preservation and spoliation of evidence

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Chapter 29

PRESERVATION AND SPOLIATIONOF EVIDENCE

Anna N. Martinez, Esq.

SYNOPSIS

29.1 INTRODUCTION

29.2 COUNSELING CLIENTS ON PRESERVATION

29.2.1Duty To Preserve

29.2.2Scope Of The Duty To Preserve

29.2.3When The Duty Arises

29.2.4Sanctions For Spoliation

29.3 LAWYERS DUTY TO PRESERVE EVIDENCE

29.4 PREVENTING SPOLIATION

Spoliation is the destruction or significant alteration of evidence, or the failure

to preserve property for anothers use as evidence in pending or reasonably foreseeable

litigation. West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999), accord,

Cache La Poudre Feeds v. Land OLakes Farmland Feed, Inc., 244 F.R.D. 614, 620 (D.

Colo. 2007). The Rules of Civil Procedure and Colorado Rules of Professional Conductobligate not only the parties, but their agents i.e., lawyers to preserve evidence they

know is relevant to ongoing or potential litigation. Failure to do so may result in a variety

of sanctions, depending on the degree of intent behind the spoliation, ranging from an ad-

verse inference to default judgment and imposition of attorney fees and costs.

For lawyers, neglecting to properly advise a client of the obligation to preserve

evidence, and/or neglecting to supervise the collection and production of evidence, may

29.1 INTRODUCTION

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result in both sanctions by the court and disciplinary action, and even a legal malpractice

claim by a sanctioned client. This chapter focuses on the lawyers role in the preservation

and production of evidence, and offers tips on preventing the spoliation of evidence.

29.2.1Duty To Preserve

Both the initiator and target of litigation have obligations to preserve evidence.

The parties have a legal duty to preserve evidence they reasonably know or can reasonably

foresee is material to a potential, imminent, or pending lawsuit. See Castillo v. Chief

Alternative, LLC, 140 P.3d 234, 236 (Colo. App. 2006). The duty to preserve evidence may

arise not just from case law, but also statutes, court rules, regulations, and even a partys

document retention policy or electronic data preservation and destruction policy. For ex-

ample, in Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004 (Fed. Cir. 2008), the court

upheld severe sanctions against Qualcomm for intentionally concealing information that

it had a duty to disclose pursuant to the written policies of the standards-setting organization

of which it was a member. Accordingly, when assessing a clients duty to preserve evidence,

the lawyer should consult not only applicable legal authorities, but also industry regulation

or internal written policy that a client may be subject to.

29.2.2Scope Of The Duty To PreserveGenerally, the scope of information that may be considered relevant to the liti-

gation includes evidence that has a tendency to make the existence of any fact that is of

consequence to the determination of the action more probable or less probable than it would

be without the evidence. CRE 401. In other words, in the spoliation context, relevance

means that a trier of fact could conclude that the lost evidence would have supported the

claims or defenses of the party that sought it. See Victor Stanley, Inc. v. Creative Pipe, Inc.,

269 F.R.D. 497, 531 (D. Md. 2010). While the scope of the duty to preserve relevant evi-

dence is broad, it is not boundless. Rather, one must only do what is reasonable under

the circumstances.1

29.2.3When The Duty Arises

In Colorado, parties are obligated to preserve evidence regardless of whether a

complaint has been filed. A party that destroys evidence may be sanctioned so long as

the party knew or should have known that the destroyed evidence was relevant to pending,

imminent, or reasonably foreseeable litigation. Castillo, 140 P.3d at 236.

29.2 COUNSELING CLIENTS ON PRESERVATION

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When the duty to preserve evidence arises is not always clear:

[T]he duty to preserve evidence is triggered by the filing of a lawsuit.

However, the obligation to preserve evidence may arise even earlier if aparty has notice that future litigation is likely. The undeniable reality is

that litigation is an ever-present possibility in our society. While a party

should not be permitted to destroy potential evidence after receiving un-

equivocal notice of impending litigation, the duty to preserve relevant

documents should require more than a mere possibility of litigation. Ul-

timately, the courts decision [on the duty to preserve] must be guided by

the facts of each case.

Cache La Poudre Feeds, 244 F.R.D. at 621.

In Cache La Poudre Feeds, the plaintiffs counsel sent a pre-suit demand letter to

the defendant, stating that the letters purpose was to clearly put [Land OLakes] on notice

of [its] clients trademark rights, and to determine whether the situation could be resolved

without litigation and media exposure.Id. at 622. The court held that this letter was in-

sufficient to create a duty on the part of Land OLakes to preserve evidence: Rather than

threatening impending litigation, [counsels] letter implied that her client preferred and

was willing to explore a negotiated resolution.Id. at 623. The court explained that under

different circumstances, a demand letter alone may be sufficient to trigger an obligation to

preserve evidence . . . . However, such a letter must be more explicit and less equivocalthan Cache La Poudres [correspondence].Id.

