Commercial Litigation and Arbitration

No Sanctions for Failure to Impose Litigation Hold and Consequent Destruction of Emails in IT Consolidation — No Bad Faith

Strutton v. Meade, 2012 U.S. App. LEXIS 2117 (8th Cir. Feb. 3, 2012):

Finally, we address Strutton's appeal of the district court's denial of sanctions against defendants. The district court retains an inherent power to impose sanctions, and we review the use of that authority for abuse of discretion. Stevenson v. Union Pac. RR. Co., 354 F.3d 739, 745 (8th Cir. 2004). Strutton argues that upon his filing of this action, defendants were under an obligation to prevent the destruction of any evidence that could be related to the case and that defendants' failure to impose a litigation hold over agency e-mails warranted the imposition of sanctions. At the hearing on the motion for sanctions, the defendants explained that there was a consolidation of the information technology systems of multiple state agencies in 2006 and that e-mails were deleted in an effort to free up server space on the consolidated system. The district court noted that "[t]here's no doubt that after the notice of the lawsuit there was an intentional destruction [of agency e-mails], [though] not perhaps with a fraudulent intent as to this case." (Mot. Hr'g Tr. 26.) The district court determined that the "Defendants' failure to maintain and produce treatment records, including their failure to impose a litigation hold on facility e-mails after Mr. Strutton filed this suit, is very troubling" but did not find that sanctions were warranted. (Mem. Opinion, Doc. 248, pg. 24, n.7.) See Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1035 (8th Cir. 2007) ("The ultimate focus for imposing sanctions for spoliation of evidence is the intentional destruction of evidence indicating a desire to suppress the truth[.]"). Accordingly, the decision to deny the imposition of sanctions was not an abuse of the considerable discretion given to the district court. See Menz v. New Holland N. Am., Inc., 440 F.3d 1002, 1005 (8th Cir. 2006) ("A district court would necessarily abuse its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence." (quoting Plaintiffs' Baycol Steering Comm. v. Bayer Corp., 419 F.3d 794, 802 (8th Cir. 2005))).

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