What Evidence Spoliation Actually Costs: Sanctions, Case Law, and How to Prevent Them

Spoliation of evidence, the destruction, alteration, or failure to preserve relevant evidence, is one of the most expensive mistakes a legal team can make. Not because of the sanctions themselves, though those are severe, but because spoliation undermines the integrity of the case, shifts the court's perception of your client, and often transforms a defensible position into an indefensible one.

Under FRCP 37(e), amended in 2015, courts have broad discretion to impose sanctions when a party fails to take reasonable steps to preserve electronically stored information (ESI) that should have been preserved in anticipation of litigation. The sanctions range from allowing the jury to draw adverse inferences to striking pleadings and entering default judgment.

But the rule itself doesn't convey what spoliation actually looks like in practice. The cases do.

The Cases: What Spoliation Actually Cost

Zubulake v. UBS Warburg (S.D.N.Y. 2003–2005)

Laura Zubulake, an equities trader at UBS, filed a gender discrimination suit. During discovery, UBS failed to preserve relevant emails despite multiple litigation hold notices. Key emails were deleted by UBS employees, backup tapes were recycled, and the company's in-house counsel failed to ensure compliance with the preservation obligation.

Judge Shira Scheindlin issued a series of opinions (Zubulake I through V) that became the foundational case law for electronic evidence preservation. The court found that UBS acted with sufficient culpability to warrant an adverse inference instruction, telling the jury it could infer that the destroyed emails would have been favorable to Zubulake.

The result: a $29.3 million jury verdict. The adverse inference instruction was widely cited as the tipping point.

Zubulake established that the duty to preserve arises when litigation is reasonably anticipated, and that counsel has an affirmative obligation to ensure relevant evidence is identified, preserved, and collected. The failure was not that emails were lost; it was that UBS did not implement a reasonable preservation process.

Allied Concrete Co. v. Lester (Va. 2011)

After Isaiah Lester filed a wrongful death suit against Allied Concrete, his attorney instructed him to "clean up" his Facebook page. Lester deleted photos showing him socializing and appearing happy after his wife's death, photos that would have contradicted his claim of emotional distress.

Allied Concrete discovered the deletions through metadata and filed a spoliation motion. The court found that the deletion was intentional and directed by counsel. Sanctions included $542,000 in monetary penalties plus $180,000 in attorney fees. The attorney who directed the deletion was separately sanctioned $542,000 by the Virginia State Bar and ultimately had his license suspended.

Spoliation sanctions do not just affect the client. They can end the attorney's career.

Guarisco v. Boh Bros. Construction Co. (E.D. La. 2009)

In this personal injury case from the Eastern District of Louisiana, a party produced a photograph that had been digitally altered. The alteration was discovered during expert analysis, and the court imposed sanctions for evidence tampering.

Guarisco is instructive because the alteration was subtle, not a fabrication from whole cloth, but a modification of a real photograph. The court's response made clear that any alteration of evidence, regardless of degree, triggers the spoliation framework. A SHA-256 hash computed at the time of collection proves mathematically that the file has not been modified, making this scenario impossible to conceal.

State v. Casey Anthony (Fla. 2011)

The Casey Anthony trial became a national case study in digital evidence challenges. The prosecution's digital forensic methodology was challenged extensively, including gaps in the chain of custody for computer evidence and questions about the reliability of forensic tools used to analyze search history.

While the spoliation issues in Casey Anthony were different in kind from the intentional destruction in Zubulake or Allied Concrete, the case demonstrated that authentication gaps in digital evidence can undermine an entire prosecution. The defense successfully challenged the reliability of the forensic process itself, not the evidence, but the system used to collect and analyze it.

FRE 902(13) certifications address this vulnerability directly: by documenting the process contemporaneously, rather than reconstructing it at trial, the proponent eliminates the gap that the defense exploited in Casey Anthony.

Victor Stanley, Inc. v. Creative Pipe, Inc. (D. Md. 2010)

Judge Paul Grimm, the same judge who authored the Lorraine opinion on digital evidence authentication, found that the defendant had engaged in systematic destruction of relevant evidence. The sanctions included an adverse inference instruction and an award of costs.

