By Carter L. Williams and Thomas Appleman
Sutherland Asbill & Brennan LLP
The first criminal trial stemming from the 2010 Gulf of Mexico oil spill is about to conclude in the government’s obstruction case against former BP engineer Kurt Mix. With the jury set to decide Mix’ fate, his case is providing important lessons for all corporations.
Mix was involved in efforts to stop the flow of oil from the Macondo well, including the failed “top kill” effort. Although Mix had no involvement with the well prior to the blowout, he became the first person indicted for conduct related to the oil spill when he was charged with two counts of obstruction of justice in the summer of 2011.
The U.S. Department of Justice alleges that Mix obstructed a grand jury’s related investigation by deleting strings of text messages with a supervisor and a BP contractor, including messages related to the rate at which oil was flowing from the well. Mix admitted deleting the text messages, but asserts that he did so innocently with no intent to disrupt the grand jury investigation.
If he is found guilty on both counts of obstruction, then Mix could face up to 40 years in prison and a $500,000 fine (20 years and $250,000 on each count). But even if he is found to have done nothing wrong, Mix presumably already has suffered irreversible damage to his reputation and psyche.
Regardless of the outcome, the trial provides a stark reminder that the consequences of failing to preserve evidence can be much more severe than adverse inferences and/or employee disciplinary actions.
Preservation of evidence
The duty to preserve potentially relevant information is generally well-defined and well understood. Upon anticipation of litigation, a company must take reasonable steps to preserve potentially relevant evidence, including implementing a litigation hold and monitoring employee compliance with that hold.
Litigation hold notices typically inform employees, at least in general terms, of the severe sanctions that the company can receive for failing to preserve potentially relevant evidence. Counsel should reiterate such warnings when conducting custodial interviews and when issuing subsequent, reminder hold notices. Employees also are told that compliance is mandatory and they may be warned that failure to comply with the notice could result in disciplinary action, including termination.
Obstruction of justice
The elements of the federal crime for which Mix has been charged under 18 U.S.C. Section 1512(c)(1) are:
- Corruptly altering, destroying, mutilating, or concealing a record, document, or other object (or attempting to do so);
- With the intent to impair the object’s integrity or availability for use in an official proceeding.
Although obstruction more frequently arises in relation to congressional or grand jury proceedings, the definition of “official proceeding” includes “a proceeding before a judge or court of the United States” and in some cases, defendants have been charged for obstructing civil litigation under the same statute.
Although obstruction charges rarely result from failure to preserve evidence relevant to civil litigation, the risks increase whenever the litigation arises out of regulated activity or other circumstances likely to lead to congressional, agency, or grand jury proceedings. In such cases, counsel should ensure that their clients appreciate the additional risks associated with a failure to preserve data.
To its credit, BP appears to have tried to warn Mix. According to paragraph 5 of the indictment, BP’s first hold notice, sent within two days of the blowout, stated that “[w]ithholding, concealing, altering, falsifying or destroying anything subject to this Legal Hold Order may subject individuals or BP to prosecution or other severe consequences.” According to paragraph 6, BP sent Mix at least nine more hold notices, including one that stated on the cover, in bold and underlined type, that potentially relevant text messages must be preserved.
In the future, companies, or at least employees receiving hold notices, might benefit from the inclusion of a reference to the Mix trial to ensure the message is received.
The case is U.S. v. Kurt E. Mix, No. 2:12-cr-00171, in the U.S. District Court for the Eastern District of Louisiana.
Carter L. Williams is counsel and Thomas Appleman is an associate in the Houston office of Sutherland Asbill & Brennan LLP. Both attorneys worked on the trial team representing defendant drilling contractor Transocean in the multidistrict litigation arising from the Gulf of Mexico oil spill in 2010, with Williams managing much of the case’s massive discovery efforts.