Sanctions

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.

Seeking Discovery Requires Specificity

When lawsuits arise, litigants are usually hesitant to cooperate with their adversaries. However, this way of thinking usually does nothing more than delay the inevitable. More often than not, adversaries choose to “fight to the death” rather than work together and speed up the lengthy litigation process. Margel v. E.G.L. Gem Lab Ltd. involves a suit between Guy Margel, the plaintiff, and E.G.L Gem Labs, a gem grading business that Margel initially started and later sold. The defendants claim that the plaintiffs have failed to provide certain pieces of discovery after the plaintiffs retained new counsel, produced 800 pages of documents, and represented that all responsive, non-privileged documents had been produced. The defendants, however, offered no proof to substantiate their claims. The court mentions that suspicions alone will not substantiate the imposition of sanctions. Under ordinary circumstances, a party’s good faith averment that the items sought simply do not exist, or are not in his possession, custody or control, should resolve the issue of failure of production.  Zervos v. S.S. Sam Houston, 79 F.R.D. 593, 595 (S.D.N.Y.1978). Based on these circumstances, the court found no basis for imposing sanctions on the plaintiffs. The plaintiffs also bring a motion against the defendants seeking the production of documents relating to the grading certificates or reports issued by EGL–USA for the period from January 1, 2000, to present [the date of litigation]. The defendants contend that some of these documents predate the claim in questions and are therefore non-discoverable. The court noted that it is not appropriate for a party to use the discovery provisions to determine whether or not it has a claim. “A party must already have a claim for which it seeks additional discovery, as discovery is not meant to allow a party to find out if it has a claim.” (quotations and citations omitted). This being the case, the court held that there is no reason to provide records for the period that pre-dates the litigation. However, the plaintiffs also sought to compel the production of electronic information relating to the claim, which the defendants contend fell outside the scope of the term “documents.” The court noted that simply because an item is stored electronically does not mean it is not considered a “document.” Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 317 (S.D.N.Y.2003)  (“[E]lectronic documents are no less subject to disclosure than paper records.”).  Therefore, the court held that the defendants were to produce the electronically stored information within ten days. In summation, Margel demonstrates the fact that it is usually easier to work together than constantly compete. Additionally, when a party puts forth a good faith effort to provide the entire discovery requested, and that party represents that the information provided is the full extent of discovery, absent evidence to the contrary additional documents will not be compelled. Finally, it is important to note that electronic information is considered to be a fully discoverable document not subject to any additional protection simply because of the electronic format.

Will A Tangled Web of Preservation Failures Lead to Sanctions?

Preserving electronic data can be a challenge for companies with multiple data centers.  However, what we have here is a failure to communicate.  The case at issue is an ERISA class action against UnumProvident. On November 26, plaintiffs' counsel wrote to request a conference to present their request for a preservation. The court then outlined principles that would serve as the basis for the parties' draft of a proposed order. The court observed, without contradiction from UnumProvident, that UnumProvident already had a duty to preserve any tapes containing emails as of November 4, the date litigation commenced. The order required all back-up tapes or other back-up hard drives, disks or other hardware containing material back-up by the defendants regarding Y2K, regardless of the date or dates of the internal or external e-mails, computer information, or electronic media contained thereon to be preserved.  Specifically the plaintiffs requested all internal and external e-mails, generated, created, or dated October 14, 15, and 16 of 2002, and November 18, 19, and 20 of 2002.  If the defendants alleged these e-mails were no longer in existence due to routine destruction or otherwise, the defendants had to provide an affidavit explaining circumstances of the unavailability. UnumProvident’s Enterprise Security Architect decided instead of preserved the data to implement a special “snapshot” back-up which would back-up those emails that were on the system as of the day or days the snapshot was taken.  UnumProvident could also have directed IBM, their data vendor, to copy email back-up tapes from existing unexpired tapes to other back-up tapes that would contain no expiration date. Similarly, it could have copied the data onto a hard drive or into other computer media.  Instead, this snapshot inadvertently caused all of the data on the back-up tapes to be overwritten. The court found that no enterprise officers of UnumProvident had sufficient expertise to discuss the preservation project in a meaningful way. Neither of them took the steps that they needed to take to get sufficiently informed advice on the issues involved. Similarly, there was insufficient supervision of the Enterprise Software Architect's efforts.  The officer had also never ordered IBM to preserve emails regarding the six dates. Additionally, the law department of UnumProvident never instructed its officers to confirm that email for the six days had been preserved by IBM. As this issue developed relatively early in discovery, the court found it difficult to determine the extent to which the plaintiffs have suffered any prejudice from the failure to capture all of the UnumProvident emails for the six days.  Throughout the whole opinion, the court was very skeptical of the testimony of UnumProvident’s officers.  The court determined most of UnumProvident’s actions were inadequate.  However, it also determined the accelerated expiration problem that occurred because of the creation of the snapshot was inadvertent and unintended.  Therefore, the court did not award any sanctions.  It can still be assumed the court would be less trusting of UnumProvident after this debacle and less likely to give them the benefit of the doubt.

