Court Declines to Hold that Lack of Written Litigation Hold Allows Presumption that Relevant Evidence was Lost or Destroyed

Steuben Foods, Inc. v. Country Gourmet Foods, LLC, No. 08-CV-561S(F), 2011 WL 1549450 (W.D.N.Y. Apr. 21, 2011)

Relying largely on the holding of Pension Comm. of Univ. of Montreal Pension Plan v. Bank of Am. Secs., defendant argued that plaintiff’s failure to issue a written litigation hold and subsequent failure to produce three allegedly relevant emails allowed for a presumption that relevant evidence was lost, thereby warranting spoliation sanctions.  Declining to adopt such a holding, the court denied defendant’s motion for sanctions absent evidence that plaintiff was responsible for the destruction or loss of any relevant evidence.

Plaintiff in this breach of contract case issued only an oral litigation hold and failed to produce at least three emails, which defendant argued were relevant to the case.  (Defendant received the emails from another defendant in the case.)  Accordingly, based on the holdings of Pension Committee, defendant argued that relevant evidence should be presumed lost, thereby warranting spoliation sanctions.

Beginning its analysis, the court set forth the relevant law of spoliation:

A party bringing a spoliation motion must demonstrate that: (1) the party charged with destroying the evidence had an obligation to preserve it; (2) the records were destroyed with a ‘culpable state of mind’; and (3) the destroyed evidence was relevant to the party’s claim or defense.

Additionally, "[c]ourts have found that actual destruction or loss of relevant documents is a prerequisite for sanctions based on spoliation."

Here, the court found that “the record fail[ed] to reveal any evidence that Plaintiff was responsible for the destruction or loss of any relevant evidence.”  For example, as to one email identified by the defendant as relevant but not produced, plaintiff argued (without opposition) that the email was merely overlooked for purposes of production.  Moreover, the court reasoned that even if the identified emails had been lost because of preservation oversights, the emails were not relevant to defendant’s defense.

Turning next to defendant’s reliance on Pension Committee, the court concluded that such reliance was “misplaced.”

In contrast to the facts in Pension Committee, Plaintiff has produced a substantial number of documents and there is no reason to presume that important documents have been lost as a result of Plaintiff’s negligence as Campbell alleges.  The three emails relied on by Campbell are a wholly inadequate basis on which to find or presume such loss or destruction by Plaintiff.  Nor will the court find that the failure to issue a written litigation hold justifies even a rebuttable presumption that spoliation has taken place.

Further justifying its rejection of Pension Committee the court reasoned that “the requirement of a written litigation hold notice, as stated in the Pension Committee case, as a ground to presume or infer loss of relevant documents, has not been adopted in this district.”  Moreover, the court declined to do so in this case:

Accordingly, the court in this case declines to hold that implementation of a written litigation hold notice is required in order to avoid an inference that relevant evidence has been presumptively destroyed by the party failing to implement such written litigation hold.

The court went on to note that in the present case, "the relatively small size of Plaintiff lends itself to a direct oral communication of the need to preserve documents in this case" and that "[s]uch considerations have been found persuasive as reasons why a written litigation hold is not essential to avoid potential sanctions for spoliation.  See, Orbit One Commc’ns, Inc. v. Numerex Corp., 271 F.R.D. 429 (S.D.N.Y. 2010).

Finally, the court concluded that because Campbell had been provided the emails by another defendant, it could not establish it was prejudiced by Plaintiff’s failure to produce the emails, “even assuming the electronically stored copy of the original in Plaintiff’s files was lost as a result of Plaintiff’s negligence.”  The court went on to find sanctions were unwarranted where defendant “failed to establish that Plaintiff destroyed any relevant evidence even in the absence of a written litigation hold.”

The court also denied defendant’s request to conduct discovery “directed to Plaintiff’s document preservation actions in this case.”