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Media Alerts - Hallmark Cards, Inc. v. Murley - 8th Circuit
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February 22, 2013
  Hallmark Cards, Inc. v. Murley - 8th Circuit
Headline Eighth Circuit panel rules that a district court must issue explicit findings of bad faith and prejudice before giving an adverse inference instruction for spoliation of evidence

Area of Law Procedure

Issue(s) Presented May a federal district court instruct a jury that it may assume contents of destroyed files would have been adverse to the destroying party if the court does not first make an explicit finding that the destruction was willful?

Brief Summary Hallmark Cards, Inc. sued former employee Murley on a variety of commercial claims. Murley had been Hallmark's group vice-president of marketing from 1999 to 2002. Her position with the company had been eliminated in 2002 in a corporate restructuring. As part of the severance package, Murley agreed to various confidentiality and non-competition obligations.

In 2006, Murley worked on an assignment for Recycled Paper Greetings, and allegedly disclosed certain confidential Hallmark information at that time to that company. Hallmark found out about the disclosure in 2009 and sued Murley. Hallmark later learned in the course of the litigation that a copy of Hurley's computer hard drive had previously been made in 2007. Hallmark also learned that just prior to the copying of the drive, a number of documents had been deleted, and that those documents related to Hallmark. Hallmark concluded that Murley had deliberately destroyed the documents to hide the contents, and asked the district court in the litigation matter to give an adverse inference instruction to the jury.

The district court did ultimately give the jury the following instruction: "If you should find that a party willfully destroyed evidence in order to prevent its being presented in this trial, you may consider such destruction in determining what inferences to draw from the evidence or facts in this case. You may, but are not required to, assume that the contents of the files destroyed would have been adverse, or detrimental to the Defendant." The district court, however, did not make a specific finding that Murley had acted in bad faith or that Hallmark was prejudiced by the absence of the missing documents, before issuing the jury instruction.

The Eighth Circuit panel ruled that a district court "is required to make two findings before an adverse inference instruction is warranted: (1) 'there must be a finding of intentional destruction indicating a desire to suppress the truth,' and (2) '[t]here must be a finding of prejudice to the opposing party.'" The panel concluded that the district court had implicitly made the findings; so the question was whether the district court committed error by not expressly making them. The panel concluded that "prospectively" the findings must be explicit, but that the district court's error in making only implicit findings in the case before it was harmless.

The full text of the opinion may be found at http://www.ca8.uscourts.gov/opndir/13/1/112855P.pdf

Panel Circuit Judges Bye, Gruender, and Shepherd

Argument Date September 20, 2012

Date of Issued Opinion January 15, 2013

Docket Number No. 11-2855

Decided Affirmed in relevant part

Counsel Mark Barry Rosen for Appellant; John C. Aisenbrey for Appellee
Author of the Opinion Circuit Judge Bye

Case Alert Circuit Supervisor Bradley G. Clary, Clinical Professor of Law, University of Minnesota Law School

    Posted By: Bradley Clary @ 02/22/2013 10:44 AM     8th Circuit  

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