Commercial Litigation and Arbitration

Spoliation — Error to Impose Adverse Inference Instruction Absent Finding of Bad Faith in Tenth Circuit

Phillip M. Adams & Assocs., LLC. v. Dell Computer Corp., 519 Fed. App’x 998 (Fed. Cir. 2013):

A spoliation sanction is proper under Tenth Circuit law when "(1) a party has a duty to preserve evidence because it knew, or should have known, that litigation was  imminent, and (2) the adverse party was prejudiced by the destruction of the evidence." Burlington N., 505 F.3d at 1032. An adverse inference sanction in particular "must be predicated on the bad faith of the party destroying the records." Aramburu v. Boeing Co., 112 F.3d 1398, 1407 (10th Cir. 1997) (emphasis added). The district court committed legal error by imposing an adverse inference sanction absent a finding of bad faith.  "A district court by definition abuses its discretion when it makes an error of law." Koon v. United States, 518 U.S. 81, 100, 116 S. Ct. 2035, 135 L. Ed. 2d 392 (1996). Accordingly, we reverse the district court's imposition of an adverse inference sanction***.


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