When Does Spoliation Warrant A Default Judgement?

Spoliation, A Proportional Response

Author: Jason Castle
Case Citation: Edelson v. Cheung, Civil Action No. 13-5870 (JLL) (JAD), 2017 U.S.
Employee/Personnel/Employer implicated: CEO
eLesson Learned: The intentional spoliation of evidence alone is not enough to compel the court to impose a default ruling against the offending party.
Tweet This: In Edelson v. Cheung, the court decided that the intentional spoliation of evidence alone was not enough to compel it to impose a default ruling against Cheung because the spoliation, though intentional, did not prejudice Edelson so greatly that he would be unable to support his claims.

In Edelson v. Cheung, Civil Action No. 13-5870 (JLL) (JAD), Plaintiff Leonard Edelson entered into a contract with Defendant Stephen Cheung. Under the terms of the contract, Edelson agreed to provide machinery, yarn, and consultant services, with a value in excess of $600,000, to defendants Eastchester facility in exchange for defendants promise to give Edelson a 50% interest in Eastchester at any time he specified. Edelson alleged that after entering into the agreement defendant transferred ownership of Eastchester to a third-party. According to Edelson, “Defendant created an e-mail account to hide relevant communications [from] his own lawyers. Then, when Edelson found out about the existence of this secret e-mail account, through another party’s production, Defendant deleted the evidence.” Edelson brought suit asserting breach the contract and breach of covenant of good faith and fair dealing.

In the matter at hand, Edelson contended that Defendant failed to preserve electronic correspondence pertaining to the issues of the case and sought a spoliation ruling against Defendant for the same. 

Plaintiff Edelson obtained an email correspondence between Defendant and the third-party that stated, “Don’t forget to use only e-mail account […] Do not use the frontier email They read everything.” Defendant testified at deposition that he deleted the emails in question because his computer was acting “sluggish” and that he was unaware that deleting the e-mails “would lead to the misunderstanding of [his] intention[s].”

Ultimately, the court found that the Defendant deliberately destroyed e-mail evidence in an attempt to conceal, suppress, and/or deprive Edelson of the information contained within it. The court imposed sanctions against Defendant under Rule 37, however, the court refused to find that the Edelson had suffered a degree of prejudice that merited the imposition of a default judgment against the Defendant. The court based its decision on two facts, (1) Edelson was able to obtain through subpoena propounded on the third-party “some of the emails” that can be presented to a jury to further support his claims; and (2) Edelson’s briefs and papers demonstrate that there is additional evidence other than the destroyed emails at issue which may be used at trial to prove the allegations against the Defendant. Though the court was not persuaded to impose a default judgment the court did decide in favor of Edelson ordering that the jury be provided an adverse inference instruction regarding the deleted emails.

The lesson of this case is that the intentional spoliation of evidence alone is not enough to compel the court to impose a default ruling against the offending party. Rather the spoliation must prejudice the affected party so greatly that they would be unable to support their claims.

Jason Castle is a 2018 Juris Doctor candidate at Seton Hall University School of Law, where he has focused his studies in the area of conflict management representing Pro Se litigants at mediation and settlement conferences in the Southern District of New York (SDNY) and District of New Jersey (DNJ) respectively. Jason serves as President of the Student Bar Association and co-founded the #LearnKnowDifferent initiative to raise awareness and lower stigma around common learning disabilities prevalent in post-secondary institutions. Upon graduating Jason intends to work in the New Jersey Judiciary as a law clerk where he has accepted a one-year appointment. Following his judicial clerkship, Jason will work for theMorristown based law firm, McElroy Deutsche Mulvaney & Carpenter. Prior to attending law school, Jason served in the United States Marine Corps where he deployed as infantry Marine in support of Operations Iraqi Freedom and Enduring Freedom. Upon completion of his military service, Jason was employed by Apple, Inc. in a business capacity as a sales executive managing Apples strategic financial services customer relationships.

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