Negligent Deletion of Meeting Notes Does Not Warrant Adverse Inference Sanctions

Recently, in the District Court for the Southern District of California, Magistrate Judge Karen Crawford declined to impose adverse inference sanctions against the defendants, despite the defendants’ negligent destruction of relevant evidence. Instead, the court found that the plaintiffs were not severely prejudiced by the defendants’ spoliation of relevant handwritten notes from meetings pertaining to the subject matter of the litigation. Therefore, the court opted for the “least burdensome sanction” and recommended that the defendants be precluded from offering testimony or other evidence about the discussions at the meetings, during which the handwritten notes at issue were taken, in support of their defenses during the trial.

In Al Otro Lado, Inc., et al. v. Chad v. Wolf, Acting Secretary, U.S. Department of Homeland Security, et al., the plaintiffs claimed that the U.S. Department of Homeland Security (the “Department”) implemented a policy, known as the “Turnback Policy,” at the U.S.-Mexico border that discouraged individuals from seeking asylum in the U.S.. The plaintiffs requested that adverse-inference sanctions be imposed against the Department due to the admitted destruction of handwritten notes by two senior officials within the U.S. Customs and Border Protection (CBP) made during the Department’s daily operation meetings where the Turnback Policy would be discussed. Essentially, the plaintiffs sought an adverse inference finding (to be adopted by the court at the bench trial of the matter) that the now-missing notes support a rebuttable presumption that, at the daily operation meetings, the CBP officers were instructed to indeed turn back asylum seekers who arrived at ports of entry at the U.S.-Mexico border and that the Turnback Policy itself is pretextual.

In support of their motion, the plaintiffs pointed out that the defendants did not distribute a litigation hold notice to one of the senior officials until more than a year after the litigation was commenced; this delay resulted in destruction of the documents at issue. Significantly, however, both senior officials stated that, even after receiving the litigation hold notices, they did not believe their meeting notes were responsive to the litigation holds because they thought those notes were not “substantive notes” and did not “convey the substance of any discussions or the substance of any particular incident,” but rather only “little notes” to remind them of necessary follow-up. While the Department admitted that the notes taken at the daily operation meetings were destroyed, the senior officials involved claimed that the meetings were only “informal meetings” where high-level updates were discussed, but no substantive decisions and/or substantive discussions about particular policies were discussed. Specifically, the senior-level officials alleged that their notes consisted only of “very basic words” or “particular words or phrases” to remind them of the next steps and that once any necessary follow-up action was taken, they would discard the notes.

In denying the plaintiffs’ request for an adverse inference sanction, the court noted that such sanction is “among the most severe sanction” and that a party seeking it must demonstrate that: (1) the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the records were destroyed with a ‘culpable state of mind,’ which includes negligence; and (3) the evidence was ‘relevant’ to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense and that the absence of the evidence is prejudicial to the party alleging spoliation. While it effectively went unaddressed in the opinion, the Magistrate Judge did not properly focus on the often-discussed spoliation sanctions scheme imposed by Fed. R. Civ. P. 37(e), because this case presented a rare situation where document spoliation did not involve electronically stored information (ESI), a prerequisite to the applicability of Rule 37(e), which we have previously blogged on. This is significant because, as the court discussed, the issue of the defendants’ state of mind in failing to preserve the handwritten notes was critical, and, after significant analysis, the court did not find sufficient evidence that the defendants acted with intent. Such a finding would be dispositive of the court’s ability to even consider an adverse inference were the evidence electronic in nature and therefore subject to Rule 37(e). Because the evidence was not ESI, however, the remaining provisions of Rule 37 relating to evidence spoliation, as well as the court’s inherent authority, were properly deemed by the court to provide the available remedies – including the imposition of an adverse inference in the absence of intent if the court deemed such a drastic remedy appropriate. In the end, it did not.

While the court found that the plaintiffs established that the handwritten notes were destroyed by the defendants with a culpable state mind, and they could be presumed to have been relevant under the circumstances, it concluded that the defendants’ culpability amounted to no more than negligence. Accordingly, the Magistrate Judge recommend that the requested rebuttable presumption – effectively an adverse inference – requested by the plaintiffs was too severe a sanction.

Instead, to deter future spoliation but also remedy the “evidentiary inequity” caused by the spoliation, the court recommended that evidentiary exclusion was the most appropriate sanction, i.e., that the Department be barred from “offering testimony or other evidence about the daily operation meetings.” The district court adopted the Magistrate Judge’s report and recommendation, “agree[ing] that any prejudice to plaintiffs resulting from the destruction of the notes does not warrant the requested rebuttable presumption.”

These decisions are significant in their treatment of non-ESI spoliation and point out the unavailability of the clear protections afforded by Rule 37(e) for ESI spoliators, particularly as they relate to available remedies when non-ESI (e.g., hard copy) spoliation takes place. The takeaway here is that relevant handwritten notes, if they exist at the time of a litigation hold trigger, should always be preserved, as their spoliation could open the door to more severe sanctions than would be available for ESI loss under Rule 37(e). This case also serves as a reminder of the importance of not only timely issuing litigation hold notices, but also ensuring that employees who are subject to litigation hold notices fully review and understand the extent of their preservation obligations. Indeed, employers should periodically follow up with each employee in receipt of a litigation hold notice to make certain that all employees are in full compliance with the notice.