Spoliation is the intentional or negligent
withholding, hiding or destruction of
relevant evidence in a legal proceeding.
“Corporate officers need to be cognizant of
spoliation issues from the time they become
aware of a potential claim,” says Irena Leigh
Norton, a partner in the litigation department
at Shulman Hodges & Bastian LLP. “Waiting
until a suit is filed is often too late.”
Smart Business talked to Norton about
the impact and consequences of evidence
spoliation.
What types of evidence are most susceptible
to spoliation claims?
Spoliation occurs when a company has lost
or destroyed evidence that it knew — or
should have known — to preserve for a lawsuit. Awareness of potential litigation imposes a duty on the manager or the corporate
officers to preserve evidence that may relate
to that lawsuit.
The evidence in question might include
electronic records like e-mail, personnel files
and physical objects. In the case of electronic evidence, specific federal laws address the
preservation of backup materials and e-mail
correspondence. Sometimes it’s not even
enough to preserve an electronic copy of e-mail. In discovery, the opposing counsel may
want to examine the computer hard drive —
and if you have failed to preserve that, you
may have created a potential spoliation issue.
What sanctions might be imposed by a
court?
Generally, spoliation of evidence is something that is proven by way of a motion or
declaration to the court. One party in the lawsuit requests a sanction be imposed on the
party that cannot provide pertinent evidence.
The scope of that sanction depends on a
determination of why the evidence is missing. Is it missing because it was accidentally
destroyed through no fault of the defendant?
Was it purposely destroyed? You will face a
much higher level of sanction in the latter
case.
Sanctions could be anything from having
an evidentiary presumption imposed against
your side or not being able to dispute certain
issues all the way up to striking an answer
and imposing a default judgment. Sometimes
monetary sanctions are awarded, as well.
Can you cite an example of evidence spoliation?
In an employment case alleging sexual
harassment, there may be an issue about
whether certain communications between a
manager and the plaintiff employee were
preserved.
In one instance, the hard drive crashes and
pertinent e-mails are unable to be resurrected. Nothing intentional was done. If that
complainant tries to seek an evidentiary
sanction, he or she will have a really hard
case to make. In all likelihood, a court will
not impose evidentiary sanctions.
In contrast, if the exchange of e-mail is deleted from the system by the manager, then
there may be a presumption that it was done
purposely. The jury will be informed as such,
and the defendant will be barred from making certain evidentiary and testimony objections. Depending on the severity of the event,
the defendant may have a liability finding
against him or her. There is not an assumption of guilt, but it’s an issue that courts take
testimony on, and there may be a full hearing
with expert testimony on how the materials
were deleted and why no backup is available.
For instance, if deleting information from a
server is a four-step process that requires a
supervisory password, then evidence suggests that a corporation or officer purposely
ordered the information to be deleted,
because it’s not something that could be done
by accident.
A judge is not likely to impose sanctions for
vagaries of electronics breaking down or for
accidents. But there are likely sanctions for
purposeful acts, and there may be substantial
repercussions.
Are spoliation claims subject to separate
causes of action?
Under California and federal law, there is
generally not a separate cause of action for
spoliation of evidence.
If you are under criminal investigation,
however, criminal liabilities may arise
because the standards are different.
Additionally, if your company does business
in other states, there may be case law supporting a separate claim for spoliation or
destruction of evidence in that jurisdiction.
What steps can a company take to discourage spoliation of evidence?
Every company should have policies and
procedures in place regarding the preservation and destruction of its business records.
High-level officers should be aware when
potential claims arise and immediately take
steps to preserve all potential evidence.
Instruct employees to maintain not only
computer-based information but also physical devices — like computer hard drives —
that would have potential relevance to a lawsuit. Even if you cannot foresee a lawsuit, as
soon as you’re served, those steps must be
taken.
Most importantly, take every precaution to
assure that courts have access to all information — bad facts as well as good facts — so
you have the best opportunity to represent
your company’s interests.
IRENA LEIGH NORTON is a partner in the litigation department at Shulman Hodges & Bastian LLP. Reach her at [email protected]
or (949) 340-3400.
