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A Recurring Theme: Spoliation Sanctions and the Requisite Level of Culpability

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Posted on June 30th, 2014

A common issue for plaintiffs seeking spoliation sanctions is the burden of proving the culpable mind in losing or destroying electronically stored information (ESI). The court took up this issue in Pegasus Aviation I, Inc., et al., v. Varig Logistica S.A., MatlinPatterson Global Advisers, LLC, et al., 104060, 603076/08 (N.Y. App. Div. June 5, 2014).

At issue was whether the MatlinPatterson (MP) defendants exercised sufficient control over VarigLog during the period from April 1, 2008, until VarigLog’s bankruptcy filing on March 3, 2009, such that the MP defendants (who did not fail to meet their own obligations to preserve or produce their own documents) would be liable for spoliation sanctions based on VarigLog’s loss of relevant electronically stored information (ESI) during that period.

Are Sanctions Warranted for Ordinary Negligence?

The court determined that the MP defendants had a sufficient degree of control over VarigLog, and it was enough to trigger a duty to preserve ESI relevant to the current litigation. However, the court objected to the notion that Defendants had committed gross negligence or acted in a wholly reckless manner. The court found that only ordinary negligence took place and conferred the duty to prove prejudice upon Plaintiffs, stating:

Because the record supports, at most, a finding of simple negligence against the MP defendants, plaintiffs must prove that the lost ESI would have supported their claims.


Notably, Judge Andrias, in his partial concurrence and partial dissent, explains that a court has discretion to impose a spoliation sanction for the negligent destruction of evidence. In determining the appropriate sanction for spoliation, the court must consider the degree to which the contumacious conduct or destruction of evidence prejudiced the other party.

One of the approaches proposed by Judge Andrias is to require a hearing to assess the extent of the prejudice suffered by plaintiffs, and for a determination as to an appropriate sanction, if any.

In looking for a common nucleus, it appears that ordinary negligence can bring about spoliation sanctions. Where courts seem to disagree is whether a party must prove that the lost ESI would have been relevant and/or supported their claims when the culpability finding is one of ordinary negligence.

The theme of the standards for spoliation sanctions, culpability and prejudice also ties into the current proposed amendments to FRCP 37(e), which we addressed previously.

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