Last month, a U.S. District Court in Louisiana issued an opinion and ruling in the case In re: Actos, a products liability action against a collection of defendants collectively described as “the Takeda entities”. Before getting to the nitty-gritty, here’s a quick summary of each party’s stance:

In its motion, the PSC [Plaintiffs' Steering Committee] argues [defendants] intentionally destroyed documents relevant to the instant litigation in bad faith, resulting in prejudice to the plaintiffs. The PSC seeks a default judgment, or in the alternative, a combination sanction of cost-shifting, a fine, an adverse inference jury instruction, restoration of the deleted files, and attorneys’ fees and costs.

In response, Takeda argues it has in no way destroyed documents in bad faith, but rather, has maintained and produced a host of documents and has in place retention policies and procedures designed to safeguard information for litigation, and that these procedures were followed in this case. Takeda’s argument focuses, primarily, upon its assertion that the reason it has been unable to produce certain responsive documents is that it did not reasonably anticipate bladder cancer litigation until July 2011, and therefore, it did not believe it had a duty to preserve evidence relating to bladder cancer[.]

So the PSC is claiming all sorts of wrongdoing and seeking the entire gamut of sanctions, while defendants claim that they followed procedure, and if documents were indeed missing, it’s because there was no reasonable anticipation of litigation relating to that specific litigation. As the opinion explains, “there are a total of forty-six (46) custodial files that cannot be located - or have not been produced – by Takeda.” These files belonged to employees from “company presidents to key officers”, so they were likely rather important.

As spoliation analyses are wont to do, this one focuses rather heavily on dates and timelines. In an email to the Special Masters and PSC counsel, Takeda initially stated:

Finally, our understanding is that Takeda issued its litigation hold notice for bladder cancer product liability litigation on February 15, 2011.

(Emphasis in original)

In a supplemental email a week later, that date had changed, and Takeda was now claiming a litigation hold notice in September of 2011. The discrepancy was not lost on the court:

This supplemental e-mail did not address the February 15, 2011 litigation hold date that had been provided by Takeda on June 6; rather, simply offered a new date, with no mention of the February 15, 2011 date which had been provided only eight days earlier.

Things got worse for Takeda: it emerged that a general products liability litigation hold had been instituted in July 2002 for claims relating to Actos, which had been “refreshed” several times over the following years. The language of that particular hold includes the phrase:

Please interpret this directive in its broadest sense to prevent the deletion or destruction of any recorded information and data relating in any way to Actos.

Next, there’s a discussion of a deposition that took place in August and September of last year:

Only one witness was presented [by Takeda] and that witness had no personal or first hand corporate knowledge of any kind of any of the topics about which he was questioned. Rather, the PSC argues he was, in effect, merely a hired gun brought in by Takeda to provide a buffer and to obfuscate on Takeda’s behalf – and this Court, after review of the 30(b )(6) deposition, cannot say the deposition does not support that argument.

There’s obviously a lot more detail in the full opinion, but let’s skip ahead a little. The court concludes that the duty to preserve kicked in with the 2002 hold, and so Takeda’s inability to produce the custodial files amounted to a breach of that duty. Next, the court has to consider the relevance of the absent files, and whether their absence caused prejudice to the plaintiffs. Here’s the key passage that shows that this box is also checked:

Takeda has confirmed [that a Managing Director, Board Member, and General Manager of their Strategic Product Planning Department's] email account was deleted from active servers on October 1, 2009; his personal file share and all personal data was deleted by a Takeda IT vendor on January 28, 2010, pursuant to a request dated January 20, 2010; and his business documents were discarded at the time of his departure. Thus, all of the foregoing deletions were made after the 2002 Litigation Hold was in place.

Finally, the court has to determine whether defendants’ actions were in bad faith, and despite all of the above, this is where plaintiff’s motion largely fails:

[T]his Court finds the PSC has carried its burden to establish both beneficial relevance and prejudice and that the PSC has made a strong and persuasive showing from the evidence of a “culpable state of mind” on the part of Takeda in its destruction of evidence. Nevertheless, this Court, at this juncture, stops short of concluding the PSC has demonstrated sufficient bad faith to support the full breadth of onerous sanctions requested. Rather, as sister courts have permitted, this Court determines it will allow all evidence of bad faith to go to the jury, and thereafter, will devise a jury instruction to be given to the jury on this point after hearing all evidence presented by each side.

By no means is Takeda off the hook, and as discussed, there’s a lot of potentially harmful facts that will make their way to the jury, but even so, the instant court’s decision to defer any judgment is a positive for the defendants.