How Much Prejudice is Needed to Warrant an Adverse Inference Instruction?

Schmidt v. Shifflett (D.N.M. Oct. 28, 2019) showcases that, under FRCP 37(e), in order to be granted spoliation sanctions, the moving party must show that they were prejudiced by the spoliation. In this case, the court ruled that the prejudice suffered must be “severe,” leaving us to wonder: what level of prejudice is needed to warrant spoliation sanctions?

Overview:

In this personal injury case involving a car crash, the plaintiff sought spoliation sanctions under FRCP 37(e) for the defendants “intentionally” destroying his personal mobile phone, leading to failed preservation of relevant data.
After the accident in question, the plaintiffs issued a preservation letter which included the “driver’s personal and business cell phone.” During discovery, the defendants admitted that the personal cell phone was no longer in the possession of the defendants because the driver [defendant] “was not pleased with the quality of service from T-Mobile.”

After reviewing cell phone records produced by the defendants, the plaintiffs’ cell phone expert testified “with scientific certainty, that Mr. Shifflett [defendant] was highly distracted at the time of the accident and this impairment caused by his cell phone use was a substantial cause of the crash.”

Ruling:

• Spoliation Sanctions Granted in Part. The court allowed the plaintiffs to introduce evidence that one of the defendants willfully spoliated his personal cell phone but would not grant an adverse inference instruction.
• No Severe Prejudice. With the plaintiffs’ expert witness testimony about the defendant’s use of his phone during the accident based on examining the defendant’s phone records, the court ruled that examining the physical phone did not severely prejudice the plaintiffs.
• Balancing of Spoliation Considerations. Even though the cell phone expert could be “100 percent accurate” if given the chance to examine the physical phone, the court decided that this bolstering of the examiner’s opinion didn’t warrant severe spoliation sanctions

Expert Opinion from Mike Hamilton, J.D. Director of Marketing, Exterro

The court leaves us to wonder whether Rule 37(e) is a get out of jail free card for the dumb intentional spoliator. Under 37(e), if the data is not completely lost or irrecoverable and the party requesting sanctions isn't severely prejudiced, sanctions aren't warranted even if the party tried unsuccessfully to delete data. Because of this more and more judges are going outside Rule 37(e) and granting punitive court sanctions for a party's bad behavior based on different rules or the court's inherent authority.

Case Law Tip:

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