Commercial Litigation and Arbitration

Spoliation — State vs. Federal Law

In a federal diversity action, is spoliation an issue of state or federal law? That is an ambiguous question because ‛spoliation“ has multiple meanings. If there is a recognized state cause of action for spoliation, that type of spoliation is clearly substantive and the claim will be recognized in federal court. What about spoliation as a sanction? Given the Supreme Court’s decisions in Business Guides, Inc. v. Chromatic Commc'ns Entm't, 498 U.S. 533 (1991) and Burlington N. R.R. v. Woods, 480 U.S. 1 (1987) (upholding Fed.R.Civ.P. 11 and Fed.R.App.P. 38, respectively, as ‛procedural“), sanctions are generally viewed as procedural, not substantive, for purposes of Erie R.R. v. Tomkins, 304 U.S. 64 (1938). That was the reasoning underlying the recent opinion in Pioneer Servs., Inc. v. Auto-Owners Ins. Co., 2007 U.S. Dist. LEXIS 50678 (N.D. Ala. July 12, 2007): "[F]ederal law governs the imposition of spoliation sanctions" (quoting Flury v. Daimler Chrysler Corp., 427 F.3d 939, 944 (11th Cir. 2005)).

Perhaps surprisingly, this is not a universal view. See, e.g., Hoffman v. CSX Transp., Inc., 2006 U.S. Dist. LEXIS 965, at *8 (S.D. Ohio Jan. 5, 2006), which rejects a "federal law of spoliation" (and the Fourth Circuit’s decision in Silvestri v. General Motors, 271 F.3d 583, 590 (4th Cir. 2001)), holding instead that ‛[s]poliation doctrines have been recognized as part of a class of evidentiary doctrines that embody important issues of substantive state policy,“ and that the Court may look, under Erie, ‛to relevant state law unless the spoliation issue clearly implicates an overriding federal rule or interest.“

It is difficult to see what could be a more important issue to the federal courts than whether litigants or lawyers are destroying evidence, whatever state policies may be. If anything, that would appear to be an a fortiori conclusion after Business Guides and Burlington Northern. There may be somewhat less difference between these positions than meets the eye, however. Whether the governing law is viewed as federal or state, the question is what forms the substance of that law. The recent Pioneer decision, looking to Eleventh Circuit law, holds that "[f]ederal law in this circuit does not set forth specific guidelines, therefore, we will examine state law factors" (internal quotes and brackets omitted). The Court therefore looked to state law for a definition of spoliation (there is a key issue here — is willfulness required?) and for appropriate penalties. In light of the volume of spoliation cases emanating from the federal courts, it is difficult to see a long future for state law substance informing a federal law of spoliation.

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