Good Faith

Deleted Documents? Improper Withholding of Evidence?

Larry Klayman sued six separate journalist defendants for defamation. This case is about Klayman wanting more discovery from the defendants. Specifically, Klayman’s motion is to compel the production of documents and to hire a computer expert. In this case, Klayman has conceded the fact that he is a public figure. So, in order to win in a defamation suit, he must prove by clear and convincing evidence that the journalists published the statements about him with actual malice. Thus, Klayman made this discovery motion to try to obtain “any and all documents, discussions and/or publications that refer or relate in any way to Plaintiff Larry Klayman within the past five years,” as well as several other document requests. Klayman contends this information is relevant to state of mind of the journalists. However, the defendants represent that they have already provided Klayman with all relevant information. Based on this representation, the court denied Klayman’s request to compel document production. Klayman also petitioned for a computer retrieval expert to be hired to go through each defendant’s computer files. Klayman claimed that the defendants had improperly withheld documents. However, the court ruled that the plaintiff must show good cause in order to compel a forensic expert, and here he has failed to do so. The court further stated that his assertions were “conclusory and unpersuasive.” 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.

What Sanctions May a Court Impose On a Party That Fails to Comply With a Discovery Order?

The plaintiff and the defendants both sold Belly Bands, the plaintiff alleged that both Belly Bands were maternity band used to hold up pants. The plaintiff previously filed cases against the defendants for trademark infringement, patent infringement and unfair competition in 2006 and 2008, but those cases were later resolved by settlement agreements. In 2013, the plaintiff filed the recent action alleging that the defendants breached both settlement agreements by selling and advertising Belly Bands. During discovery, the defendants produced some electronically stored information (ESI). The parties contested the sufficiency of the defendants’ ESI production. On December 20, 2013, the court ordered the the defendant to produce all documents referring to customer comments or complaints regarding the defendants’ Belly Band and disclose its search methods within thirty days. On January 21, 2014, the defendants issued a declaration stating that they were in Europe when the court issued this order, and could not immediately comply. They also stated that they would need a computer expert to help them retrieve deleted customer e-mails. On January 3, 2014, the defendants retained a computer expert. On February 4, 2014, the defendant told the plaintiff that they found additional ESI, but did not produce the ESI at that time. The plaintiff filed a motion on February 10, 2014, for sanctions against the defendants for failure to comply with the court order within the thirty day timeframe, seeking: attorneys fees and costs associated with the defendants failure to comply; an order that the defendants disclose all hard drives and provide the plaintiff with access to all email accounts; and an order precluding the defendants “from opposing the plaintiff’s claim that the defendants’ Belly Bands were used to hold up [pants,] from opposing the plaintiff’s damage calculations, and from introducing any opposing evidence wit respect to the damages calculation.” At the time the motion was filed, the defendants still had not produced any additional ESI. Within two weeks after the motion was filed, the defendants produced over 1,000 new electronic documents. The court began its analysis by noting that courts may sanction a party for discovery abuses pursuant to the Federal Rules of Civil Procedure and the court’s inherent powers. Rule 37(b)(2)(C) states a court must order a party who failed to comply with a discovery order to pay the opposing party’s reasonable expenses associated with failure to comply, including attorney’s fees, “unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Sanctions are permissible regardless of the reason for the party’s noncompliance. Moreover, willfulness, fault, or bad faith are not required to impose Rule 37 sanctions, unless the sanction is dismissal. “However, in order for the sanction to comport with due process, the sanction imposed under Rule 37 must be specifically related to the particular claim which was at issue in the order to provide discovery.” Rule 37 sanctions should only be imposed when the party’s failure to comply prejudiced the nonoffending party. Furthermore, the court may impose three types of sanctions pursuant to its inherent powers specifically when there has been spoliation of evidence, including: “1) the court may instruct the jury that it may infer that evidence made unavailable by a party was unfavorable to that party; 2) a court can exclude witness testimony based on the spoliated evidence; and 3) the court can dismiss the claim of the party responsible for the spoliation.” “In determining what sanctions are appropriate in cases of spoliation, courts consider: 1) the degree of fault of the party who altered or destroyed the evidence; 2) the degree of prejudice suffered by the opposing party; and 3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party.” The chosen sanction should be “determined on a case-by-case- basis, and . . .commensurate to the spoliating party’s motive or degree of fault in destroying the evidence. First, the court held that the plaintiff was entitled to an award of monetary sanctions under Rule 37. the defendants failed to substantially justify why they couldn’t produce all responsive documents within the court ordered thirty day timeframe. The fact that the defendants were in Europe when the court issued the Order did constitute substantial justification to excuse their noncompliance. the defendant did not alert the court of their travel plans, request an extension, instruct their office manager to comply with the Order, or offer a reason as to why they did not immediately retain a computer expert to assist them in complying with the Order. Further, even once additional ESI was discovered, the defendants failed to produce said ESI for almost a month. Thus, the defendants’ actions prejudiced the plaintiff by forcing the plaintiffs to subpoena third parties for responsive documents, by preventing the completion of necessary depositions, and by having to file the instant motion. Moreover, the court held that the defendant must disclose its hard drives and provide the plaintiff with access to all its email accounts, subject to the defendants’ privileges or privacy interests. The court found that there was real danger that evidence on the the defendants’ hard drive had been destroyed. Further, the defendants made an array of false statements, such as claiming they produced all responsive documents when they in fact had not, and claiming that no documents had been deleted during the time of litigation when overwhelming evidence indicated otherwise. The court found that the plaintiff needed access to the defendants hard drive to prevent any more documents from being destroyed and ensure all responsive documents were produced. Additionally, based upon the same reasoning, the court granted the plaintiff access to all of the defendants’ email accounts, including Amazon, Facebook, Twitter and eBay accounts. However, the court held that the plaintiff failed to prove that the court should prohibit the defendants “from opposing the plaintiff’s claim that the defendants’ Belly Bands were used to hold up [pants,] from opposing the plaintiff’s damage calculations, and from introducing any opposing evidence wit respect to the damages calculation.” The court stated “preclusion remedies are a harsh remedy that should be imposed only in extreme circumstances.” Here, given that the plaintiff obtained documents from third parties and that the plaintiff may recover additional responsive ESI from the defendants’ harddrives and email accounts, the plaintiff cannot—at this time—demonstrate that the defendants’ conduct “impaired the plaintiff’s ability to go to trial or threatened to interfere with the rightful decision of the case.” However, the court denied the plaintiff’s request for preclusion sanctions without prejudice, thereby allowing the plaintiff to request preclusion sanctions should the plaintiff’s search of the defendants’ harddrives and email accounts reveal that the defendants knowingly destroyed evidence and that destruction threatened the plaintiff’s ability to secure a just outcome. Thus, when a court orders ESI production, parties would be wise to immediately comply with the order, or immediately inform the court of substantial reasons as to why compliance will be delayed.   Aaron Cohen, a Seton Hall University School of Law student (Class of 2015), focused 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, he 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. Want to read more articles like this?  Sign up for our post notification newsletter, here.

