This article was written for the American Bar Association was published July 17, 2023.
Preservation of evidence is the cornerstone of litigation. The failure to preserve evidence, in particular video evidence, has significant consequences. Generally, the duty to preserve evidence is triggered when litigation commences or is reasonably anticipated. See, e.g., Philips Elecs. N. Am. Corp. v. BC Technical, 773 F. Supp. 2d 1149, 1195 (D. Utah 2011). Failure to preserve evidence has significant consequences and can lead to sanctions or curative measures from the court.
In Hollis v. CEVA Logistics U.S., Inc., 603 F.Supp.3d 611 (N.D. Ill. May 19, 2022), the U.S. District Court for the Northern District of Illinois imposed curative measures in the form of findings of fact that would be read to the jury detailing the circumstances of CEVA Logistics U.S. Inc.'s spoliation of video-recording evidence and the potential inferences the jury could draw from those circumstances. Hollis involved a wrongful termination suit against CEVA. CEVA fired the plaintiff based on an alleged altercation. Three white witnesses reported that the plaintiff assaulted another employee, while African American witnesses gave different descriptions of the alleged altercation and reported that the plaintiff did not assault the other employee.
At the time, three video cameras were aimed at the area where the altercation took place. The plaintiff requested, orally and in writing, that CEVA view the video footage. The plaintiff then filed a letter of complaint with CEVA, a charge of discrimination with the Equal Employment Opportunity Commission, and finally, suit against CEVA.
CEVA's discovery responses revealed that no video existed and that the custodian of the video recordings was a third-party vendor. However, in the third-party vendor's deposition, the representative testified that it was never the custodian of the footage from CEVA's plant, that the vendor merely sold the recording equipment, and that CEVA owned and operated the system and recordings, which were normally retained between 30 and 90 days. Notably, the evidence reflected that the plaintiff's supervisor pulled and reviewed the video footage related to a different incident before the termination.
In its analysis, the court evaluated Federal Rule of Civil Procedure 37(e). Rule 37(e) sets forth five threshold requirements before sanctions and curative measures can be applied: "(1) the information must be ESI [electronically stored information]; (2) there must have been anticipated or actual litigation that triggers the duty to preserve ESI; (3) the relevant ESI should have been preserved at the time of the litigation was anticipated or ongoing; (4) the ESI must have been lost because a party failed to take reasonable steps to preserve it; and (5) the lost ESI cannot be restored or replaced through additional discovery." Id.
Of the five threshold requirements, the "reasonable anticipation" inquiry was the most relevant. Under the "reasonable anticipation" inquiry, the court explained that a duty to preserve arises when litigation is reasonably anticipated, i.e., when CEVA was put on notice after receiving the plaintiff's formal letter of complaint for workplace discrimination. For intent, the court held that, if intent is established, then prejudice would be presumed, and sanctions could be applied. However, curative measures only require prejudice. The court found that prejudice did exist, but, while plenty of evidence existed that could lead a reasonable person to conclude that CEVA acted with intent, a reasonable argument also existed that CEVA was merely incompetent.
The court left the intent determination to the jury, but gave certain curative jury instructions. The court gave the jury certain factual findings related to the video that it had to accept as true, i.e., "[i]f you decide that CEVA intentionally failed to preserve the video recording of November 28, 2018, to prevent Hollis from using the video recording in this case, you may—but are not required to—presume that the video recording was unfavorable to CEVA." Id. at *9.
Hollis illustrates the difficulties in determining when parties should recognize the duty to preserve and when it begins. But, Hollis offers one key takeaway: The duty to preserve begins when litigation is reasonably anticipated, not just when litigation commences. To avoid being faced with potential sanctions or curative measures, parties should 1) consult with counsel when the preservation obligation arises, or when the party reasonably believes preservation is necessary; 2) create a written legal hold plan; 3) identify custodians; 4) interview custodians once the duty arises; and 5) document the process. As the Hollis decision demonstrates, the failure to take reasonable steps to preserve relevant evidence once notice is given will undoubtedly lead to significant consequences.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
