Spoliation cites

[Aimee Farr]

james wrote:

> If one keeps records, and suddenly someone sues one, and THEN one
> starts shredding, yes, then one can get into trouble.  If
> however, one shreds away indiscriminately, on a routine and
> regular schedule, one is in the clear.   As a remailer operator
> said to the courts  "Sorry, I do not keep
> records".
>
> Now if he had kept records, and then erased them on being
> summoned to the court, he would have had a problem.  But because
> he erased them routinely, no problem.

If you read any of those cites and shep'd them, you will see there are
circumstances where
defendants didn't know the documents were relevant to a specific lawsuit.
There is support for the words "SHOULD HAVE KNOWN" might NOT equivocate to:
"a lawsuit has been filed." Nor even "expect a specific lawsuit."
Furthermore, in Lewy, they did adhere to a destruction policy and plaintiffs
got a jury instruction allowing for a negative inference. Does this tell you
anything?

Normally, you consider the following in a retention policy:

o pending or threatened litigation = easy answer, keep it.
o statute-specific retention requirements = easy answer....
o statutes of limitations = starts getting fuzzy here, usually the length of
the relationship, plus the limitations periods....
o real estate = long time.
o IP = forever.
o email = most say a few weeks, unless it is a complaint, etc.

It's not so simple as many think. It's document specific.
-------

In certain cases, opponents may argue that the high-risk nature of certain
enterprises amounts to a state of continual pending or threatened
litigation, although non-specific in nature. They also may argue, as in
Lewy, that destruction pursuant to a retention policy and normal business
practice -- is not good enough. The court will look beyond the practice to
ask if the policy is reasonable GIVEN THE PARTICULAR NATURE OF THE DOCUMENT
AT ISSUE. The root of the matter is: SHOULD YOU HAVE KEPT IT? The court
seemed to infer in Lewy that the nature of the business and the likelihood
of litigation is a consideration.

--------------------------------------------------------
Lewy v. Remington Arms Co. 836 F.2d 1104 (8th Cir., 1998)
--------------------------------------------------------
..."We hold that there was sufficient evidence from which the jury could
find that Remington knew the M700 was dangerous. The following evidence was
before the jury: complaints from customers and gunsmiths that the Model 700
would fire upon release of safety, some of these complaints dating back as
far as the early 1970s; ....

.....Remington was unable to produce several documents that were destroyed
pursuant to Remington's "record retention policy." Remington argues that
destroying records pursuant to routine procedures does not provide an
inference adverse to the party that destroyed the documents.  Smith v.
Uniroyal, Inc., 420 F.2d 438, 442-43 (7th Cir. 1970).

The record reflects that Remington had its record retention policy in place
as early as 1970. In addition, the records that have been destroyed pursuant
to the policy -- complaints and gun examination reports -- were kept for a
period of three years and if no action regarding a particular record was
taken in that period it was destroyed. Vick v. Texas Employment Commission,
514 F.2d 734, 737 (5th Cir. 1975) (records destroyed pursuant to regulations
governing inactive records).

...First, the court should determine whether Remington'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.
*****************

[i.e., not just lawsuits - complaints. The court probably wanted to know if
the defendant was on notice that this information would be sought in future
NON-SPECIFIC litigation.]

****************
Finally, the court should determine whether the document retention policy
was instituted in bad faith.  Gumbs v. International Harvester, Inc., 718
F.2d 88, 96 (3rd Cir. 1983) ("no unfavorable inference arises when the
circumstances indicate that the document or article in question has been
lost or accidentally destroyed, or where the failure to produce it is
otherwise properly accounted for."); Boyd v. Ozark Air Lines, Inc., 568 F.2d
50, 53 (8th Cir. 1977) ("We recognize, however, that the destruction of
business records may be sufficient to raise an unfavorable inference."). In
cases where a document retention policy is instituted in order to limit
damaging evidence available to potential plaintiffs, it may be proper to
give an instruction similar to the one requested by the Lewys. Similarly,
even if the court finds the policy to be reasonable given the nature of the
documents subject to the policy, the court may find that under the
particular circumstances certain documents should have been retained
notwithstanding the policy.
************

For example, if the corporation knew or should have known that the documents
would become material at some point in the future then such documents should
have been preserved. Thus, a corporation cannot blindly destroy documents
and expect to be shielded by a seemingly innocuous document retention
policy.  Gumbs, 718 F.2d at 96 ("Such a presumption or inference arises,
however, only when the spoliation or destruction [of evidence] was
intentional, and indicates fraud and a desire to suppress the truth, and it
does not arise where the destruction was a matter of routine with no
fraudulent intent.") (quoting 29 Am. Jur. 2d Evidence '  177 (1967)).

###

In some high-risk endeavors, opponents may argue that destruction or
purposeful non-retention = fraudulent intent. I don't think Remington REALLY
wanted to keep those complaints 3 years, James. Ask yourself why they did
even that.

Look, we are just trying to envision what opponents are likely to try. The
outcome will depend on the facts.

Finally, the fact that a case (within the range of hypotheticals we have
discussed) has not arisen is not dispositive on the issue. If that were the
case, James, precedent would have no value, because the law could never move
forward. Indeed, precedent, by it's very nature usually involves something
novel. Otherwise, it wouldn't get to court, because everybody would know the
answer.

> You guys keep telling us we are not allowed to routinely purge
> records,

You keep speaking in absolutes. It's more complicated.

> But if you routinely destroy records on the basis that all
> records of type Y more than X days old shall be destroyed, unless
> there is some specific reason for keeping them, routine,
> regularly scheduled erasure of logs, then you are not destroying
> them in specific anticipation of a lawsuit.  You
> may well be destroying them in general anticipation of the
> general possibility of lawsuits, as Microsoft quite obviously is,
> as most companies quite obviously are, but Microsoft is not
> destroying them in specific anticipation of a specific lawsuit,
> so they are in the clear.

See above.


~Aimee