Employees

What Happens When the Smoking Gun is Thrown in the Recycling Bin?

In January 2014, the Hon. Lawrence E. Kahn in the U.S. District Court for the Northern District of New York granted plaintiff Dataflow, Inc.’s motion for sanctions in a case regarding deleted email correspondence.  Sanctions took the form of the often-case-ending adverse inference, with the judge reserving on the specific language of the adverse inference jury instruction until trial.  Defendant Peerless Insurance Co. might not wait that long, as even the neophyte lawyer can tell when blood is in the water. Dataflow’s claim arose out of a discovery request for production of documents that “targeted, inter alia internal communications and investigations regarding Plaintiffs’ claim.” Dataflow, Inc., v. Peerless Ins. Co., No. 3:11-cv-1127 (LEK/DEP), 2014 WL 148685, *2 (N.D.N.Y. Jan. 13, 2014).   When the defendant failed to produce any internal communications responsive to the document request, the plaintiffs tried again.  After the plaintiffs submitted an even narrower request for production, the defendants still didn’t produce anything responsive. Perhaps smelling something fishy, Dataflow started taking depositions and asking questions about the internal communications at Peerless.  The plaintiffs quickly learned that email was routinely used to communicate about claims.  The emails that Dataflow already asked for.  The emails that Dataflow was told didn’t exist.  The plot thickens. Hon. David E. Peebles, the Magistrate Judge handling discovery in this matter filed a Report and Recommendation urging sanctions be granted and fees shifted.  The District Court, reviewing Judge Peebles’s ruling de novo determined that the Magistrate got it right—and that sanctions are appropriate. The court analyzed the facts of the case under the spoliation framework set forth in Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002): On a motion for sanctions due to spoliation, the moving party must show that: (1) the party having control of the evidence had an obligation to preserve it at the time it was destroyed; (2) that party had a culpable state of mind; and (3) the destroyed evidence was of a nature that a reasonable trier of fact could find that it would support the moving party’s claim or defense. Dataflow, at *2 (citing Residential Funding Corp, at 107). Here, the duty to preserve for an insurance party was triggered when a claim was submitted.  As such, any internal communication regarding that claim is obviously supposed to be preserved.  The culpable state of mind can be inferred by the gross negligence displayed by email deletion resulting from a “system change.”  A “system change” that also conveniently “changed” the methods of preservation of documents related to paid and unpaid claims.  Finally, since the plaintiff was able to prove that the contents of the internal email conversations likely would have supported the plaintiffs’ theory of the case, sanctions in the form of an adverse inference just make sense. Perhaps it’s time for Peerless to have a “system change” with regards to their general counsel. Kevin received a B.S. in Political Science from the University of Scranton (2009), and will receive his J.D. from Seton Hall University School of Law in 2015.  Prior to joining the Seton Hall community, Kevin worked as an eDiscovery professional at two large “white-shoe” law firms in Manhattan. Want to read more articles like this?  Sign up for our post notification newsletter, here.