What Should a Party Not Do When Compelled to Turn Over Computers after Having Already Admitted How Much Activity Took Place on Those Computers? Turn Over Computers That Show No Record of Activity

It is never a good idea to raise the suspicions of the court. If a party is going to try to cover its tracks, it has to do so subtly and discretely. It certainly has to do a better job than Dr. O did in the above case. She revealed too much information about herself in the early stages of the case, and it came back to hurt her when it was time to produce discovery. MetLife has brought suit against Dr. O, after the doctor tried to make an insurance claim based on an alleged disability. First of all, Dr. O delayed her responses to initial discovery requests, which is just never a good idea! But not only that, it was subsequently discovered that she had email accounts containing relevant documents that she had not even previously disclosed! Needless to say, Dr. O has already lost all benefit of the doubt in this case. Dr. O was ordered to turn over the computers she used during the relevant period so that MetLife could perform a key word search. Instead of turning over all computers that she used, she turned over only the two computers that she owned. She claimed that she did not have access to all the computers she used anymore, because some were in Internet cafes she used while traveling. OK, fine, but even still, the computers she did turn over, the two computers she owned and presumably used most often, reflected very little activity! Her hard drives showed no evidence of her sending or receiving any emails during a five-year period. In addition, the hard drives reflected a minimal amount of Web browsing. Well that certainly piques the Court’s interest, especially in light of Dr. O’s earlier testimony in which she admitted to searching the Internet on a daily basis! So she searches the Web every single day, and yet there is no record of it on either of her personal computers? Suspicions have been officially raised! But it does not end there. Dr. O specifically testified at her deposition that she used her personal computer (one of the two she handed over) to type up a twenty two-page letter complaining about MetLife. Well, lo and behold, there is no record of this letter reflected in the personal documents on the computers she turned over. So now Dr. O has been caught in a direct lie! But wait, there’s more! Dr. O testified that she engaged in online banking…but the computers show no record of that, either. She also admitted to doing a lot of online shopping as a symptom of her depression and PTSD. And yet, there is nothing on her computers that is consistent with even a single purchase! Dr. O was not subtle and discrete in covering her tracks, and the court saw right through it. It explained that in light of earlier testimony that the doctor is an avid computer user, the lack of use on the computers she turned over demonstrates that she did not provide all of her principal computers. The court found that Dr. O willfully failed to comply with the court’s orders compelling production, and that this refusal was done in bad faith, prejudicing MetLife’s ability to present its case. Therefore, due to the extent and continued nature of non-compliance on the part of Dr. O, the court imposed an adverse inference instruction against the doctor. Again, this just goes to show that a party has to be more careful than Dr. O was in this case. It cannot claim to use computers all day, every day, and then respond to an order of production of these computers by turning over computers that reflect very little, if any, use. Dr. O was too obvious about what she was doing, and the court sanctioned her for it. Do not be like Dr. O! 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.