What Conduct is Necessary for the Court to Impose a Dispositive Sanction?

In cases involving a large amount of e-discovery, it is common for a litigant to be accused of misplacing or destroying relevant evidence.  When evidence is lost, the court must evaluate whether sanctions are appropriate, and if so, what type of sanctions should be imposed.  In making this determination, the court will consider the following factors: (1) the degree of fault of the spoliation party, (2) the degree of prejudice to the adverse party, and (3) whether there is a less severe punishment that would avoid substantial unfairness to the adverse party while still serving to deter similar spoliation by others in the future. In Micron Technology, Inc. v. Rambus Inc., the parties sued and countersued for claims relating to patent infringement.  During discovery, the court determined that Rambus destroyed a significant amount of documents relevant to the lawsuit.  Specifically, Rambus engaged in three “shred days” (also known within the company as a “shredding parties”) where evidence was destroyed pursuant to the company’s document retention policy.  Much of this evidence, however, was lost after a litigation hold was in place. In order to determine if sanctions were appropriate, the court first analyzed whether there was any bad faith on the part of Rambus.  The court explained that bad faith requires a showing that the “spoliating party intended to impair the ability of the potential defendant to defend itself.”  The court found that during the shred days, employees were instructed to be selective about which documents they destroyed.  Employees were told to “expunge documents questioning the patentability of Rambus inventions,” while at the same time to “look for things to keep that would help establish that Rambus had intellectual property.”  Further, Rambus employees testified that they were destroying documents in preparation for the “upcoming battle” of litigation.  Ultimately, the court determined that Rambus destroyed documents in bad faith. Next, the court examined whether Rambus’s bad faith shredding parties caused prejudice to its adversary.  Prejudice “requires a showing that the spoliation materially affects the substantial rights of the adverse party and is prejudicial to the presentation of its case.”  The court explained that when bad faith exists, the spoliating party bears the “heavy burden” of showing a lack of prejudice.  The court explained that Rambus failed to meet this heavy burden and enumerated multiple claims and defenses that were prejudiced by Rambus’s bad faith destruction of evidence. Finally, the court considered whether a dispositive sanction is an appropriate sanction under these circumstances. The court explained that when there is “clear and convincing evidence that the spoliation was done in bad faith and was prejudicial to the opposing party, then dismissal may be an appropriate sanction” as long as a lesser sanction would serve as an adequate deterrent. The court considered whether an award of attorney’s fees or other monetary sanctions would be appropriate, but ultimately rejected these “relatively mild sanctions [that were] disproportionate to the degree of fault and prejudice at hand.”  Next, the court analyzed whether an adverse jury instruction would be a proper sanction.  The court rejected this sanction as being inadequate punishment and deterrence in light of Rambus’s extensive bad faith spoliation.  Lastly, the court considered whether an evidentiary sanction would be an adequate remedy.  This sanction would foreclose Rambus from offering any evidence related to the subject matter of the destroyed documents.  Once again, the court found this sanction to be unsatisfactory due to Rambus’s extensive destruction of evidence.   Therefore, after considering the extraordinary circumstances of this case, along with the lesser sanctions available, the court found that the only appropriate sanction was to hold Rambus’s patent-in-suit claims unenforceable against its adversary. In sum, the court held that a dispositive sanction is appropriate when a party destroys evidence in bad faith, the destruction is prejudicial to the adversary, and no lesser sanction would be appropriate to punish and deter similar action.  It should be noted that dispositive sanctions are rare, but nonetheless are warranted when “destruction of evidence is of the worst type: intentional, widespread, advantage-seeking, and concealed.” E-DiscoParty, a Seton Hall University School of Law graduate (class of 2014), served on the executive board of the Seton Hall Law Review and is a member of the Interscholastic Moot Court Board.  E-DiscoParty currently clerks for a Justice on the Supreme Court of New Jersey. 

