Preserving Your Own Evidence (Or, People Who Live In Glass Houses ... )

The first step to ensuring success in litigation is to make sure that your own house is in order


In the first three articles in this series, we discussed some of the more common grant assurances that are disputed. This article takes a slightly different direction, discussing how to begin preparing for litigation or settlement discussions in advance of commencing litigation.

The first step to ensuring success in litigation is to make sure that your own house is in order — your defensive strategy. This article discusses how to avoid claims that you destroyed evidence, especially given that you may need to make those same claims against your opponent in potential litigation.

Spoliation Claims

You may have heard about a growing trend in the law which uses terms like “spoliation” and “litigation holds”. Spoliation is the negligent or intentional destruction, mutilation, alteration or concealment of evidence, usually of a document or electronic file.

While state laws vary on what remedies are available for spoliation, and whether spoliation must be intentional for your adversary to recover, the fact remains that destroying evidence is the wrong thing to do. As with many things in life, however, the devil is in the details. What actually constitutes spoliation? Can the routine overwriting of the last backup tape in your cycle constitute spoliation? Can tossing out, or even failing to keep, organized records on a particular issue result in a claim of spoliation? You bet. Read on.

Litigators today often only half-jokingly lament that they now end up litigating spoliation claims more often than the underlying issues in dispute. Spoliation claims are attractive because they sound dramatic. Who wouldn’t want to take an otherwise boring contract dispute and, instead of comparing contract clauses and testimony about them in front of a jury, animatedly tell the jury about a nefarious plan by one of the key players to permanently hide the ball?

In addition to adding spice to a jury trial in an otherwise boring case, the non-spoliating party may seek an adverse inference against its opponent at trial. If granted, the judge tells the jury that the destroyed or missing record is deemed to have been harmful to you and helpful to your opponent.

You’re then put in a position of defensively trying to explain away why you couldn’t come up with the record, lamely asserting that (in your view) it wasn’t important, and that your opponent is creating a smoke screen. Not a good spot to be in.

The Litigation Hold

Since you’re now worried about spoliation claims as you contemplate litigation in your airport/tenant dispute, how do you avoid a spoliation claim being brought against you? Start by getting your own house in order with a litigation hold. “Identifying the boundaries of the duty to preserve [evidence] involves two related inquiries: when does the duty to preserve attach, and what evidence must be preserved.”

  • • a. When does the duty to preserve attach?

“It is well established that the duty to preserve evidence arises when a party reasonably anticipates litigation. Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold to ensure the preservation of relevant documents.”

Acknowledging the difficulty in determining when the obligation attaches, courts have stated that “The exact moment of when the duty to impose a ‘litigation hold’ arises is vague.”

The standard developed is whether litigation should be “reasonably anticipated.” Examples: retaining counsel; receiving a Notice of Claim; when a party knows it will be filing suit; the filing of a lawsuit; sending a demand letter; and an employee’s related termination.

  • b. What evidence must be preserved?

The Federal Rules of Civil Procedure state: “Evidence that must be preserved includes documents, electronically stored information, and physical evidence that the party knows or reasonably should know is relevant to claims or defenses in the action, is reasonably calculated to lead to the discovery of admissible evidence, or is reasonably likely to be requested during discovery.”

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