## Facts

- A Union Pacific freight train collided with Frank and Mary Stevenson’s vehicle at a highway grade crossing in Vanndale, Arkansas on November 6, 1998.
- Mary Stevenson died; Frank Stevenson suffered serious injuries and had no memory of the collision.
- Frank Stevenson and Mary Stevenson’s estate filed a diversity negligence action against Union Pacific; Operation Lifesaver, Inc. was later added and then dismissed for failure to state a claim.
- The district court granted partial summary judgment to Union Pacific on certain negligence theories, including claims tied to train speed.
- Plaintiffs sought spoliation sanctions for destruction of (1) an audio recording of crew–dispatcher communications near the time of the collision and (2) track-maintenance records related to the crossing and track condition.
- Union Pacific asserted the materials were destroyed under routine retention practices (re-use of audio tapes and a one-year retention period for certain maintenance documents).
- After an evidentiary hearing, the district court imposed sanctions, including a permissive adverse-inference instruction and an award of costs and attorneys’ fees; it also barred Union Pacific from explaining its retention practices to the jury.
- A jury found for plaintiffs on negligence. Union Pacific appealed the sanctions and related rulings; plaintiffs cross-appealed adverse rulings on summary judgment and dismissal of Operation Lifesaver.
- While the appeal was pending, Union Pacific satisfied the judgment for Mary Stevenson’s estate, mooting that portion of the appeal.

## Issues

1. Whether the district court abused its discretion by imposing spoliation sanctions and a permissive adverse-inference instruction for destruction of the audio recording.
2. Whether the district court abused its discretion by imposing an adverse-inference instruction for track-maintenance records destroyed under a routine retention policy before litigation began, without a sufficient showing of bad faith.
3. Whether the district court erred by categorically barring Union Pacific from rebutting the permissive adverse inference by presenting evidence of its retention policies and reasons for the destruction.
4. Whether attorneys’ fees were a permissible spoliation sanction and, if so, what limits applied.

## Decision

- The court affirmed the spoliation sanction and adverse-inference instruction regarding the destroyed audio recording.
- The court reversed, in part, the adverse-inference sanction tied to track-maintenance records destroyed pre-litigation under a routine retention policy, absent an adequate showing of bad faith.
- The court held that sanctions were potentially available for relevant materials destroyed after suit commenced (when preservation duties were clear and discovery rules applied).
- The court held it was error to prevent Union Pacific from offering rebuttal evidence to counter a permissive adverse inference, and that the exclusion wrongly prejudiced the defense.
- The court approved fee-shifting as a spoliation remedy to the extent the fees were tied to prejudice and to expenses caused by the spoliation dispute.
- The judgment was affirmed in part, reversed in part, and remanded for a new trial; the cross-appeal issues were affirmed.

## Legal Principles

- An adverse-inference instruction imposed under a court’s inherent authority generally requires a showing of bad faith—intentional destruction reflecting an effort to suppress the truth—rather than mere routine disposal.
- Routine destruction consistent with a document-retention policy, by itself, does not justify an adverse inference absent proof of bad faith, particularly when destruction occurs before litigation begins.
- When litigation is reasonably foreseeable, destruction of uniquely relevant evidence may support a bad-faith finding and spoliation sanctions if the loss prejudices the opposing party.
- A permissive adverse-inference instruction must allow the affected party a fair opportunity to present reasonable rebuttal evidence explaining the loss or destruction.
- Attorneys’ fees may be awarded as a spoliation sanction when supported by a showing of prejudice and limited to costs incurred because of the spoliation and related proceedings.

## Conclusion

The Eighth Circuit upheld sanctions for destruction of a highly relevant audio recording when litigation was foreseeable, but limited adverse-inference sanctions for pre-suit destruction of maintenance records absent bad faith, and ordered a new trial because the district court both overreached in its spoliation instructions and improperly barred Union Pacific from rebutting a permissive adverse inference.


Stevenson v. Union Pac. R.R. Co., 354 F.3d 739 (8th Cir. 2004)