U.S. v. Maxxam, Inc., 2009 WL 817264 (N.D. Cal. Mar. 27, 2009)
In this case, which arose from the joint purchase of the Headwaters Forest by the United States Government and the State of California, plaintiffs moved for sanctions due to the alleged spoliation of “critical” evidence by defendants Maxxam and Hurwitz. Despite finding that “certain evidence was not preserved,” the court declined to impose spoliation sanctions where there was no evidence that the destruction was intentional and where, at the time of the destruction, there was no duty to preserve.
In the 1990’s, the U.S. Government and the State of California agreed to purchase the Headwaters Forest from Pacific Lumber, which had recently been taken over by defendant Maxxam, Inc., a company controlled by defendant Hurwitz. As a condition of purchase, Pacific Lumber agreed to develop and implement a sustained yield plan (“SYP”) for its retained properties, subject to approval. An SYP was prepared by Pacific Lumber’s consulting company, VESTRA, using computer modeling and was eventually approved. Later, plaintiffs determined that the SYP was fraudulent in many respects and a lawsuit was filed in December 2006.