United States District Court, S.D. Mississippi, Northern Division
P. JORDAN IIIUNITED STATES DISTRICT JUDGE
tax-fraud matter is before the Court on Defendant Jeffrey C.
Randall's Motion to Dismiss or, Alternatively, in Limine
to Exclude Evidence and Testimony . Because he fails to
show both the Government's control over specific evidence
and bad faith, the motion is denied.
Court previously set forth the events leading up to this
point. As such, the facts described in the Orders denying
Randall's request for interrogatories  and an
evidentiary hearing  are fully incorporated herein. But
the Court does offer the following brief summary.
was indicted on September 1, 2015, for two counts of
income-tax fraud and one count of conspiring to defraud the
United States. Indictment  ¶¶ 6(F), 7, 8. On
April 18, 2016, Randall moved to dismiss the indictment, or
in the alternative, exclude testimony by IRS agents and his
now convicted tax preparer Lynn Allen Floyd . He styled
these requests as spoliation sanctions, contending that the
IRS failed to obtain and/or preserve evidence related to the
tax returns at issue. Randall timely filed his Memorandum of
Authorities  in support of his motion on December 29,
2016; the Government responded , and Randall replied
. The Court, being fully advised in the premises, is
prepared to rule.
party's duty to preserve evidence comes into being when
the party has notice that the evidence is relevant . . . or
should have known that the evidence may be relevant.”
Guzman v. Jones, 804 F.3d 707, 713 (5th Cir. 2015).
The “destruction or the significant and meaningful
alteration of such evidence” is termed
“spoliation.” Id. (quoting Rimkus
Consulting Grp., Inc. v. Cammarata, 688 F.Supp.2d 598,
612 (S.D. Tex. 2010)); see generally Rimkus, 688
F.Supp.2d at 607 (Rosenthal, J) (setting out the analytical
issues of spoliation sanctions); Pension Comm. of Univ.
of Montreal Pension Plan v. Banc of Am. Sec., 685
F.Supp.2d 456, 468 (S.D.N.Y. 2010), abrogated on other
grounds by Chin v. Port Auth. of N.Y. & N.J., 685
F.3d 135 (2d Cir. 2012). Here, Randall moves the Court to
sanction the Government for alleged spoliation by either
dismissing the indictment or excluding certain evidence and
testimony from trial.
Fifth Circuit has examined the issue in a handful of criminal
cases. Most notably, United States v. Wise holds
that a showing of bad faith is required to establish
spoliation. 221 F.3d 140, 156 (5th Cir. 2000); see also
United States v. Valas, 822 F.3d 228, 239 (5th Cir.
2016) (holding that spoliation requires proof of “bad
faith or bad conduct by the other party”). Among the
cases Wise cites, Eaton Corp. v. Appliance
Valves Corp. recognized two elements for a spoliation
claim-destruction of evidence and bad faith. 790 F.2d 874,
878 (Fed. Cir. 1986), cited in Wise, 221 F.3d at
156. Of course, destruction of evidence assumes that the
evidence “existed and w[as] within the control of the
opposing party.” Jobe v. ATR Mktg., Inc., No.
98-31366, 1999 WL 511380, at *6 n.3 (5th Cir. June 23, 1999).
standards have been consistently applied in this circuit, but
not in the context of a motion to dismiss. Instead, the Fifth
Circuit criminal cases addressing spoliation have examined
whether the defendants proved bad faith and were therefore
entitled to an adverse-inference instruction. See
Valas, 822 F.3d at 239; United States v.
Livingston, 243 F. App'x 37, 38 (5th Cir. 2007);
United States v. Fasono, No. 06-60406, 2007 WL
505265, at *1 (5th Cir. Feb. 13, 2007); United States v.
Ochoa, 88 F. App'x 40, 42 (5th Cir. 2004);
Wise, 221 F.3d at 156-57. It is conceivable that
Randall might develop enough evidence at trial to show that
the Government destroyed evidence in bad faith. If so, he can
seek an adverse-inference instruction. But for the reasons
that follow, he has not yet made that showing and is not now
entitled to sanctions- including dismissal.
Whether Government Controlled and Destroyed Evidence
spoliation allegations may be split into two broad
categories: evidence that the IRS failed to obtain and
evidence that he says was known to have existed but was not
turned over. Notably, there is no evidence that the
Government actually obtained and then destroyed evidence in
Court first turns to evidence the IRS allegedly should have
collected, as that consumes most of Randall's briefing.
Randall says that, upon summoning, interviewing, and
investigating his tax preparer Lynn Floyd, IRS “agents
should have found six months of communications,
emails, and work papers” concerning Randall's tax
returns on her computer but that the Government has not
produced any such evidence. Def.'s Mem.  ¶ 8
(emphasis added). He premises the purported existence of this
evidence “upon documents produced by the government,
documents that Defendant Randall and his tax counsel have
been able to find or reconstruct, and reasonable inference
arising from the information available in documents,
pleadings, and attendant circumstances.” Id.
¶ 3 n.1.
even accepting this speculative assertion that evidence
existed, Randall's argument is of no moment without proof
that the Government or IRS ever obtained and then destroyed
it. Randall simply avers the IRS should have
collected it under IRS regulations, not that it did. And the
Government says it has “never received the computer or
otherwise possessed the information in question.”
Gov't's Resp.  at 6. In fact, the Government
claims that once it requested Floyd's computer, it
learned that the computer had crashed, id. at 4, but
it nevertheless produced a forensic image of the hard drive
Floyd eventually turned over, id. at 2.
Randall provides no basis for the Court to hold that the
failure to obtain certain evidence during an investigation is
spoliation. Indeed, the opposite is true. In Wise,
the court faced a similar issue. Like Randall, the
Wise defendant argued that the Government failed in
its duty to seize a computer, thus depriving him of necessary
evidence when the computer subsequently crashed. 221 F.3d at
156. The Fifth Circuit affirmed the denial of an
adverse-inference instruction because “the government
did not destroy [the] computer; in fact, the computer was not
even in the government's custody.” Id. at
156-57 (noting lack of bad faith). This applies equally to
Randall's argument that the IRS failed to conduct certain
interviews and inquiries. See ...