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Reviewing a motion for sanctions for spoliation of evidence, the
United States Court of Appeal for the Second Circuit rejected the
argument that failure to issue a litigation hold constitutes gross
negligence per se. Chin v. Port Authority,
Nos. 10-1904-cv(L), 10-2031-cv(XAP), 2012 U.S. App. LEXIS 14088, at
*68 (2d Cir. July 10, 2012). Instead, the Second Circuit held
that failure to issue a litigation hold is just one factor in the
spoliation analysis.
In Chin, the plaintiffs brought an action under Title
VII of the Civil Rights Act of 1964 for failure to promote seven
police officers of Asian descent. The basis for the
plaintiffs' motion for sanctions was the destruction of
promotion folders that had been used as part of the relevant
promotion decisions. The folders were destroyed at some point
after the defendant received notice of the plaintiffs' EEOC
charge. In their motion, the plaintiffs sought an adverse
inference instruction from the district court. The district
court denied the motion finding that the plaintiffs had ample
alternative sources of evidence and that the destruction of
the promotion folders was negligent, but not grossly so.
On appeal, the plaintiffs argued that failure to issue a
litigation hold amounted to gross, rather than simple,
negligence. The Second Circuit rejected this argument, and
held that "the better approach is to consider the failure to
adopt good preservation practices as one factor in the
determination of whether discovery sanctions should
issue." Id. (internal quotations omitted).
Furthermore, the Second Circuit also noted that even if the
defendant's actions were grossly negligent, the District Court
was not required to give an adverse inference
instruction. Instead, "a 'case-by-case approach to
the failure to produce relevant evidence,' at the discretion of
the district court, is appropriate." Id.
(quoting Residential Funding Corp. v. DeGeorge Fin. Corp.,
306 F.3d 99, 108 (2d. Cir. 2002)).
It is important to note the Chin decision does not
indicate that parties should stop issuing litigation holds
altogether. The absence or presence of a litigation hold is
still a factor in determining whether a party's preservation
practices were so flawed as to justify sanctions. However, the
decision should provide relief to any party that inadvertently
fails to issue a litigation hold and faces a motion for
sanctions. The Chin decision makes clear that a
party's failure to issue a litigation hold is not sufficient in
and of itself to prove gross negligence and the applicability of
sanctions.
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