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Archive for August 10th, 2008

Case Blurb: Morris; Data Retention Policies and Adverse Inferences

Posted by rjbiii on August 10, 2008

In accord with its pretrial ruling, the district court gave the following instruction to the jury during the course of the trial:

You’ve heard evidence that there was an audio tape recording of communications made by railroad employees over their radios, including the communications between the railroad dispatcher and the employees on the train in Waldo. The tape was erased about 90 days after the accident because Union Pacific Click for Enhanced Coverage Linking Searcheshas a policy to reuse it’s [sic] audio voice tapes and it is usual procedure to record over the tapes after 90 days. However, this court found in another hearing or a previous hearing that Union Pacific should not have re-recorded this tape pursuant to its policy but should have saved the tape because it was on notice that a serious injury had occurred and it knew there was a possibility that a lawsuit would follow the injury. Because Union Pacific destroyed the information on the tape when it should have kept the information, you may, you may, infer that there was information in the recorded communications that would have proved damaging to Union Pacific or helpful to John Morris.

Relying on this adverse inference instruction, counsel for Morris argued extensively to the jury that it should infer evidence damaging to Union Pacific from the missing audiotape. Among the inferences suggested were that dispatchers at Union Pacific headquarters in Omaha directed the crew to move the train notwithstanding the crew’s protest that it could not be done safely, that train movement was rushed because dispatchers were concerned about train traffic, and that the train crew made admissions during spontaneous chatter between the crew and dispatchers following the accident. There was no direct evidence of these facts introduced at trial, and members of the train crew disputed them. Counsel also emphasized to the jury that Union Pacific was “destroying evidence,” which it was “not supposed to do.”

An adverse inference instruction is a powerful tool in a jury trial. When giving such an instruction, a federal judge brands one party as a bad actor, guilty of destroying evidence that it should have retained for use by the jury. It necessarily opens the door to a certain degree of speculation by the jury, which is admonished that it may infer the presence of damaging information in the unknown contents of an erased audiotape. As the district court in this case put it colloquially, “it’s like cow crap; the more you step in it, the more it stinks.” One distinguished court years ago cautioned against use of an adverse inference instruction like the one given in this case (there, involving an absent witness rather than missing evidence), because “the jury should not be encouraged to base its verdict on what it speculates the absent witness would have testified to, in the absence of some direct evidence.”

Presumably cognizant of these factors, our court in Stevenson v. Union Pac. R.R. Co., 354 F.3d 739 (8th Cir. 2004), recently clarified what circumstances justify the sanction of an adverse inference instruction. Stevenson specifically addressed the pre-litigation destruction of documents pursuant to Union Pacific document retention policy. While acknowledging that dicta in Lewy had articulated a “knew or should have known” negligence standard for imposition of the sanction, we ultimately rejected that approach, and held that “there must be a finding of intentional destruction indicating a desire to suppress the truth” before an adverse inference instruction is justified. Id. at 746. Though observing that the case before it “tested the limits of what we are able to uphold as a bad faith determination,” the Stevenson court held that the district court did not abuse its discretion in finding that Union Pacific acted with the requisite intent to destroy evidence for the purpose of suppressing evidence. Id. at 747-48.

The district court in this case did not have the benefit of the clarification in Stevenson that a finding of intent is required to impose the sanction of an adverse inference instruction. In light of Stevenson, we conclude that the adverse instruction was not proper in this case.

The most important consideration in our analysis is the district court’s own finding regarding Union Pacific’s intent. The district court specifically concluded that Union Pacific “did not intentionally destroy the tape.” (Addendum at 12). This does not strike us as a casual or off-handed finding. The district court acknowledged that “historically, spoliation only arose from the intentional destruction of evidence, and therefore a finding that the spoliator intentionally destroyed the evidence was a prerequisite to prevail in a motion for sanctions for spoliation.” (emphasis in original). Only after reaching the understandable conclusion, based on our court’s opinion in Lewy, that “a finding of no intent is no longer dispositive of the issue” did the district court rule that Union Pacific should be sanctioned for destroying the audiotape.

Morris v. Union Pac. R.R., 373 F.3d 896, 900-901 (8th Cir. Ark. 2004).

Posted in 8th Circuit, Adverse Inference, Case Blurbs, Data Management, Judge Steven M. Colloton, Sanctions | Leave a Comment »

Case Blurb: Lewy; On Remand, Court should examine validity of party’s document retention policy

Posted by rjbiii on August 10, 2008

On remand, if the trial court is called upon to again instruct the jury regarding failure to produce evidence, the court should consider the following factors before deciding whether to give the instruction to the jury. First, the court should determine whether [Producing Party’s] record retention policy is reasonable considering the facts and circumstances surrounding the relevant documents. For example, the court should determine whether a three year retention policy is reasonable given the particular document. A three year retention policy may be sufficient for documents such as appointment books or telephone messages, but inadequate for documents such as customer complaints. Second, in making this determination the court may also consider whether lawsuits concerning the complaint or related complaints have been filed, the frequency of such complaints, and the magnitude of the complaints.

Finally, the court should determine whether the document retention policy was instituted in bad faith.

Lewy v. Remington Arms Co., 836 F.2d 1104, 1112 (8th Cir. Mo. 1988 )

Posted in 8th Circuit, Case Blurbs, Data Management, Judge Floyd R. Gibson | Leave a Comment »

Case Blurb: Kelley; Rule for Adverse Inference, 1st Circuit

Posted by rjbiii on August 10, 2008

When a document relevant to an issue in a case is destroyed, the trier of fact sometimes may infer that the party who obliterated it did so out of a realization that the contents were unfavorable. Before such an inference may be drawn, there must be a sufficient foundational showing that the party who destroyed the document had notice both of the potential claim and of the document’s potential relevance. Even then, the adverse inference is permissive, not mandatory. If, for example, the factfinder believes that the documents were destroyed accidently or for an innocent reason, then the factfinder is free to reject the inference.


When evidence indicates that a party is aware of circumstances that are likely to give rise to future litigation and yet destroys potentially relevant records without a particularized inquiry, a factfinder may reasonably infer that the party probably did so because the records would harm its case.

Kelley v. United Airlines, 176 F.R.D. 422, 427-28 (D. Mass. 1997)

Posted in 1st Circuit, Adverse Inference, Case Blurbs, Magistrate Judge Robert B. Collings | Leave a Comment »

Case Blurb: In re 11th Liab. Ins. Coverage; Attorneys’ obligations in Discovery

Posted by rjbiii on August 10, 2008

Discovery is run largely by attorneys, and the court and the judicial process depend upon honesty and fair dealing among attorneys. Thus the court may impose appropriate sanctions on a party that, without substantial justification, fails to disclose information required by Rule 26(a) or 26(e)(2). A failure to disclose under Rule 37 encompasses both the destruction of evidence, or spoliation, and untimely production of documents and information required to be produced.

In re September 11th Liab. Ins. Coverage Cases, 243 F.R.D. 114, 31-32 (S.D.N.Y. 2007).

Posted in 2nd Circuit, Attorney Liability, Case Blurbs, Duty to Disclose, Duty to Preserve, Duty to Produce, FRCP 26(a), FRCP 26(e), Judge Alvin K. Hellerstein, S.D.N.Y | Leave a Comment »