The Difference Between Routine Document Destruction and Spoliation

When it comes to preserving or deleting documentation, consider the difference between routine destruction and spoliation. The key is whether there was a duty to preserve or if they were destroyed to conceal information.
By Steven A. Neeley
September 26, 2021

In today’s world, there is a tendency to believe that everything must be preserved forever. The common belief is that documents, emails, text messages, etc. cannot be deleted because doing so may be viewed as spoliation (i.e., intentionally destroying relevant evidence). A party guilty of spoliation can be sanctioned, which can include an adverse inference that the lost information would have helped the other side. But that does not mean that contractors have to preserve every conceivable piece of information or data under all circumstances. There are key differences between routine document destruction (when done before receiving notice of potential claims or litigation) and spoliation.

The Armed Services Board of Contract Appeals decision in Appeal of Sungjee Constr. Co., Ltd., ASBCA Nos. 62002 and 62170 (Mar. 23, 2021) provides a good reminder. There, Sungjee challenged its default termination under a construction contract at Osan Air Base in South Korea. Sungjee argued that the government denied it access to the site for 352 days (out of a 450-day performance period) by refusing to issue passes that were needed to access the base. The government argued that it had issued the passes, but it could not produce them to Sungjee in discovery because they had been destroyed as part of a routine document destruction policy. The base security force issued hard copy passes and entered the information in a biometric system. The government was able to produce the biometric system data but not the hard copy passes because they were destroyed each year.

Sungjee argued the government was guilty of spoliation and moved for sanctions. It asked the Board to draw an adverse inference that the passes would have shown that the government had not issued proper passes on a timely basis, which delayed Sungjee’s performance. The Board denied Sungjee’s motion for several reasons.

First, when the passes were destroyed, the government was not under a duty to preserve them so their destruction could not be spoliation. There are two ways the duty to preserve arises:

  1. a statutory, regulatory or contractual obligation to preserve documents for a specific period of time (e.g., FAR Subpart 4.7 and Subpart 4.8); or
  2. litigation is “reasonably foreseeable” and the party should know that the documents may be relevant to the litigation.

In the Sungjee case, the hard copy base passes were not “contract files” (which agencies must preserve) because the base security force was not a contracting party. Moreover, when the passes were destroyed, there was no reason to think that Sungjee would appeal its termination, so litigation was not “reasonably foreseeable.” Sungjee had not previously asserted an excusable or government delay and had even admitted fault for the delays on several occasions.

Even if the government did have a duty to preserve, the destruction of the passes did not warrant sanctions because the government did not destroy the documents in bad faith or with a “culpable state of mind.” In other words, the passes were destroyed “as a matter of routine policy,” not out of a desire to conceal evidence. The Board also found that Sungjee was not prejudiced because Sungjee could not offer any other evidence to support its argument that the destroyed passes would have supported its position: “If the government’s failure to issue needed passes was indeed the reason Sungjee could not timely perform, it seems highly unlikely that Sungjee would not carefully document this fact, so that at trial it could support its defense against the eventual termination for default with its own contemporaneous records.”

Although the Sungjee decision absolved the government from potential sanctions, its rationale applies with equal force to contractors. Spoliation is not a “gotcha” and sanctions should not be imposed just because data is deleted. The key is whether there was a duty to preserve and whether the documents or data were destroyed out of a desire to conceal the information. If they were, sanctions may be appropriate. But that does not mean contractors must preserve everything forever. Routine document deletion when there is no duty to preserve is appropriate and permissible.

by Steven A. Neeley

Steven A. Neeley is a Washington, D.C.-based partner with the law firm Husch Blackwell LLP. He focuses his litigation and arbitration practice on government contracts, renewable energy and construction projects.

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