“I just delete. I delete – delete. Anything there that I don’t want, don’t need anymore, I delete.” Peterson v. Evapco, Inc., 238 Md. App. 1, 21 (2018). That is an invitation to disaster.
Steamfitters Local Union No. 602 v. Erie Insurance Exchange, 469 Md. 704 (2020), involved spoliation in the context of novel issues of the duty owned by a landowner to two nearby properties. The nearby properties were damaged by a mulch fire that started on the landowner’s property and that was spread by the wind. The cause of the mulch fire was discarded cigarette butts. The cigarettes were discarded by trainees who were in-between training classes on the landowner’s property.
The landowner – Steamfitters – had video surveillance over or near the area where the fire started. The video was not preserved and could not be produced. The trial court gave an adverse inference instruction to the jury and the appellate courts affirmed.
It was undisputed that a preservation demand was sent to Steamfitters before the video was scheduled to be overwritten. It was likely – but not certain – that fire department investigators also timely requested it. However, it was not preserved.
The fire started on April 6, 2015. A preservation demand was sent to Steamfitters by plaintiff’s insurer on April 23, 2015. 469 Md. at 738, 742. A fire investigator testified that he was aware that generally companies have rapid overwrite policies and his office generally tried to obtain video within seven days; however, he did not know the exact date of the department’s effort.
The Court wrote: “Steamfitters failed to produce the video during discovery, and it was undisputed that the video was taped over and destroyed 30 days later.” Id. at 738.
Thus, the duty to preserve was triggered before the preservation failure. The Court did not need to address proportionality. The damages exceeded $1 million and it would have cost virtually nothing to preserve the video. Relevance, state of mind, and prejudice remained to be established.
Steamfitters argued that the video was not relevant. Understanding that argument requires a brief review of the merits. Steamfitters argued that it had no tort duty to nearby properties because mulch was not dangerous. Plaintiffs responded that there were hundreds, if not thousands, of cigarette butts thrown in the mulch, making it dangerous and triggering a tort duty. Plaintiffs argued that the video would show that trainees were smoking, discarding butts, and Steamfitters had knowledge of the fire danger presented by cigarette butts in mulch. While no one knows what was on the video, the assertion is that it might have supported plaintiffs’ claims.
The loss of the video is not explained in the decision. Steamfitters stated that its attorney asked it to provide footage, but the request from its attorney was after the thirty-day retention period “so we were unable to retrieve any of that.” Id. at742.
While the opinion stated that plaintiff’s counsel sent a preservation demand to Steamfitters, there is no indication as to whether or when defense counsel sent a litigation hold notice to Steamfitters. One may question why video evidence after a large fire was not immediately put on legal hold. However, it went missing.
Steamfitters attempted – unsuccessfully – to deflect sanctions.
First, Steamfitters argued that the video had been reviewed by a representative of plaintiff and was considered “useless.” The testimony on that issue was disputed:
That factual dispute was properly presented to the jury. Id. at 744.
Second, Steamfitters argued that the camera was not focused on the area at issue, stating that “this video might have showed people congregating here, it might have also been completely irrelevant, which is what Mr. Sclater told my folks. So why preserve it anyway? They haven’t made a showing that there would be any reasons to ever preserve this video.” Id. at 743-44.
“In response, counsel for the Plaintiffs argued that the video recording would have shown an area ‘unbelievably close’ to where the fire was alleged to have originated and might have shown what people were doing in the parking lot.” Id. at 743.
The Court held that the relevance argument was without merit.
There was evidence in the record that the camera was pointed in a direction that would have captured persons present on Steamfitters’ property prior to and at the time of the fire, as well as a portion of the property close to the origin of the fire. Video of that area may have captured other evidence similar to the evidence captured by the other video cameras, which were shown to the jury, such as the color of the smoke, wind direction, and speed.
Id. at 744. One might have also argued that Steamfitters’ failure to preserve after receipt of a preservation demand was intentional spoliation and therefore a presumption of prejudice arose. See Fed.R.Civ.P. 37(e)(2)(A, B). Steamfitters should not be heard to argue that, because we failed to preserve the evidence, our opponent cannot prove what it would have shown.
The trial court instructed on both negligent and intentional spoliation. The Court held that there had been no objection to the intentional prong of the instruction; however, even if the issue had been preserved, the instruction was proper. Id. at 745 n. 8.
Third, Steamfitters argued that “the video recording had been taped over prior to receiving the litigation hold letter,” relying on testimony from its corporate designee. Id. at 743. This was a pure heart, empty mind, argument, and it did not hold water.
It is well accepted that the duty to preserve arises when litigation is reasonably anticipated, and a preservation letter from an opponent is not necessary to trigger the duty.
While a litigant certainly may request that an adversary agree to preserve electronic records during the pendency of a case, … it is not required, and a failure to do so does not vitiate the independent obligation of an adverse party to preserve such information.
Thompson v. U.S. Dep’t of Hous. & Urban Dev., 219 F.R.D. 93, 100 (D. Md. 2003). Further, the Court of Special Appeals’ decision in Steamfitters stated that the plaintiff’s preservation demand was sent by UPS on April 23, 2015, seventeen days after the fire, and Steamfitters’ attorney acknowledged receipt on April 27. 241 Md. App. at 132. Thus, Steamfitters had actual notice of the claim before the video was overwritten.
It may be that Steamfitters was arguing that the video was overwritten before Steamfitters’ attorney asked Steamfitters to produce it. If that is the argument, it would also lack merit. It has been established since Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003), that the duty to preserve is triggered when litigation is reasonably anticipated. For a recent discussion of when the duty is triggered, see “Triggering the Duty to Preserve ESI.”
One lesson learned is: “[I]f you anticipate relying on a surveillance video, send a preservation letter as soon as possible. Retention times vary, so the sooner the letter is sent, the less likely the video will have been over[written] or stored in an inaccessible manner.” Donna Fisher and Matthew Hamilton, “New Cases Bring Lessons on Video Surveillance Preservation,” JDSupra (Sept. 18, 2020).
For additional detail, see M. Berman and A. Shelton, “The Spoliation Doctrine in Maryland State Courts,” in M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), Chap. 12, and a subsequent blog regarding an unreported decision.