Recycling—Helps the Earth, Saves Lives, and Destroys Electronic Evidence

“Recycle,” “conserve,” “waste,” and “pollution” are terms that were implanted into the minds of each of us at a young age and are now they are being instilled into companies worldwide as a measure to reduce operational costs. Companies such as JPC Equestrian, Inc. have begun recycling and reusing “cleaned” electronic devices from former employees, which would normally not be an issue if companies had a company-wide server or cloud-based software that held all of the information stored within the device. However, since JPC Equestrian, Inc. does not have a company-wide server, once an employee leaves, the company has a procedure in place to “scub” the computer and reassign it to another without care for the electronic information within the device. In Kearney v. JPC Equestrian, Inc., Mark Kearney, a former employee, sued JPC Equestrian, Inc. (“JPC”) for the failure to produce emails relevant to the claim he is asserting. Kearney commenced this lawsuit against JPC when they wrongfully terminated his employment, and breached his sales agreements by either failing to pay him sales commissions or by paying reduced commissions that did not satisfy contractual obligations. Kearney through the discovery process received email documentation from numerous employees and executives dating back to 2005. The discovery submission included JPS turning over 250 pages of documents relevant to the parties and situations involved. However, Kearney requested information for "all relevant emails," which in his original discovery requests, were defined as "[a]ll emails that mention, or refer to the Plaintiff, however, marginally, in any way shape or form from 2002 through 2010." Kearney v. JPC Equestrian, Inc., 2014 U.S. Dist. LEXIS 153975, *5 (M.D. Pa. Oct. 30, 2014). Kearney was missing three years of discovery. Kearney only received documentation dating back to 2005 because the information dating back to 2002 did not exist or does not exist anymore and cannot be recovered. JPS claims that the information cannot be recovered because the computers that would have held that data were wiped clean and erased before the device was transitioned to another employee. JPS has found loopholes around document retention and the court agreed. The court held that JPS’ procedure of document retention was acceptable and the court has, “no basis to conclude that the defendants have withheld responsive documents, or that there is any basis to compel a further response regarding potentially relevant email communication.” Id. at *7. Unfortunately, this holding allows companies an avenue to discard potential and relevant information pertaining to potential litigation that otherwise would have been saved if not for the guise of recycling and employee cost saving. This holding should be reversed and JPS should be penalized for its failure to maintain adequate records for an appropriate period of time. The court should not excuse a company, no matter the size or market capitalization, for not maintaining the electronic information of employees who work within the company. Not only is that bad preservation practice, its poor business practice. Recycling and the protection of our planet is important but those ideals should not give rise to loopholes of common electronic document preservation practices, which are becoming as worldwide and important as protecting the planet itself. Timothy received his B.A. from Rutgers University in 2011. He began his post-college life working in Trenton, New Jersey, at a lobbying and non-profit management organization before attending law school in the fall of 2012. He will receive his J.D. from Seton Hall University School of Law in 2015. Timothy has had a diverse set of experiences during his time in law school and has found his calling in Tax Law. Want to read more articles like this?  Sign up for our post notification newsletter, here.

When Will There Be a Presumption that ESI Is Inaccessible?

Parties requesting e-discovery speak up or forever be subject to possible cost-shifting.  Generally, the responding party bears its own costs of complying with discovery requests; however, the rules of discovery allow a trial judge to shift the cost to the requesting party in certain circumstances.  Cost-shifting does not even become a possibility unless there is first a showing that the electronically stored information (“ESI”) is inaccessible.  However, if neither party submits to the Court that the ESI is accessible, then courts can presume it to be inaccessible.  This should be especially concerning to the requesting party, who typically does not bear the burden to pay for such costs. In Zeller v. South Central Emergency Medical Services, Inc., Richard Zeller (“Employee”) filed an action against his former employer, South Central Emergency Medical Services (“Employer”) alleging an unlawful and retaliatory discharge under the Family Medical Leave Act (“FMLA”).  The Employee was out of work pursuant to the FMLA for approximately a month.  He alleged that, upon his return to work, the Employer did not restore him to his previous position and retaliated against him for using the FMLA.  The Employer claimed that the Employee was fired for excessive absenteeism. The e-discovery issue in this case involved the allocation of costs to recover e-mails between the Employee and his doctors.  In this matter, there was no formal motion for a cost-shifting protective order, rather the issue was raised by both parties in their submissions to the court on outstanding discovery issues.  Typically, the rule is for cost-shifting to be possible, there must first be a showing of inaccessibility.  Here, the court presumed that the parties agreed the information sought was inaccessible because neither party submitted that the ESI was accessible.  Once the court presumed that the ESI was inaccessible, the court then analyzed whether discovery costs should be shifted by applying the seven-factor test from the Zubulake Court.  In Zeller, the court held that some cost-shifting to the Employer, the requesting party, was appropriate. Although the ESI in Zeller was most likely inaccessible, parties requesting e-discovery can still learn a valuable lesson from this case.  The requesting party should submit to the court that the ESI sought is accessible to avoid both a presumption of inaccessibility and the possibility of cost-shifting.  Requesting parties should not leave it up to the producing party to bear the burden of showing that the ESI is inaccessible because the courts are now willing to presume this finding if neither party contends otherwise.         Gary Discovery received a B.S. in Business Administration, with a concentration in Finance from the Bartley School of Business at Villanova University.  He will receive his J.D. from Seton Hall University School of Law in 2015.  After graduation, Gary will clerk for a presiding civil judge in the Superior Court of New Jersey. Want to read more articles like this?  Sign up for our post notification newsletter, here.

