When Missing Emails Become Spoliation in Minnesota

What makes missing emails spoliation in Minnesota?

Missing email falls under Minnesota’s spoliation rule in state court when it “should have been preserved in the anticipation or conduct of litigation,” was lost “because a party failed to take reasonable steps to preserve it,” and “cannot be restored or replaced through additional discovery.” Minn. R. Civ. P. 37.05. All three conditions must be present, and they still do not produce a sanction by themselves. The court acts under Rule 37.05(a) only “upon finding prejudice to another party from loss of the information,” and under Rule 37.05(b) “only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation.” The advisory committee comment to the 2018 amendment says: “In the absence of prejudice, the rule does not authorize the imposition of sanctions for loss of information.”

The Minnesota Supreme Court defines spoliation as the “failure to preserve property for another’s use as evidence in pending or future litigation.” Federated Mutual Insurance Co. v. Litchfield Precision Components, Inc., 456 N.W.2d 434 (Minn. 1990) (quoting a California decision). Email fits that definition easily, because a business conversation often exists only in email, and internal emails often become evidence about what the company knew and when.

Rule 37.05 applies to “electronically stored information,” the term the Minnesota Rules of Civil Procedure use for email, texts, and other digital records. The rule was rewritten effective July 1, 2018. Its three conditions mean that a missing email is not automatically a problem. An email deleted before any dispute was foreseeable, or one that a recipient still has, does not meet the rule. The risk lies in email that disappears after the company should have been holding on to it.

When does a company’s duty to preserve email begin?

The duty to preserve begins before a lawsuit is filed. The Minnesota Supreme Court has said it applies “whenever a party knows or should know that litigation is reasonably foreseeable,” and that “Breach of the duty to preserve evidence once such a duty arises may be sanctioned, under a court’s inherent authority, as spoliation.” Miller v. Lankow, 801 N.W.2d 120 (Minn. 2011).

No rule sets a number of days. The question is when your company knew, or should have known, that a lawsuit was coming. Events that may put a company on notice include:

1. A demand letter or a lawyer’s letter threatening suit.
2. A letter asking your company to preserve documents.
3. An employee complaint, a customer dispute, or a contract breach that both sides are treating as a claim.
4. Your own decision to pursue a claim against someone else.

The duty runs both ways. A company that plans to sue has the same obligation as a company expecting to be sued. In Miller, the court reaffirmed “our rule that custodial parties have a duty to preserve relevant evidence for use in litigation.” The same duty applies when the trigger is an internal matter; see preserving evidence during an internal investigation.

How do auto-delete settings and departed employees’ accounts create spoliation risk?

Email often goes missing through routine settings that keep running after the duty to preserve has begun: automatic deletion, mailbox size limits, and the deletion or reassignment of a former employee’s account. Under Minn. R. Civ. P. 37.05, the question is whether the company took “reasonable steps to preserve it.”

A retention policy that deletes email on a schedule is common in ordinary operations. The trouble starts when nobody turns it off for the people and dates involved in a dispute. The same is true when an employee leaves, IT closes the account to save a license, and that employee turns out to be the person who handled the deal now in dispute. The legal hold obligations for departed employees deserve their own checklist for that reason.

Preservation questions usually start with control rather than ownership. Whose name is on the mailbox and who controls the system are different facts, and the second one tends to decide who must act. I have advised a compliance manager whose IT department declined to preserve two former executives’ mailboxes under a litigation hold, pointing to an internal approval policy. In that situation, I recommended getting the refusal and the policy behind it in writing and putting the company’s defense attorney on notice of it. A consequence under Rule 37.05 falls on the party to the lawsuit, which is the company, not the department that hesitated.

How can lost emails be restored or replaced before sanctions apply?

Rule 37.05 applies only when the lost email “cannot be restored or replaced through additional discovery.” Minn. R. Civ. P. 37.05. If the same messages can be found somewhere else, the rule’s remedies do not apply, so the first response to missing email should be a search for other copies.

Email is rarely stored in only one place. Common sources include:

• the recipients’ mailboxes, inside and outside the company;
• other employees who were copied or forwarded the message;
• server or cloud backups and archives;
• phones, tablets, and laptops that synced the account;
• the email provider’s retention or recovery tools.

The advisory committee comment to the 2018 amendment, which guides how the rule is read but is not itself the rule, says that the rule “looks to ameliorating any prejudice by allowing discovery to restore or replace the missing information. This might be accomplished by locating alternate copies of the information, or reconstructing backed up copies.”

Backups can be expensive to search. Minn. R. Civ. P. 26.02(b)(2) provides that “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” Identifying a source does not end the question: “On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost.” Even after that showing, “the court may nonetheless order discovery from such sources if the requesting party shows good cause and proportionality.” For how these requests fit into a case as a whole, see discovery for a Minnesota business defendant.

What can a Minnesota court do when emails are lost through carelessness?

When lost email harms the other side and cannot be replaced, the court “upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice.” Minn. R. Civ. P. 37.05(a). The remedy is sized to the harm, and no finding of bad intent is needed for it.

The advisory committee comment to the 2018 amendment says that “Most often, this would be an order precluding evidence or limiting claims or defenses affected by the missing ESI.” That can be decisive. In Patton v. Newmar Corp., 538 N.W.2d 116 (Minn. 1995), the motor home at the center of a product claim was lost or destroyed before the lawsuit began. When the defendant asked to inspect it, the motor home’s location was not known, and the components the plaintiffs’ expert had removed and retained had been lost. The trial court excluded the expert’s testimony and the evidence derived from his inspection. Without it, the plaintiffs could not make their case, and the Minnesota Supreme Court reinstated summary judgment against them.