In Castillo v. Chief Alternative, LLC, the court of appeals similarly held:

Aloi [v. Union Pacific Railroad, 129 P.3d 999 (Colo. 2006)] did not specif-

ically address whether a trial court may sanction a party for precomplaint

destruction of evidence. However, the rule announced inAloi that a

party may be sanctioned for destroying evidence after notice that it is rel-

evant to litigation would seemingly apply regardless of whether a com-

plaint has been filed, so long as the party knew or should have known thatthe destroyed evidence was relevant to pending, imminent, or reasonably

foreseeable litigation. . . . However, the behavior of the party moving for

sanctions is an important factor for assessing whether sanctions are ap-

propriate.

Castillo, 140 P.3d at 236-37.

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In Castillo, the plaintiff was injured when a cylinder-shaped mirrored column fell

from the ceiling of the defendants nightclub.Id. at 235. Over one year later, the nightclub

closed, and the manager discarded the mirrored column. The plaintiff thereafter filed a

complaint. During the course of litigation, the plaintiff filed a motion for sanctions againstthe nightclub for discarding the apparatus. The trial court, in its analysis of the motion for

sanctions, turned its attention to the plaintiffs pre-complaint conduct, noting that while

the defendant kept the apparatus for a year and a half following the plaintiffs injury, the

plaintiff did not request to view the item or demand that it be preserved. Moreover, the

manager testified that approximately one month after the incident, he called the plaintiff

to inquire about her well-being and the plaintiffs father informed him that

she was doing okay, that her bills were being paid, that she wasnt hurt

bad, and they werent going to sue or anything. The manager also testi-

fied that in January 2003, he spoke with The Chief Alternatives insurance

company and asked if there was anything else they needed from [him],

and they said no, nothing had been filed, or they didnt need any other pa-

perwork from [him].

Id. at 237.

The court declined to impose sanctions against the nightclub, reasoning that the

plaintiff failed to provide The Chief Alternative [nightclub] with clear, prompt notice that

a complaint would be filed.Id.

By contrast, inAloi, the plaintiff tripped and fell on a loose rubber mat in a railroad

car while working as a conductor for the Union Pacific Railroad, and informed the railroad

within a week of his injuries that he would bring a personal injury lawsuit. Despite receiv-

ing notice of a claim, the railroad did not institute a litigation hold, i.e., suspension of rou-

tine document destruction policies. Instead, it adhered to its usual document retention

policy, resulting in destruction of inspection and maintenance records relating to the loco-

motive where the fall took place. Although there was no evidence suggesting the documents

were intentionally destroyed, the court upheld sanctions against the railroad, reasoning that

[i]t does not matter whether a party destroyed evidence in bad faith or whether a partydestroyed evidence willfully because, regardless of the destroying partys mental state, the

opposing party will suffer the same prejudice.Id. at 1003.

As the cases above demonstrate, determining when the duty to preserve evidence

arises is not always straightforward. However, when a client comes to a lawyer with a notice

of claim, demand letter, or incident report, the lawyer should undertake careful analysis to

determine if the incident itself or notice of claim triggers the duty to preserve evidence, and

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take steps to fulfill any preservation obligations. Moreover, when representing a claimant,

the lawyer should take steps to properly put an opponent on notice of a claim and contem-

poraneously address the obligation to preserve evidence in the same correspondence.

29.2.4Sanctions For Spoliation

A trial court has the inherent discretionary power to impose appropriate evidentiary

sanctions to redress the destruction or spoliation of relevant evidence. Pfantz v. Kmart

Corp., 85 P.3d 564, 567-68 (Colo. App. 2003). The courts power to impose sanctions may

be exercised even if the party has not acted intentionally to destroy evidence.Id. See also

Rodriguez v. Schutt, 896 P.2d 881, 884 (Colo. App. 1994) (sanction of adverse inference

may be appropriate in absence of bad faith), affd in part and revd in part on other

grounds, 914 P.2d 921 (Colo. 1996). Sanctions may be imposed both to punish a party that

has spoiled evidence and to remediate harm to the injured party from the absence of that

evidence.Pfantz, 85 P.3d at 567.

The most common form of sanction for spoliation is an instruction to the jury per-

mitting it to infer that spoliated evidence was adverse to the party that lost or destroyed it.

See Aloi, 129 P.3d at 1001. However, depending on the facts surrounding the spoliation,

sanctions can be more severe, ranging from suppression of evidence, imposition of attorney

fees and costs, and, in the most egregious cases, default or dismissal. See Mosaid Techs.

Inc. v. Samsung Elecs. Co., 348 F. Supp. 2d 332, 335 (D.N.J. 2004) (discussing range of

potential sanctions for spoliation of evidence);see also Capellupo v. FMC Corp., 126

F.R.D. 545 (D. Minn. 1989) (discussing factors the court should consider to impose sanc-tion of default or dismissal).

