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Electronically Stored Evidence + Spoliation of Evidence = Retailers Have a Duty to Preserve  

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By Jackie Jewell

Retail, Hospitality, and Entertainment Facilities Liability - Spring 2019 Newsletter
April 18, 2019

As Retailers are becoming paperless in an effort to conserve the environment, Courts are faced with opportunities to further define how electronically stored information should be preserved during litigation. One such way is for Plaintiffs or Defendants to use the tort spoliation of evidence. “Spoliation of Evidence” is a separate cause of action, for the destruction of evidence or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation. While this principal can be seen as far back as Roman law, it consistently remains part of everyday practice at the present time. Yet, Spoliation of evidence typically comes to light when either the Plaintiff or Defendant intentionally or accidentally concealed or destroyed evidence relevant to the case. This can include the destruction of:

1) physical objects;
2) documents;
3) pictures; and
4) electronically stored information.

Due to the increase of electronically stored information over the past several years, this doctrine has been more prevalent. This has created an increase in accusations to both Plaintiffs and Defendants about spoliating evidence needed to either prove or disprove their case.

Amendments to the Federal Rules of Civil Procedure continue to highlight the issues surrounding spoliation in relation to electronically stored information. According to the December 1, 2015 Amendments to Federal Rule of Civil Procedure 37, the existence of “exceptional circumstances” is no longer required before a court can impose sanctions for a parties’ failure to turn over electronically stored information misplaced, lost or destroyed during the course of a “routine, good faith operation of electronically store information system”. Rather, Rule 37(e) lists possible sanctions on a party who fails to take “reasonable steps” to preserve the electronically stored information during or in anticipation of litigation. Specifically, the Rules provides:

If electronically stored information that should have been preserved in anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and cannot be restored or replaced through additional discovery, the Court:

1. Upon finding prejudice to another party from loss of information, may order measures no greater than necessary to cure the prejudice; or

2. Only upon the finding of the party acted with the intent to deprive another party of the information’s use in the litigation may:

A. Presume that the lost information was unfavorable to the parties;
B. Instruct the jury that it may or must presume the information was unfavorable; or
C. Dismiss the action or enter a Default Judgment.

The Amendments make clear how the Court should deal with sanctions relating to electronically stored information and a parties’ failure to preserve such information. As of now, it remains somewhat uncertain as to how judges deal with possible sanctions for spoliation of non-electronically stored information materials.

Spoliation Claims Against Plaintiffs
In tort actions, spoliation of evidence claims are typically seen against the Defendant. However, depending on the circumstances, the cause of action may exist against a Plaintiff for spoliation. If a Plaintiff is in custody or control of evidence, they too, run the risk of a spoliation claim if they fail to take the necessary steps to prevent the loss or destruction of evidence. Additionally, an action by a Plaintiff can also amount to a claim for spoliation if the Plaintiff takes active steps to destroy evidence.

Spoliation Claims Against Defendants
As it is more likely that spoliation claims are asserted against the defense, there are several protocols a Defendant can institute to avoid such claims. If a Defendant does not properly preserve evidence related to the initial harm, it does so to its own peril. Thus, retailers should take the following steps to prevent Spoliation of Evidence claims:

1. Invest in a risk management company/HR Department that can spend time and energy on counseling individuals on how to implement litigation hold protocols.
2. Set a plan for litigation holds. These protocols will begin immediately after an event and are helpful to identify, collect, and retain evidence that will likely reduce the success of a spoliation claim.
3. Train employees on these procedures. This would help the employees—who are likely gathering this information—to have a better understanding of their requirements/demands to preserve this evidence.
4. When appropriate, engage counsel at the outset of an incident to gain proper advice on the preservation of evidence.

Spoliation claims are not going away any time soon and it is best to be well prepared to combat these claims from the outset. Please contact Reminger if our attorneys can be of any assistance in implementing protocols or advising on specific action items after an incident takes place.

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.
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