A party’s duty to preserve evidence arises when litigation is ‘reasonably anticipated’

Evidence preservation is a critical issue for attorneys and their clients. Failing to preserve evidence can result in monetary, evidentiary, and issues sanctions, up to case-killing terminating sanctions with a judge’s order imposing such sanctions reviewed and reversed only for “manifest abuse exceeding the bounds of reason.” Sabetian v. Exxon Mobil Corp., 57 Cal.App.5th 1054, 1084 (2020); Tucker v. Pac. Bell Mobile Servs., 186 Cal.App.4th 1548, 1560 (2010) (sanction orders only reversable when “’arbitrary, capricious, or whimsical….’”) (citation omitted).

Until recently, legal clarity on the details of the what, how and when of evidence preservation was unsettled. The Discovery Act contains no code or statute that expressly forbids evidence destruction or spoliation before a lawsuit is filed, and California courts disagreed on whether sanctions could result from failing to preserve evidence before an affirmative act like filing a lawsuit or serving discovery occurs. Compare Cedars-Sinai Med. Ctr. v. Superior Ct., 18 Cal.4th 1, 12 (1998) (“Destroying evidence in response to a discovery request after litigation has commenced would surely be a misuse of discovery…as would such destruction in anticipation of a discovery request.”) with New Albertsons, Inc. v. Superior Ct., 168 Cal.App.4th 1403, 1430-31 (2008) (describing Cedars’ pre-discovery destruction statement as dicta and holding that the “discovery statutes regulate the court’s power to impose sanctions…[and that] those statutory restrictions on the exercise of the court’s inherent sanctioning power are binding unless they materially impair the court’s ability to ensure the orderly administration of justice.”)

In an attempt to end this conflict and uncertainty, and set clear standards on when the duty to preserve evidence arises, the court of appeal in Victor Valley Union High School Dist. v. Superior Court, 91 Cal.App.5th 1121 (May 24, 2023) reviewed a trial court’s imposition of sanctions resulting from a school’s failure to preserve video evidence of an alleged student-on-student sexual assault.

Plaintiffs in Victor Valley alleged the school failed to properly supervise a minor student who the school agreed needed constant adult supervision because of his susceptibility to others and propensity to wander. Id. at 1133-34. During the school day, plaintiffs alleged other students lured the minor student into the restroom where he was then sexually assaulted. At the time of the alleged assault, there was no adult supervising the student. Plaintiffs contended that a security camera captured the involved students entering the bathroom together without any adult supervision. Ibid.

When teachers learned of the alleged assault they informed the assistant principal who – along with a school security guard – reviewed the video footage, confirmed it showed the involved students entering the bathroom, and wrote an incident report that was sent to the district’s risk manager. Id. at 1135. The assistant principal did not preserve the video evidence because he believed the security guard did. After 14 days, the video recording was automatically erased. Ibid.

When plaintiffs learned of the video’s destruction, they sought monetary and terminating sanctions for what they argued was the intentional destruction of critical evidence that severely prejudiced their ability to work up their case. Ibid. Defendant argued the video’s destruction was unintentional and protected by the safe-harbor provisions of Code of Civil Procedures section 2023.030(f), which prevents sanctions when the destruction of electronic evidence is the result of “the routine, good faith operation of an electronic information system.” Defendant further argued they had no duty to preserve the evidence because, at the time the video was reviewed, a potential lawsuit was a mere possibility. Ibid.

The trial court denied plaintiffs’ request for terminating sanction as it found the video’s destruction was negligent and not willful. The trial court, however, did order monetary, issue, and evidentiary sanctions that defendant argued amounted to terminating sanctions. Id. at 1136. The court of appeal granted defendant’s writ of mandate.

The Victor Valley court began with well understood principles of how impactful evidence destruction could be on “fairness and justice.” The court then teed up the primary issue by addressing when the duty to preserve evidence should arise as no discovery statute provided clear direction.

The court began with a detailed analysis of section 2023.030’s legislative history and concluded the when was when litigation was “reasonably anticipated.” Id. 1141-43. But when is that? The court found no answer in either the legislative history or California caselaw. Id. at 1142.

So, the court of appeal turned to federal courts for guidance and, after a thorough analysis, concluded that the duty to preserve evidence arises when “litigation is reasonably foreseeable,” which means litigation is “’probable’ or ‘likely’ to arise from a dispute or incident [citation], but not when there is no more than the ‘mere existence of a potential claim or the distant possibility of litigation.” Id. at 1149 (citations omitted). The court of appeal further held that the “reasonably foreseeable” standard “does not require that future litigation be ‘imminent [or] probable without significant contingencies,’ or even ‘certain.’” Ibid. (emphasis in original).

Made clear was that the duty to preserve evidence could arise before filing suit or serving discovery. But what should trial courts consider when faced with a sanctions motions alleging pre-lawsuit evidence destruction?

As the duty to preserve evidence begins “’somewhere between knowledge of the dispute and direct, specific threats of litigation,’” (id. at 1153 [citation omitted]), court should consider (1) the injury type and severity; (2) how often similar kinds of incidents lead to litigation; (3) the course of conduct between the parties, including past litigation or threatened litigation; and (4) what steps both parties took after the incident and before the loss of the evidence, including whether the defendant initiated an investigation into the incident. Ibid. (citing Bistrian v. Levi, 448 F.Supp.3d 454, 468 (E.D. Pa. 2020)).

The court of appeal then analyzed specific types of cases and discussed when the duty to preserve evidence could likely arise. In addressing slip-and-fall and prison incidents, such cases “predictably result in litigation,” but emphasized that fact, alone, would not be enough. Rather, it would be that type of case “combined with other circumstances” that could be enough for a defendant to reasonably anticipate litigation. Id. at 1153 (emphasis in original).

Turning to cases involving school districts and their heightened duty towards students, the court of appeal found that the reporting of student on student sexual assault, alone, “weighs heavily in favor of finding litigation is reasonably foreseeable….” Id. at 1154 and n.18 (citing federal cases for same).

Then, more broadly, the court of appeal addressed the reasonable foreseeability of litigation arising upon the creation of an incident report coupled with an internal evidence preservation policy, which demonstrates a party is actually preparing for litigation. Id. 1156.

In light of the specific facts, and its thorough review of federal caselaw, the court of appeal held that because litigation relating to the alleged sexual assault was reasonably foreseeable, the school district had a duty to preserve the at-issue video evidence. The matter was then remanded to trial court to consider a lesser form of sanctions.

The practical takeaway from Victor Valley is that, depending on several factors, the duty to preserve evidence can arise well in advance of a lawsuit. To ensure this duty is honored we should immediately send detailed evidence preservation letters to all potential adverse parties and simultaneously advise our clients of their preservation obligations so as to ensure that fairness and justice prevail.