While spoliation sanctions are increasingly common in civil litigation, it is rare for such conduct to be charged as criminal obstruction of justice. But in an indictment unveiled last week, the Department of Justice did just that. In a trade secrets theft case, DOJ charged the defendant, Kolon Industries, Inc., with obstruction of justice, in addition to conspiracy and trade-secret-theft counts, as a result of conduct undertaken in a private civil case.

The obstruction charge is based on the intentional deletion of documents by Kolon employees shortly after they found out about a related civil suit filed by DuPont, in an apparent effort to deprive DuPont of relevant evidence. Both Kolon and the five individuals involved have been charged with violating 18 U.S.C. § 1512(c)(1) & (2), which imposes severe criminal penalties for document destruction aimed at obstructing a “federal proceeding.” Such charges are common where defendants have deleted electronically stored information in an attempt to thwart a criminal investigation, but the “federal proceeding” underlying the charges against Kolon was the civil litigation brought by DuPont. We are aware of only a handful of cases in which that has happened.

The obstruction charges followed the litigation of spoliation claims in the DuPont v. Kolon trade secrets case, which resulted in sanctions against Kolon including an adverse-inference jury instruction. The court’s extensive opinion is available here. Crowell & Moring represented DuPont in the civil litigation, which resulted in a $920 million jury verdict for DuPont.

The prospect of criminal charges for spoliation in civil litigation raises the stakes for civil litigants, particularly where a parallel criminal investigation is a possibility because obstruction counts can easily be tacked on to substantive criminal charges. Even the harshest of civil sanctions can pale in comparison to the criminal penalties a corporate litigant could face and the significant jail time to which individuals could be exposed.