When Is An Employer Permitted To Monitor and Review An Employee’s Internet Activity and Usage?

On March 10, 20108, Marc Liebeskind began working at Rutgers Facilities Business Administration Department.  By March 28 of that year, Liebeskind was terminated for lacking the basic skill set needed to perform his job in addition to having a poor attitude while on the job. Liebeskind’s supervisors had suspected he was spending an unreasonable amount of time on non-work related activities on his work computer. Having doubts about Liebeskind’s work performance, his supervisors reviewed the browsing history on Liebeskind’s computer by using an application called IEHistoryView. It is important to note that this search only entailed browsing history, and there is no evidence that Liebeskind’s supervisors were granted any access to his personal or password-protected information and accounts. After his termination, Liebeskind filed suit against Rutgers University and his supervisors, claiming invasion of privacy, among other claims. On appeal, the New Jersey Superior Court Appellate Division affirmed the lower court’s ruling, which ruling struck down all claims that Liebeskind’s privacy was violated as a result of his supervisors’ investigating the browser history on his computer. The appellate court referenced the New Jersey Supreme Court’s Stengart ruling, which had set the precedent for an employer’s right to monitor employee Internet activity and usage. Closely followed in previous eLessons Learned posts, the 2010 Stengart ruling held that an employee’s email communication with her attorney, using a company-issued computer, but via a personal, password-protected email account was held to be protected by the attorney-client privilege. However, the court’s decision to uphold Stengart’s privacy was not intended to forbid employers from monitoring employees’ actions on company-issued computers or devices in the future. In Stengart, New Jersey’s highest court stated: “Companies can adopt lawful policies relating to computer use to protect the assets, reputation, and productivity of a business and to ensure compliance with legitimate corporate policies.” As noted in Liebeskind, Rutgers’ “Acceptable Use Policy for Computing and Information Technology Resources” was in effect during the time of Liebeskind’s employment. This policy expressly stated that an employee’s privacy “may be superseded by the University’s requirement to protect the integrity of information technology resources, the rights of all users and the property of the University.” Additionally, Rutgers University “[r]eserve[d] the right to examine material stored on or transmitted through its facilities.” Unlike the findings in Stengart, the court established that Liebeskind did not have a “reasonable expectation of privacy.” In addition, the court agreed that Rutgers had a “legitimate interest in monitoring and regulating plaintiff’s workplace computer.” All companies can learn from this case and the policies in place at Rutgers that protected its right to monitor and search an employee’s computer. One of the most important lessons to be learned here is the need for a written internet usage policy. At the very least, these written policies should mandate that employees are expected to use the Internet and their work issued computers for work related activities only. Additionally, the possible disciplinary actions for any violation of this policy should be made available to employees. As seen in in this case, the existence of an internet usage policy and the reserved right of a company to monitor its employee’s Internet activity is the key to eliminate an employee’s reasonable expectation of privacy.