What Should A Party Do When It Receives A Confusing Discovery Response?

Were the defendants at fault for providing to the plaintiffs a CD containing information confusing to the plaintiffs? A court found that, no, the parties should have communicated with each other in order to facilitate the discovery process. The issue arose when the defendants provided a CD to the plaintiffs containing information the plaintiffs had requested. However, the plaintiffs did not know how the defendants collected the information on the CD, nor did the plaintiffs know how the contents were responsive to their discovery requests. Based on this incident, the plaintiffs filed this motion to appoint a neutral discovery master to oversee the discovery process. The plaintiffs also argued that the defendants had not been timely with their discovery submissions. However, as the court pointed out, the plaintiffs had not been timely. Ultimately, the court found that if the parties had merely taken the time to communicate with each other that this motion likely could have been avoided. The court further stated that the parties must, “meet and confer in good faith in order to communicate about issues of untimely or confusing production and resolve them without judicial intervention.” Thus, the court dismissed the motion. 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.

Changing Horses Midstream? Court Says “Yes” to plaintiff Switching From Manual Document Review to Predictive Coding

The court entered its usual case management order setting forth a timeline of how this case was going to proceed. One of the first phases of litigation is the discovery phase. This means that both sides get to ask each other for documents and information regarding the issue in the case. The rules are fairly straightforward in this phase and each side will likely be obligated to provide much of what the opposing side asks for. In the instant case, after doing some manual searching, the plaintiff, Bridgestone, requested to use predictive coding to help sort through over two million documents. Predictive coding, to put it simply, is akin to a smarter keyword search. Keywords are put in and the program searches for those words as well as for other relevant words that it has “learned” to associate with the keywords in order to determine if a document is relevant or not. The defendant, International Business Machines Corporation, objected to Bridgestone’s use of predictive coding. The objection being that it would be an unwarranted change in the case management order. However, the court ruled that predictive coding could be used because under the rules discovery should be efficient and as cost-effective as possible. Thus, predictive coding, which is a smart search, was allowed in this case in order to expedite the discovery phase and save money on manual or other document review techniques. Moral of the story: Predictive coding may be implemented as an efficient discovery technique even if a case management order is already in place. 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.

Adding Insult to Injury: Court Criticizes Plaintiff’s Improper Pleading in Process of Largely Denying Motion to Compel

