eDiscovery Daily Blog

• December 5, 2019

In United States et al. v. Supervalu, Inc. et al., NO. 11-3290 (C.D. Ill. Nov. 18, 2019), Illinois District Judge Richard H. Mills, despite an email produced by the defendants with instructions to their pharmacies to destroy evidence, denied the relators’ motion for sanctions, stating: “Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.”

Case Background

In this case, the defendants produced in discovery a January 27, 2012 email from a pharmacy district manager for 33 Shop ‘n Save pharmacies, instructing those pharmacies to “throw away all your competitor’s price matching lists and get rid of all signs that say we match prices.” The email was sent seven days after the January 20, 2012 government agents’ visits to the defendants’ pharmacies, including one of the district manager’s pharmacies, five days after the manager learned of the visit by a Special Agent with the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), and three days after the defendants received a subpoena from the Government requesting documents regarding the price match program.

The relators further alleged it appeared that another district manager ordered the destruction of signage promoting the defendants’ price match program after visits by government agents and service of the HHS-OIG subpoena and also alleged the defendants waited until almost the end of discovery to produce the January 27, 2012 email.  As a result, they requested the entry of an Order imposing appropriate sanctions against the defendants for what they alleged was (1) Defendants’ failure to timely issue a litigation hold; (2) the intentional destruction of material evidence relating to defendants’ price match program; and (3) their subsequent efforts to conceal and obstruct discovery of their spoliation of evidence, including the wrongful withholding of material evidence of the spoliation until just days before the close of discovery in this case.

The defendants, in turn, claimed (1) they timely issued a litigation hold in this matter; (2) did not intentionally destroy material evidence; and (3) did not attempt to conceal and obstruct discovery of any alleged spoliation of evidence.  The Defendants claimed they issued three litigation holds: (1) one to individuals in the corporate business department on January 30, 2012; (2) one to all Pharmacy District Managers on February 20, 2012; and (3) one to the corporate marketing and advertising executives on March 15, 2012.  Alleging there were inconsistencies in both the number and timing of the litigation holds between defendant declarations, the relators asked the Court for an in camera review of the three litigation holds noted above.

Judge’s Ruling

Judge Mills, in noting that “A showing of bad faith—like destroying evidence to hide adverse information—is a prerequisite to imposing sanctions for missing evidence”, ruled as follows:

“The Court does not believe that an in camera review of the Defendants’ litigation holds is necessary at this time. At this time, the Court does not believe that sanctions are warranted based on the Defendants’ alleged failure to timely issue a litigation hold, their intentional destruction of evidence relating to the price match program, or their efforts to conceal and obstruct discovery of the spoliation of evidence. Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.

Ergo, the Relators’ motion for sanctions [d/e 205] is DENIED.”

So, what do you think?  Do the defendants’ actions seem to be in bad faith or was the Court’s ruling appropriate?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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