How Are Electronic Materials Slipping Through the Cracks? The Scope of eDiscovery Is Limited to Discovery Requests, Not search Terms

We have entered the age of information!  Every conversation, e-mail, text message, attachment, voicemail, and other electronic data are being stored all day, every day.  These types of electronically stored information (a.k.a. “ESI”) are regularly used during litigation.  So why is there a problem collecting information for trial?  Lawyers need to search through these massive amounts of ESI in order to provide the materials to the opposing party before trial.  This process is known as eDiscovery, or electronic discovery, and it has raised a number of issues regarding who, what, where, when, why, and how ESI is produced. The issue discussed here is what defines the scope of eDiscovery.  In ChenOster v. Goldman, Sachs & Co., the court made it clear that the scope of discovery, whether electronic or not, is still defined by traditional discovery requests and demands.  However, what brought forward this conclusion? Traditionally, the process of discovery is the period when lawyers exchange requests and demands for information, documents, and other materials that may be used in the case.  Generally, this can be broken down into three steps: (1) Requesting party will make a discovery request; (2) the opposing party will use any means she deems appropriate to find the materials; and (3) the opposing party will respond to the request in the form of producing the materials or an objection. However, in Chen-Oster, the parties deviated slightly from this traditional process.  Here, the requesting party, the plaintiffs, made traditional discovery requests for ESI.  Then the plaintiffs negotiated with the opposing party, the defendants, in order to determine what search terms would be used to filter through the enormous amounts of ESI available. Now, why is this different from a traditional discovery process?  This is different because both parties collaborated to determine how the ESI requested would be located. The issue presented in Chen-Oster begins upon production of the ESI by the defendants.  The defendants only produced the ESI they deemed to be relevant to the discovery requests set forth by the plaintiffs.  However, the plaintiffs intended to collect all ESI produced by the search terms they agreed upon. This brings us back to the main question:  what defines the scope of eDiscovery?  It is either all ESI located under the agreed upon search terms; or it is only ESI located under the search terms that are relevant to the original discovery request. According to Chen-Oster, an agreement to use specific search terms or discovery protocol does not override discovery demands and requests.  In other words, search terms used to filter through electronic data do not define the scope of discovery.  The scope of discovery is determined by the discovery requests rendered.    Victoria O’Connor Blazeski received her B.S. form Stevens Institute of Technology, and she will receive her J.D. from Seton Hall University School of Law in 2015.  Prior to law school, she worked as an account manager in the Corporate Tax Provision department of Thomson Reuters, Tax & Accounting.  Victoria is a former D3 college basketball player, and she has an interest in tax law and civil litigation.  After graduating, she will clerk for the Hon. Joseph M. Andresini, J.T.C. in the Tax Courts of New Jersey.   Want to read more articles like this?  Sign up for our post notification newsletter, here.

What Happens When ESI Is Lost?

Willfully destroying evidence? Failing to preserve materially relevant evidence? These are just two of the allegations Lisa Alter has made against the Rocky Point School District. Prior to submitting her complaint, Ms. Alter had accused the school district of similar wrongdoings. Alter worked for the Rocky Point School District holding various positions over the years. While employed as the Coordinator of Central Registration/Administrative Assistant within the Human Resources department, Alter alleges that she was subject to a hostile work environment on the basis of her gender. Further, Alter claims that she was retaliated against for complaining to the School District about it. The opinion here is related to a matter regarding electronic discovery in this case. The plaintiff filed a motion to compel discovery and for sanctions. After taking several depositions, plaintiff claims to have discovered new testimony relevant to her most recent motion to compel discovery. Specifically, the plaintiff alleged that: “(1) Defendants both failed to preserve and willfully destroyed evidence, and (2) Defendants continue to intentionally withhold relevant evidence despite repeated demands for production.” The school district had a system for overwriting backup drives. The plaintiff contended that by not stopping the overwriting of the backup drives that it constituted a breach of the defendant’s preservation obligation. The defendant claimed that all information relevant to this case (i.e., emails stored on the school’s employee email system). The duty to preserve arises when litigation is “reasonably foreseeable.” The party that has control over the evidence has an obligation to preserve it. Once evidence is lost, the court then looks to the obligor’s state of mind to determine culpability. Here, the court determined that the defendants did not intentionally lose the data. The burden then shifted to the plaintiff to prove that the lost data was relevant.[1] In the instant case, the court did not find bad faith; thus, it was up to the plaintiff to then prove the relevance of the lost data. Ultimately, the court granted in part and denied in part the plaintiff’s motion. The court found that the plaintiff did not meet her burden of showing that the lost documents were relevant. However, the actions of the defendants that lead to losing materials placed the plaintiff in a position to have to file this motion. Thus, sanctions were awarded in the amount of $1,500.00. The moral of the story: When litigation is pending, or likely to begin, preserve or pay the price. Jessie is a third year student at Seton Hall University School of Law (Class of 2015). She graduated from Rutgers University, New Brunswick in 2012 with a B.A. in Philosophy and Political Science.   Want to read more articles like this?  Sign up for our post notification newsletter, here. [1] When the breaching party acts in bad faith, relevance is assumed.

