Source: https://bowtielaw.wordpress.com/category/duty-to-preserve/
Timestamp: 2019-04-21 05:14:07+00:00

Document:
The City of New York, 50 unnamed NYPD officers, and the former NYPD Commissioner are involved in a civil rights lawsuit over allegedly issuing summonses without probable cause, violating the First, Fourth, Fifth, Eighth, and Fourteenth Amendments to the U.S. Constitution, if true. The City was found to be grossly negligent in issuing and executing its litigation hold for the preservation of email and text messages. Stinson v. City of New York (S.D.N.Y. Jan. 2, 2016) 2016 U.S. Dist. LEXIS 868, at *1.
The City did not issue a litigation hold until three years AFTER the complaint had been filed. The Court stated that litigation hold was not effectively communicated and the officers listed in the City’s initial disclosures did not acknowledge receiving the hold notice. Stinson, at *3-4.
The NYPD had a document destruction policy of three years for bureau chief memos and four years for monthly performance reports and summonses. Stinson, at *4. The NYPD “did not have a specific policy with regards to the destruction of email communications, it did impose a hard size limit on officers’ inboxes, and that when officers hit that limit, ‘they delete.’” Stinson, at *5. The NYPD document retention and destruction policy did state, “unless specific steps were taken, relevant NYPD documents would be destroyed.” Id.
The Court further explained that 1) the City made no effort to preserve text messages between police officers; and 2) the NYPD had no policy on preserving text messages. Stinson, at *6.
The City of New York produced only a few documents from key players. Id. Moreover, no emails were produced from the former Commissioner, the former Chief of the department, and three other key custodians. In all, the Court noted a total of fewer than 25 emails produced from key players. Stinson, at *7. The City took the position that the “Police Department on the whole did not operate via email.” Stinson, at *8. This assertion was contradicted by emails the Plaintiff acquired from third parties. Id.
The Court found that the City’s litigation hold was both late and ineffective. Moreover, the fact relevant emails were found, demonstrated that relevant emails were also deleted. Id.
3) That the destroyed evidence was relevant to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.
The Court found that the duty to preserve was the date of an earlier lawsuit involving quota-related allegations that was “strikingly similar” to the instant case, which was January 31, 2008, opposed to the date of the current lawsuit, filed on May 25, 2010. Stinson, at *10-11, referencing Floyd v. City of New York, 283 F.R.D. 153, 164-66 (S.D.N.Y. 2012).
…[T]he reasonableness or unreasonableness of one party’s demands does not determine the scope of the other party’s obligation to preserve documents. The Plaintiffs’ putative overbroad demands do not excuse the City’s failure to issue a litigation hold, to properly supervise its implementation, or to suspend document retention policies that would foreseeably lead to the spoliation of evidence.
The Plaintiffs’ putative overbroad demands do not excuse the City’s failure to issue a litigation hold, to properly supervise its implementation, or to suspend document retention policies that would foreseeably lead to the spoliation of evidence.
Life lesson: Just because the Plaintiff has overly broad scope for discovery requests, does not justify the lack of a litigation hold.
Neither negligence or gross negligence has been clearly defined in the context of discovery misconduct, such as spoliation. These terms simply describe a continuum. Conduct is either acceptable or unacceptable. Once it is unacceptable the only question is how bad is the conduct. That said, it is well established that negligence involves unreasonable conduct in that it creates a risk of harm to others.
Stinson, at *16 [Citations omitted].
The Court held the following factors amounted to gross negligence: 1) failure to issue a litigation hold; 2) failure to implement the hold after it was issued with poor communications and the destruction of evidence; and 3) failure to circulate the hold and ensure compliance. Stinson, at *17-18.
The NYPD cannot credibly argue that, despite setting guidelines for document destruction and providing an industrial shredding truck for that purpose, it did not know or intend that documents would be destroyed. Similarly, Lieutenant Scott’s Rule 30(b)(6) testimony amounts to an admission that the Department knew that officers’ email inboxes would hit their space limits – and that those officers would delete potentially relevant ESI when they did. Although the paucity of relevant emails produced from the inboxes of key decision makers does not establish that ESI was deleted, it is consistent with such spoliation and with Lieutenant Scott’s acknowledgement that deletion of emails was a foreseeable consequence of the NYPD’s storage policy.
