Magistrate Judge Declines to Presume Prejudice, Recommends Denial of Motion for Sanctions

Herrmann v. Rain Link, Inc., No. 11-1123-RDR, 2013 WL 4028759 (D. Kan. Aug. 7, 2013)

Plaintiff sought sanctions for Defendants’ allegedly intentional spoliation of evidence and argued that prejudice could be presumed.  The Magistrate Judge declined to do so and also found that Defendants’ spoliation was merely negligent.  Thus, absent a showing of actual prejudice, the Magistrate Judge recommended that Plaintiff’s motion be denied.

In the Tenth Circuit, “a spoliation sanction is proper when (1) a party had a duty to preserve evidence because it knew, or should have known, that litigation was imminent, and (2) the adverse party was prejudiced by the destruction of the evidence.”  If the moving party seeks an adverse inference, “that party must also prove bad faith on the part of the producing party.  Negligence in losing or destroying documents is not sufficient ‘because it does not support an inference of consciousness of a weak case.’”

Relying on a 2007 opinion from the U.S. Bankruptcy Court in the District of Kansas, Plaintiff argued that “prejudice and intentional spoliation of evidence are related in that the court may presume prejudice if the spoliation was intentional.”  As the Magistrate Judge noted, that opinion, in turn, relied upon the “often-cited Zubulake opinions from the Southern District of New York.”  The Magistrate Judge went on to reason, however, that “[s]ince Krause . . . the Tenth Circuit has issued opinions that make clear it is necessary to demonstrate prejudice” and also noted that Plaintiff had identified no authority from the Tenth Circuit supporting its position.  Moreover, the Magistrate Judge “[did] not find that the document destruction here was in fact intentional.”  Rather, “[t]he examples of document destruction resulted from defendants’ failure to suspend their routine practices, which under the circumstances, demonstrat[ed] negligence.”  Thus, Plaintiff was not relieved of its obligation to make a showing of actual prejudice.  (“In the context of demonstrating prejudice, the moving party has the burden to demonstrate actual prejudice rather than theoretical prejudice.)

To be clear, Defendants’ “failure to suspend their routine practices,” included, for example, the practice of destroying draft meeting minutes to ensure that they were not inadvertently included in the corporate minute book.

In considering Plaintiff’s motion, the Magistrate Judge declined to “delve into details” concerning allegedly lost documents “where plaintiff ha[d] not attempted to show he suffered prejudice” and indicated he would “only address those documents referenced in the portion of plaintiff’s briefs addressing prejudice.”  In footnote, the Magistrate Judge further indicated that “spoliation sanctions [were] not appropriate for defendants’ alleged general failure to implement a proper litigation hold, absent a showing of prejudice.”

Ultimately, the Magistrate Judge found that “while some documents and ESI were destroyed, plaintiff has not shown he was prejudiced by the destruction of documents.”  Further reasoning that the destruction of ESI and other documents was merely negligent and thus insufficient to warrant an adverse inference, the Magistrate Judge recommended that Plaintiff’s motion be denied “in so far as it [sought] adverse-inference jury instructions and analogous inferences by the court in conjunction with summary judgment briefing, attorney fees, and other monetary sanctions.”  Recognizing, however, that the question of prejudice in at least one instance was a “close call” and that “issues concerning the admission and exclusion of evidence” were “best left” to the trial judge, the Magistrate Judge recommended that Plaintiff’s request for evidentiary sanctions be denied without prejudice.