Every Inaction in Preservation Has an Equal and Opposite Judicial Reaction
Stinson v. City of New York, No. 10 Civ. 4228, 2016 U.S. Dist. LEXIS 868 (S.D.N.Y. Jan. 2, 2016).
In this class action involving constitutional claims, the court found the City of New York deserving of spoliation sanctions for its three-year delay in issuing a legal hold and its failure to suspend its records retention program, which led to the destruction of countless e-mails and other relevant data.
The plaintiffs argued that the City and its police department (NYPD) issued summonses to individuals without probable cause as part of an unspoken “quota” system. During discovery, the court ordered the defendants to give the plaintiffs access to the electronic records of several dozen police officers. However, many requested records were missing, prompting the plaintiffs to file a spoliation motion.
The court ruled that sanctions were appropriate for three reasons. First, the City had a duty to preserve the evidence. The City issued a “late and ineffective” legal hold three years after the plaintiffs filed their complaint, well after the duty to preserve arose. Moreover, another case with “strikingly similar” and “hotly contested” allegations had been ongoing since 2008, extending that duty.
Second, the City’s destruction was grossly negligent because it failed “to take its preservation obligations seriously.” The City distributed an online preservation notice to NYPD members, but no officers involved in the lawsuit acknowledged receiving it. The City’s “failure to circulate a legal hold, and to ensure that it was properly implemented, was particularly damaging in the context of the NYPD’s standing document retention policies, which ensured that inaction on the part of the City would result in the destruction of evidence.” The policies addressed the length of time for keeping certain types of documents but not e-mails or text messages. However, the policies explained in detail how to shred documents and how e-mails would be automatically deleted once inboxes reached a storage threshold. As a result of these policies, the City produced very few, if any, relevant e-mails and no text messages from key custodians, despite the broad keywords used to search the NYPD’s electronic files. The City claimed the NYPD did not rely on e-mail, but the plaintiffs collected other e-mails from other sources relating to summonses and performance issues that had been deleted from City accounts, contradicting the City’s assertion.
Third, the lost records were relevant to the case. The court explained that in cases of gross negligence, “the evidence satisfying the culpable state of mind factor will ‘frequently’ also satisfy the relevance factor.” Here, the evidence suggested links between summons performance and employment decisions.
In choosing a remedy, the court found that the plaintiffs’ request for 16 adverse inferences “would be out of proportion to the City’s culpability and inappropriate” because the plaintiffs had “a steep evidentiary burden to establish the existence of an official policy, pattern, or practice.” The court settled upon a permissive adverse inference because it “will ensure that the City faces consequences for its failure to take its preservation obligations seriously, but will not result in an unwarranted windfall for the [p]laintiffs.”
Inaction is never a justifiable response to the need to preserve evidence. It is unfathomable that any court would find a three-year delay from the date of a complaint to the issuance of a legal hold justifiable, nor would a court support a party that argues, as did the City, that it should have “no preservation obligations at all,” particularly for the two reasons the City gave.
First, given “the size and scope” of its work and “frequency of litigation” involving the NYPD, the City suggested that “a rule that any labor grievance or tangentially-related lawsuit triggers a broad duty to preserve would amount to a ‘perpetual litigation hold.’” While the court found this assertion “inarguable,” it was not enough to absolve the City of its preservation obligations.
Second, the City argued that the breadth of the plaintiffs’ discovery requests meant it would have to “preserve ‘every arguably relevant document within the NYPD.’” The court noted that “the reasonableness or unreasonableness of one party’s demands does not determine the scope of the other party’s obligation to preserve documents.” The City should have realized the foreseeable consequences of its failure to act—spoliation—and taken steps to avoid that outcome.