A Grimm View on Spoliation Posted By Daniel Kaiser, Esq. on September 11, 2009
Goodman v. Praxair
Would you be surprised to hear that Judge Paul Grimm, Chief United States Magistrate Judge for the U.S. District Court for the District of Maryland, holds the Parachutist Badge, the Meritorious Service Medal, the Army Commendation Medal and the Army Achievement Medal? I was. These just aren’t the usual images springing to 
mind when one thinks of the small handful of federal judges in the eDiscovery world who have been instrumental in getting eDiscovery’s rules of the game out there with clarity. Lawyers beware; you don’t want to be on his bad side.
So bombs away: True to form, Judge Grimm’s decision in Goodman v. Praxair Services, Inc.[1] packed a punch with its wealth of analysis and rules.
This was a case in which Goodman, a pro se litigant, filed suit for breach of contract based upon non-payment of a success fee. Marc Goodman was hired by the Tracer Research Corporation (“Tracer”) to help secure an Environmental Protection Agency exemption for Tracer’s products. Although Tracer succeeded in winning their desired exemptions, the company refused to pay Goodman the stated fee – stating that other third party consultants were solely responsible for obtaining the exemptions.
The opinion revolved around Goodman’s Motion for Spoliation Sanctions, filed pursuant to Tracer’s failure to institute a timely litigation hold and due to Tracer’s destruction of computers (and files) after the duty to hold had been triggered.
Here is a quick look at a few eDiscovery take-aways from Goodman.
The Two Main Federal Law Sources of a Court’s Authority to Levy Sanctions on a Spoliator. Judge Grimm points to the following:
(1) First, there is the “court’s inherent power to control the judicial process and litigation, a power that is necessary to redress conduct ‘which abuses the judicial process.’”[2]
(2) Second, if the spoliation violates a specific court order or disrupts the court’s discovery plan, sanctions also may be imposed under Fed.R.Civ.P. 37.[3]
The Required Elements for Spoliation Sanctions. The proponent must prove:
(1) [T]he party having control over the evidence had an obligation to preserve it when it was destroyed or altered;
(2) the destruction or loss was accompanied by a “culpable state of mind;” and
(3) the evidence that was destroyed or altered was “relevant” to the claims or defenses of the party that sought the discovery of the spoliated evidence, to the extent that a reasonable factfinder could conclude that the lost evidence would have supported the claims or defenses of the party that sought it.[4]
The Culpability Requirement. The mens rea element included in number two above may be satisfied by one of the following three states of mind:
(1) Bad faith / knowing destruction. “Bad faith” as used here means “destruction for the purpose of depriving the adversary of the evidence.”[5] “Knowing destruction” has been related to “willful,” and “[d]estruction is willful when it is deliberate or intentional . . .”[6]
(2) [G]ross negligence, and
(3) [O]rdinary negligence.[7]
Sanctions Involving Money. When it comes to motions for a reimbursement of discovery costs and attorneys’ fees, four situations give rise to such awards:
(1) First, courts will award legal fees in favor of the moving party as an alternative to dismissal or an adverse jury instruction.
(2) Second, courts will grant discovery costs to the moving party if additional discovery must be performed after a finding that evidence was spoliated.
(3) Third, in addition to a spoliation sanction, a court will award a prevailing litigant the litigant’s reasonable expenses incurred in making the motion, including attorney’s fees.
(4) Fourth, in addition to a spoliation sanction, a court will award a prevailing litigant the reasonable costs associated with the motion plus any investigatory costs into the spoliator’s conduct.[8]
The Timeliness of a Spoliation Motion. Although this element of a motion for discovery sanctions isn’t covered by Fed.R.Civ.P. 37, the following factors have been considered in judicial assessments:
(1) [K]ey to the discretionary timeliness assessment of lower courts is how long after the close of discovery the relevant spoliation motion has been made . . . .[9]
(2) [A] court should examine the temporal proximity between a spoliation motion and motions for summary judgment.[10]
(3) [C]ourts should be wary of any spoliation motion made on the eve of trial.[11]
(4) [C]ourts should consider whether there was any governing deadline for filing spoliation motions in the scheduling order issued pursuant to Fed.R.Civ.P. 16(b) or by local rule.[12] [and]
(5) [T]he explanation of the moving party as to why the motion was not filed earlier should be considered.[13]
In sum, Judge Grimm says that these motions should ideally be filed during the discovery phase in order to accommodate the court’s determination of “when the duty to preserve commenced, whether the party accused of spoliation properly complied with its preservation duty, the degree of culpability involved, the relevance of the lost evidence to the case, and the concomitant prejudice to the party that was deprived of access to the evidence because it was not preserved.”[14]
[1] __ F.Supp.2d __, 2009 WL 1955805 (D.Md. July 7, 2009).
[2] Id. at *9, citing United Med. Supply Co. v. United States, 77 Fed. Cl. 257, 263-64 (2007), and Chambers v. NASCO, Inc., 501 U.S. 32, 45-46, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991).
[3] Id. citing United Med. Supply Co. v. United States, 77 Fed. Cl. 257 at 264 (2007).
[4] Id. at *12 (citing Thompson, 219 F.R.D. at 101, and Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212, 220 (S.D.N.Y.2003)).
[5] Id. at *19, citing Poell v. Town of Sharpsburg, 591 F.Supp.2d 814, 820 (E.D.N.C. 2008).
[6] Id.
[7] Id. at *18.
[8] Id. at *22.
[9] Id. at *10, citing McEachron v. Glans, No. 98-CV-17 (LEK?DRH) 1999 WL 33601543, at *2 & n.3 (N.D.N.Y. June 8, 1999).
[10] Id.
[11] Id. citing Permasteelisa CS Corp. v. Airolite Co., LLC, No. 2:06-cv-569, 2008 WL 2491747, at *2-3 (S.D. Ohio June 18, 2008).
[12] Id.
[13] Id.
[14] Id. at *11.
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