## Facts

- Owners and operators of a power plant sued the generator’s designer and supplier over alleged defects and related contract and warranty claims.
- The case proceeded in federal court under diversity jurisdiction.
- A jury trial began in January 2004 but ended in a mistrial after plaintiffs produced a previously undisclosed expert report and related materials during trial, which the court found prejudiced defendant’s expert preparation and cross-examination.
- After the mistrial, defendant moved for an order directing plaintiffs to preserve physical items, documents, software, and electronically stored information (ESI).
- Plaintiffs responded with a counter-motion seeking a corresponding preservation order directed at defendant.
- Defendant moved to strike plaintiffs’ counter-motion.

## Issues

1. When should a federal district court, exercising inherent authority, issue an order directing preservation of documents, things, and ESI in the absence of a clear showing of ongoing or imminent destruction?
2. Whether defendant established a concrete risk of loss or alteration of relevant evidence sufficient to justify a preservation order against plaintiffs.
3. Whether plaintiffs established a concrete risk of loss or alteration of relevant evidence sufficient to justify a preservation order against defendant.
4. Whether plaintiffs’ counter-motion should be stricken.

## Decision

- The court denied defendant’s motion for a preservation order.
- The court denied plaintiffs’ counter-motion for a preservation order.
- The court denied defendant’s motion to strike as moot.
- The court applied a three-part standard and concluded neither party met the required showing on the record presented.

## Legal Principles

- A preservation order is an exercise of the court’s inherent authority to manage litigation and prevent spoliation, but it is not automatic and may impose significant burdens.
- A court may consider, at minimum:
  - whether the underlying action is properly before the court;
  - whether the movant shows a significant, non-speculative concern that relevant evidence will be lost, destroyed, or materially altered absent an order; and
  - whether the requested preservation obligations are reasonable and proportional given the amount in controversy, party resources, and the importance of the evidence.
- Past discovery failures, without a concrete basis to believe evidence is currently at risk, do not by themselves justify broad preservation mandates.
- Preservation orders should not substitute for ordinary discovery tools and rule-based remedies (including case-management measures and sanctions) where those mechanisms can address prejudice.

## Conclusion

The court refused to impose broad preservation obligations on either side because neither demonstrated a concrete and proportionate need showing that relevant evidence faced a real risk of loss, destruction, or material alteration, and existing discovery remedies were adequate on the record.


Capricorn Power Co. v. Siemens Westinghouse Power Corp., 220 F.R.D. 429 (W.D. Pa. 2004)