An Arm & Hammer executive was penalized for deleting text messages the company wanted to review for a legal matter. A manufacturer was sanctioned $3 million for failing to stop a senior executive from deleting data. Google was fined $79,000 for failing to preserve employees’ chat evidence.
What do they all have in common? A party failed to protect evidence considered useful in a lawsuit and was found guilty of spoliation.
What is spoliation?
Spoliation (pronounced /spohl-ee-ay-shuhn/) is the act of destroying or altering evidence relevant to an ongoing lawsuit. Evidence can be:
- Physical objects, such as photographs, machines, or documents
- Electronically stored information (ESI), such as emails, social media posts, video footage, design files, audio files, or text messages
While you may picture someone shredding or burning documents, the reality is, spoliation is much more nuanced.
Which activities fall within the spectrum of spoliation?
When evaluating spoliation claims, courts examine underlying motivations and how the lost or damaged evidence could impact a case. Consider the following scenarios:
- An executive drops their phone in the ocean while on vacation, complicating the retrieval of information stored on their phone.
- A company destroys its business documents older than five years in accordance with its record retention policies.
- An individual destroys personal communications with their spouse.
- Employees are told to preserve all information related to the case. An executive directs the IT department to delete and destroy any evidence, then deletes his personal and professional texts and emails.
As you can see, actions and motivations vary. If the information isn’t relevant to the case, has spoliation occurred? If someone accidentally destroys materials that impact the case, how should the court respond? If a business follows its standard operational procedures, has it done anything wrong?
Courts seek to answer these questions. If they find a party spoliated evidence – deliberately or not– it may enforce penalties. And in some cases, an employer may penalize its employees, as seen in the Arm & Hammer case. The executive lost approximately $200,000 in stock options for intentionally deleting text messages against his company’s wishes.
What are the consequences?
If a court determines you tampered with evidence, it can enforce three penalties.
- The court can presume the lost evidence hurts or is unfavorable to your position. It may instruct the jury to do the same.
- The court bars witnesses, denying you the ability to defend your position.
- The court grants a judgment for the other side, dismissing the case. The opposition wins, and you may have to pay attorney and court fees.
How do attorneys collect evidence?
At the start of a lawsuit, attorneys should issue a litigation hold letter. These letters notify opposing parties that litigation is underway. Recipients of hold letters are responsible for identifying, collecting, and preserving evidence to ward against spoliation claims. When businesses receive a hold letter, their legal counsel should communicate and enforce protocols across the organization to ensure compliance. Best practices dictate that your IT personnel should collect all relevant ESI in a litigation hold drive so documents are not accidentally deleted, etc.
Once litigation enters the discovery phase, attorneys issue requests to produce and subpoenas to obtain evidence. Not only are they collecting evidence, but they’re also looking for evidence that should exist and whether any metadata has been compromised.
Courts provide oversight to ensure attorneys seek relevant and admissible evidence during discovery. Depending on jurisdiction, a court’s definition of relevant and admissible evidence may be more limited or broader in scope. In addition, courts may provide third parties, such as discovery masters, to help filter through information and determine what is relevant to the case. In some cases, entire hard drives, phones, and external cloud-based drives must be turned over to special masters. They search the devices for keywords or terms relevant to the litigation.
How can I prevent claims of spoliation?
Evidence has the potential to be lost or damaged in every civil case. We’ve seen the following:
- Intentional deletion of text messages
- Phones accidentally destroyed in lakes and oceans while employees were on vacation
- Hard drives swapped out with new drives to avoid turning over key evidence
- Cloud-based systems deleted
There are simple rules to help reduce your exposure to any spoliation claims:
- NEVER actively destroy, delete, hide, tamper, or withhold evidence.
- ALWAYS provide your employees with a litigation hold letter informing them of protocols to safeguard any potentially relevant evidence and to never delete such evidence.
Courts and parties to the litigation have various ways to extract the information they need, including forensic experts and specialists. Not only could your efforts be useless, but they could also severely hurt your case.
If a potential litigant or their counsel advises you that a legal dispute has arisen, even before litigation technically begins with the filing of a lawsuit, you have two responsibilities.
- Follow the legal process and comply with court orders regarding evidence.
- Safeguard any relevant or potentially admissible evidence.
It is best to be upfront and transparent with your attorney and the court at all stages of litigation, from the time the dispute arises through discovery and trial.
Plaintiffs and defendants in all cases must preserve evidence. In many cases, defendants have a larger volume of information and may shoulder more responsibility to preserve it. Risk managers, in-house counsel, public officials, and leadership teams are critical in anticipating litigation, designing and enforcing policies and procedures, and following the law.
Ultimately, altering or destroying evidence carries more risk than reward. If you want to give your case the greatest chance for success, follow the legal process and hire the right attorney to advocate on your behalf.
About the Author
Jeff Hart has more than 27 years of experience as a lawyer. He litigates complex commercial, employment, construction, professional liability, transportation, OSHA, and MIOSHA matters. He earned his Juris Doctor from Loyola University Chicago School of Law.
Smith Haughey represents businesses, professionals, and individuals in all types of civil litigation. We are second to none in helping clients navigate disputes.