish bad faith,“ and it cited a Seventh Circuit decision (S.C. Johnson & Son, Inc. v. Louisville & Nashville R.R. Co., 695 F.2d 253, 259 (7th Cir. 1982)) for the proposition that even an adverse-inference instruction might be inappropriate.

The real question, of course, is whether the data in the computer and in the chart accurately reflected the data transcribed in the expert’s notes. The Fourth Circuit stressed the lack of prejudice because, among other things, the defendant could review its own records and ascertain what the information was — and, in fact, had presented it at trial through its own expert.

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