The U.S. District Court for the District of Connecticut has granted a motion, filed by Pitney Bowes, for sanctions for spoliation of evidence in a CERCLA recovery action. Innis Arden Golf Club v. Pitney Bowes, Inc., Case No. 3:06 cv 1352 (JBA), 2009 WL 1416169 (May 21, 2009). The ruling is a strong reminder of the obligations of parties and their experts to impose a litigation hold and to ensure that all forms of evidence — tangible and electronic — are preserved. A party may be sanctioned for the negligent destruction of evidence even in the absence of bad faith or intentional misconduct. Byrnie v. Cromwell, 243 F.3d 93, 107-08 (2d Cir. 2001). Thus, it is critical that parties are aware of and comply with their evidence preservation obligations.
In the lawsuit, the plaintiff golf course accused Pitney Bowes, which occupies nearby property, of being the source of PCB contamination found on the golf course, and sought to recover the cost of remediation from Pitney Bowes and other defendants. Despite the fact that the plaintiff had retained an expert environmental consulting firm and had hired counsel to lay the groundwork for a cost recovery action in early 2005, the expert failed to retain any of the soil samples taken from the golf course property, and did not impose a litigation hold to prevent the routine destruction of its emails and other electronic data.
Pitney Bowes, represented by Hunton & Williams, filed a motion for sanctions based on plaintiff’s spoliation of evidence. Pitney Bowes argued that it was severely prejudiced because its experts could not conduct tests that might establish that Pitney Bowes was not the source of the contamination. U.S. District Judge Janet Bond Arterton granted the motion and precluded any “evidence based on the soil samples Innis Arden took from its own property and subsequently destroyed.” 2009 WL 1416169, at *10.
At the outset, the court rejected Innis Arden’s suggestion that CERCLA cases should be treated differently than other cases and instead applied traditional spoliation analysis. The court recognized that requiring CERCLA litigants to preserve samples of contaminated materials would not require them to delay remediation of contaminated property. Rather, “where remediation will eliminate potential future sampling, the investigation, remediation, and cost recovery phases must proceed in accordance with the usual rules governing preservation of potentially relevant evidence for litigation.” Id. at *5 n.5.
The court’s ruling addresses several points that are important for litigants in any type of civil litigation.
First, a party’s duty to retain evidence may arise long before the filing of litigation.
A party has a duty to retain evidence “when a party should have known that the evidence may be relevant to future litigation.” 2009 WL 1416169, at *5 (quoting Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998)). The court found the plaintiff’s duty attached when it began working to identify potentially responsible parties it could sue to recover the cost of the remediation of the golf course — more than a year and a half before it filed suit. Id. at *6.
Once a party reasonably anticipates litigation, “it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” Id. (quoting Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003)) (other citations omitted). This includes tangible evidence as well as electronic evidence.
Second, a litigant may be sanctioned for its expert’s failure to preserve evidence. Id. at *8. In a related order imposing discovery sanctions, the magistrate judge in the case found sanctions warranted for the failure of the environmental consulting firm hired by the plaintiff to suspend its routine email deletion policy and for other abuses. Dkt. #515.
Third, although courts have stated that the duty to preserve evidence is not “indefinite,” the court rejected the plaintiff’s argument that it could not be sanctioned because it allegedly had notified Pitney Bowes of its intention to remediate the property. 2009 WL 1416169, at *7. The court found that Pitney Bowes had not affirmatively disclaimed an interest in the sampling evidence before Innis Arden destroyed it, and that Innis Arden’s provision of notice that it intended to conduct remediation, without any indication that it would destroy the samples, did not relieve it of its obligation to preserve those samples. Id.
The court concluded that the facts warranted a severe sanction “because overlooking the failure to preserve this evidence would have the effect of condoning this broad disregard for the need to retain raw scientific-sampling evidence and might not deter similar conduct in future CERCLA actions.” Id. at *10. Although the court found “no basis on which to conclude that Innis Arden purposefully destroyed evidence to advantage it or disadvantage Pitney Bowes, the consequences of the loss of this evidence are significant,” and the proper remedy was to exclude any evidence based on the samples. Id. at *10. Atlanta