Commercial Litigation and Arbitration

Spoliation — Adverse Inference Instruction — Circuit Breakdown as to Whether Bad Faith, Intentionality or Mere Negligence Is Needed

Two cases:

1. From United States v. Laurent, 2010 U.S. App. LEXIS 12449 (1st Cir. June 17, 2010):

A "spoliation" instruction, allowing an adverse inference, is commonly appropriate in both civil and criminal cases where there is evidence from which a reasonable jury might conclude that evidence favorable to one side was destroyed by the other. 4 L. Sand et al., Modern Federal Jury Instructions § 75.01 (instruction 75-7), at 75-16 to -18 (2010). The burden is upon the party seeking the instruction to establish such evidence. 4 Sand et al., supra, § 75.01, at 75-18; United States v. Lopez-Lopez, 282 F.3d 1, 18 (1st Cir.) ("[A] defendant is not entitled to an instruction on a defense when the evidence in the record does not support that defense."), cert. denied, 536 U.S. 949, 122 S. Ct. 2642, 153 L. Ed. 2d 821 (2002).

In general, the instruction usually makes sense only where the evidence permits a finding of bad faith destruction; ordinarily, negligent destruction would not support the logical inference that the evidence was favorable to the defendant. 4 Sand et al., supra, § 75.01, at 75-17. But the case law is not uniform in the culpability needed for the instruction

[Footnote 5] E.g, Buckley v. Mukasey, 538 F.3d 306, 322-23 (4th Cir. 2008) (mere negligence not enough, intentional conduct — but not bad faith — required); United States v. Artero, 121 F.3d 1256, 1259-60 (9th Cir. 1997) (bad faith required), cert. denied, 522 U.S. 1133, 118 S. Ct. 1089, 140 L. Ed. 2d 145 (1998); Bashir v. Amtrak, 119 F.3d 929, 931 (11th Cir. 1997) (same); Aramburu v. Boeing Co. , 112 F.3d 1398, 1407 (10th Cir. 1997) (same); Gumbs v. Int'l Harvester, Inc. , 718 F.2d 88, 96 (3d Cir. 1983) (suppression of the evidence must be intentional, not accidental); Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 101, 108-10 (2d Cir. 2002) (negligent destruction is enough if other indications suggest the evidence would have favored the party affected by the destruction). Our own decision in Nation-Wide Check Corp. v. Forest Hills Distribs., Inc., 692 F.2d 214, 217-20 (1st Cir. 1982), is not entirely clear on this point. See also Blinzler v. Marriott Int'l, 81 F.3d 1148, 1159 (1st Cir. 1996) (stating that the factfinder is "free to reject" the adverse inference when it believes the evidence was "destroyed accidentally or for an innocent reason").

and, anyway, unusual circumstances or even other policies might warrant exceptions. Consider, for example, negligent destruction of a particular piece of evidence likely to be exculpatory or routine destruction of a class of such evidence—neither variation being present here.

In all events, above all else an instruction must make sense in the context of the evidence, and no adverse-inference instruction would make sense here. The routine erasure of a video surveillance tape by the Manchester Police Department [note: this case is a federal, not state, prosecution] after much time had elapsed without an arrest creates no inference that the tape was destroyed because it contained evidence favorable to the defendant. Cf. Pimentel v. Jacobsen Fishing Co., 102 F.3d 638, 640 n.1 (1st Cir. 1996) (finding a district court's refusal to draw an adverse inference from an inadvertent destruction of evidence to be neither clear error nor an abuse of discretion).

2. From Rimkus Consulting Group v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. 2010) (Rosenthal, J.):

As a general rule, in this [Fifth]circuit, the severe sanctions of granting default judgment, striking pleadings, or giving adverse inference instructions may not be imposed unless there is evidence of "bad faith." Condrey v. SunTrust Bank of Ga., 431 F.3d 191, 203 (5th Cir. 2005); King v. Ill. Cent. R.R., 337 F.3d 550, 556 (5th Cir. 2003); United States v. Wise, 221 F.3d 140, 156 (5th Cir. 2000). "'Mere negligence is not enough' to warrant an instruction on spoliation." Russell v. Univ. of Tex. of Permian Basin, 234 F. App'x 195, 208 (5th Cir. 2007) (unpublished)(quoting Vick v. Tex. Employment Comm'n, 514 F.2d 734, 737 (5th Cir. 1975); see also King, 337 F.3d at 556 ("King must show that ICR acted in 'bad faith' to establish that it was entitled to an adverse inference.") Vick v. Tex. Employment Comm'n, 514 F.2d at 737 ("The adverse inference to be drawn from destruction of records is predicated on bad conduct of the defendant. Moreover, the circumstances of the act must manifest bad faith. Mere negligence is not enough, for it does not sustain an inference of consciousness of a weak case." (quotation omitted)).

Other circuits have also held negligence insufficient for an adverse inference instruction. The Eleventh Circuit has held that bad faith is required for an adverse inference instruction.

[Footnote 10] See Penalty Kick Mgmt. Ltd. v. Coca Cola Co., 318 F.3d 1284, 1294 (11th Cir. 2003) ("[A]n adverse inference is drawn from a party's failure to preserve evidence only when the absence of that evidence is predicated on bad faith." (quoting Bashir v. Amtrak, 119 F.3d 929, 931 (11th Cir. 1997))).

The Seventh, Eighth, Tenth, and D.C. Circuits also appear to require bad faith.