Throwback to 1986: Court of International Trade Gets Discovery Rules Right

It seems that courts were ruling on the intersection of new technology and discovery practice back in the day. In 1986, the United States Court of International Trade decided motions to compel discovery regarding new technologies in Daewoo Electronics Co., Ltd. v. U.S. The court even noted that “[t]his controversy is a good example of how the development of new technology for using, storing and transmitting information allows parties to test the rules of disclosure or discovery.” There, the court grappled with whether the Department of Commerce met their burden of producing certain documents. The Department of Commerce was accused of committing three faux pas: (1) the tapes provided to the plaintiff was recorded at a much greater density than was stated, (2) data regarding the sale of two separate companies was requested, but not provided, and (3) the government failed to provide material known as an SAS data set. The government argued that they were in strict compliance with an earlier order mandating that they turn over certain evidence. However, the court expressed that it was troubled “by indications that [the government] took an inordinately restrictive view of its obligations under the order.” The government, when ordered to turn over certain tapes, turned over the tapes themselves (which the plaintiff was unable to read), as opposed to the data contained on the tapes. “To say that the data sets into which the computer tapes were transferred are not governed by an order speaking of computer tapes is as if someone has said at the dawn of the era of typewriters that types documents are not governed by a court order speaking of ‘writings.’” Further, the court noted that if the government was acting in earnest, then they had “taken unfair advantage of the court’s lack of familiarity with the variety of further electronic refinements and embodiments of taped information.” Thus, the court granted the plaintiff’s Motion to Compel, setting a precedent for reasonable interpretation of words surrounding new technologies. Matthew G. Miller, a Seton Hall University School of Law graduate (Class of 2014), focuses his practice in the area of Intellectual Property. Matt holds his degree in Chemistry from the University of Chicago. During law school, Matt worked as a legal intern at Gearhart Law, LLC.

Can a Court Sanction a Pro Se Party for Deleting Evidence? The Third Circuit Will, So Do Not Delete Your Data!

Whenever sanctions are involved, you can expect to see questionable behavior from one or more parties.  In this particular case, a pro se litigant tried to be cute and the court called him out for it.  The Appellant here used to own a company which provided consulting services to the Appellee.  Since the company became defunct, the owner became the only remaining party being sued. The district court had entered a discovery preservation order in which the parties agreed the appellant would return a laptop computer along with all of its data.  However, the appellant deleted data off the laptop minutes before signing the agreement.  Then the appellee initiated post-settlement litigation to obtain sanctions.  The appellant’s attorney then withdrew and the appellant continued pro se.  The judge found the appellant to be in civil contempt and awarded sanctions of over $50,000. The appellant raised three contentions on appeal.  First he argued sanctions under 28 U.S.C. § 1927 could only be awarded against attorneys, not pro se individuals.  Circuits are split on this issue.  The Third Circuit navigated around the issue, asserting that the district court judge could have justified its sanction under other grounds. Second, the appellant argues that monetary sanctions should not have been awarded because the information was deleted before the discovery agreement was signed.  The Third Circuit called out the argument as being a bit too clever and was not persuaded.  It all but accused the appellant of deliberately misleading the district court.  More damning was the actual language of the agreement.  It exposed the appellant to liability arising from the agreement itself, which governed the return of the laptop. Third, the appellant challenges the award for all attorneys' fees.  On this issue the Third Circuit remanded for a determination of what fees fairly reflect compensation for the appellant's contumacious conduct.  What is more vital here is the punishment for deleting data off the computer.  Those who try to outsmart the court will get their just deserts and acting pro se does not provide any sort of loophole.

Facebook Fails: Can I Delete my Facebook while a Lawsuit is Pending?

