Background
With trial six weeks away, plaintiffs moved for sanctions based on alleged spoliation and asked the Delaware Court of Chancery to hold a pretrial hearing and impose adverse inferences. They alleged that a defendant’s trustee failed to disable cellphone auto-delete settings, failed to preserve data during phone upgrades, and deleted text messages.
The motion sought merits-based sanctions before trial. Under Court of Chancery Rule 37(e)(2), an adverse inference requires a finding that the party acted recklessly or intended to deprive another party of the information’s use in the litigation.
The Court’s Holding
Vice Chancellor Will denied the request for a pretrial hearing and deferred resolution of the sanctions motion until after trial. The court concluded that the paper record did not permit it to determine whether the alleged conduct was negligent, reckless, or intentional.
The complete trial record will allow the court to assess the trustee’s state of mind, any prejudice from the alleged loss of evidence, and the appropriate scope of any remedy. Because this is a bench trial, the court need not give itself preliminary evidentiary instructions; it can decide whether an adverse inference or burden shift is warranted when it decides the merits.
Key Takeaways
- An adverse inference under Rule 37(e)(2) requires reckless or intentional destruction, not mere negligence.
- Where spoliation turns on credibility and state of mind, the Court of Chancery may defer sanctions until it has heard trial evidence.
- The parties must present evidence on the alleged spoliation at trial and address requested relief in post-trial briefing.
Why It Matters
The decision reinforces the Court of Chancery’s preference not to let pretrial disputes over allegedly lost evidence displace adjudication of the merits. It also recognizes that, in a bench trial, the court can evaluate spoliation alongside the full evidentiary record and tailor any remedy to culpability and prejudice.