Erasing Videotapes Can Be Dangerous for Everyone, Not Just Politicians!

In McCann v. Kennedy Univ. Hosp., Inc., the plaintiff Robert McCann sued Kennedy University Hospital, asking the court to sanction the hospital for intentionally or inadvertently destroying necessary videotapes.  The plaintiff contended that the videotapes contained an account of the defendant’s emergency room lobby on the night the plaintiff claims to have been mistreated by the defendant’s staff. The plaintiff argued that the defendant knew or should have known that the video tapes were discoverable material and that there was actual withholding or suppression of the videotapes, which constituted spoliation. On December 21, 2011, the plaintiff was transported to the hospital after suffering extreme rectal pain and trouble breathing. The Plaintiff claims to have been in excruciating pain while he was waiting to be seen by the hospital staff. He states that he was ignored and neglected for at least seven hours. During the time that he was at the hospital, the plaintiff claimed to have collapsed on the floor and was left lying on the floor for over ten minutes, while staff walked over him without offering assistance. McCann also claimed that when he was eventually seen by the hospital staff, they treated him in ways that made him feel humiliated and uncomfortable. The hospital allegedly refused to treat McCann because he did not have insurance. On December 23, 2011, the plaintiff sent an e-mail to Renae Alesczk, the assistant to the Senior Vice President of the Kennedy Health System, complaining about his experience at the hospital while also threatening to sue. A few hours after the email was received, Aron Berman, formerly employed as the defendant’s Director of Guest Relations and Service Improvement, forwarded the McCann’s e-mail to Kim Hoffman, the Corporate Director of Patient Safety. The defendant claimed to have conducted an internal investigation of the complaints at that time, and notified the plaintiff that his complaints were being addressed. The hospital staff then stated that the investigation showed that the hospital staff acted appropriately and managed the patient’s clinical care in a professional manner. So far, so good. However, the plaintiff’s attorneys requested videotapes of the emergency room lobby, which showed the plaintiff waiting without being treated by staff. The defendants claimed that there was no videotape footage because they did not have enough disc drive space to keep all their video footage and had already erased the footage from the night in question. The plaintiff argued that the defendants knew or should have known that the videotapes would be requested in discovery, and that the defendants should not have destroyed the videotapes. The plaintiff claimed such activity as obstruction of justice and an intentional spoliation of evidence. The defendants argued that the tapes only show the time period during which the patient was in the waiting room, and are irrelevant to the plaintiff’s complaints about the treatment by staff when he was seen in the hospital. The Third Circuit has adopted a four-factor test for evaluating spoliation claims, finding that spoliation occurs where: “(1) the evidence was in the party's control; (2) the evidence is relevant to the claims or defenses in the case; (3) there has been actual suppression or withholding of evidence; and (4) the duty to preserve the evidence was reasonably foreseeable to the party.” Here, there is no argument that the tapes were in the party’s control. The court found that the tapes were not relevant to the plaintiff’s claims and that the defendant did not have a duty to preserve the video tapes at issue.  Therefore, there had not been actual suppression or withholding of the evidence. The takeaway from this case is that the court found it was reasonable for the hospital to destroy the videotapes because the plaintiff’s claim was specifically in regard to his being treated while at the facility, NOT his experience while waiting in the lobby. However, to be safe, videotapes of the night in question should be preserved to avoid this kind of confusion. Rebecca Hsu, a Seton Hall University School of Law student (Class of 2015), focuses her studies in the area of patent law, with a concentration in Intellectual Property. She is also certified in Healthcare Compliance, and has worked in Compliance at Otsuka America Pharmaceuticals, Inc.  Prior to law school, she graduated, cum laude, from UCLA and completed graduate work in biomedical science. She has co-authored two medical science research articles, as well as completed fellowships through UCLA Medicine and the Medical College of Wisconsin. In addition to awards for her academic achievements, Rebecca has been honored by awards for her community service with disadvantaged communities. In her spare time, Rebecca regularly practices outdoor rock climbing, and can be found camping in the Adirondacks. Want to read more articles like this?  Sign up for our post notification newsletter, here