The defendant in personal injury litigation commonly requests discovery concerning a plaintiff’s Facebook account.  The reason such requests are made is that pictures on Facebook may reveal the “injured” plaintiff dancing on top of a bar table, skiing, traveling, etc.  These damaging photos may prove that the plaintiff’s injury is not as severe as he or she claims and could result in dismissal of the case.  Therefore, it is not uncommon for a plaintiff to delete his or her Facebook account in order to conceal any damaging pictures.  The deletion of a Facebook account, however, may result in sanctions such as an adverse inference jury instruction.[1] In Gato v. United Airlines, Inc., the plaintiff was injured while working for the defendant.  During the litigation, the plaintiff permanently deleted his Facebook account.  The defendant motioned for an adverse inference jury instruction claiming that the deletion of the Facebook account destroyed relevant evidence, thereby prejudicing the defendant. In granting the sanction, the district of New Jersey adopted a very low standard as to what a litigant must show in order to obtain an adverse inference jury instruction.  The court held that “so long as evidence is relevant, the offending party’s culpability is largely irrelevant, as it cannot be denied that the opposing party has been prejudiced.”  This seemingly simple sentence has enormous implications for litigants in the district of New Jersey for two reasons. First, it means that as long as the destroyed evidence was relevant, a litigant need not prove that the adversary intentionally (or even negligently) destroyed evidence.  The lack of state of mind requirement eliminates what is often the most difficult element to prove when seeking spoliation sanctions.  Without the need to prove a litigant’s culpability in destroying the evidence, the court seems to impose a form of strict liability upon the destroying party.  The only requirement imposed by the court is that the party seeking sanctions prove that the destroyed evidence was relevant.  This is a significant deviation from the traditional method employed by courts which requires proof that a party was at least negligent in destroying the evidence. Second, the court indicates that as long as the evidence is relevant, it will presume that the destruction of the evidence was prejudicial to the opposing party.  This eliminates the need for the party seeking sanctions to prove that it was prejudiced by the missing evidence.  Instead, the party only needs to prove that the evidence was relevant. Notably, the court explained that the defendants in Gato were “prejudiced because they have lost access to evidence that is potentially relevant to Plaintiff’s damages and credibility.”  In other words, the defendant in Gato did not have to even prove that the destroyed evidence was undoubtedly relevant—the defendant only had to prove that the evidence was potentially relevant. In sum, the District of New Jersey imposed an adverse inference jury instruction simply because the destroyed evidence was potentially relevant to the litigation.  The court did not require the defendant to show that it was prejudiced by the destruction, nor did the court require any showing as to the Plaintiff’s state of mind in destroying the evidence.  Moving forward, litigants must be extra careful in their efforts to preserve evidence relevant to litigation. E-DiscoParty, a Seton Hall University School of Law graduate (Class of 2014), served on the executive board of the Seton Hall Law Review and is a member of the Interscholastic Moot Court Board.  Currently, E-DiscoParty clerks for a Justice on the Supreme Court of New Jersey.  [1] An adverse inference jury instruction is a powerful sanction where the court advises the jury to presume that any destroyed or missing evidence contained detrimental information about the party that destroyed or lost the evidence.

Employers—Got Resumes? Don’t Toss Them Just Yet

Plaintiff Erick Zayas joined with the Equal Employment Opportunity Commission (EEOC) to sue Ventura Corp. for employment discrimination on the basis of sex in 2007. In essence, Zavas complained that Ventura’s long-standing tradition of hiring women for the position he applied to was discriminatory. Furthermore, Zavas alleged that Ventura destroyed relevant evidence. In its answer, Ventura stated that the fact that no men have filed applications or have not met the position requirements did not support the plaintiffs’ assertion of discrimination. However, during limited discovery a list revealed that qualified men did in fact apply and accounted for 34.5 percent of qualified applicants. The central issue involved application materials received by Ventura. These included materials submitted by e-mail and hard copy resumes. The court first notes that spoliation is “the failure to preserve evidence that is relevant to pending or potential litigation.”  The duty to preserve relevant evidence arises once litigation is reasonably anticipated. The court noted that since Ventura was notified in 2007 that it was being charged with sexual discrimination, at that point Ventura should have reasonably anticipated litigation and was thus under the duty to preserve. Ventura attempted to make a statutory argument that resumes did not need to be preserved. The relevant statute, 29 CFR 1602.14 (see http://www.law.cornell.edu/cfr/text/29/1602.14), makes reference to “application forms” and “test papers.” Ventura argued that it required neither application forms nor test papers and that resumes were not mentioned. However, the court rejected this argument. The court noted that the statute also includes the language, “other records having to do with hiring.” The court ultimately held that resumes therefore clearly applied. Ventura’s Human Resource Analyst testified that certain documents were shredded or taken to a warehouse as a result of an office restructuring in 2009. Furthermore, the HR Analyst wasn’t able to find the said documents. The plaintiffs were therefore able to establish that Ventura either lost or destroyed the resumes between 2007 and 2010. Because Ventura was on notice since 2007, the disappearance of these documents constituted a violation of its duty to preserve relevant evidence. Soft copies of resumes delivered by e-mail were also lost in the same time period. In fact, th plaintiffs were able to produce a relevant e-mail to and from Ventura, while Ventura was not able to produce the very same e-mail. This e-mail alone and the fact that other relevant e-mails likely existed in the 2007-2010 period but were nowhere to be found, was sufficient to infer that Ventura likely destroyed them. The court held that sanctions were in order for Ventura’s violation of its duty to preserve. As a result of Ventura’s failure to preserve relevant evidence, the court imposed a “spoliation instruction” or adverse inference instruction. Such an instruction allows the trier of fact to infer that the content of the destroyed relevant evidence was damaging to Ventura’s case. Lesson learned? If you intentionally or unintentionally destroy relevant evidence while under a duty to preserve, an adverse inference instruction will likely bring swift defeat and sway the trier of fact against you. It’s best to preserve evidence and maintain your credibility with the court and trier of fact even with bad facts. Rocco Seminerio is a Seton Hall University School of Law graduate (Class of 2014). Mr. Seminerio focuses in the areas of Estate Planning, Elder Law, and Health Law. He graduated from Seton Hall University in 2011 with a degree in Philosophy. He also has an interest in the life sciences.