The court began its opinion by reciting the quote that “[d]iscovery relevance is minimal relevance,” leading most readers to presume the court was going to rule in favor of Plaintiff’s motion to compel.  However, after learning that Plaintiff sought “the entire claims file” of Defendant, that presumption slowly dissipates. The motion before the court involved Plaintiff’s request for an order compelling Defendant to produce documents that are responsive to certain of Plaintiff’s second, third and fourth sets of Requests for Production of Documents.  The Plaintiff alleged that Defendant’s objections are premised on unsupported claims of privilege and that the documents Defendant did turn over were excessively redacted.  After a back and forth regarding the concept of “privileged” the court rules that the real crux of the issue is the “point at which Defendant was reasonably anticipating litigation.” It is at this point that a privilege is created for the documents at issue based on the work product doctrine as outlined in Fed. R. Civ. P. 26(b)(3)(A) at which point a privilege for the documents at issue based on the work product doctrine. Because insurance claims are of such sensitive and proprietary nature, the court holds that the question of whether insurer documents were created in anticipation of litigation “depends on whether the party seeking protection can point to a definite shift made by the insurer from acting in its ordinary course of business to acting in anticipating of litigation.”  Colloquially known as a “trigger” for document preservation, the burden is on the Defendant to establish the existence of such privilege in the face of litigation.  The court ultimately held that the relevant date was December 28, 2012, when Defendant sent a letter regarding a settlement check.  Thus, the court ordered that any information withheld on the basis of work product doctrine after that time must be produced. After serving its second set of discovery requests, the Plaintiff subsequently asked for the documents to be produced in native electronic format.  However, the Defendant had already produced documents in paper and PDF form, which Plaintiff alleged was not the form maintained by the Defendant “or in any reasonably usable form.”  Citing Fed. R. Civ. P. 34(b)(2)(D) and (E), the court noted that the rule allows, but does not require, the requesting party to specify the form in which it is requesting electronic data.  The court also noted there is nothing in the rule that prohibits a party from requesting different formats from one set of discovery requests to the next. Ruling in favor of the objecting Defendant, however, the court considered the “proprietary nature of certain software used by Defendant” and “Defendant’s right to withhold privileged information” as well as the “added costs of re-producing information already submitted to Plaintiff.”  Because the Defendant endured the time, effort, and expense of producing documents in PDF form as initially requested by Plaintiff, the court denied Plaintiff’s request to compel the native electronic forms of such documents. The Plaintiff’s motion to compel also sought all files containing “similar” claims.  While disregarding the Plaintiff’s motivations for requesting such documents, the court opined that the effect of requiring this production would be to “subject [Defendant] to undue burden in light of topics which, at best, have limited evidentiary value in this case given the broadly worded nature of the information requested.” Adding insult to injury, the court makes it a point to criticize Plaintiff’s complaint.  The cause of action was premised on a breach of the covenant of good faith and fair dealing yet Plaintiff’s motion “continually” refers to this as a claim for “bad faith.”  Succinctly and sharply, the court imparts some legal education by bluntly stating that the two are not interchangeable.  After making its criticism of Plaintiff’s mischaracterization, the court writes that “even if such information were to be considered relevant, the requests, as written, are facially over broad.” The court broadly cites a “lack of specificity” before denying more than 25 of Plaintiff’s discovery requests.  Because Plaintiff “failed to provide a sufficient, substantive limitation,” the court ruled that these “generalized discovery requests” were “facially over broad as well as irrelevant.” Lastly, seemingly as a concession to the largely defeated Plaintiff, the court partially grants Plaintiff’s final discovery request.  Plaintiff sought the “complete personnel files” for certain claims handling supervising personnel involved in the claim.  As with the other requests, Defendant objected citing the “personal, confidential, private information” that these files held.  Significantly, the court recited that “‘confidential’ does not equate to ‘nondiscoverable’ or privileged.”  Thus, the court granted Plaintiff’s motion to compel such personnel files, although it concluded this grant by limiting it to information from the files that specifically pertains to the employees’ “background, qualifications, training and job performance” and explicitly excluded any “sensitive personal or medical information” regarding these individuals. By the end of its succinct seven-page opinion, the District Court for the District of Kansas handed down many valuable lessons for future parties engaged in discovery-based litigation.  Among them:  (1) The work product doctrine will not prevent production if litigation is reasonably anticipated; (2) Request documents in the form desired or risk a landslide of “unusable” documents; (3) Be careful, diligent, and precise in your word choice – both in your pleadings and your document requests; (4) Private/Confidential does not mean Privileged/Nondiscoverable. Nicole was a 2010 magna cum laude graduate of Northeastern University located in Boston, Massachusetts where she earned her B.A. in English and Political Science.  She will receive her J.D. from Seton Hall University School of Law in 2015.  After graduation, Nicole will serve as a clerk to a trial judge of the Superior court of New Jersey in the Morris-Sussex Vicinage. 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Hiding Bank Account Records Can Be Criminal—Not Just For the Mob!