The Court further held that the evidence lost was relevant to the Plaintiff’s claims from the handful of emails that were produced from a third party and other discovery. Stinson, at *20-21.
The Court had to craft a proportional adverse inference instruction based on the City’s conduct. As one would expect, the Plaintiff sought nuclear sanctions that would make them prevail on hotly contested disputes in the case. Stinson, at *22. As the Court explained, the Plaintiff was entitled to “an inference that helpful evidence may have been lost, not relief from their obligation to prove their case.” Id.
A permissive inference will ensure that the City faces consequences for its failure to take its preservation obligations seriously, but will not result in an unwarranted windfall for the Plaintiffs. The jury will be instructed that the absence of documentary evidence does not in this case establish the absence of a summons quota policy.
Large organizations often get trapped in the “fog of war” with litigation holds. Failed communications, not monitoring for compliance, or not issuing a hold can result in catastrophic results.
USCS Fed Rules Civ Proc R 37(e).
It will be very interesting to see the first case that applies Rule 37(e). Time will tell how quickly that day comes. While the factual analysis will likely remain the same, the sanctions analysis should be less art and more science.
The duty to preserve is a tricky beast. Determining when a party “knew or should have known that litigation was imminent” is often a free fall into analyzing the facts of when a party had notice of a lawsuit.
There are times when it is very obvious that a party should have ejected and pulled the ripcord on not destroying any evidenced. This is one of those times.
The Plaintiff in the case was injured in a skydiving accident. The Defendant sent the parachute in the accident from Oklahoma to England prior to the Plaintiff bringing her lawsuit and propounding discovery that sought the inspection of the parachute. Wethington v. Swainson (W.D.Okla. Dec. 23, 2015, No. CIV-14-899-D) 2015 U.S. Dist. LEXIS 171126, at *2.
The Plaintiff brought a motion seeking sanctions, ranging from default judgment to adverse inference instructions. However, this case did not have a crash landing for the Defendant. The Court noted that the Defendant was pro se and should have been aware of the relevance of the parachute. Wethington, at *4. That being said, the Court found that issuing nuclear sanctions were currently inappropriate, but would award the Plaintiff’s attorney fees incurred for the discovery motion. Wethington, at *5.
The Defendant effectively had an emergency chute to avoid sanctions, because the Defendant could produce the parachute for inspection. Id. As such, the Court ordered the inspection of the parachute at the Defendant’s cost, subject to any protocols the parties agreed to, such as a licensed parachute rigger supervising the inspection. Wethington, at *5-6.
The triggering event for the duty to preserve electronically stored evidence is not always as clear as an accident. A retail store where someone has a slip and fall, or auto accident with a shipping service, are all clear lines in the sand to start preserving evidence. Threat of a lawsuit in business is another matter.
Consider situations where individuals who are producing a crowdfunded fan fiction movie are sued by the movie studio that owns the rights to the subject property. Was the triggering event when the first emails were sent discussing the production of the fan film? Was it when the producers first expressed concern they could be sued? Is there any event prior to the filing of a lawsuit that could have triggered the duty to preserve evidence?
The answer is “it depends” on the facts. Few cases are as clear-cut as a skydiving accident and require thoughtful analysis of when someone “knew or should have known that litigation was imminent.” The next steps of identifying the scope of preservation are also complicated, but necessary to ensure a party is reasonably meeting their duty to preserve relevant evidence.
Magistrate Judge Jonathon Goodman knows the value of an expert deposition in complex litigation and B.B. King.
Here is the basic dispute in Procaps S.A. v. Patheon Inc.: The Plaintiff, based in Columbia, did not put a litigation hold in place until ordered by the Court. There are issues with inadequate searches and the Plaintiff’s attorney did not travel to Columbia to meet with the Plaintiff’s IT team. Custodians conducted searches themselves for collection without reviewing the discovery requests. The Plaintiff is accused of spoliation of electronically stored information. A spoliation motion is expected. Procaps S.A. v. Patheon Inc., 2015 U.S. Dist. LEXIS 53997, 2-4 (S.D. Fla. Apr. 24, 2015).
