To the spoliator belongs the victory? Not in the post-Enron/Andersen, post Sarbanes-Oxley world. And not in the wake of recent Supreme Judicial Court decisions clarifying the scope of the obligation to retain evidence and the penalties for failure, even negligently, to do so.
Mass. R. Prof. C. 3.4(a), adopted in 1998, prohibits lawyers from unlawfully obstructing another party's access to evidence or unlawfully altering, destroying or concealing a document or other material having potential evidentiary value. The rule further provides that lawyers cannot counsel or assist another person in such acts. The comment to the rule emphasizes its purpose to insure "fair competition" in the adversary process and to secure opposing parties' procedural rights of access to evidence through subpoena or discovery.
Clearly it is critical for lawyers to be able to advise clients as to their obligations concerning document retention and to be able to make similar decisions as to the business records of their own law firms. (But as to lawyers' separate obligations to retain client files, see "Talking Trash Recycled" and "It's Not Over Until It's Over," parts one and two, at the Bar Overseer articles section of www.mass.gov/obcbbo). And clearly lawyers do not wish to commit disciplinary violations in so doing.
Equally obviously, and even with increased electronic storage capacities, it is impractical for anyone - a law firm, a business entity or an individual - to retain every document created or received, either electronically or in hard copy. The question, therefore, is what type of destruction of documents is lawful or permissible for lawyers and clients and what is unlawful, impermissible, or in violation of civil court requirements, criminal statutes or (for lawyers) the rules of professional conduct.
Spoliation has been defined as the willful destruction of evidence or the failure to preserve potential evidence for another's use in pending or future litigation. Trigon Ins. Co. v. U.S., 204 F.R.D. 277 (E.D.Va., 2001). Two recent SJC decisions, Fletcher v. Dorchester Mutual Insurance Company, 437 Mass. 544 (2002), and Keene v. Brigham and Women's Hospital, 439 Mass. 223 (2003), flesh out what is required of parties to civil litigation as to document retention. Both cases emphasize that sanctions (in extreme cases, up to and including default or dismissal) may be appropriate for the spoliation of evidence, whether negligent or intentional, even where the loss of potential evidence occurs before an action has been commenced, if a litigant or its expert knows or reasonably should know that the evidence might be relevant to a possible action
Beyond civil sanctions, lawyers and clients should also take note of applicable criminal statutes. The federal crime of obstruction of justice is defined by 18 U.S.C. ß 1503 to include conduct that, among other things, corruptly endeavors to obstruct or impede the due administration of justice. To sustain its burden of proof, the government must prove that there was a pending judicial proceeding, that the defendant knew this proceeding was pending and that the defendant then corruptly endeavored to influence, obstruct or impede the due administration of justice.
In applying the obstruction of justice statute to issues of destruction of documents, federal courts generally have not required that a subpoena have issued. Rather, it is sufficient for an obstruction conviction that the defendant knew that a grand jury was investigating possible violations of federal law and intentionally caused destruction of the incriminating document. U.S. v. Fineman, 434 F. Supp 197 (E.D.Pa 1977). And in at least one case where corporate officials allegedly destroyed documents sought during discovery in a class action employment discrimination case, a federal district court denied a motion to dismiss indictments, holding that the officials could be prosecuted criminally under the obstruction of justice statute for the spoliation in the civil suit. U.S. v. Lundwall, 1 F.Supp.2d 249 (S.D.N.Y.,1998).
In addition, the Sarbanes-Oxley Act of 2002 has expanded the federal law of obstruction by adding new sections to 18 U.S.C. ß 1512 and enacting a new statute, 18 U.S.C. ß 1519, creating additional crimes relating to alteration, destruction, mutilation or concealment of records, documents or objects. Section 1512(c) requires acting corruptly with intent to impair the item's integrity or availability for use in "official proceedings," defined by 18 U.S.C. 1515 to include proceedings before federal courts, agencies, Congress and regulatory proceedings involving the insurance business. This statute is particularly striking in providing, in subsection (f), that an official proceeding need not be pending or about to be instituted at the time of the offense and that the document need not be admissible in evidence or free of a claim of privilege. Section 1519 relates to any matter within the jurisdiction of a federal department or agency or any case filed under title 11 (bankruptcy) and requires intent to impede, obstruct or influence the investigation or administration of such a matter or case. It also includes actions taken "in relation to or contemplation of" a matter or case.
In a bar discipline proceeding alleging a violation of Rule 3.4(a), one key issue would be whether the documents were destroyed or altered (in the language of the rule) "unlawfully." For example, spoliation by a lawyer that constitutes a crime or violates a discovery order or the requirements of a subpoena is unlawful and in violation of Rule 3.4(a). Such conduct may also violate other rules, such as Rule 1.2(d) (counseling or assisting a client in criminal or fraudulent conduct) or the general misconduct proscriptions of Rule 8.4.
However, depending upon how the SJC interprets the term "unlawful" in conjunction both with the rule's prohibition on destruction of material having "potential evidentiary value" and its own case law, a lawyer who knows that litigation is pending (and thus that a document has potential evidentiary value) might be committing misconduct in destroying or advising a client who is a party to destroy a record even before a subpoena or discovery request issues. Given the language of the Fletcher and Keene cases identifying a party's duty to preserve evidence or potential evidence, it might be unlawful to destroy or recommend to a client that a document or other item be destroyed even if litigation is anticipated but not yet filed. At least one commentator suggests that Rule 3.4(a) mandates preservation of documents once a lawsuit is filed even if destruction is not a crime (and that to advise destruction is "unlawful") - and, further, that the rule "requires a lawyer who is consulted about existing evidence to consider the course of lawsuits that have not yet been, and may never be, filed." See 2 Hazard and Hodes, The Law of Lawyering ß 30.4 (3rd ed. 2003).
To address the problem of massive storage requirements, lawyers may wish to recommend to clients, particularly business clients, that they implement a legitimate and uniform policy on document retention and destruction and that they do so in advance of any known problems. Lawyers may also wish to consider instituting such procedures as to their own business records. (Lawyers' client files, again, are a separate issue.) If a document was routinely shredded or deleted as part of a standard practice as to certain types of items after a certain period of time, it is obviously less likely that a tribunal will find a violation.
On the other hand, if litigation is reasonably anticipated and relevant materials are destroyed, even when such items would otherwise be within the scope of an established document destruction policy, the tribunal is less likely to be forgiving. Lawyers may therefore wish to advise clients, and act themselves, to take steps to insure that evidence (including computer files and e-mail) is preserved whenever a government investigation is threatened or civil litigation looms.
Sanctions aside, bear in mind that the items that you or your client do not retain may well have been kept by someone else and will surface to be used against you - or that such materials may have helped your case. At the end of the day, erring on the side of caution in preserving documents not only protects lawyer and client from an array of possible penalties, but also acts to prevent embarrassment in courts of both law and public opinion.