Judge Trash-Talks the Government for its Discovery Abuses

Impoverished Children Seeking Valuables in a Garbage Dump; all too common in 3rd World CountriesThe United States Court of Federal Claims began a recent opinion imposing sanctions against the government for spoliation by quoting the old saying:

“One man’s trash is another man’s treasure.”

United Med. Supply Co., Inc. v. United States, 2007 WL 1952680 (Fed. Cl. June 27, 2007).  The saying was invoked because the government had shredded much of the plaintiff’s valuable evidence.  After the quote, the Court immediately launched into a high-level righteous rant about the government’s spoliation.

Aside perhaps from perjury, no act serves to threaten the integrity of the judicial process more than the spoliation of evidence. Our adversarial process is designed to tolerate human failings – erring judges can be reversed, uncooperative counsel can be shepherded, and recalcitrant witnesses compelled to testify. But, when critical documents go missing, judges and litigants alike descend into a world of ad hocery and half measures – and our civil justice system suffers.

To guard against this, each party in litigation is solemnly bound to preserve potentially relevant evidence. In this government contract case, defendant violated that duty not once or twice-but repeatedly, over many years, and in sundry ways, leading to the destruction of many admittedly relevant documents. Most disturbingly, some of these documents were destroyed even after the court conducted its first spoliation hearing. While defendant apologizes profusely for what it claims is the “negligence” of some of its employees and for making repeated misstatements to the court as to the steps that were being taken to prevent spoliation, it, nonetheless, asseverates that the court should not-indeed, cannot-impose spoliation sanctions because defendant did not proceed in bad faith. While defendant may be wrong in asserting that it acted in good faith, it most certainly is wrong in thinking that it can recklessly disregard its obligations to preserve evidence without legal consequence.

Id. at *1.

The Judge describes a parade of discovery horribles, recounting in detail the blunders and misrepresentations by the Department of Justice, its attorneys and staff, and the Department of Defense.  Although the case involves some emails and other electronic records, the main spoliation here is from good old-fashioned shredding.  Hundred of boxes of paper documents, including email print-outs, were thrown away for years after suit was filed.  My favorites horribles in the parade include:

  • Making false statements to plaintiff and the Court that a complete search had been made, and all responsive documents had been produced, when in point of fact the government had only searched eight of the eighteen facilities. Defense counsel blamed that one on a bad paralegal. Id. at *3, *4, *15.
  • Sending some of the preservation notices to key players 5 to 6 years after the suit was filed. Id. at *4, *12.
  • Destroying documents both before and after the preservation notices. Id.
  • Failing to preserve relevant records for five years after the government had notice of plaintiff’s claim. Id. at *12.
  • Sending evidence to the garbage dump even after the Court’s first hearing on spoliation. Id.

The Judge goes on to speak loudly about the need to punish the government and others for this kind of discovery spoliation.  The long and scholarly opinion speaks of the need to send a message of deterrence and impose sanctions, even without proof of bad faith, as that is often an elusive and difficult thing to prove.  The strong words include the following that we are likely to see quoted again in the future.

Guided by logic and considerable and growing precedent, the court concludes that an injured party need not demonstrate bad faith in order for the court to impose, under its inherent authority, spoliation sanctions. Several reasons lead to this conclusion. For one thing, it makes little sense to talk of a general duty to preserve evidence if, in fact, the breach of that duty carries no real legal ramifications. Requiring a showing of bad faith as a precondition to the imposition of spoliation sanctions means that evidence may be destroyed wilfully, or through gross negligence or even reckless disregard, without any true consequences. . . . Second, imposing sanctions only when a spoliator can be proven to have acted in bad faith defenestrates three of the four purposes underlying such sanctions-to protect the integrity of the fact-finding process, to restore the adversarial balance between the spoliator and the prejudiced party, and to deter future misconduct-and severely frustrates the last, to punish. These objectives are hardly served if the court, in effect, is constrained to say to the injured party-“sorry about that, but there is nothing I can do, except to let you present your case, such as it remains.” Indeed, while some commentators have asserted otherwise, the history of the spoliation doctrine suggests that it was not designed solely to punish those who consciously destroy inculpatory documents, but also to address the manifest unfairness inherent in the loss of relevant evidence. Even if such sanctions were once rooted in an inference of consciousness of a weak case, that is neither the controlling rationale nor the prevailing rule nowadays. Finally, adopting a bad faith standard when the court is operating under its inherent authority creates an incongruity between the sanctions available for spoliation depending upon whether-or not-a discovery regime has been established that would trigger Rule 37. This incongruity could be viewed as encouraging the earlier destruction of evidence-a race to the shredder, so to speak. . . .

Id. at *10.

It is the duty of the United States, no less than any other party before this court, to ensure, through its agents, that documents relevant to a case are preserved. Indeed, while not entering into the calculus here, a good argument can be made that, as the enforcer of the laws, the United States should take this duty more seriously than any other litigant. Unfortunately, in the case sub judice, irrefutable evidence demonstrates that over an extended period of time, the United States, acting through at least some of its employees, recklessly disregarded that duty, thereby undoubtedly damaging plaintiff’s ability to present its case in this matter and disrupting the orderly administration of this proceeding. Weighing the seriousness of the fault here, as well as its impact on plaintiff and the integrity of the judicial process, the court concludes that it must impose spoliation sanctions against the United States.

Id. at *15.

After such tough talk, you would expect the opinion to conclude with the imposition of many harsh and stinging penalties to sanction the government for its skullduggery. Perhaps an order to jail, as in the bankruptcy case described in my Blog of July 7, 2007, or the entry of a default judgment,  or at the very least, the imposition of an adverse inference as in the Optowave case discussed in the Blog of November 11, 2006.  You would be wrong! 

Instead, the 18-page opinion ends with a sanction that merely limits the government’s cross examination of plaintiff’s experts, and provides for some reimbursement of fees and costs incurred by plaintiffs on discovery. Perhaps this is a stronger penalty than it appears. I don’t know, but certainly the plaintiff was disappointed by this seemingly wimpy outcome, especially after such a big build-up in the first 16 pages of the decision.  Apparently, one judge’s harsh sanction is another’s slap on the wrist.

The Judge did not give the plaintiff the default judgment it wanted because, in his words, of the lack of “any proof suggesting that the destruction of the records was purposeful and designed to obscure the truth.” Id. at *17.  Does that sound like the same judge?   I can just hear some would-be-spoliators’ glee, saying that discovery sanctions are just a paper tiger, there is no real need to preserve evidence.  The worst thing that can happen is a stern lecture, just some trash talk, and little more.  But don’t kid yourself; that would be serious mistake, especially if you are not the Department of Justice.  The next judge could have a different favorite saying, such as “Speak softly and carry a big stick.”  In that case, watch out: jail time or default could be a harsh reality for this kind of discovery behavior.

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