When Is “Discovery On Discovery” Improper?

In Freedman v. Weatherford Int'l Ltd., a putative class action alleging securities fraud, the plaintiff moved for reconsideration of the court’s denial of a motion to compel discovery. The plaintiff sought to compare a document that had been produced by defendant Weatherford International during discovery with documents from two internal investigations conducted by defendant, which had not been produced during discovery. Specifically, the plaintiff secured 18 emails from “‘critical custodians at Weatherford’ that were produced (after briefing on the original motion to compel was complete) . . . by third-party KPMG.” KPMG worked with the defendant on its remediation efforts. The defendant never produced these emails during discovery, thereby—according to the plaintiff—demonstrating significant deficiencies in the defendant’s discovery production. The United States District Court for the Southern District of New York acknowledged that discovery on discovery is proper “where a party makes some showing that a producing party’s production has been incomplete . . . in order to test the sufficient of that party’s discovery efforts.” However, these meta-discovery requests must be “closely scrutinized” to avoid unnecessarily prolonging the “costly and time-consuming discovery process.” The plaintiff argued that KPMG’s production of the 18 emails proved that the defendant’s production was deficient and that providing the plaintiff with the documents of the two internal investigations would lead to the discovery of “additional relevant documents that had not been produced.” Thus, the district court noted that the plaintiff did seek to test the defendant’s discovery efforts. Rather the plaintiff sought to ‘identify the documents missing from [the defendant’s] production.” The district court held that the documents the plaintiff sought would not lead to additional documents not previously produced. The plaintiff admitted that only three of the 18 emails would have been identified had it been able to compare initially produced documents with documents of the two internal investigation. Additionally, the plaintiff never argued that other documents produced by third parties, but not by the defendant, would have been identified by requested document comparison. Moreover, the court stated “the Federal Rules of Civil Procedure do not require perfection.” Further, “it [was] unsurprising that some relevant documents may have fallen through the cracks,” when the defendant “reviewed million of documents and produced hundreds of thousands.” In conclusion, the plaintiff’s requested remedy was not best suited to cure the alleged discovery deficiencies. In order to win a motion to compel discovery on discovery, the plaintiff needed to “proffer[] an adequate factual basis for their belief that the current production [was] deficient.” Given that a party is not subjected to sanctions for failing to produce minimal amounts of documents during a massive discovery production when its production was otherwise lawful, the plaintiff in this case should never have filed the motion for reconsideration of its previous motion to compel discovery. Furthermore, the plaintiff should have assessed the usefulness of the relief they sought. In this case, the motion to compel discovery was unnecessary because only three of the 18 emails were relevant and the proposed document comparison would not have yielded any other documents not produced by the defendant. Aaron Cohen, a Seton Hall University School of Law student (Class of 2015), focuses his studies in the area of family law. He participated in the Seton Hall Center for Social Justice’s Family Law Clinic. After graduation, he will clerk for a judge in the Superior Court of New Jersey, Family Division. Prior to law school, Aaron was a 2011 cum laude graduate of The George Washington University Columbian College of Arts and Sciences, where he earned a B.A. in Psychology.

