By David Woodcock and Jessica Mederson

Just a month after Judge Shira Scheindlin revisited and updated her landmark Zubulake decisions in Pension Committee,¹ one of the most prominent federal judges in the e-discovery world has issued an important decision affecting the standards governing electronic discovery. In Rimkus Consulting Group, Inc. v. Cammarata,² Judge Lee Rosenthal, chair of the Federal Judicial Conference Advisory Committee for Federal Rules of Civil Procedure, while generally agreeing with the analysis of e-discovery preservation and collection issues laid out in Pension Committee, distinguished the level of culpability necessary to merit an adverse inference instruction and took a different approach on how to give such instructions. Judge Rosenthal cautions courts to avoid overuse of e-discovery sanctions, which can divert focus from the more important facts and merits of the case.

The Rimkus case addressed allegations of intentional spoliation, unlike the gross negligence at issue in Pension Committee. While the Rimkus court determined that the defendants had intentionally destroyed relevant information after the duty to preserve had arisen, the plaintiff was able to recover much of the deleted information. In addition, the record presented conflicting evidence about why the information was deleted, some of which was favorable to the defendants.

In addressing the issue of spoliation, the court first considered the level of culpability required before an adverse inference instruction can be given. Judge Rosenthal began by noting that the circuits are split on this question. The authority for such sanctions is found in the inherent power of courts to regulate the litigation process, and the Supreme Court has linked the exercise of that inherent power to instances of bad-faith conduct that affects the litigation.³ Moreover, the Fifth Circuit generally prohibits the imposition of severe sanctions, such as giving adverse inference instructions, unless there is evidence of “bad faith.”  Several circuits — the Seventh, Eighth, Tenth, Eleventh, and DC Circuit — also hold negligence insufficient for an adverse inference instruction, while the court noted the First, Fourth, and Ninth Circuits do not require bad faith but often emphasize its presence. Accordingly, destruction or deletion of information subject to a preservation obligation is not sufficient for sanctions. Bad faith is required.

Rimkus also addressed the standards governing preservation or discovery conduct. Rimkus is one of only a few cases to rely on the Sedona Principles in deciding what is acceptable in preservation or discovery conduct. Under those principles, what is acceptable “depends on what is reasonable, and that in turn depends on whether what was done — or not done — was proportional to that case and consistent with clearly established applicable standards.” The court, like Judge Scheindlin in Pension Committee, observed that this analysis always depends heavily on the facts and circumstances of the particular case. Both Judge Rosenthal and Judge Scheindlin hoped that this emphasis on judging conduct based on the facts of a given case would prevent parties or courts from judging discovery conduct based on a checklist of “acceptable” behaviors.

Finally, the court distinguished the instruction it would give the jury from the instruction given in Pension Committee. In Pension Committee, which involved only gross negligence, the court instructed the jury that it was bound by the court’s determination that the plaintiffs had destroyed documents after the duty to preserve had arisen, but did not instruct the jury on whether the evidence was relevant or prejudicial. In Rimkus, where there was strong evidence that the defendants deleted and hid relevant emails, the court refused to create a rebuttable presumption against the defendant or instruct the jury that the defendant had engaged in intentional misconduct. Instead, the court instructed the jury to decide for itself whether there was intentional destruction of evidence and, if so, whether or not to infer that the lost information would have been prejudicial.

Rimkus is an important decision because, while it comports with much of Pension Committee, it also concludes that mere gross negligence in the conduct of e-discovery would not result in an adverse inference instruction. Rimkus focuses attention on what is reasonable and proportional in a given case, reinforcing the idea that every e-discovery case must be viewed on its own merit. Rimkus also suggests that courts should hesitate to impose their findings of misconduct on the jury, but should instead instruct the jury to make its own determination of whether the culpable party intended to destroy the evidence and whether such destruction was prejudicial. While Rimkus is more forgiving to parties guilty of misconduct in e-discovery, the safest course is to avoid spoliation in all cases through careful and specific consideration of the facts of each case, and a close eye to the relevant law in each jurisdiction.

¹The Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010),
²__ F.Supp.2d__, 2010 WL 645253 (S.D. Tex. Feb. 19, 2010).
³Chambers v. NASCO, Inc., 501 U.S. 32, 43-46 (1991).

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