During the course of discovery, plaintiff Luellen requested that defendant Hodge  produce bank account records.  Hodge failed to produce the bank account records, claiming that the bank, Capital One (and Charter One), had destroyed these records already. Luellen argues that Hodge was aware that the records were being sought for discovery and deliberately allowed the records to be destroyed. Luellen argues that Hodge had two different ways of being aware that the records were relevant to litigation and thus had a duty to preserve the records. First, Hodge was served with Luellen’s interrogatories, requesting information relating to bank accounts in Hodge’s name. Second, Hodge filed a motion for a protective order requesting that the Court quash a subpoena directed to Charter One. The fact that Hodge sought a protective order regarding the bank indicates knowledge that the bank records were sought for discovery. In addition, Luellen claims that in filings dated February 27, 2012, Hodge made statements indicating his awareness of Luellen's pursuit of information regarding Hodge's personal accounts. The argument for spoliation of the bank records is based on the reasonable assumption that if Hodge had directed Charter One to preserve his records when he was served with the first set of interrogatories, then the relevant records would not have been destroyed in accordance with the bank's record retention policy. In a spoliation motion, the party must show that:   (1) the party charged with destroying the evidence had an obligation to preserve it; (2) the records were destroyed with a “culpable state of mind”; and, (3) the destroyed evidence was relevant to the party's claim or defense. In reference to the first element, the court found that “a common sense understanding of the relationship between an account holder and a financial institution leads to the conclusion that Hodge had sufficient control over the documents to be able to direct their preservation.” Hodge should have directed the bank to preserve the records. In reference to the second factor, that the records were destroyed with a culpable state of mind, the court finds that Hodge’s failure to prevent the bank from destroying the records was negligent but not bad faith. The court finally holds that severe sanctions are not warranted in this case because Luellen has not shown that Hodge's failure to preserve the Charter One account records were done in bad faith or that Luellen had been severely disadvantaged by the destruction of the records. Hodge was directed to reimburse Luellen's costs and expenses in the amount of $18.00. The takeaway message here is that while you are in control of bank records, if you can show that you did not act in bad faith when you failed to prevent the banks from destroying the records, you could avoid a spoliation charge. But beware, it is better to anticipate this and prevent it by telling your bank to keep all your records! 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.

To Preserve or Not to Preserve? THAT Is the Question

This dispute stems from Plaintiff Linda Riley’s slip and fall at a Marriott hotel in Hawaii (her husband, James, is another named plaintiff).  As a result of this fall, in simple terms, Riley broke her right leg and sustained permanent nerve damage including sensory motor loss and weakness in her right foot.  Riley contends Marriott was negligent for failing to remove accumulated water (it had been raining that day), provide a non-slip surface, or provide warning signs. The entire accident was recorded on Marriott’s security cameras, and according to the loss prevention manager, the footage is maintained for 30 days.  However, during discovery, instead of being provided with several hours of footage, Riley was only provided with about 7 minutes; the rest was destroyed.  The footage released began about one minute before Riley’s accident, and ended before Riley was even lifted off of the ground! Plaintiff rightfully believed she was prejudiced because:  (1) she is unable to determine how much water was removed from the location and how long it took hotel staff to remove it, and (2) that the loss prevention manager’s testimony regarding the footage cannot be meaningfully challenged because the footage was gone.  This recording was apparently turned over to the Marriott’s liability insurance carrier, but neither Marriott’s investigation into its destruction (if one occurred) nor the results of any such investigation were ever disclosed.  Even maintenance logs—that might have also denoted any water that was removed from the floor or the placement of any signs—were also allegedly destroyed. From this, the court “easily” found Marriott had a duty to preserve both the sweep logs and the video footage from the day of the accident.  Further, the court recognized Marriott’s failure to offer any justification for its failure to preserve the evidence.  For these actions, the court found “at a minimum, gross negligence.”  The question then turned to imposing sanctions. Fortunately for Marriott, their answer was not stricken.  Nonetheless, their failure to preserve evidence still resulted in an adverse inference instruction regarding the video footage, or lack thereof.  This means the absence of a recording can, at trial, corroborate Plaintiffs’ statements that there were no warning signs at the time of the accident and that water had also accumulated on the floor.  Of note here, the jury would not be required to make such an inference.  However, Marriott might not be eager to take that chance.          Samuel is in the Seton Hall University School of Law Class of 2015 pursuing the Intellectual Property concentration. He received his master’s from the Rutgers Graduate School of Biomedical Sciences and became a registered patent agent prior to entering law school.  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.

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: 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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