[Footnote 11] See, e.g., Turner v. Pub. Serv. Co. of Colo., 563 F.3d 1136, 1149 (10th Cir. 2009) ("Mere negligence in losing or destroying records is not enough because it does not support an inference of consciousness of a weak case." (quoting Aramburu v. Boeing Co., 112 F.3d 1398, 1407 (10th Cir. 1997))); Faas v. Sears, Roebuck & Co., 532 F.3d 633, 644 (7th Cir. 2008) ("In order to draw an inference that the [destroyed documents] contained information adverse to Sears, we must find that Sears intentionally destroyed the documents in bad faith."); Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1035 (8th Cir. 2007) ("A spoliation-of-evidence sanction requires 'a finding of intentional destruction indicating a desire to suppress the truth.'" (quoting Stevenson v. Union Pac. R.R. Co., 354 F.3d 739, 746 (8th Cir. 2004))); Wyler v. Korean Air Lines Co. , 928 F.2d 1167, 1174, 289 U.S. App. D.C. 75 (D.C. Cir. 1991) ("Mere innuendo . . . does not justify drawing the adverse inference requested . . . .").

The First, Fourth, and Ninth Circuits hold that bad faith is not essential to imposing severe sanctions if there is severe prejudice, although the cases often emphasize the presence of bad faith.

[Footnote 12] See, e.g., Hodge v. Wal-Mart Stores, Inc., 360 F.3d 446, 450 (4th Cir. 2004) (holding that an inference cannot be drawn merely from negligent loss or destruction of evidence but requires a showing that willful conduct resulted in the loss or destruction); Silvestri v. Gen. Motors Corp., 271 F.3d 583, 593 (4th Cir. 2001) (holding that dismissal is "usually justified only in circumstances of bad faith" but "even when conduct is less culpable, dismissal may be necessary if the prejudice to the defendant is extraordinary, denying it the ability to adequately defend its case"); Sacramona v. Bridgestone/Firestone, Inc., 106 F.3d 444, 447 (1st Cir. 1997) ("Certainly bad faith is a proper and important consideration in deciding whether and how to sanction conduct resulting in the destruction of evidence. But bad faith is not essential. If such evidence is mishandled through carelessness, and the other side is prejudiced, we think that the district court is entitled to consider imposing sanctions, including exclusion of the evidence."); Allen Pen Co. v. Springfield Photo Mount Co., 653 F.2d 17, 23-24 (1st Cir. 1981) ("In any event, Allen Pen has not shown that the document destruction was in bad faith or flowed from the consciousness of a weak case. There is no evidence that Springfield believed the lists would have damaged it in a lawsuit. Without some such evidence, ordinarily no adverse inference is drawn from Springfield's failure to preserve them."); Glover v. BIC Corp. , 6 F.3d 1318, 1329 (9th Cir. 1993) ("Short of excluding the disputed evidence, a trial court also has the broad discretionary power to permit a jury to draw an adverse inference from the destruction or spoliation against the party or witness responsible for that behavior.").

In the Third Circuit, the courts balance the degree of fault and prejudice.

[ Footnote 13] See, e.g., Bensel v. Allied Pilots Ass'n, No. 02-2917, 263 F.R.D. 150, 2009 U.S. Dist. LEXIS 118342, 2009 WL 4884052 (D.N.J. Dec. 17, 2009) (declining to apply a spoliation inference or other sanction for the loss of information resulting from the defendant's failure to impose litigation holds in a timely manner); Mosaid Techs. Inc. v. Samsung Elecs. Co., 348 F. Supp. 2d 332, 335 (D.N.J. 2004) (noting that "[t]hree key considerations that dictate whether such sanctions are warranted are: '(1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and, where the offending party is seriously at fault, will serve to deter such conduct by others in the future'" and holding that bad faith was not required for an adverse inference instruction as long as there was a showing of relevance and prejudice (quoting Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d. Cir. 1994))).

The court in Pension Committee imposed a form of adverse inference instruction based on a finding of gross negligence in preserving information and in collecting it in discovery. The court applied case law in the Second Circuit, including the language in Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 108 (2d Cir. 2002), stating that "[t]he sanction of an adverse inference may be appropriate in some cases involving the negligent destruction of evidence because each party should bear the risk of its own negligence." That language has been read to allow severe sanctions for negligent destruction of evidence. See, e.g., Rogers v. T.J. Samson Cmty. Hosp., 276 F.3d 228, 232 (6th Cir. 2002); Lewis v. Ryan, 261 F.R.D. 513, 521 (S.D. Cal. 2009) (noting that California district courts had followed the Second Circuit's approach in Residential Funding). In the Fifth Circuit and others, negligent as opposed to intentional, "bad faith" destruction of evidence is not sufficient to give an adverse inference instruction and may not relieve the party seeking discovery of the need to show that missing documents are relevant and their loss prejudicial. The circuit differences in the level of culpability necessary for an adverse inference instruction limit the applicability of the Pension Committee approach. And to the extent sanctions are based on inherent power, the Supreme Court's decision in Chambers may also require a degree of culpability greater than negligence.

14 The finding of gross negligence in Pension Committee was in part based on the finding that the spoliating party submitted declarations describing discovery efforts that were either lacking in detail or intentionally vague in ways the court characterized as misleading. Pension Committee, No. 05 Civ. 9016, 2010 U.S. Dist. LEXIS 4546, 2010 WL 184312, at *10-11. Counsel's misrepresentations to the court can result in severe sanctions. See, e.g., Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co. , 20 So. 3d 952, 954 (Fla. Dist. Ct. App. 2009) (trial court entered a partial default judgment and deemed certain allegations as established facts based in part on misrepresentations by counsel to the court about when they learned that emails existed on backup tapes; on appeal, the judgment was set aside on other grounds).

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