A recent Federal Circuit decision denying a petition for a writ of mandamus should serve as a cautionary tale and reminder for corporate entities regarding the critical importance of preserving documentary evidence in a timely and appropriate manner.
In In re: (
Background
Among the many pitfalls and challenges inherent in litigation discovery and case management, evidence spoliation is one that can lead to powerful adverse sanctions. “Spoliation is 'the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or future litigation.'” (Glaukos) Corp. v.
To avoid spoliation, parties must preserve evidence when litigation becomes reasonably foreseeable. Thus, at the outset of litigation, parties often initiate so-called “litigation holds,” which are directives to maintain and preserve documentary and electronic evidence and to suspend corporate document retention policies that may lead to the destruction of evidence. While this practice generally is necessary, it may not be sufficient to satisfy the duty to preserve evidence, depending on the timing, mechanisms, and substance of the litigation ho
Because the intentional or negligent destruction of evidence can have serious ramifications in a party's ability to defend or prosecute its case, courts have significant authority to impose sanctions, based in the Federal Rules of Civil Procedure, or alternatively but to a lesser degree, in their inherent judicial power.
Rule 37(e) identifies three nonexclusive sanctions for courts to consider imposing after a finding that a party acted with the “intent to deprive another party of the information's use in the litigation”: “presume that the lost information was unfavorable to the party; instruct the jury that it may or must presume the information was unfavorable to the party; or dismiss the action or enter a default judgment.”
Courts may also impose sanctions based on their inherent authority to manage their dockets — and such sanctions may be imposed without a finding of bad faith that the Federal Rules require. Although courts must exercise their inherent power “with restraint and discretion,” they have “broad discretion” to fashion sanctions for spoliation on a “case-bycase” determination based on considerations of fault, prejudice, and avoidance of substantial unfairness. See, Roadway
In
Litigation in the District Court
The concern about evidence spoliation first emerged during discovery when “Ivantis informed
The district court ultimately granted
At the heart of the district court's decision was
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Originally published by The Intellectual Property Strategist,
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