Litigation: Events courts consider when deciding if duty to preserve evidence has been triggered

Preservation obligation is triggered when a litigation or a government investigation is probable

We know there is no general duty to preserve evidence before litigation is reasonably anticipated, so the trick is to determine what facts the court will consider when determining when that duty attaches. For an individual or company that initiates litigation, the obligation to preserve relevant evidence may be triggered before a lawsuit is commenced. Triggering events may include seeking advice of counsel, sending a cease and desist letter, or taking specific steps to initiate specific legal action. See, e.g., Hynix Semiconductor Inc. v. Rambus Inc. (sanctioning company that destroyed documents while strategically planning to bring a specific lawsuit).  

As for a potential defendant, the receipt of a prelitigation preservation request, a request to inspect, a demand letter, a cease and desist letter, a cure notice, or even a discussion with an opposing party or its counsel may trigger a company’s obligation to preserve information relevant to potential litigation. Likewise, if a company learns an employee or former employee is seriously contemplating a lawsuit, if an event or other circumstance would reasonably put an organization on notice that a lawsuit is likely to be filed, or if a company has a history of litigation arising out of similar events or circumstances, the duty to preserve may be triggered. These events or circumstances must be examined in the context of an organization’s history or experience with particular types of litigation. For instance, in Stevenson v. Union Pacific R.R. Co., the court upheld sanctions against a railroad because it destroyed voice tapes immediately after an accident despite knowing that voice tapes had been used in earlier lawsuits to its advantage. That is, the railroad’s experience in prior litigation should have caused it to conclude that the accident would lead to litigation where the voice tapes would be relevant.

Sometimes a party will receive its first notice that it must preserve particular documents or things upon receipt of a complaint or a document request from an opposing party. A party is generally not obliged to retain evidence before it has any particular knowledge of a potential complaint. Of course, receipt of a complaint, a discovery request, a subpoena or some other formal notice that a company is the subject of a lawsuit or a governmental investigation triggers the duty to preserve information relevant to that request, lawsuit, subpoena or investigation.

In any event, the preservation obligation is triggered only when, based on credible facts, a company determines or should have determined that litigation or a government investigation is probable. One way to help understand when that duty is triggered, it is to consider when it does not arise. For example, the duty is not triggered by a vague rumor or indefinite threat of litigation. Likewise, a threat to file suit that is not credible or one not made in good faith will not trigger a preservation obligation. A company may decide that the threat of litigation lacks credibility based on the threat itself, its past experience regarding the type of threat, the source of the threat, the legal bases for the threat, or similar facts. Id.

Don’t ignore credible triggers. If your organization learns or receives credible information that litigation against it is probable from these or similar events, a court may determine from these facts that the duty to preserve was triggered when that information came to the company’s attention. Once that happens, the key is to take steps to preserve appropriate documents, data and things. We will talk about the scope of that obligation in our next post.

Contributing Author

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Margaret Koesel

Margaret M. Koesel is a partner in the Litigation, Labor and Employment Groups at Porter Wright Morris & Arthur LLP and is a Co-Author of...

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Contributing Author

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Tracey Turnbull

Tracey L. Turnbull is a partner in the Litigation Group at Porter Wright Morris & Arthur LLP and is a Co-Author of Spoliation of Evidence:...

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