If, hypothetically, your business were devising a business strategy that could, if successful, severely impact if not destroy another business, should you “reasonably foresee” litigation at the outset of implementing that business strategy?
A person must preserve documents that the person knows or should know will be discoverable in “reasonably foreseeable” litigation. In the hypothetical, when does the potential for future litigation rise to the level of reasonably foreseeable litigation?
This scenario has come up in the Fair Isaac vs. Experian, Trans Union, Vantage Score trial currently before U.S. District Court Judge Ann Montgomery. Fair Isaac would have liked to offer document destruction into evidence, suggesting that the defendants embarked on a strategy which they knew and foresaw would ultimately end up in litigation but, along the way, deleted and/or destroyed evidence. (Presumably, Judge Montgomery rejected the proposed evidence because today Fair Isaac submitted its Rule 103 Offer of Proof, which is what one does to preserve for appeal the rejection of evidence at trial. (See below.))
The U.S. Court of Appeals for the Eighth Circuit has clearly grappled with this issue. Consider Morris v. Union Pacific Railroad Co., 373 F.3d 896 (8th Cir. 2004) and Stevenson v. Union Pacific Railroad Co., 354 F.3d 739 (8th Cir. 2004) (upholding sanctions for destruction of evidence and reversing adverse inference instruction for destruction of evidence, same year, same defendant). What might be a challenge for Fair Isaac is the Eighth Circuit’s rather narrow requirement that the party seeking sanctions prove “intent to destroy evidence.” Such an intent could only be formed when there is actual litigation or truly imminent litigation, not when it is one of several future scenarios one might consider as possible.
Fair Isaac Offer of Proof