Data Retention Policies and Litigation Holds: More Than Just a Formality
Siggers v. Campbell et al.
Case No. 2:07-cv-12495
U.S. District Court, E.D. Michigan, 2014
In Siggers v. Campbell et al., a recent case out of the Eastern District of Michigan, a defendant narrowly avoided sanctions for spoliation. The court’s opinion in this matter is a great reminder for attorneys of the importance of communicating to their clients the need for clear data retention policies and the implementation of litigation holds when necessary. Although a client may survive dismissal and formal sanction, such discovery errors can resurface at trial.
In Siggers, the plaintiff objected to the magistrate judge’s Opinion and Order Denying Plaintiff’s Motion for Contempt and Opinion and Order Denying Plaintiff’s Motion for Spoliation Sanctions. Siggers contended that spoliation sanctions were proper because the defendant Campbell failed to preserve emails directly responsive to his discovery requests. Also, Siggers alleged that the defendant did not institute a litigation hold until four years after the filing of the complaint. The magistrate judge found that defendant had the duty to preserve the emails, though the “situation presents a closer call than either party is willing to recognize.” The court held that sanctions were not appropriate in this situation because “Siggers failed to demonstrate Campbell’s ‘culpable state of mind’ in destroying the evidence and show that responsive documents existed and were among the destroyed.”
Upon review, the court defined spoliation as “the intentional destruction of evidence that is presumed to be unfavorable to the party responsible for its destruction,” and the sanctions for spoliation “range from dismissal to adverse jury instruction.” The court stressed the plaintiff’s failure to show that the emails he sought ever existed or that they were destroyed as a result of the defendant’s failure to have a data retention policy or a litigation hold in place. Finally, the court stressed the words of the magistrate judge that even though the defendant had escaped sanctions, she had not heard the last of her retention failures, as the plaintiff might question the defendant “at trial about her failure to timely impose a litigation hold….”
It is important to take away two things from this case. First, although the simple lack of a data retention policy is not itself an offense worthy of sanction, it is something a jury could learn about at trial and would most likely not leave them with a favorable impression. Second, both the magistrate judge and the district court judge stressed that the plaintiff Siggers failed to show that the documents in question ever existed or that such documents were destroyed. However, it is quite possible that without data retention or litigation hold policies in place, a party could destroy documents responsive to discovery requests and thus be subject to sanctions. Therefore, attorneys should impress upon their clients the importance of properly managing electronic data through the implementation of proper data retention and litigation hold policies to avoid such issues in future litigation.