There is no consensus among state or federal courts on the standards that govern preservation and spoliation issues. Yet, whether and when a company has a duty to preserve evidence is among the first questions that come to mind for inside counsel considering spoliation issues. Generally, a company has no duty to preserve evidence before litigation is filed, threatened or reasonably foreseeable unless there is a statutory or regulatory mandate, a contractual obligation, some special circumstance, or an organization has voluntarily assumed an obligation to retain some document, data or thing. That means, unless a company has notice of a probable or pending litigation or a government investigation, it generally has the right to dispose of its own property, including documents, electronically stored information or tangible things, without liability.
So, when does a company have a duty to preserve documents, data or things that may be relevant to a government investigation or a lawsuit? There are several subtle variations in standards for establishing when a pre-litigation duty to preserve evidence may be triggered. In large part because plaintiffs control when litigation is commenced, a plaintiff’s duty to preserve is often triggered before litigation is commenced. However, it does not matter if a company initiates or is the target of litigation; most courts find that the common law duty to preserve evidence arises the moment litigation is “reasonably anticipated.” (e.g., Micron Tech., Inc. v. Rambus Inc.)
Some courts find that a duty to preserve evidence is triggered for potential litigation if a reasonable person in the party’s position should have foreseen that specific documents, data or things were material to a lawsuit. Other courts have held that a duty to preserve such evidence arises once a party knows that information may be relevant to a reasonably foreseeable claim. For instance, in the oft-cited Zubalake decision, the court found that a company employer had a duty to preserve electronic records destroyed before an employee filed the charge of discrimination that triggered a government investigation because almost everyone with whom that employee worked anticipated she might bring a lawsuit. That is, the court held that duty to preserve attached at the time that litigation was “reasonably anticipated,” and that key company employees anticipated litigation months before the employee filed a charge of discrimination. Still other courts look at whether a party has some notice that the data, documents or things are relevant to litigation, or that the party should have known that the data, documents, or things may be relevant to some future litigation.
One circuit court suggested that a party has a duty to preserve evidence only if it knew, or should have known, “that litigation was imminent.” Burlington Northern & Santa Fe Ry. v. Grant. But the Federal Circuit in Micron Tech., Inc. rejected this standard, refusing to “sully the flexible reasonably foreseeable standard with [a] restrictive gloss” that would require a showing that a person reasonably foresee that “litigation was imminent.” Rather, the court found that the “reasonably foreseeable” standard is sufficiently flexible and fact-specific to allow a court to exercise the discretion necessary to consider the many factual situations inherent in a spoliation inquiry. The trick is to determine what facts the court will consider when determining that litigation was reasonably foreseeable or reasonably anticipated; a topic we will address next.