Defendant’s “Hands-Off” Approach Insufficient; Sanctions Ordered

In this case, Peerless Industries, Inc.  sued defendants Crimson AV, LLC claiming patent infringement and design patent infringement arising out of defendant’s manufacture and sale of certain TV mounts. While not a defending party, Sycamore Manufacturing Co., Ltd. (“Sycamore”) is plaintiff's former supplier of these TV mounts and played a vital role in the alleged infringement. Sycamore is located in China, while Peerless and Crimson are both located in the United States. Plaintiffs filed two motions: (1) a motion to compel the deposition of the Sycamore’s president, Tony Jin, and (2) a renewed motion for sanctions, both of which were granted. It was also determined in a previous case that Jin exercised managerial control over both Sycamore and Crimson. Therefore, plaintiff satisfied that Mr. Jin is a managing agent of Crimson. The court stated, “Plaintiff must simply show ‘that there is at least a close question as to whether the witness is a managing agent.’ We already found this to be the case. Furthermore, Mr. Jin clearly satisfies the ‘paramount test,’ which is whether the individual identifies with the corporation's interests as opposed to an adversary's.” The court further ordered that without any showing of hardship, Jin’s deposition would have to take place in the United States and not in China. As for the plaintiff’s renewed motion for sanctions, this motion marked the third time the plaintiff filed a motion regarding the same set of documents. The plaintiff argued that at the deposition of Crimson’s managing director, “it became clear that defendant did not conduct a reasonable investigation regarding Sycamore’s document production or Sycamore’s document retention for purposes of this litigation.” The plaintiff then filed a renewed motion for sanctions. The defendant and Sycamore asserted that certain documents in Sycamore’s possession had been produced. The plaintiff noted, that defendants did not represent that all requested documents were produced or that they were searched for but no longer existed. The plaintiff argued that the defendant wanted to rely on the same declarations as opposed to issuing more specific responses. The court stated that since it had determined Jin was principal of both Crimson and Sycamore and that he exercised a considerable amount of control over both corporations, that he was able to obtain all relevant documents from Sycamore. However, the court found that defendant took a “back seat” approach and instead used a third-party vendor to collect the documents. Finding that neither Crimson nor Jin had apart in the process of obtaining the requested discovery, the court granted the plaintiff’s motion for sanctions. The court held that this “hands-off’ approach is insufficient. “Defendants cannot place the burden of compliance on an outside vendor and have no knowledge, or claim no control, over the process. Finally, the court held that defendants must show that they in fact searched for the requested documents and, if those documents no longer exist or cannot be located, they must specifically verify that it is they who cannot produce. Salim received his B.A. in Applied Communications, with a minor in Legal Studies, from Monmouth University. He received his J.D. from Seton Hall University School of Law in 2014. Salim’s past experiences include interning for a personal injury law firm prior to attending law school, as well as judicial internships in the Civil and Family Divisions. Currently, Salim is taking part in the Immigrants’ Rights/International Human Rights Clinic at Seton Hall Law.