Opinion ID: 779367
Heading Depth: 2
Heading Rank: 2

Heading: The District Court's Denial of DeGeorge's Motion

Text: 49 We review a district court's decision on a motion for discovery sanctions for abuse of discretion. See, e.g., Selletti v. Carey, 173 F.3d 104, 110 (2d Cir.1999). 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. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). In the instant case, DeGeorge contends that, in denying its motion for sanctions, the District Court both made errors of law and based its ruling on a clearly erroneous view of the evidence.
50 As the District Court correctly held, a party seeking an adverse inference instruction based on the destruction of evidence must establish (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; and (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. Byrnie v. Town of Cromwell, 243 F.3d 93, 107-12 (2d Cir.2001). Similarly, where, as here, an adverse inference instruction is sought on the basis that the evidence was not produced in time for use at trial, the party seeking the instruction must show (1) that the party having control over the evidence had an obligation to timely produce it; (2) that the party that failed to timely produce the evidence had a culpable state of mind; and (3) that the missing evidence is 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. 51 RFC did not dispute in its opposition to DeGeorge's motion that it (1) had an obligation to preserve and timely produce the back-up tapes. Accordingly, the only issues before the District Court were (2) whether RFC acted with a culpable state of mind in failing to timely produce the e-mails and (3) whether the missing e-mails are relevant to DeGeorge's claim or defense such that a reasonable trier of fact could find that they would support that claim or defense. a. The proper legal standard for determining whether RFC acted with a culpable state of mind 52 In determining whether RFC acted with a culpable state of mind, the District Court specifically discussed only whether RFC acted in bad faith or with gross negligence. See Trial Tr. at 1375-76. As we explicitly noted in Byrnie, however, the culpable state of mind factor is satisfied by a showing that the evidence was destroyed knowingly, even if without intent to [breach a duty to preserve it], or negligently.  Id. at 109 (emphasis added). Reilly v. Natwest Markets Group, which the District Court cited, is not to the contrary; in that case we held that a case-by-case approach to the failure to produce relevant evidence was appropriate because [s]uch failures occur `along a continuum of fault—ranging from innocence through the degrees of negligence to intentionality.' 181 F.3d at 267 (quoting Welsh v. United States, 844 F.2d 1239, 1246 (6th Cir.1988)). 53 The 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. As Magistrate Judge James C. Francis, IV aptly put it, 54 [The] sanction [of an adverse inference] should be available even for the negligent destruction of documents if that is necessary to further the remedial purpose of the inference. It makes little difference to the party victimized by the destruction of evidence whether that act was done willfully or negligently. The adverse inference provides the necessary mechanism for restoring the evidentiary balance. The inference is adverse to the destroyer not because of any finding of moral culpability, but because the risk that the evidence would have been detrimental rather than favorable should fall on the party responsible for its loss. 55 Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68, 75 (S.D.N.Y.1991). See generally Kronisch v. United States, 150 F.3d 112, 126 (2d Cir.1998) (stating that an adverse inference instruction serves the remedial purpose, insofar as possible, of restoring the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party). 56 Although the District Court properly cited Reiley and Turner, it explicitly analyzed only whether RFC acted in bad faith or with gross negligence. It is therefore unclear whether the District Court applied the proper legal standard. Ordinarily, we would remand for clarification of this issue, but, in view of our analysis of the remaining issues in this case, such clarification is unnecessary. 57 b. The proper legal standard for determining whether DeGeorge adduced sufficient evidence that the missing e-mails are relevant 58 Although we have stated that, to obtain an adverse inference instruction, a party must establish that the unavailable evidence is relevant to its claims or defenses, Byrnie, 243 F.3d at 109; Kronisch, 150 F.3d at 128, our cases make clear that relevant in this context means something more than sufficiently probative to satisfy Rule 401 of the Federal Rules of Evidence. 3 Rather, the party seeking an adverse inference must adduce sufficient evidence from which a reasonable trier of fact could infer that the destroyed [or unavailable] evidence would have been of the nature alleged by the party affected by its destruction. Kronisch, 150 F.3d at 127; Byrnie, 243 F.3d at 110. Courts must take care not to hold[] the prejudiced party to too strict a standard of proof regarding the likely contents of the destroyed [or unavailable] evidence, because doing so would subvert the ... purposes of the adverse inference, and would allow parties who have ... destroyed evidence to profit from that destruction. Kronisch, 150 F.3d at 128; Byrnie, 243 F.3d at 110. 59 Where a party destroys evidence in bad faith, that bad faith alone is sufficient circumstantial evidence from which a reasonable fact finder could conclude that the missing evidence was unfavorable to that party. See, e.g., Kronisch, 150 F.3d at 126 (It is a well-established and long-standing principle of law that a party's intentional destruction of evidence relevant to proof of an issue at trial can support an inference that the evidence would have been unfavorable to the party responsible for its destruction.). Similarly, a showing of gross negligence in the destruction or untimely production of evidence will in some circumstances suffice, standing alone, to support a finding that the evidence was unfavorable to the grossly negligent party. See Reilly, 181 F.3d at 267-68. Accordingly, where a party seeking an adverse inference adduces evidence that its opponent destroyed potential evidence (or otherwise rendered it unavailable) in bad faith or through gross negligence (satisfying the culpable state of mind factor), that same evidence of the opponent's state of mind will frequently also be sufficient to permit a jury to conclude that the missing evidence is favorable to the party (satisfying the relevance factor). 4 60 A party seeking an adverse inference instruction need not, however, rely on the same evidence to establish that the missing evidence is relevant as it uses to establish the opponent's culpable state of mind. For example, in Byrnie, the party seeking the adverse inference established relevance through deposition testimony regarding the nature of the missing documents, which we held were likely relevant for purposes of an adverse inference in light of the opponent's shifting theory of the case. Byrnie, 243 F.3d at 109-10. 61 In this case, the District Court stated that the only evidence DeGeorge had adduced suggesting that [the unproduced e-mails] would likely have been harmful to RFC was the nonproduction itself. Trial Tr. at 1377. It also stated, however, that RFC's actions after it retained EED, including representation that e-mails would be produced, without mentioning the absence of any from the critical time period, a missed Federal Express deadline for sending backup tapes so they could be forwarded to DeGeorge's vendors, and resistance to responding to technical questions about the tapes, suggest[] a somewhat purposeful[] sluggishness on RFC's part.  Trial Tr. at 1376 (emphasis added). 62 It is unclear why the District Court did not consider RFC's acts evincing purposeful sluggishness as supportive of DeGeorge's claim that the e-mails were likely harmful to RFC. Just as the intentional or grossly negligent destruction of evidence in bad faith can support an inference that the destroyed evidence was harmful to the destroying party, see, e.g., Kronisch, 150 F.3d at 126; Reilly, 181 F.3d at 267-68, so, too, can intentional or grossly negligent acts that hinder discovery support such an inference, even if those acts are not ultimately responsible for the unavailability of the evidence ( i.e., even if those acts do not satisfy the culpable state of mind factor because they did not cause the destruction or unavailability of the missing evidence). Thus, if any of RFC's acts that hindered DeGeorge's attempts to obtain the e-mails was grossly negligent or taken in bad faith, 5 then it could support an inference that the missing e-mails are harmful to RFC. 63