[EDRM Editor’s Note: The opinions and positions are those of Michael Berman.]
This is the fourth and final blog on Felder v. MGM National Harbor, LLC, 2024 WL 3690779 (D. Md. Aug. 7, 2024)(Simms, J.). The prior blog, Felder Part 3 of 4: Defendant’s Overwriting of Video Footage After 14 Days Held Not to be Spoliation, described the Court’s holding that defendant’s overwriting of a security video was not sanctionable because defendant’s information governance policy called for overwriting in 14 days; however, plaintiff had not given notice of her claim for 60 days.
This blog poses questions about whether that policy was reasonable and defensible.
The old “safe harbor” rule provided that, absent exceptional circumstances, sanctions could not be imposed under the Rules if electronically stored information was no longer available as a result of the routine, good-faith operations of an electronic information system. Both the Federal Rules of Civil Procedure and the Maryland Rules have abandoned that rule. See M. Berman, “It is Time to Replace Maryland’s ‘Safe Harbor’ Rule,” Maryland State Bar Ass’n. White Paper (2022); Md. Rule 2-433(b); Advisory Committee Note to Fed.R.Civ.P. 37(e)(safe harbor rule protecting information lost due to routine, good-faith operation was replaced by 2015 amendments).
In Lewy v. Remington Arms Co., Inc., 836 F.2d 1104 (8th Cir. 1988), the appellate court was not persuaded by destruction of gun incident reports after three years pursuant to Remington’s facially neutral information governance policy.
The facts involved unloading a rifle. In order to unload Remington’s Model 700 bolt-action rifle, the “safety” had to be switched from, in my words, the safe “no fire” position to the unsafe “fire” position. Then the bolt could be opened and the bullet removed, making the rifle safe.
Mr. Lewy did that and – – inadvertently – – shot his mother while trying to unload the rifle.
This was not the first time that a Model 700 rifle had discharged in the process. However, more than a decade earlier, Remington had adopted a record retention policy providing that “complaints and gun examination reports” were destroyed after three years.
At trial, Mr. Lewy sought and obtained an adverse inference instruction because Remington was unable to produce documents destroyed under the policy. Id. at 1111. Remington objected, and appealed, based on its long-standing, neutral document destruction policy.
The Eighth Circuit remanded for fact-finding and provided the following guidance on information governance:
We are unable to decide, based on the record we have before us, whether it was error for the trial court to give this instruction. On remand, if the trial court is called upon to again instruct the jury regarding failure to produce evidence, the court should consider the following factors before deciding whether to give the instruction to the jury. First, the court should determine whether Remington’s record retention policy is reasonable considering the facts and circumstances surrounding the relevant documents. For example, the court should determine whether a three year retention policy is reasonable given the particular document. A three year retention policy may be sufficient for documents such as appointment books or telephone messages, but inadequate for documents such as customer complaints. Second, in making this determination the court may also consider whether lawsuits concerning the complaint or related complaints have been filed, the frequency of such complaints, and the magnitude of the complaints.
Finally, the court should determine whether the document retention policy was instituted in bad faith…. In cases where a document retention policy is instituted in order to limit damaging evidence available to potential plaintiffs, it may be proper to give an instruction similar to the one requested by the Lewys. Similarly, even if the court finds the policy to be reasonable given the nature of the documents subject to the policy, the court may find that under the particular circumstances certain documents should have been retained notwithstanding the policy. For example, if the corporation knew or should have known that the documents would become material at some point in the future then such documents should have been preserved. Thus, a corporation cannot blindly destroy documents and expect to be shielded by a seemingly innocuous document retention policy.
Felder v. MGM National Harbor, LLC, 2024 WL 3690779, at 112 (D. Md. Aug. 7, 2024)(Simms, J.)(emphasis added).
Admittedly, Lewy has been subsequently criticized. Stevenson v. Union Pac. R. Co., 354 F.3d 739, 747 (8th Cir. 2004); Morris v. Union Pac. R.R., 373 F.3d 896, 901 (8th Cir. 2004). One author states that those later decisions “clarified” Lewy. Matthew D. Mitchell, “The Status of the Spoliation Instruction in Arkansas After Bunn Builders: A Framework for Analysis,” 65 Ark. L. Rev. 663, 679 (2012); Robert Hardaway, et al., “E-Discovery’s Threat to Civil Litigation: Reevaluating Rule 26 for the Digital Age,” 63 Rutgers L. Rev. 521, 584 (2011)(later decisions added “intent” requirement).