A Special Master was appointed to examine the eDiscovery and forensic issues in the case. Additionally, a neutral third-party computer forensic expert examined the Plaintiff’s computers. A Report was prepared that showed “that nearly 200,000 emails, PDFs, and Microsoft Word, Excel, and PowerPoint files were apparently deleted. It appears that approximately 5,700 of these files contain an ESI search term in their title, which indicates that they could have been subject to production in the forensic analysis if they had not been deleted. Procaps, at *7.
The Report also stated duplicate files could exist and that “there is no evidence that any ESI or other documents have been deleted or purged with no chance of being recovered.” Procaps, at *7-8.
The Defendants sought to conduct the deposition of the neutral third-party expert to explain the report. After a protracted discussion of whether the Court could order such a deposition procedurally, the Court stated Federal Rule Evidence 706(b)(2) expressly provided for such depositions. Procaps, at *15.
The Court explained that deposing the expert would benefit the parties and the Court in understanding the ESI issues in the case. As the Judged explained, “the Undersigned has no hesitation about disclosing my appreciation for help on complex ESI issues from court-appointed, neutral forensic experts (and from special masters with considerable experience in E-discovery).” Procaps, at *14-15.
The Court ordered the deposition of the third-party computer forensic expert to be conducted in part by the Special Master. Procaps, at *2-3. The goal of the deposition was to assist the Court in deciding the issues from the deleted files and assist the Defendant in determining whether or not to file a sanctions motion. Id.
First things first, I hope B.B. King is comfortable.
The “e” in “eDiscovery” is not because it is “easy.” Determining whether ESI was lost, whether it exists in another location, whether it is not reasonably accessible, requires expert analysis. This expert analysis needs to be communicated to the Court, usually in the form of a Report or Affidavit, but sometimes in a deposition.
The battles in this case focused on procedural issues with having the expert deposition. The Court rightly allowed the deposition and was wise to leverage the Special Master, who is very knowledgeable in eDiscovery, to conduct the deposition. Many cases have complex issues with how to collect data and strategies for reviewing ESI. Employing an expert is a smart way to focus on the merits and not get lost in eDiscovery issues.
As we learned from Judge Kevin Fox, no, we are not cool.
The case involved claims for wrongful termination and fighting over audio recordings and emails for over five years. Novick v. AXA Network, LLC,2014 U.S. Dist. LEXIS 150004 (S.D.N.Y.Oct. 22, 2014).
After protracted discovery battles, the Defendants produced audio recordings that had an eight-week recording gap. Novick, at *16-17.
The Court found that 1) the Defendants created audio recordings in that time period; 2) those recordings were not produced because they were missing; and 3) there was no explanation on how these recordings went missing. Novick, at *17.
As such, the Court held that the Defendants spoliated relevant evidence. Id.
The defendants’ repeated failure to search for properly, locate and produce audio recordings to the plaintiff, as noted in the October 3, 2013 order, as well as their inability to account for the audio recordings’ disappearance, suggests nothing other than deliberate conduct and a culpable state of mind. The Court finds that the defendants acted in bad faith because, after representing to the assigned district judge, during the June 27, 2012 conference, that the audio recordings exist, but “are not searchable,” the defendants represented to the plaintiff, on November 20, 2012, that they “have investigated and have not located any audio recordings of the trading desk (where the individuals identified by plaintiff were located) from 2006.” Thereafter, it was not until after the plaintiff made a motion for sanctions that the defendants searched for and located the existing audio recordings, and, not until after the Court ordered their production on October 3, 2013, that the defendants admitted that the audio recordings, covering the period of time critical to the plaintiff’s claims, were missing. The defendants’ delay in properly searching for, locating and producing relevant audio recordings and their conflicting representations to the court and the plaintiff about the existence of audio recordings prejudiced the plaintiff by: (i) preventing him from discovering facts material to the adjudication of his claims; (ii) causing him to incur unnecessary costs making his motion for sanctions and the instant motion; and (iii) prolonging the litigation.
