When is the Destruction of Evidence Spoliation?
The preservation of evidence is critical for a fair trial or appeal, but what happens when the evidence is destroyed? Spoliation of evidence occurs when either the defendants or plaintiffs suspect or uncover that the other party has deliberately, negligently or accidentally destroyed evidence. Spoliated evidence can include physical objects, photographs, documents or electronically stored information (ESI). It is illegal to destroy or alter evidence for the purposes of influencing a trial. When spoliation occurs, the responsible party may be held accountable through a variety of different sanctions. Those sanctions vary greatly from jurisdiction to jurisdiction. Destruction of evidence can occur before or once a case is filed, but when does destruction of evidence become spoliation?
Armed Forces Board of Contract Appeals (ASBCA) 62002 and 62170
Decision issued March 23, 2021
Sungjee Construction Company Ltd. (Sungjee) was contracted by the United States Air Force (Air Force) for repair of officer dormitory building No. 929 located at Osan Air Base, Republic of Korea. Sungjee began contract work on the dormitories, however, the Air Force terminated the task order on December 20, 2018, for default.
In the original protest, Sungjee appealed the contract officer’s termination of the contract for default. On appeal, Sungjee alleged the government refused to issues passes the contractors needed to perform the work for the total 352 contracted days. Sungjees’ defense relied in part on being able to prove the government hindered access to the worksite. Sungjee sought the pass applications it submitted to the Air Force from August 2016 to August 2018.
The office responsible for issuing passes on Osan Air Base was the 51st Fighter Wing Security Forces (Wing Security Forces), which were located on-site. During discovery, Sungjee learned the Air Force could not produce pass-related documents. The Air Force explained it destroyed those passes in January 2019, two months before Sungjee filed its appeal at the Armed Forces Board of Contract Appeals (ASBCA). The Air Force stated it was standard practice for the Wing Security Forces to destroy pass requests and issued passes no later than one year from when the passes were entered into the squadron’s database. The only information the Air Force had to the relevant period was the biometric data showing which personnel had access to the facility.
On August 4, 2020, Sungjee filed a motion for sanctions against the Air Force for the spoliation of evidence. In its motion, Sungjee argued the Government knew, or should have known, about possible litigation in December 2018, following the Air Force’s termination for default of Sungjee’s contract. The Air Force replied that the soonest it could have known about the litigation was March 2019 when Sungjee filed its bid protest.
In its legal arguments, Sungjee argued the duty to preserve records arises in two ways. First, a duty arises when a statute or application requires the records be maintained for a specific period of time. On this point, Sungjee argued FAR Part 4.805; Storage, Handling, and Contract Files; required the retention of construction contract documents worth more than $2000 for six years and three months after final payment. Secondly, the duty to preserve records is triggered when a party knows, or should have known, that records may be relevant to future litigation. Sungjee argued litigation was foreseeable when the Air Force issued its Notice of Termination on December 20, 2018.
The Government argued the Wing Security Forces’ destruction of those documents was done as a regular course of business. The records custodian, technical Sgt. Hutchinson, asserted that if passes for personnel “were no longer required, expired, or that the business relationship is terminated, pass-related documents would have been destroyed during the annual review in January 2019.”
In its sanctions motion, Sungjee also asked the ASBCA for an adverse inference against the Air Force. An adverse inference is a legal inference made from the party’s silence or the absence of requested evidence. For example, as a sanction for spoliation of evidence, the ASBCA could draw an inference that the evidence contained in the destroyed documents would have been unfavorable towards the Air Force. In this case, “namely that the board find that the documents that no longer exist would have supported appellant’s position that the government did not issue the passes that were needed by appellant to timely complete the work on the project.” The Air Force responded to this request by stating that a dispositive adverse inference required a finding of bad faith.
ASBCA listed three elements necessary for proving spoliation: “(1) the party having control over the evidence had an obligation to preserve it when it was destroyed or altered; (2) the destruction or loss was accompanied by a “culpable state of mind;” and (3) the evidence that was destroyed or altered was relevant to the claims or defenses of the party that sought the discovery of the evidence, to the extent that a reasonable factfinder could conclude that the evidence would have supported the claims or defenses of the party that sought it.”
The ASBCA Administrative Law Judge (ALJ) further commented the third element “is often cast in terms of prejudice,” and it “must be shown that the requesting party was prejudiced by the loss of evidence.” Relating to the issue of a dispositive sanction, the ASBCA agreed with the Air Force that this required a showing of bad faith:
To make a determination of bad faith, the court must find that the spoliation party intentionally destroyed documents that it knew would be important or useful to its opponent, and the fundamental element of bad faith spoliation is “advantage-seeking behavior by the party with superior access to information necessary for the proper administration of justice.”
The ASBCA concluded the pass-related documents Sungjee sought in relation to its appeal were destroyed under the current document retention policy of the Wing Security Forces office in January 2019. It further found the longer retention policies Sungjee cited did not apply to those pass-related documents. The ASBCA did not find that a Notice of Termination for Default was sufficient to trigger the agency's expectation of foreseeable litigation. Furthermore, the ASBCA retorted Sungjee did not identify or establish, in its first or second sanction motion, how the Government’s destruction of pass-related documents violated either standard.
If a company or contractor is anticipating appealing a contracting officer’s final decision, it would be wise to send out a “preservation of evidence” notice as soon as possible. When Sungjee’s original contract was terminated due to default, Sungjee should have sent out a “preservation of evidence” notice to the Air Force. This notice would have requested that certain documents, ESI and data be preserved in anticipation of future litigation. Since Sungjee did not send out this notice, any evidence destroyed as a result of standard operating procedures before the original bid protest could not be considered spoliated.