Patton involved physical evidence. Its test weighs “the nature of the item lost” against the claims asserted, along with “the potential for remediation of the prejudice.” In Miller, the court restated the rule that “even when a breach of the duty to preserve evidence is not done in bad faith, the district court must attempt to remedy any prejudice that occurs as a result of the destruction of the evidence.”

When can a court presume the missing emails were unfavorable?

For lost email, the most serious remedies are available “only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation.” Minn. R. Civ. P. 37.05(b). With that finding, the court may presume the email was unfavorable, tell the jury to do so, or end the case.

The three remedies in Rule 37.05(b) are:

1. “presume that the lost information was unfavorable to the party;”
2. “instruct the jury that it may or must presume the information was unfavorable to the party; or”
3. “dismiss the action or enter a default judgment.”

Older Minnesota decisions allowed an unfavorable inference without intent. In Wajda v. Kingsbury, 652 N.W.2d 856 (Minn. App. 2002), a city reused its police dispatch tapes under a standing policy, and the Minnesota Court of Appeals affirmed a jury instruction permitting an unfavorable inference, stating that “The law in Minnesota is that spoliation of evidence need not be intentional to warrant sanctions.” The court relied on the city’s exclusive control of the tapes, testimony that a recording likely existed, and the recording’s importance to a central issue. Wajda was decided before Rule 37.05 existed. For lost electronically stored information today, the rule’s text ties a presumption or a jury instruction to a finding of intent to deprive.

The timing of deletions, who ran them, and what the company knew when they ran are facts the other side can use to argue intent. A deletion made the week after a demand letter arrived is one such fact.

How should a company preserve email once a dispute is foreseeable?

Once a lawsuit is reasonably foreseeable, the company should stop automatic deletion for the people and time period involved, send a written hold, and keep the accounts of departing employees intact. Minn. R. Civ. P. 37.05 asks whether email was lost “because a party failed to take reasonable steps to preserve it.” The steps below are my recommendations aimed at that standard, in order:

1. Identify the people. List everyone who sent or received email about the dispute, including former employees and outside contractors using company accounts.
2. Suspend deletion. Have IT turn off automatic deletion, archiving purges, and mailbox limits for those accounts. Written confirmation of this change is the first thing to get, because it is the one step that cannot be repaired after the fact.
3. Send a written hold. A legal hold notice should tell each person what to keep, including texts and messages on personal phones used for business.
4. Freeze departing accounts. When someone on the list leaves, keep the mailbox and devices instead of deleting or reassigning them.
5. Document the steps. Keep a dated record of who was notified and what IT changed, because reasonableness is judged later from that record.

Once the case is filed, preservation becomes a required topic. Under Minn. R. Civ. P. 26.06(b), the parties must “discuss any issues about preserving discoverable information; and develop a proposed discovery plan,” and the plan must state their views on “any issues about disclosure, discovery, or preservation of electronically stored information.”

Miller set a notice rule, under the court’s inherent authority, for physical evidence (removed stucco) that a party with a legitimate need intended to destroy. For a party in that position, the court wrote: “A meeting or a letter indicating the time and nature of any action likely to lead to destruction of the evidence, and offering a full and fair opportunity to inspect will usually be sufficient.” The same decision says notice does not excuse destruction “without a legitimate need to do so, or destroys evidence in bad faith,” and that its “decision today does not deal with the situation where evidence is destroyed unintentionally.”

What can a company do when the other side’s emails go missing?

When the opposing party cannot produce emails it should have kept, your company raises the problem by motion in the same lawsuit and asks the court for a remedy under Minn. R. Civ. P. 37.05. Expect the court to ask first whether the email can be restored or replaced, and then whether its loss prejudiced you.

A motion is stronger when it is built in this order:

1. Request the email. Minn. R. Civ. P. 34.01 lets a party request “any designated documents or electronically stored information,” so a precise request creates the record that the email is missing.
2. Look for other copies. Your own employees, third parties who received the messages, and the opponent’s backups may hold them. If they do, the rule’s remedies may not apply.
3. Show what the missing email would have addressed. Prejudice is the test under Rule 37.05(a), so connect the gap to a claim or defense.
4. Gather evidence of intent, if any. The presumption, jury instruction, and dismissal remedies in Rule 37.05(b) require a finding of intent to deprive.

If email is disappearing during the case, the court can be asked to act before more is lost; see asking for a preservation order, and if the opponent will not search or produce, a motion to compel. A separate damages lawsuit for the lost evidence is not the usual path, because the Minnesota Supreme Court in Federated declined to create a spoliation tort on the record before it, stating that “Creating a new tort is a function properly reserved for the supreme court based upon appropriate facts and record.”

Missing email turns into a litigation problem at a predictable point: after a dispute became foreseeable and before anyone turned off deletion. Minnesota’s rule asks whether the company took reasonable steps, whether the email can be found elsewhere, whether its loss caused prejudice, and whether anyone intended to deprive the other side of it. A company that stops deletion early, writes down what it did, and searches for other copies keeps the problem small. For more on how Aaron Hall handles business disputes, see the Minnesota litigation practice page. If you would like a second set of eyes on a preservation question or on email the other side cannot produce, email aaron@aaronhall.com with a brief description of the situation.