Limits to the Duty to Preserve

In AMC opinion, decided in the Northern District of California, AMC sued Cisco for breach of contract arising out of an alleged failure of Cisco to deliver a particular computer connector. As part of AMC’s discovery, they requested data from the computer of an employee that had retired just four days prior to the filing of the lawsuit. In accordance with a written document retention and destruction policy, the employee’s hard drive had been “wiped” thirty days after his departure. 

The AMC case raises a number of novel issues. Although the data was destroyed in accordance with an established document destruction plan, it was destroyed after an ever important “trigger event,” which in this case was the service of the complaint on the defendant, Cisco. On its own, this destruction of data would support an adverse inference instruction; however, the court held that the identity of the custodian matters in determining whether the destruction of data falls within the scope of a spoliation motion.

In AMC the custodian of the laptop had been an employee of Cisco in an entirely different division than that which negotiated the deal for the delivery of the computer connector. The court noted that any access that he had to the disputed deal was “fleeting at best.” Perhaps most importantly, neither party listed the employee in their respective initial notifications of persons who might have relevant data and whose data should be preserved.

The court noted that although Cisco had a general duty to preserve evidence when it destroyed the employee’s documents, the scope of this duty was not limitless. Stated succinctly, “[a] litigant has an obligation to preserve only evidence ‘which it knows or reasonably should know is relevant to the action.” As Judge Scheindlin held in Zublake , “[r]equiring a litigant to preserve all documents, regardless of their relevance, would cripple parties who are often involved in litigation or are under the threat of litigation.” Previously, this “relevance” applied only to the relevance of the requested document to the litigation, but AMC appears to expand the meaning of relevance to include whether it is reasonably foreseeable that the custodian of such information would be relevant to the litigation.

Because Cisco had implemented a document retention and destruction policy, and the employee was not “relevant” to the litigation, i.e. a key player reasonably likely to possess evidence related to the litigation, the court denied AMC’s spoliation motion. This case illustrates that the door swings both ways in regards to a spoliation motion for evidence in the custody of a seemingly non-relevant employee. Had AMC listed the employee on its initial notification of persons whose data should be preserved, Cisco would have been on notice, and deletion of the hard drive would have been ripe for sanctions.