The Duty to Preserve Evidence Must be Properly Observed and Monitored to Avoid Sanctions
Zach S. Whitney
zwhitney@kmksc.com
(414) 962-5110
It is well recognized under the law that a duty to preserve evidence arises when a party in possession of evidence knows that litigation is pending or probable. This duty is an “affirmative obligation” insofar as it requires any party subject to the duty to actively take measures to ensure that unique, relevant evidence that might be useful to an adversary is not destroyed or otherwise discarded. When a litigant breaches its duty to preserve evidence, it risks being sanctioned for spoliation. Such sanctions can vary in severity, from an order to pay attorneys’ fees or a jury instruction to make an adverse finding, for lesser infractions, to default judgment against the offending party where a breach of the duty to preserve is egregious.
As technology progresses, evidence and the means by which digital information is created, shared and stored constantly evolves, thus impacting how courts interpret the duty to preserve evidence. It is therefore worthwhile to consider recent examples of cases where litigants have been sanctioned for spoliation to keep abreast of developments in the law concerning the duty to preserve.
In the 2024 age discrimination case of Donofrio v. Ikea, the federal court sitting in Philadelphia applied the duty to preserve evidence to email, particularly with regard to preserving communications by former employees. As is true of many companies, IKEA had a standard practice of deleting former employees’ mailboxes. In IKEA’s case, the custom was to do so 30 days after termination except for where there was a litigation hold in place. The court found nothing inherently wrong with IKEA’s policy.
The chief problem for IKEA arose when, after years of litigation, several key employees whose mailboxes should have been subject to the litigation hold left the company. The litigation hold, which had been in place since before the lawsuit, had not been properly updated to include the accounts of these key employees. IKEA subsequently failed to stop its IT department from deleting the email accounts pursuant to its customary practice. The court found IKEA spoliated material evidence by inadvertently deleting the mailboxes and imposed sanctions including a substantial award of attorneys’ fees.
In the 2024 wrongful termination case of Maziar v. City of Atlanta, the federal court sitting in Atlanta applied the duty to preserve evidence to text messages; particularly with regard to preserving communications on an employer-issued “work” cell phone. In Maziar, the City of Atlanta wiped all the data—including text messages—from a key employee’s work cell phone after she left her job. The City did so notwithstanding the litigation hold in place and the pending litigation. Although the court agreed with the City that its actions were not intentional, i.e., not intended to deprive Maziar of relevant evidence, the court nevertheless concluded that the City’s handling of the phone amounted to gross negligence, thus warranting sanctions for spoliation. Once again a substantial award of attorneys’ fees was among the sanctions imposed.
Another example of the duty to preserve evidence as it relates to cell phones is reflected in Safelite Group, Inc. v. Nathaniel Lockridge, a 2024 misappropriation of trade secrets case. In Safelite, the federal court sitting in Cincinnati considered whether Lockridge spoliated evidence when he failed to disable a feature on his cell phone that automatically deleted text messages after 30 days. Lockridge was a former store manager of Safelite, a glass repair and replacement provider, before taking a position at Caliber Collision Centers, a Safelite competitor. Safelite accused Lockridge of using Safelite’s proprietary information (at Caliber’s direction) to persuade Safelite employees and customers to take their talents and business to Caliber. Needless to say, Lockridge’s cell phone and the relevant communications likely stored therein were identified early in the litigation as a focus of discovery, and a formal litigation hold was issued shortly after the case was filed. Despite the pending lawsuit and litigation hold, months passed before Lockridge made efforts to preserve his text messages. In the meantime, many text messages on Lockridge’s phone were destroyed because it was set to delete text messages after 30 days. After finding Lockridge spoliated evidence, the court sanctioned Lockridge with attorneys’ fees and further permitted Safelite to argue to the jury that it could infer that Lockridge was concealing his liability when he failed to preserve relevant text messages.
Taken together, the recent cases of Donofrio, Maziar and Safelite serve as a strong reminder that the duty to preserve evidence is ongoing. A litigation hold is not the end of a party’s affirmative obligation to preserve evidence, it is just the beginning. After the hold is issued, a company must monitor the hold to ensure its appropriate scope and to confirm that digital evidence that is, or should be, subject to the hold is not inadvertently discarded.
If you would like to discuss the duty to preserve evidence or have other questions about litigation holds, please contact KMK Attorney Zach S. Whitney at zwhitney@kmksc.com or (414) 961-4854.