Spoliation — Not the Kind of Testimony You Want a Client to Give

From Brown v. Brown, 2008 Bankr. LEXIS 1503 (Bankr. D. N.H. May 19, 2008): Defense witness No. 1 testified:

Q. And--and you have no documents because you--you don't retain documents.

A. No.

Q. You discard them.

A. Yes.

Q. And since the commencement of this litigation you continued to discard documents.

A. Yes.

Defense witness No. 2 then decided to provide a business rationale for spoliation:

Documents are an interest[ing] area. I learned early that I don't want to be their museum curator to keep all their stuff, and you're not required to. And I can't tell you how much criticism I've gotten in court for this. Judge--not judges, but lawyers are always saying that I've destroyed documents, that I've done this and I've done that. I have not destroyed documents, I don't keep them.

It is very important not to keep anything you don't need because that opens doors. ***

I think documents are a way to get into a lot of trouble. . . .

[Discarding documents] makes for a much tighter business, and my line about that is, one man's trash is another's treasure. Business people are trying to get rid of stuff. Lawyers just try to keep stuff. . . .

Now the final point is, if you have documents, I've generally found that they don't do any good, and that's been my experience. . . .

So if you don't need something, discard it. Don't trash it. In other words, the last thing you ever can do is, if you're ever sued, don't start throwing things out because that's like being a witness. That's fraud. Don't do that. If it's a regular habit with you, that's good. . . .

So be very careful about documents. Generally, they can't help you, they can hurt you. . . .

The Court held that this conduct was sufficiently egregious that the appropriate sanction was to deem that the plaintiff had satisfied its burden of proof on the issue as to which documents had been spoliated. The case also contains a succinct summary of the underpinnings of First Circuit spoliation law (excerped from Townsend v. American Insulated Panel Co., 174 F.R.D. 1, 4 (D. Mass. 1997)):

The First Circuit has many times visited the principles concerning spoliation of evidence and the evidentiary inferences that can be drawn as a result. The permissive (as opposed to mandatory) negative inference "springs from the commonsense notion that a party who destroys a document (or permits it to be destroyed) when facing litigation, knowing the document's relevancy to issues in the case, may well do so out of a sense that the document's contents hurt his position." Testa v. Wal-Mart Stores, Inc., 144 F.3d 173, 177 (1st Cir. 1998). There are at least three rationales for allowing the inference. There is the general evidentiary rationale, in that the document must have some relevance to the claim(s) if the party charged with the spoliation went to the trouble to destroy it. Nation-Wide Check Corp., Inc. v. Forest Hills Distribs., Inc., 692 F.2d 214, 218 (1st Cir. 1982). There are also policy-based prophylactic and punitive reasons for permitting the inference, in that allowing the inference by the fact-finder deters future pre-trial destruction of documents and penalizes the spoiler by placing it at risk of an erroneous judgment that it might avoid if it had preserved the document. Id. See also Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998) (adding to the evidentiary, prophylactic and punitive rationales, a "remedial rationale" suggesting that the adverse inference should function for the purpose "of restoring the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party").

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