When Can Spoliation Result in an Adverse Inference Jury Instruction? Where there was an Obligation to Preserve, a Culpable State of Mind, and Destruction of Relevant Evidence.

Employers should take note: erasing and taping over messages that relate to a fired employee is never a good idea. Employers who engage in this type of practice will never escape the wrath of a judge when the fired employee inevitably brings a wrongful termination. Eventually, such action catches up with the defending company and they will have to pay a steep price. Take, for instance, the case Novick v. AXA Network, LLC. The plaintiff was asking the judge for sanctions to be imposed on the defendants because he claimed that the defendants spoliated audio recordings and emails from an eight-week stretch, which ran from late August until early November 2006. The defendants admitted that recordings from this time period were likely erased and taped over. The problem here is that this stretch of time covers the time directly before and directly after Novick’s termination. It should seem obvious to anyone that a company’s failing to preserve any recordings regarding a former employee’s termination is a terrible idea and will likely hurt one’s case in court. It should instead be common sense that when an employee is terminated, and certainly when that termination is contentious, a lawsuit is foreseeable.  Thus, the employer should take care to preserve anything that might come into play at trial. Novick asked the judge to sanction the defendants for the spoliation of emails. The defendants could not produce any emails between the two employees at AXA Network, who took over Novick’s accounts, and Novick’s former clients. If these employees were involved with Novick’s clients after Novick was fired, it is only logical that there would have been emails taking place between these employees and those clients! Nevertheless, the defendants could not produce a single e-mail. Sanctions can be imposed on a party for spoliation in violation of a court order under Rule 37(b) of the Federal Rules of Civil Procedure or, where there has been no violation of a court order, a judge can impose sanctions for spoliation under the court’s “inherent power to control litigation.” West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999) (emphasis added). For the court to exercise its inherent power, there must have been a showing of bad faith. United States v. Int’l Bhd. of Teamsters, 948 F.2d 1338, 1345 (2d Cir. 1991). The Novick court in this case found that the defendants did spoliate the audio recordings because they were notified in October 2006 to preserve the recordings for future litigation and to produce those recordings  to the plaintiff. In addition, the defendants provided no reason for why or how these recordings were missing. Unsurprisingly, the court suggested that such behavior indicates that the company acted deliberately and therefore possessed a culpable state of mind. The defendants acted in bad faith. The court did not find that the defendants spoliated the email messages, but it still believes they acted in bad faith with respect to the production of the emails because the company failed to search one of their email archives for months due to what was claimed as “human error.” This was clearly a delay tactic, further warranting sanctions. The court invoked its inherent power to control litigation because the defendants acted in bad faith, employed delay tactics, caused substantial costs to be incurred by the plaintiff, and wasted the court’s time. The court imposed an adverse inference jury instruction. Adverse inference instructions can be imposed against a party who had an obligation to preserve evidence at the time it was destroyed, who destroyed the evidence with a culpable state of mind, and who destroyed evidence that was relevant to the opposing party’s claim or defense. Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002). The clear takeaway from this case is that it is better to be safe than sorry; if it is reasonable that a lawsuit may be brought against you, take all measures to preserve any evidence that might have anything to do with that future case. Preserving the evidence will not hurt, but failing to do so will. Logan Teisch received his B.A. in Government and Politics from the University of Maryland, College Park in 2012. He is now a student at Seton Hall University School of Law (Class of 2015), focusing his studies in the area of criminal law. Logan’s prior experiences include interning with the Honorable Verna G. Leath in Essex County Superior Court as well as interning with the Essex County Prosecutor’s Office. Want to read more articles like this?  Sign up for our post notification newsletter, here.

