Rimkus Consulting Group Inc. v. Cammarata - Ballard Spahr LLP

Case 4:07-cv-00405 Document 450 Filed in TXSD on 02/19/10 Page 16 of 139
The court in Pension Committee imposed a form of adverse inference instruction
based on a finding of gross negligence in preserving information and in collecting it in
discovery. 14
The court applied case law in the Second Circuit, including the language in
Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 108 (2d Cir. 2002),
stating that “[t]he sanction of an adverse inference may be appropriate in some cases
involving the negligent destruction of evidence because each party should bear the risk of its
own negligence.” That language has been read to allow severe sanctions for negligent
destruction of evidence. See, e.g., Rogers v. T.J. Samson Cmty. Hosp., 276 F.3d 228, 232
(6th Cir. 2002); Lewis v. Ryan, 261 F.R.D. 513, 521 (S.D. Cal. 2009) (noting that California
district courts had followed the Second Circuit’s approach in Residential Funding). In the
Fifth Circuit and others, negligent as opposed to intentional, “bad faith” destruction of
evidence is not sufficient to give an adverse inference instruction and may not relieve the
party seeking discovery of the need to show that missing documents are relevant and their
loss prejudicial. The circuit differences in the level of culpability necessary for an adverse
inference instruction limit the applicability of the Pension Committee approach. And to the
extent sanctions are based on inherent power, the Supreme Court’s decision in Chambers
may also require a degree of culpability greater than negligence.
14 The finding of gross negligence in Pension Committee was in part based on the finding that the spoliating
party submitted declarations describing discovery efforts that were either lacking in detail or intentionally
vague in ways the court characterized as misleading. Pension Committee, No. 05 Civ. 9016, 2010 WL
184312, at *10–11. Counsel’s misrepresentations to the court can result in severe sanctions. See, e.g.,
Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., 20 So. 3d 952, 954 (Fla. Dist. Ct. App. 2009)
(trial court entered a partial default judgment and deemed certain allegations as established facts based in part
on misrepresentations by counsel to the court about when they learned that emails existed on backup tapes;
on appeal, the judgment was set aside on other grounds).
16