Electronic Discovery Law
Court Rejects "Shifting Duty" Theory of Preservation, Denies Sanctions Absent Showing that Crucial Evidence was Destroyed in Bad Faith
Point Blank Solutions, Inc. v. Toyobo Am., Inc., No. 09-6116-CIV, 2011 WL 1456029 (S.D. Fla. Apr. 5, 2011)
Plaintiffs sought sanctions for defendants’ alleged spoliation of evidence, including email correspondence, communications with other body armor manufacturers, and internal communications, among other things. Finding that plaintiffs failed to show that crucial evidence was destroyed in bad faith, as is required for an adverse inference in the 11th Circuit, the court denied plaintiffs’ motion for sanctions.
Defendants manufactured Zylon, a product used by plaintiffs and other manufacturers in the production of body armor. In June 2003, a 100% Zylon vest manufactured by Second Chance Body Armor (a non-party to the present litigation) failed when a police officer was shot. Following the failure of the vest, defendants hired a PR firm to assist with messaging, etc. surrounding possible litigation, although none had yet been initiated. In November 2003, defendants were “sued across the county in numerous cases involving Zylon-containing vests” (although, apparently, none of these suits involved the plaintiffs in the present action) and the government initiated its own investigation of Zylon-containing body armor. Also in November 2003 defendants’ counsel requested a list of documents in connection with litigation and an oral litigation hold was issued, although the scope of the hold was not definitively ascertained. In January 2004 defendants were served with a request for production from the Massachusetts AG which sought copies of all correspondence with certain body armor manufacturers, including plaintiffs. A similar request was issued from a Michigan state court in July 2004. In April 2004, defendants and Armor Holdings, a body armor manufacturer, were jointly sued in a class action lawsuit. In August 2004, defendants were served with a government subpoena seeking evidence related to defendants’ communications with vest manufacturers other than Second Chance (which would have included plaintiffs). Despite all of this, defendants maintained that litigation with plaintiffs was not anticipated until at least 2006 (and thus no duty to preserve existed until that time), in large part because until that time, plaintiffs continued to “tout the merits of Zylon.”
Although defendants maintained that there was no duty to preserve as to plaintiffs until 2006, some steps were taken to preserve evidence beginning in November 2003, including the collection and preservation of information related to litigation involving Second Chance’s use of Zylon in its vests and other Zylon-related documents. Also at that time, employees were instructed to exercise caution in the creation of any new documents concerning Zylon and to consider using the phone as a primary means of communication—instructions which provided some explanation for the low volume of evidence produced from that time period. Moreover, the court was presented with no evidence of intentional spoliation.
In the 11th Circuit, a party seeking spoliation sanctions must prove “first that the missing evidence existed at one time; second, that the alleged spoliator had a duty to preserve the evidence; and third that the evidence was crucial to the movant being able to prove its prima facie case or defense.” Additionally, sanctions are available “only where the absence of that evidence is predicated upon bad faith.”
The court first took up the question of whether evidence was “missing” for purposes of the analysis where plaintiffs were in possession of much of the allegedly spoliated evidence, having received it from other sources (including its own files). Without deciding the question, the court reasoned that “[c]ommon sense dictates that evidence obtained elsewhere cannot be ‘missing’ and that an adverse inference instruction (intended to compensate a party for wrongly discarded evidence) is inappropriate when the evidence is in the plaintiff’s possession and can be presented to the jury.”
Turning next to the existence of a duty to preserve, the court determined that defendants had a duty to preserve Zylon-related evidence, including correspondence, which was triggered by the pending litigation with Second Chance in 2003 and by the receipt of requests for production and the government subpoena as discussed above. However, the duty did not necessarily arise as to plaintiffs where they did not make the requests for production or issue the subpoena which triggered the duty. Moreover, the court noted that it was difficult to reconcile plaintiffs’ arguments that defendants should have anticipated litigation with them (which would have triggered the duty to preserve) where plaintiffs “continued to publically and privately support the product for several years.”
Continuing with the question of whether a duty to preserve existed as to plaintiffs, the court rejected the “shifting duty” theory which plaintiffs argued would have shifted the duty of preservation owed to other parties to the plaintiffs. This theory, the court reasoned, was “incompatible with the basic rule that a duty is owed to a specific party.” The court also rejected the “industry-wide litigation theory” which would have would have triggered defendants’ duty to preserve because of notice of “industry-wide litigation.” Specifically, despite conceding that the theory “appear[ed] more logical” than the shifting-duty theory, the court relied on the fact that the Eleventh Circuit had not adopted the industry-wide theory of preservation and indicated its reluctance to take a position on the issue when it was unnecessary to resolve the motion at hand.
Having avoided the question of when a duty to preserve arose as to plaintiffs (because there were alternative grounds on which to resolve the motion), the court turned to the question of whether plaintiffs had shown that the allegedly destroyed evidence was sufficiently crucial to its case and found that it had not. Likewise, the court found that plaintiffs had failed to establish that defendants destroyed evidence in bad faith. Accordingly, plaintiffs’ motion for sanctions was denied.
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