Novick, at *17-19, emphases added.
The Court turned the dial up to 11 finding bad faith conduct because of the misconduct regarding the audio files, the search for missing email messages, and the failure to search an archive due to “human error” without any further explanation. Novick, at *19.
The Court sanctioned the Defendant both with an adverse inference jury instruction and monetary sanctions. Novick, at *22-23. Striking the Defendant’s answer would have gone too far in the Court’s view.
(3) The audio recordings were relevant to the plaintiff’s claims such that a reasonable trier of fact could find that they would support his claims.
The Court explained that the sanctioned would deter “spoliation, place the risk of an erroneous judgment on the defendants and restore the plaintiff to the position he would have been in absent the defendants’ wrongful spoliation of the audio recordings.” Novick, at *22-23.
Judges want to know specifics when there is a discovery dispute. As such, parties should document steps to preserve electronically stored information; including how ESI was searched; the technologies used for such searches; and were the collected information is stored. The failure to document with a detailed chain of custody and search report can end badly when electronically stored information goes missing.
Can You Ask the Court to Order a Party to Follow the Duty to Preserve?
A Pro Se Plaintiff in a prison inmate case requested the Court order the Defendants not to destroy any relevant video surveillance footage from a specific date. The Court declined, because the Defendant was already subject to the duty to preserve. Ross v. Conner, 2014 U.S. Dist. LEXIS 146887, at *17-18.
The Plaintiff [rightly] was concerned that the Defendants had a document destruction policy of one-year. However, the Court found it unnecessary to issue an order for the Defendants to preserve information that was already subject to the duty to preserve.
Under the doctrine of spoliation, parties have a duty to preserve (including a duty to not destroy) evidence when litigation is filed or becomes reasonably anticipated. To fulfill the duty to preserve relevant evidence, “[o]nce a party reasonably anticipates litigation, it is obligated to suspend its routine document retention/destruction policy and implement a “litigation hold” to ensure the preservation of relevant documents.” Here, if Defendants destroy any exculpatory evidence they will be subject to sanctions. However, because they are already under a duty to preserve evidence, an order from this Court is not necessary.
There are no shortage of cases where the duty to preserve has gotten attorneys and parties a like in trouble. However, it is difficult to ask a Court to order a party to “follow the rules,” because the party already has a duty to so. However, if there is evidence of wrongdoing by the party that was subject to the duty to preserve, the outcome could be different.
Plaintiffs are well served to include a “preservation letter” to the opposing party early in the case. Some attorneys include this letter with their complaint. This acts as both a shot across the bow on the importance of preserving ESI, but puts the opposing party on notice of what sources of ESI are relevant in the case.
No vacation should end with people becoming Plaintiffs. Sadly, that happened on a trip to Hawaii when someone had a slip and fall in a hotel garage after exiting an elevator. Riley v. Marriott Int’l, Inc., 2014 U.S. Dist. LEXIS 135728 (W.D.N.Y.Sept. 25, 2014).
The Defendant hotel maintained both video surveillance of the area and “sweep logs” when the area was swept. However, the Defendant lost both. Neither the Plaintiffs or Court said “Mahalo” over this loss.
The Defendant’s Loss Prevention Manager responsible for preserving information for the Hotel explained that the video system records 24-hours a day, is stored on a hard drive, and those records are maintained for 30-days. Riley, at *2-3. The Manager watched the security footage after being told of the Plaintiff’s fall, her removal from the area in a wheelchair, followed by hotel employees placing wet floor signs, and then sweeping up the water. Riley, at *3. The video was turned over the hotel’s liability insurance company. Id.
Although facing a serious motion for sanctions with potentially significant consequences, Marriott apparently did not investigate the destruction of the relevant evidence or, if it did, explain the results of the investigation. Thus, the only information that this Court has concerning the destruction of the evidence are the assertions of Marriott’s counsel made during oral argument. Even then, Marriott’s counsel was unable to provide any facts concerning the circumstances under which the video footage was destroyed. The failure to provide the Court with any sworn facts from persons with knowledge of the destruction of the challenged evidence demonstrates such a lack of diligence that it suggests bad faith destruction. In any event, Marriott’s failure to preserve the entire video footage relating to Linda’s accident and the sweep logs for the day in question despite the Hotel’s loss prevention employee’s testimony that he knew that he had a duty to preserve relevant evidence constitutes, at a minimum, gross negligence.
