It has become common in litigation to charge that one’s opponent has engaged in destruction of important evidence, termed “spoliation” of evidence. A finding of wrongful spoliation can lead to sanctions by the court, which may include a negative jury instruction, preclusion of evidence or even loss in litigation by default. But before any sanctions can be imposed, the court must find that the destruction took place when the party had a “duty to preserve evidence.”
When does that duty arise? Clearly, once a party files litigation or is served with a complaint, it must preserve all relevant evidence. Litigation hold letters are then appropriate. But it is generally agreed that the duty can arise prior to the filing of a lawsuit, if certain facts come to the party’s attention.
A recent Massachusetts case, JFF Cecilia LLC v. Weiner Ventures, LLC (Mass.Sup.Ct. 2023) held that the duty to preserve arises once it is merely “possible” that suit would be filed and the evidence would be relevant to the case. The case involved a dispute between partners in a construction project in Boston. When problems arose, one party’s counsel sent a letter to the other side giving notice of a dispute between the parties under the agreement governing the project. Six weeks later, the same counsel sent another letter including a settlement offer to defendants’ counsel, with a four-day deadline to reach an agreement. Two weeks later, the first party filed a complaint.
The plaintiffs later filed a motion for spoliation sanctions after discovery revealed that defendants had deleted relevant emails and texts and had reset the contents of a cell phone when transitioning to a new phone without a backup. This occurred in the time between the initial notice letter and the filing of suit.
The trial court initially denied the motion, holding that before a duty to preserve evidence arose, it must have been “probable” that litigation would ensue. The correspondence did not yet create such a probability. But an appellate court reversed, holding that the correct standard is whether the defendants “knew or reasonably should have known that evidence might have been relevant to a possible action.” On remand, the trial court found that this standard was met due to the correspondence, and ordered that the jury would be instructed that spoliation occurred, and could (although it would not be required to) conclude that the deleted emails and texts would be unfavorable to the defendants.
This legal standard is somewhat more expansive than usually cited in federal litigation, i.e., that a duty arises “when a party should have known that the evidence may be relevant to future litigation,” Kronisch v. United States, 150 F.3d 112, 126 (2d Cir.1998), or when litigation is “reasonably foreseeable.” Bistrian v. Levi, 448 F.Supp.3d 454, 468 (E.D.Pa. 2020). New York state courts use a standard that requires preservation of evidence “once a party reasonably anticipates litigation.” Gregorian v. New York Life Ins. Co., 211 A.D.3d 706, 710 (2d Dept. 2022); VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 93 A.D.3d 33, 36 (1st Dept. 2012)
The takeaway here is that whenever any kind of dispute arises which may result in litigation, it is prudent to preserve anything that might be relevant evidence. Since a great deal of evidence is in the form of electronic documents and information, this can easily be done by copying these into an easily accessible location.
When does that duty arise? Clearly, once a party files litigation or is served with a complaint, it must preserve all relevant evidence. Litigation hold letters are then appropriate. But it is generally agreed that the duty can arise prior to the filing of a lawsuit, if certain facts come to the party’s attention.
A recent Massachusetts case, JFF Cecilia LLC v. Weiner Ventures, LLC (Mass.Sup.Ct. 2023) held that the duty to preserve arises once it is merely “possible” that suit would be filed and the evidence would be relevant to the case. The case involved a dispute between partners in a construction project in Boston. When problems arose, one party’s counsel sent a letter to the other side giving notice of a dispute between the parties under the agreement governing the project. Six weeks later, the same counsel sent another letter including a settlement offer to defendants’ counsel, with a four-day deadline to reach an agreement. Two weeks later, the first party filed a complaint.
The plaintiffs later filed a motion for spoliation sanctions after discovery revealed that defendants had deleted relevant emails and texts and had reset the contents of a cell phone when transitioning to a new phone without a backup. This occurred in the time between the initial notice letter and the filing of suit.
The trial court initially denied the motion, holding that before a duty to preserve evidence arose, it must have been “probable” that litigation would ensue. The correspondence did not yet create such a probability. But an appellate court reversed, holding that the correct standard is whether the defendants “knew or reasonably should have known that evidence might have been relevant to a possible action.” On remand, the trial court found that this standard was met due to the correspondence, and ordered that the jury would be instructed that spoliation occurred, and could (although it would not be required to) conclude that the deleted emails and texts would be unfavorable to the defendants.
This legal standard is somewhat more expansive than usually cited in federal litigation, i.e., that a duty arises “when a party should have known that the evidence may be relevant to future litigation,” Kronisch v. United States, 150 F.3d 112, 126 (2d Cir.1998), or when litigation is “reasonably foreseeable.” Bistrian v. Levi, 448 F.Supp.3d 454, 468 (E.D.Pa. 2020). New York state courts use a standard that requires preservation of evidence “once a party reasonably anticipates litigation.” Gregorian v. New York Life Ins. Co., 211 A.D.3d 706, 710 (2d Dept. 2022); VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 93 A.D.3d 33, 36 (1st Dept. 2012)
The takeaway here is that whenever any kind of dispute arises which may result in litigation, it is prudent to preserve anything that might be relevant evidence. Since a great deal of evidence is in the form of electronic documents and information, this can easily be done by copying these into an easily accessible location.