Judge Scheindlin Sets New Standards for E-Discovery Shortfalls
Per the ABA's Litigation News, March 3, 2010:
In an 85-page opinion in Pension Committee of the Univ. of Montreal Pension Plan v. Banc of America Securities, LLC, Judge Shira Scheindlin sanctioned 13 plaintiffs for negligence or gross negligence in their identification, preservation, and collection of electronically stored information. . . . Judge Scheindlin’s opinion states that “. . .This is a case where plaintiffs failed to timely institute written litigation holds and engaged in careless and indifferent collection efforts after the duty to preserve arose.”
Judge Scheindlin found particular fault with the sanctioned plaintiffs’ failure to issue litigation holds until after the stay was lifted in 2007. She also found the sanctioned plaintiffs had failed to identify, collect, and preserve sources of potentially relevant and responsive electronic evidence, such as back-up tapes.
Judge Scheindlin found that 6 of the 13 plaintiffs had been grossly negligent and ordered a burden-shifting jury instruction as to them.
The Pension Committee decision’s sharpest break with precedent is the creation of a burden-shifting test for spoliation. Traditionally, a party is entitled to an adverse inference instruction as to spoliated evidence only if it can show, among other prerequisites, that the evidence was relevant to the party’s claim or defense and that the party suffered real prejudice as a result of the spoliation.
Noting that it is almost impossible for a party to make such a showing when it cannot know the substance of the spoliated evidence, Judge Scheindlin created a new burden-shifting test. If a party can show that spoliation was the result of bad faith or gross negligence, prejudice may be presumed. The burden then shifts to the spoliating party to rebut that presumption.
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