We like our litigation to be decided on the merits. Sanctions motions based on unsupported claims of spoliation create expensive sideshows that distract from the merits. And sometimes – although perhaps not frequently enough – baseless and abusive motions are punished.
Recently, in Smith v. Westchester County Dept. of Corrections, No. 07-CIV-1803 (SDNY), Judge Shira A. Scheindlin sanctioned plaintiff’s counsel for his repeated, unsupported claims of spoliation of evidence that ignored the court’s previous decision that no such spoliation occurred. The ruling was remarkable because it not only awarded fees and costs, but also “permanently enjoined” plaintiff’s counsel from raising in other cases allegations of misconduct in Smith. And Judge Scheindlin required that plaintiff’s counsel submit a letter, attaching her decision, to two other judges “retracting any allegations, statements, facts, or arguments regarding [defense counsel's] alleged misconduct and/or the discovery issues in this action.”
What did plaintiff’s counsel do to warrant this extraordinary ruling?
Simply put, plaintiff’s counsel “failed to stop, think and investigate before filing his baseless” sanctions motion and making “unsupported, conclusory, and incendiary allegations of [discovery] misconduct” in Smith to both the court and two other federal courts. The spoliation claims were indeed baseless because, according to the court, they failed to satisfy all three requirements of Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99 (2d Cir. 2002). First, defendants did not have a duty to preserve the document at issue because the information contained therein was neither previously requested nor previously identified as being relevant to the case. That information was also “previously and repeatedly provided” to plaintiff’s counsel through other documents. Second, “without a duty to preserve, [plaintiff's counsel] could not possibly demonstrate any level of culpability required to justify an adverse inference, much less that the spoliation was ‘intentional or reckless’ as he alleged.” And third, plaintiff’s counsel “failed to produce any evidence that the [destroyed document] would have substantiated plaintiff’s claim.”
So, does this mean that every baseless spoliation claim should itself be met with a sanctions motion? Afraid it’s not that easy.
The sanctioned conduct was not run-of-the-mill or even borderline. Rather, the court found it was abusive and evidenced bad faith in litigating the action. As the court noted, plaintiff’s counsel exhibited an “unyielding determination to cast [defense counsel] in a negative light despite [the court's] repeated admonitions to ratchet down the personal attacks.” In one particular instance, plaintiff’s counsel even argued that he could “continue to refer to the [spoliation] allegations, even though [he] lost at the appellate court.”
But parties should not underestimate the concerns of judges who have been faced with an increasing diet of discovery disputes and sanctions motions. While another recent decision by Judge Scheindlin, Sekisui Am. Corp. v. Hart, No. 12-CIV-3479 (SDNY), has raised questions and debate about the role of relevance and prejudice in resolving spoliation claims, we recall that in Pension Committee, Judge Scheindlin was concerned about overly incentivizing parties to pursue spoliation claims absent a showing of relevance and prejudice:
[T]he party seeking relief has some obligation to make a showing of relevance and eventually prejudice, lest litigation become a “gotcha” game rather than a full and fair opportunity to air the merits of a dispute. If a presumption of relevance and prejudice were awarded to every party who can show that an adversary failed to produce any document, even if such failure is completely inadvertent, the incentive to find such error and capitalize on it would be overwhelming. This would not be a good thing.
In Smith, plaintiff’s counsel learned the meaning of “not. . . a good thing.”