United States: Second Circuit Holds That Failure To Issue A "Litigation Hold" Will Not Result In Per Se Sanctions And Clarifies Title VII Liability And Damages

Chin v. Port Authority of New York & New Jersey,No. 10-cv-1904 (2d Cir. July 10, 2012): The Second Circuit Court of Appeals rejected case law holding that the failure to institute a "litigation hold" will per se result in sanctions. On cross-appeal, the defendant admitted that it did not issue a litigation hold following its receipt of an EEOC charge, resulting in the destruction of a plaintiff's promotion folder. However, the Second Circuit disagreed that this failure was per se gross negligence, thus explicitly overruling Judge Shira A. Scheindlin's prior decisions. The Second Circuit instead held that the failure to adopt good preservation practices is but "one factor" in the determination of discovery sanctions, emphasizing a "case-by-case approach" to determining whether to issue sanctions for failing to preserve documents.

The Second Circuit also held that it was reversible error to charge the jury on a "pattern or practice" theory of discrimination liability. The court declined to extend the "pattern or practice" theory to any non-class, private plaintiff because to do so would improperly shift the burden of proof to an employer to prove that the employer did not discriminate. But the court repeatedly emphasized that evidence of a "pattern or practice" of discrimination—"in the ordinary sense of those words, rather than in the technical sense describing a theory of liability for discrimination"—remains "highly relevant" in assessing disparate treatment or impact claims. The ruling held that neither private plaintiffs nor courts may convert such "pattern or practice" proof into a theory of liability. Finally, the Second Circuit held that the district judge had committed error by awarding back pay for discriminatory failures to promote occurring prior to the statute of limitations. The court held that a failure to promote is "by its very nature a discrete act," and thus the district judge had improperly applied the "continuing violations" theory to such evidence. Thus, the plaintiffs were barred from raising any failures to promote that occurred prior to statute of limitations or obtaining back pay for them.

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