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Court Addresses What Constitutes “Bad Faith,” Imposes Adverse Inference & Monetary Sanctions

Posted in CASE SUMMARIES

Bozic v. City of Washington, No. 2:11-cv-674, 2012 WL 6050610 (W.D. Pa. Dec. 5, 2012)

Addressing Plaintiff’s accusation of spoliation based on the destruction of the contents of an audio tape, the court considered “the requisite mental state or level of scienter” necessary to establish bad faith, as is required in the Third Circuit, and found that the circumstances surrounding the destruction established sufficient culpability, that it was “highly likely” that Plaintiff was materially prejudiced, and that “no lesser sanction than at least a spoliation adverse inference would avoid substantial unfairness” and ordered an adverse inference and monetary sanctions.

The plaintiff in this case was hired by the City of Washington as a firefighter as part of a settlement after bringing a Title VII charge against the City.  She was later terminated from that position for lying about her residency, following a meeting with several city employees, including the City Solicitor.  That meeting was recorded by the City Solicitor and the tape was subsequently labeled and stored in his possession.

Despite acknowledging his anticipation of litigation upon Plaintiff’s termination, the City Solicitor later recorded over the tape.  He claimed, however, that this occurred during a time when litigation was not anticipated, although he was unable to pinpoint specifically when that was.  During the same time, there was ongoing litigation regarding Plaintiff’s application for unemployment compensation.  Attempting to explain his behavior, the City Solicitor asserted, for example, that his anticipation of litigation regarding Plaintiff’s termination was negated by a favorable hearing in the unemployment litigation in March 2010, despite the fact that no final determination was made until after the City received notice of Plaintiff’s Charge of Discrimination in June of that year.

The court’s spoliation analysis relied heavily upon the Third Circuit’s opinion in Bull v. United Parcel Service, Inc., 665 F.3d (3d Cir. 2012) and focused on two of four relevant factors: whether the duty to preserve was reasonably foreseeable and whether there had been “actual suppression or withholding of evidence,” which the Third Circuit in Bull interpreted to require “bad faith.”

Based on the City Solicitor’s adamant assertions that he recorded over the tape when litigation was not anticipated and his statements regarding the possible time frame for the destruction, e.g., after the favorable unemployment hearing but before receipt of notice of Plaintiff’s charge, the court identified a three-month window “as the period of time in which, according to [the City Solicitor], litigation was not foreseeable.”  The court reasoned that the claim that no litigation was anticipated “[did] not appear to be accurate,” however, in light of an email written by the City Solicitor during that time which indicated that he actually anticipated civil litigation.  Moreover, the court reasoned that a belief that anticipation of litigation had dissipated "would not have been objectively reasonable," noting specifically that a final determination in the unemployment litigation had not yet been issued.  The court’s discussion also included consideration of Plaintiff’s prior charge against the City.  In short, the court concluded that the City Solicitor “should have known (and in fact did know) that the litigation, as to which the tape recording of the Meeting would be important, was likely from the moment of [Plaintiff’s] dismissal until this suit was filed.”

Turning to the question of culpability, the court noted that following Bull, it remained to be determined what constituted the “requisite mental state or level of scienter” to demonstrate “bad faith” i.e., “whether the movant must demonstrate that the sanctioned party acted with the specific intent of hiding adverse information … or whether other types of actions that are intentional in form, yet only highly reckless as to their consequences relative to evidence, also rise to that bad faith level.”  More specifically, the court noted that this case presented the “more nuanced question of whether a reckless disregard for the consequences of an intentional and conscious destruction of evidence, previously specially preserved for purposes of subsequent litigation, at a time when litigation is necessarily foreseeable, meets that ‘bad faith’ test.”  The court determined that it does: 

While it is unclear where the exact line of “bad faith” under Bull lies, the Court concludes that destroying the tape, after specifically preserving it for litigation purposes, knowing that it was the Bozic Meeting tape, and while anticipating litigation, goes well past any such line and fulfills the “bad faith” standard announced in Bull.

Having found that spoliation occurred, the court turned to the question of sanctions and found that “no lesser sanction than at least a spoliation adverse inference would avoid substantial unfairness.”  Thus, the jury will be instructed at trial that “it may conclude that such evidence was destroyed because its contents were harmful to the Defendant.”  The court further found that a “focused monetary remedy [was] also necessary in this case in order to properly allocate the litigation costs resulting from the tape’s destruction.”