The Court found that the lost evidence prejudiced the Plaintiffs and the Defendant’s failure to explain how the information was destroyed amounted to gross negligence, thus allowing an inference the information was unfavorable to the Defendant. Riley, at *14.
The Plaintiff’s request for relief asked the Court to “remedy the injustice caused by defendants by ruling the evidence in [p]laintiffs’ favor and by granting summary judgment.” Riley, at *17.
The Court interpreted the requested relief as to strike the Defendant’s answer or an adverse inference instruction. The Court held striking the answer was “too drastic” and instead issued an adverse inference instruction to “permit, but not require, the factfinder to infer that the missing video footage would have been favorable to the [Plaintiffs] and unfavorable to [the Defendant].” Riley, at *19.
The Duty to Preserve never goes on vacation. Moreover, no lawyer should be sent into Court armed only with a Ukulele to sing a song on not knowing what happened to relevant electronically stored information.
If a party has actual notice of a triggering event and has reviewed relevant evidence, that information absolutely has to be preserved. This requires the information to be defensibly copied, which could mean a mirror image or a targeted collection, depending on the needs of the case. What then follows are chain of custody forms that document each step of preserving the information. The data should be maintained in a secure medium, which could be an evidence locker with biometric security (again, depending on the needs of the case).
This case is interesting because despite the inability to explain what happened, the Court refused to strike the Defendant’s answer. I agree this is the right call, especially considering the fact the Court found gross negligence for the lost data.
A Defendant sought reconsideration of a Court order allowing discovery on their document retention policies and litigation hold strategy on the grounds 1) the order was premature and 2) it was irrelevant and not discoverable. Cactus Drilling Co. v. Nat’l Union Fire Ins. Co., 2014 U.S. Dist. LEXIS 45251, 11-14 (D. Okla. 2014).
The Court denied the motion.
Plaintiff is entitled to inquire into the circumstances of the destruction of such relevant files while this litigation is pending, whether defendants took proper precautions, and whether such precautions were actually exercised by defendants’ employees. Thus, clearly a discovery request on defendants’ document retention and litigation hold practices and policies and whether such policies were followed with respect to Ms. Valerio’s hard copy Cactus file is relevant and discoverable.
The Court also held that the order was not premature, as the Defendants requested a ruling on whether they had to produce the discovery and witness for deposition in their Joint Status Report. Cactus, at *12.
The Court has been disappointed with the parties’ inability to communicate in good faith and work out many discovery issues that could have been resolved between the parties. Such behavior has necessitated repeated intervention by the Court, unnecessarily and significantly depleting the Court and the parties’ valuable time and resources. Accordingly, the Court advises the parties that it will not look favorably on any party engaging in less than good faith behavior that leads to further abuse of the Court’s time and resources.
Cactus, at *14, fn 5.
Discussing the preservation of discovery, its scope and privilege is NEVER premature. These issues should be at the first meet and confer. Attorneys should be actively thinking about preservation the moment the case begins. Lawyers cannot afford to take a “let’s see how the motions go” before ensuring discovery is preserved.
Why do attorneys wait to exercise their duty of competency to ensure the preservation of discovery? Some might not know how to, others might not want to spend the money and others might think they can keep their clients happy by having the least amount of intrusion. These are all bad reasons.
An effective client interview and litigation hold strategy is less invasive then the joys of a person most knowledgeable deposition over how a litigation hold was enacted. Moreover, motion practice is not known for its low billable hours.
There are some lawyers who model their meet and confer strategies right out of Tombstone. This is not a good idea. There are issues worth fighting about, but methods of preservation, the scope of discovery, and other technical issues should stay objective. These issues are vital for moving the case forward, but are not worth brawling over. Save the fight for the merits.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.