While there should be no question that there may be serious consequences for destroying evidence subject to legal preservation obligations, there are no bright lines showing how specific instances of spoliation map to specific sanctions. A recent decision from the U.S. District Court for the Southern District of New York demonstrates this point starkly. In Sekisui Am. Corp. v. Hart, the court declined to issue an adverse inference even though the plaintiff deleted “the entire active email folder of an important witness—perhaps the key witness—at a time when [plaintiff] obviously knew that it might commence a lawsuit.”

The allegations trace events starting with the 2009 acquisition by the plaintiff of a company controlled by the defendants, the Harts. Mr. Hart was kept on as CEO, but in late 2010, the plaintiff fired Hart. It warned him of its intention to seek legal redress against him based on allegations of wrongdoing associated with the sale of the business. 

More than a year went by before plaintiff took its own warnings seriously enough to make any attempt to preserve electronically stored information (ESI). To make matters worse, the plaintiff outsourced its IT operations but did nothing to notify its IT vendor about any preservation obligation until three months after filing the complaint against the Harts. And in a seeming coup de grace, plaintiff’s HR director, Taylor, told the vendor to delete a number of email folders, including Hart’s.

The nature of spoliation sanctions can turn to some degree on “culpability”—what was plaintiff thinking when it destroyed Hart’s emails? It testified that it was not trying to destroy harmful evidence, but simply doing IT “housekeeping,” freeing up storage space to improve performance. Taylor claimed to have printed any emails she believed were “pertinent to the company.” Moreover, the plaintiff acknowledged that it had made an error in causing the deletion of the emails, disclosed its mistake promptly, and tried to recover the emails from other sources. 

But the facts for the plaintiff get even worse. Plaintiff’s HR director seemed to be on a mission to destroy Hart’s emails. Emails between the IT vendor and Taylor showed that Taylor insisted that the vendor delete the emails despite the vendor’s resistance and recommendation against deletion. 

When the court looked at these facts, there didn’t seem to be any question about the existence of a duty to preserve at the time the emails were deleted. At the time of the spoliation, plaintiff “obviously knew that it might commence a lawsuit seeking substantial monetary damages.” The court found that the plaintiff was “at least” negligent in destroying the evidence.  In the 2nd Circuit, negligent destruction of evidence can warrant an adverse inference. 

Defendants probably thought they had plaintiff right where they wanted it. A clear duty to preserve existed at a time when defendant clearly took affirmative action to cause the deletion of emails of a key witness. But just when they thought they had the adverse inference in their grasp, the court’s analysis turned to other, less helpful considerations.

The court noted that relevance of the lost ESI and resulting prejudice to defendants were preconditions to an adverse inference. Unfortunately for the defendants and many other parties who have found themselves on the short end of the spoliation stick, there is an inherent difficulty in demonstrating the relevance of information that has been destroyed. This type of relevance or prejudice must be demonstrated by what still exists, a challenge that cannot always be surmounted.

Ruminating on the potential relevance of the lost emails, the court suggested that there were some respects in which they could have been relevant and others in which they could not have been. The court focused instead on the steps that plaintiff took to try to ameliorate any prejudice from the spoliation, steps which were ongoing and had already resulted in the recovery of 36,000 emails to or from Hart. Finally, the court pointed out that the defendants were unable to show or “even describe” any relevant emails that were not produced. No adverse inference instruction would be ordered.

It would be wrong to draw the conclusion from Sekisui that preservation of relevant evidence, at the time litigation is reasonably anticipated, can be treated casually. However, it does appear that catching the spoliator in the act of destroying the emails of a key witness, intentionally (although not necessarily in bad faith), does not make an adverse inference sanction a slam dunk, or even a layup. Establishing these incriminating facts is only the first step along the road to achieving such a sanction, a road where “relevance” and “prejudice” must be weaved together from shreds of surviving evidence. Dead ESI tells no tales, and that can be a big hurdle for those who seek spoliation sanctions. 

The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP.