Still No Bright-Line Rules on Spoliation Sanctions

In 2010, federal courts in New York, Texas, and Maryland rendered well-publicized decisions on the proper factors to consider on a motion for sanctions based on spoliation of electronically stored information. Two issues predominated in each case -- culpability and prejudice. In the first decision, Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities,[FOOTNOTE 1] the court in the Southern District of New York held that sufficiently culpable conduct was enough to warrant severe, even case-dispositive, sanctions irrespective of whether the innocent parties demonstrated that the loss of such ESI was prejudicial.

The subsequent decisions, Rimkus Consulting Group Inc. v. Cammarata,[FOOTNOTE 2] and, perhaps more so, Victor Stanley Inc. v. Creative Pipe Inc.,[FOOTNOTE 3] seemed to de-emphasize culpability; focusing instead on the alleged relevance of the spoliated ESI and the resulting prejudice to both the innocent party's case and the truth-finding process. Since these decisions, several federal district courts have weighed in on the proper analysis for ESI spoliation motions with differing results but some trends are emerging.

This article briefly summarizes the three 2010 decisions referenced above with particular emphasis on how those courts analyzed the issues of culpability and prejudice and the relative weight allocated to each such issue in fashioning spoliation sanctions. The article then examines several 2011 decisions to determine whether, and to what extent, federal courts have followed these decisions in considering spoliation motions. Finally, given the uncertainty that remains with respect to ESI spoliation law, the article concludes with recommendations for establishing and maintaining defensible litigation holds, which remain critical in avoiding potentially case-dispositive spoliation sanctions.

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Source: law.com
By: Keith M. Brandofino and Ian M. Goldrich