Nevertheless, the Sedona Conference has subsequently, and favorably, cited Lewy and wrote that Lewy “outlined factors to be considered in assessing the reasonableness of a record retention policy for a spoliation instruction, including the following: (i) whether the policy was reasonable considering the facts and circumstances surrounding the relevant documents (i.e., whether a three-year retention policy is reasonable for a class of materials, such as email); (ii) whether any lawsuits relating to the documents had been filed, or may have been expected; and (iii) whether the document retention policy was instituted in bad faith.” “The Sedona Conference Commentary on Information Governance, Second Edition,” 20 Sedona Conf. J. 95, 148 (2019).
Additionally, Lewy has been favorably cited by others. “Since Lewy, other federal courts have added requirements that the company follow its document retention policy in a reasonably consistent manner …. [T]he Lewy court also explained that even reasonable data retention policies may give rise to intentional spoliation in particular circumstances, explaining that parties cannot ‘blindly destroy documents and expect to be shielded by a seemingly innocuous document retention policy.’” Shawn A. Johnson, “Brookshire Brothers v. Aldridge: Making the Spoliation Instruction A Litigation Unicorn,” 3 Tex. A&M L. Rev. 445, 481–82 (2015); Kenneth J. Allen, Robert D. Brown, “Thinking Outside the Toolbox,” AAJ 50 Trial, April 2014, at 28, 30 (citing Lewy: “compliance with routine retention practice does not, in itself, immunize a party from potential spoliation liability”); see M. Berman, “The Duty to Preserve Esi (Its Trigger, Scope, and Limit) & the Spoliation Doctrine in Maryland State Courts,” 45 U. Balt. L.F. 129, 133 n. 21 (2015)(citing Lewy).
…a corporation cannot blindly destroy documents and expect to be shielded by a seemingly innocuous document retention policy.
Lewy v. Remington Arms Co., Inc., 836 F.2d 1104, 1112 (8th Cir. 1988) (emphasis added).
I suggest that the following remains a viable principle: “[I]n Lewy v. Remington Arms Co., the Eighth Circuit noted that a document-retention policy could be instituted in bad faith, if that policy were designed to ensure that potentially damaging documents never were preserved.” Wm. Grayson Lambert, “Keeping the Inference in the Adverse Inference Instruction: Ensuring the Instruction Is an Effective Sanction in Electronic Discovery Cases,” 64 S.C. L. Rev. 681, 710 (2013).
Felder v. MGM is a well-written, comprehensive, and persuasive decision. It may be the case that the Felder video would have supported defendant.
My only question is whether the pro se plaintiff might have prevailed on her spoliation motion if she had questioned the reasonableness of defendant’s 14-day video overwriting policy. Is that policy reasonable under all of the facts and circumstances?
It may be prudent for litigants to question acceptance of a facially neutral, but rapid, overwriting policy for video evidence, even though 14 and 30-day overwriting is very common. Opposing litigants faced with a 14-day video overwriting policy might ask additional questions about the policy before accepting it as a defense to spoliation.
Why, for example, was security video overwritten in 14 days by MGM in Felder? Storage is cheap. Was there a legitimate cost or business justification for such a policy? What would the cost of a longer retention period be? Is longer storage technologically feasible and is it proportionate to those risks? What are the capabilities of the recording hardware and software? Is the defendant technologically sophisticated?
For example, if Felder had been an email or text message deletion policy, instead of video, would it have appeared reasonable to an ordinary, prudent observer? And, how long does that party retain other ESI? Is it only video that is overwritten quickly?
What are the hazards that are presented by the rapidly-overwritten ESI? Lewy involved firearms and personal injury; Felder involved security escorts. Has the policy been consistently enforced?
When, how, and why was the overwriting policy developed? Does it appear to be an effort to protect against potential litigation exposure? Was it implemented shortly after a prior claim?
It may be prudent for litigants to question acceptance of a facially neutral, but rapid, overwriting policy for video evidence, even though 14 and 30-day overwriting is very common. Opposing litigants faced with a 14-day video overwriting policy might ask additional questions about the policy before accepting it as a defense to spoliation.
Michael Berman, E-Discovery LLC.
It may be that the same result would have been reached if those questions were asked in Felder. Or, maybe not in that or the next case.
Other Blog Posts in this Series
Felder Part 1 of 4: Court-Ordered Transcription of “Meet and Confer” Session
Felder Part 2 of 4: Defendant Sanctioned for Late Cancellation of Depositions
Felder Part 3 of 4: Defendant’s Overwriting of Video Footage After 14 Days Held Not to be Spoliation
Takeaways From Felder v. MGM National Harbor – EDRM
