E.D. Va. Imposes Spoliation Sanctions for Failure to Suspend Document Destruction Policy

Per Toys "R" Us-Delaware, Inc. v. Tots in Mind, Inc., Slip Copy, 2012 WL 529595 (E.D. Va. Feb. 17, 2012):

TRU's Motion for Sanctions is based on Tots' alleged spoliation of evidence. During his deposition, Mr. LaMantia, Tots' Fed.R.Civ.P. 30(b)(6) witness, testified that Tots never altered its seven-year document destruction policy during either this, or the underlying Blanco, litigation. Following LaMantia's deposition, Tots filed affidavits correcting LaMantia's alleged misstatement. The affidavits indicate that a policy suspending document destruction has been in place as to relevant documents since the time of the Blanco litigation. Seemingly as an excuse for the inconsistencies, Mr. LaMantia's affidavit also states that he previously suffered a stroke, which has affected his memory.

“Spoliation refers to the destruction or material alteration of evidence or to the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.” See Silvestri v. Gen. Motors Corp., 271 F.3d 583, 590 (4th Cir.2001). The trial court's discretion for choosing the appropriate sanction for spoliation is broad. Id. In addition to sanctioning improper conduct, the district court may also impose sanctions for the purpose of leveling the evidentiary playing field. Id.

The Court is not persuaded that subsequent affidavits alone should be permitted to wholly contradict Mr. LaMantia's prior deposition testimony. See Russell v. Acme–Evans Co., 51 F.3d 64, 68 (7th Cir.1995) (“We have been highly critical of efforts to patch up a party's deposition with his own subsequent affidavit.”). Defendants failed to file a notice of errata subsequent to the damning deposition; Defendants failed to provide any internal documentation evidencing a suspension of its document destruction policy; and Defendants failed to provide any medical documentation evidencing (a) Mr. LaMantia's stroke or (b) that the alleged stroke impacted Mr. LaMantia's memory.

After careful consideration, the Court finds that sanctions for spoliation are appropriate. The Court will instruct the jury that no retention policy was put in place at Tots during the relevant time period. The Court will also instruct the jury that they may infer that but for Tots' spoliation, TRU would have been able to prove (1) that Tots did in fact receive the MPO; (2) that Tots retained printed copies of Shipment Set Details predating 2004 on file; and (3) that the paper purchase orders exchanged between Tots and TRU, prior to the electronic purchase orders, contained indemnification and warranty provisions printed on the reverse side of the orders. However, the Court will further instruct the jury that they are not required to so find, and in making their decision, they should consider all of the relevant evidence presented. In sum, the jury will be instructed that it may find that Tots' seven-year document destruction policy is the reason Tots was unable to produce the relevant documents.

E.D.Va. Rejects $50 Million Civil Penalty in FCA Case as Unconstitutionally Excessive

Per U.S. ex rel. Bunk v. Birkart Globistics GmbH & Co., Slip Copy, 2012 WL 488256 (E.D.Va. Feb. 14 2012):

Presently pending before the Court is the Plaintiffs' post-trial motion for an award of civil penalties under the False Claims Act with respect to the DPM claim. For the reasons stated herein, the Court concludes that the mandatory civil penalty of at least $50,248,000 constitutes an unconstitutionally excessive fine in violation of the Eighth Amendment and, having made that determination, further concludes that it does not have the discretion to fashion some other civil penalty that would be within constitutional limits; and therefore no civil penalty will be imposed.