Because the severity of a sanction increases with the level of misconduct involved

in the destruction of evidence, a lawyer should advise the client in writing about the duty

to preserve evidence whether the client is the plaintiff or defendant. Additionally, the

lawyer should supervise the preservation of evidence to ensure compliance with the scope

of the duty to preserve, and prevent inadvertent destruction of evidence that may result

in sanctions.

Lawyers, as officers of the court, have an additional duty to preserve potential ev-

idence and to be forthcoming in the disclosure and presentation of evidence during litiga-

tion. For instance, the Rules of Professional Conduct prohibit a lawyer from offering

evidence that the lawyer knows to be false (see Colo. RPC 3.3(a)(3)) and instruct lawyers

29.3 LAWYERS DUTY TO PRESERVE EVIDENCE

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against unlawfully obstructing another partys access to evidence, or unlawfully altering,

destroying, or concealing documents or other material having potential evidentiary value

(see Colo. RPC 3.4(a)). Additionally, the Rules prohibit a lawyer from assisting a client in

conduct that the lawyer knows is criminal or fraudulent. See Colo. RPC 1.2(d). (With regardto evidence, it is a crime to tamper with physical evidence. See C.R.S. 18-8-610.) The

Rules also require a lawyer to decline or terminate representation if the representation will

result in the violation of the Rules of Professional Conduct or other law. See Colo. RPC

1.16(a)(1). Violation of the Rules of Professional Conduct in the context of destruction of

evidence may result in disciplinary action. See People v. Attorney at Law, 88 Colo. 325,

326, 295 P. 917, 918 (1931) (reprimanding lawyer and holding that [n]o lawyer can make,

destroy or alter evidence . . .).

A lawyer who engages in the destruction of evidence will not only be accountable

to the disciplinary committee, but may also be subject to monetary sanctions. In Allied

Concrete Co. v. Lester, 736 S.E.2d 699 (Va. 2013), a wrongful death case, the trial court

imposed monetary sanctions against both the lawyer and his client for spoliation of evi-

dence on the clients Facebook page. In that case, the defendant issued a discovery request

seeking a printout of the plaintiffs profile page, message board, and pictures. The next

morning, the plaintiffs attorney told his client to clean up his Facebook page, and di-

rected the client to delete certain images.Id. at 702. The plaintiff deleted his Facebook

page. Thereafter, the lawyer issued an answer to the discovery requests, stating that the

client did not have a Facebook page. Ultimately, the trial court imposed sanctions in the

amount of $542,000 against the lawyer, and $180,000 against the plaintiff for their mis-conduct.Id. at 703.

With regard to preservation and production of electronic information, the courts

have imposed responsibilities on lawyers to facilitate production of evidence. InZubulake

v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004), the landmark case on preservation

and production of electronic discovery, the court set forth the following three rules for

lawyers and their clients:

1) Counsel and the parties must preserve data as soon as litigation is reasonably

anticipated by establishing a litigation hold, periodically re-issuing notice ofthe hold, and monitoring compliance with the hold;

2) Counsel must communicate directly with the people likely to have relevant in-

formation, such as information technology employees, and persons listed in

Rule 26 disclosures; and

3) Counsel must instruct the clients employees to produce relevant electronic

records, including backup media.

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Id. at 432. For more detailed guidance on the duty to preserve electronic evidence, see Chap-

ter 16, Technology and the Practice of Law. Failing to actively engage in the preservation

and production of electronic information can result in monetary sanctions, and even a mal-

practice claim by a sanctioned client.

To prevent spoliation, a lawyer must be actively engaged in the preservation, re-

view, and production process. Some of the steps a lawyer should consider taking are as

follows:

Advise the client in writing about the duty to preserve evidence over which theclient has control and reasonably knows or can reasonably foresee is relevant to

a potential or pending legal claim;

Actively supervise the ongoing collection of evidence, rather than relying on the

client to do so;

In the event electronically stored information is relevant, take steps to locate and

preserve the data in compliance with court rules and governing case law;

If representing a claimant, promptly put the opponent on notice of a claim and

the duty to preserve relevant evidence; and

If representing the target of litigation, inform the client of letters requesting

preservation of data and information, and advise the client of potential sanctions

for failure to comply.

1. Compare Victor Stanley, 269 F.R.D. at 522-23 (holding that preservation efforts must

merely be reasonable under the circumstances, i.e., what is proportional to the case and consistent

with established standards), with Orbit One Commcns, Inc. v. Numerex Corp., 271 F.R.D. 429, 436

(S.D.N.Y. 2010) (disagreeing with holding in Victor Stanley that the definition of what must be pre-served should be guided by principles of reasonableness and proportionality, and advising liti-

gants to retain all relevant documents . . . in existence at the time the duty to preserve attaches).

See also Cache La Poudre Farmland Feed, 244 F.R.D. at 623-24 (observing that defendant managed

over 400 servers, and holding that it was unrealistic to expect defendant to stop routine document

management practices when presented with merely an equivocal statement of discontent).

29.4 PREVENTING SPOLIATION

NOTE

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preservation and spoliation of evidence

Documents