When Are Sanctions Issued Based on Evidence Destroyed During the Ordinary Business Protocols?

Companies issue laptops to their employees to be used for business purposes both in the office and at home. A company’s distributing laptops is joined with the company’s responsibility to preserve the electronically stored information (ESI) when litigation is reasonably anticipated. Every company has its own “ordinary business protocol” to be used in relation to these laptops when a situation requires it, but sometimes these protocols lead to bigger issues. In Hawley v. Mphasis Corp., the United States District Court for the Southern District of New York granted an adverse inference instruction regarding a supervisor’s laptop, but not for the employee laptop. In Hawley, an employee of the defendant company brought an employment discrimination claim and moved for sanctions against the defendant for alleged discovery violations; those of which, in particular, were violations regarding spoliation of information on two company laptops.  The employee alleged that the company deleted all information from his work laptop, as well as his supervisor’s information, and did not produce records vital to the defendant’s case. The company countered, arguing that clearing the hard drive of a former employee’s laptop was the business protocol. In evaluating the request for an adverse inference sanction, the district court explained that the plaintiff must demonstrate: “(1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; and (3) that the destroyed evidence was relevant to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.” Hawley v. Mphasis Corp., No. 12 Civ. 592 (DAB) (JLC), 2014 WL 3610946, at *7 (S.D.N.Y. July 22, 2014) (quoting Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002)). As to the supervisor’s computer, the court held for an adverse inference sanction because the company had a duty to preserve the supervisor’s data from the time of the EEOC filing.  Furthermore, the company negligently destroyed the records on the laptop , which were found to be highly relevant to the employee’s case.  In regards to the employee’s computer, the court found both a duty and the requisite culpability; however, the court did not believe that the employee sufficiently proved how relevant the information was to his case. The lesson to extract from this case is that the courts do not care if your company’s protocol requires one procedure to be followed (i.e., wiping a hard drive) when it comes to the spoliation of relevant evidence.  The company’s wiping the hard drives is trumped by a duty to preserve data when a lawsuit is reasonably anticipated. The ruling in Hawley demonstrates that, in an employment case, the receipt of an EEOC charge triggers the obligation to preserve all data, but it could arise earlier depending on the circumstances. Be aware of when a lawsuit is reasonably anticipated and do not hesitate to act and preserve. Such awareness will help your company in the long run. With that, be on top of the individuals responsible for preserving company data and ensure those individuals are complying with company policy. One does not want to need a hard drive that has no data saved on it. Evidence must be preserved until litigation is resolved or no longer reasonably anticipated, and as courts become stricter with this rule of law, so should every company.  A look at the circumstances and a possible deviation from ordinary protocols may be needed. For more information on the case used as precedent, Residential Funding Corp. v. DeGeorge Fin. Corp., click here: http://caselaw.findlaw.com/us-2nd-circuit/1003010.html. Amanda is a third year student at Seton Hall University School of Law, where she is pursuing a J.D. with a certificate in Health Law. Prior to law school, she was a 2011 magna cum laude graduate of Seton Hall University, where she earned Bachelor of Arts in Political Science and a minor in Philosophy. Presently, she is a law clerk at a small firm handling real estate and bankruptcy matters. After graduation this native New Yorker hopes to work at a mid-sized firm in the Big Apple. Want to read more articles like this?  Sign up for our post notification newsletter, here.

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  • Recent Praise

    The blog takes a clever approach to [e-discovery]. Each post discusses an e-discovery case that involves an e-discovery mishap, generally by a company employee. It discusses the conduct that constituted the mishap and then offers its ‘e-lesson’ — a suggestion on how to learn from the mistake and avoid it happening to you.

    Robert Ambrogi

    Legal Tech Blogger and creator of LawSites




    Although I may have missed some, yours is the first article that I have seen addressing Zubulake II. It is often the lost opinion amongst the others.

    Laura A. Zubulake

    Plaintiff, Zubulake v. UBS Warburg


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