e-Lessons Learned

Suddenly find yourself at the wrong end of a trade secrets litigation? Heed this advice: When the court says “preserve,” that means documents, files, data, and BlackBerry^® smartphones. Thus, be sure to instruct your clients not to wipe the memory from their BlackBerrys or other handheld devices before turning them in; or else, your client may be subject to sanctions.

The defendants in a trade secrets theft case learned this lesson the hard way when the District Court in Florida slapped them with sanctions after they turned in freshly “wiped” BlackBerrys. The court interpreted the freshly sanitized BlackBerrys as evidence of bad faith that justified sanctions. But you might be thinking: “A BlackBerry wiped clean? Who cares! All the e-mails the other side could possibly want are readily available on the server.” This type of thinking could get you in trouble. Let’s see why.

After plaintiff Southeastern Mechanical Services, Inc. (“SMS”) prosecuted employees of a construction services company (“Defendants”) with theft of trade secrets, they obtained a court order requiring Defendants to preserve “all computer files, data, documents, or similar information on their computers” until otherwise notified. The court also prohibited Defendants from “destroying any and all information and documents potentially relevant to” SMS’s claims. Defendants’ in-house counsel properly requested employees to turn in their laptops and BlackBerrys, but seemingly failed to warn them to refrain from wiping the BlackBerrys’ internal memory.

The BlackBerrys ultimately made their way into the hands of SMS’s computer forensics expert who quickly determined that (a) they had been wiped clean, and (b) the “wiped-clean” condition was no accident. Even the Defendants’ own forensic expert conceded at a deposition that only “intentional actions” would result in a full BlackBerry data wipe. That was all the court needed to hear.

The court considered SMS’s requests to sanction Defendants by granting either (a) default judgment, (b) a ruling as to the improper use of trade secrets, or (c) an adverse inference jury instruction. In Florida, a court may impose sanctions based on evidence spoliation when the opposing party, in bad faith, destroys evidence it had a duty to preserve and that had once existed. The destroyed evidence must also be “crucial” to the other party’s case or defense. Thus, for the court to justify issuing the sanctions requested against Defendants, it would need to conclude that the deleted BlackBerry data was crucial to SMS’s case.

With minimal deliberation, the court first concluded that “evidence existed at one time” on the BlackBerrys and that Defendants had a duty to preserve that evidence. But was that evidence crucial to SMS’s case? And had Defendants deliberately wiped the BlackBerrys in bad faith?

The “crucial” requirement was easy. The court concluded that a “substantial and complete” destruction of data justified a finding that the destroyed evidence would have helped SMS’s case and its loss was prejudicial.

The court next noted that the BlackBerrys could have only achieved a “wiped” state following deliberate and intentional actions; and that it was “suspicious” that, following months of use, the BlackBerrys contained no “e-mails, text messages, calendar entries, or records of telephone calls.” It all reeked of bad faith. The court discounted the Defendants’ suggestion that SMS’s forensic expert could have accidentally deleted the files from the BlackBerrys.

Defendants argued that it didn’t matter that they had wiped the BlackBerrys before returning them because any e-mails that had been deleted were mirrored on their server, and they had already given SMS copies of those e-mails.

The court, however, was not impressed. It pointed out that Defendants had used their BlackBerrys for both work and personal e-mail accounts; and the personal e-mail accounts were not mirrored on the employer’s server. For one Defendant, the court calculated that approximately three weeks’ worth of potentially relevant data had been deleted. Based on all facts at hand, the court granted SMS an adverse inference jury instruction based on the Defendants’ failure to preserve their BlackBerrys.

While this case dealt specifically with BlackBerrys, the lesson learned should be applied to any smartphone or other handheld device that can store data, including iPods, digital cameras, and GPS devices. To avoid spoliation sanctions, make it clear to all employees that they should not perform any data wipes, system resets, scrubs, scours, or other similar actions once the duty to preserve exists. Bottom line: don’t go near the “Wipe Handheld” choice in the “Security Options” menu.

By day, Laura J. Tyson handles e-discovery issues for a boutique litigation firm in Roseland, NJ, while at night she completes her J.D. at Seton Hall Law School in Newark, NJ.

Article posted on March 15, 2010 at 2:43 AM |              More... 
Tagged as: Accessibility, Computer Forensics Protocols, Experts, Legal Hold/Preservation, Sanctions, Spoliation.
View more articles implicating: Employees, In-House Counsel
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