What made Victor Stanley notable was the court's detailed analysis of what constitutes "reasonable steps" to preserve ESI. The court emphasized that preservation requires more than a general instruction to employees; it requires a systematic process that identifies relevant custodians, places legal holds on their data, suspends routine deletion policies, and monitors compliance.

The Common Thread: Process Failure

Across these cases, the sanctioned party did not set out to commit fraud. In most instances, the destruction resulted from a failure of process: no litigation hold was issued, or the hold was issued but not enforced, or the hold was enforced but incomplete.

Spoliation sanctions are almost always preventable. They result from the absence of a system, not from a deliberate decision to destroy evidence.

Defensible preservation requires:

1. Issue litigation holds immediately upon reasonable anticipation of litigation
2. Identify all relevant custodians and data sources
3. Suspend automatic deletion policies for relevant data
4. Use systems that prevent deletion of held evidence (not just flag it)
5. Document every step of the preservation process
6. Monitor compliance and follow up with custodians

FRCP 37(e): The Current Framework

The 2015 amendment to Rule 37(e) clarified the sanctions framework for ESI spoliation:

37(e)(1): If ESI that should have been preserved is lost because a party failed to take reasonable steps, and the loss cannot be cured by additional discovery, the court may order measures "no greater than necessary" to cure the prejudice. This includes allowing additional discovery, requiring the party to provide information about the lost ESI, or giving the jury additional instructions.

37(e)(2): If the court finds that the party "acted with the intent to deprive another party of the information's use in the litigation," the court may presume the information was unfavorable, instruct the jury to make that presumption, or dismiss the action or enter default judgment.

The distinction between 37(e)(1) and 37(e)(2) is intent. Negligent spoliation triggers curative measures. Intentional spoliation triggers the harshest sanctions available, including case-dispositive remedies.

Even under 37(e)(1), the curative measures can be significant. An instruction that tells the jury "the defendant failed to preserve relevant evidence, and you may consider that failure" can shift the trial's trajectory substantially.

What Reasonable Preservation Looks Like

A defensible preservation process for digital evidence includes:

Immediate litigation hold. As soon as litigation is reasonably anticipated, a formal written hold notice should be issued to all relevant custodians. The notice should identify the subject matter, the types of data to preserve, and the custodian's obligations.

System-level enforcement. The hold should be enforced at the system level, not just through instructions to individuals. This means configuring the evidence management system to prevent deletion of held files. A verbal instruction to "don't delete anything" is not a litigation hold.

Continuous chain of custody. Every access to preserved evidence should be logged with the accessor's identity, timestamp, IP address, and the action taken. If the evidence is later challenged, the chain of custody log provides a complete record of every interaction.

Integrity verification. Cryptographic hashing (SHA-256) at the point of preservation establishes a baseline. Any subsequent verification that produces the same hash proves the evidence has not been altered. Any verification that produces a different hash identifies tampering immediately.

Documentation. The preservation process itself should be documented: who issued the hold, when, to whom, what systems were preserved, and how compliance was monitored. This documentation is the proof that reasonable steps were taken, which is the threshold under 37(e).

The Cost of Prevention vs. the Cost of Failure

A litigation hold system costs, at most, a few hundred dollars per month. An evidence management platform with preservation capabilities, chain of custody logging, and integrity verification runs $149 to $499 per month depending on the firm's needs.

A single spoliation sanction starts at five figures and scales rapidly. Zubulake resulted in a $29.3 million verdict that the adverse inference instruction made possible. Allied Concrete cost $722,000 in sanctions alone, plus the attorney's career. Even the "minor" sanctions, such as additional discovery costs and curative instructions, add $10,000 to $50,000 in attorney time to defend.

One foundation witness to authenticate evidence that should have been self-authenticating costs $3,000 to $5,000 per appearance.

Conclusion

Spoliation sanctions are documented, recurring consequences of process failures that are entirely preventable. Systematic preservation, including litigation holds, chain of custody logging, integrity verification, and documented compliance, addresses the root cause of every case reviewed here. The rules are clear. The case law is clear.

For body camera footage, which defense attorneys receive with no chain of custody, the preservation challenge is immediate. See our guide on body cam footage chain of custody for a practical workflow applicable from the moment discovery is received. And once preservation is in place, authentication is the next step: FRE 902(13) certification eliminates the need for a foundation witness entirely.