Tagged: Spoliation

How a “Stink Bomb” E-Mail and Its Proof That Facebook Pictures Were Deleted Might Have Blown Up a $10.6 Million Verdict

Parties in all types of cases often post pictures and messages on Facebook that might be detrimental to their cases. After his wife died tragically in an automobile accident, and he brought a wrongful death case, Isaiah Lester did just that when he posted a photo of himself wearing an “I [love] hot moms” t-shirt and garter belt on his head while he had a beer in hand. That was his first bad choice.

Davis v. Grant Park Holds That Sanctions Motions for Breach of Duty to Preserve Electronic Communications are Premature Until the Close of Discovery

Magistrate Judge John M. Facciola recently struck down, without prejudice, a motion for sanctions for the alleged destruction of electronic communications, finding it “premature to consider the question of sanctions until discovery ends and the Court can assess accurately what prejudice, if any, the loss of the electronically stored information has caused.” Davis v. Grant Park, No. 08-cv-1764 (PLF/JMF), 2010 U.S. Dist. (D.D.C. Nov. 9, 2010). Deeming the assessment of prejudice the critical issue, and citing D’Onofrio v. SFX Sports Group, Inc., No. 06-cv-687 (JDB/JMF), 2010 U.S. Dist. LEXIS 86711, at *11 (D.D.C. Aug. 24, 2010) (Facciola, J.), Judge Facciola determined that “the nature and extent of the loss suffered” could not be “accurately gauged” until “all the information that is available” is gathered, which occurs at the close of discovery. Id. at *3. As such, the court directed plaintiff to decide whether to renew the motion after discovery ended, noting further that a renewed motion should “show as clearly as possible the nature of the prejudice,” and that defendant’s submission should “make a similarly precise showing in opposition.” Id. at *4. The decision is consistent with D’Onofrio, wherein Judge Facciola instructed, “[i]t is only after establishing the prejudice the plaintiff suffered that any resulting sanction will fairly address that prejudice, consistent with this Circuit’s insistence that any sanctions imposed be a function of the prejudice done to a party by its offending opponent.” 2010 U.S. Dist. LEXIS 86711, at *11 (citing Bonds v. District of Columbia, 93 F.3d 801, 808 (D.C. Cir. 1996)). Judge Facciola’s directive serves as an important reminder to litigants that any sanctions imposed should ultimately bear a relationship to the prejudice suffered by the other party, and that such prejudice may not be discernable until the close of discovery in a contested matter.

Orbit One: Inadequate ESI Preservation Does Not Merit Sanctions Absent Evidence That Relevant Information Has Been Destroyed

Orbit One Communications, Inc. v. Numerex Corp., 2010 WL 4615547 (S.D.N.Y. Oct. 26, 2010) represents a dichotomy in jurisprudence on ESI preservation efforts and the imposition of automatic sanctions. In Orbit One, Magistrate Judge James C. Francis, IV found that regardless of how inadequate a litigant’s preservation efforts may be, sanctions are not appropriate without proof that “information of significance” has been lost. The court determined that the threshold determination must be “whether any material that has been destroyed was likely relevant even for purposes of discovery.” In so holding, the court discussed and diverged from Judge Shira A. Scheindlin’s decision in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, which earlier held that sanctions may be warranted for inadequate preservation efforts even if no relevant evidence is lost. 685 F. Supp.2d 456, 465 (S.D.N.Y. 2010).

Time For a Bright-Line Preservation Rule?

As was recently reported in the New York Law Journal, one of the issues for discussion at the recent annual meeting of the New York State Bar Association this January was the need for more uniformity, and possibly even a bright-line rule, to govern issues of document preservation. This was the focus of a panel including two New York State Supreme Court justices and three federal judges from the Southern District of New York – District Judge Shira Scheindlin and Magistrate Judges Andrew Peck and James Francis.

New York Courts Address ESI Inconsistencies at State and Federal Level: An Erie Solution?

A panel of New York state and federal judges recently convened to discuss the differing standards between New York state and federal law governing the pre-litigation preservation of ESI and to make recommendations to resolve such inconsistencies. The panel’s findings are reported in the publication, Harmonizing the Pre-Litigation Obligation to Preserve Electronically Stored Information in New York State and Federal Courts. The critical issue is determining when a litigant’s duty to preserve ESI is triggered, how that duty is fulfilled, and the potential consequences for breaching the duty. The panel recognized that the disparate treatment that litigants may receive in New York state courts versus federal courts could lead to a great deal of confusion and uncertainty, even for parties that cautiously implement ESI strategies with an eye towards future litigation. For example, the trend in New York federal courts has been in favor of the adoption of per se culpability when determining a litigant’s state of mind. In Zubulake, the court held that once the duty to preserve ESI attached, any destruction of documents would be, at a minimum, negligent. In Pension Committee, the court held that failure to issue a written litigation hold constituted “gross negligence.” State courts, on the other hand, have largely declined to adopt such per se rules, preferring instead to analyze a litigant’s culpability on a case-by-case basis, as the courts did in cases such as Deer Park and Ecor Solutions.

Lawyers for Civil Justice Plea for Change in ESI Preservation Rules; Report Submitted to Civil Rules Advisory Committee

Lawyers for Civil Justice (“LCJ”) recently submitted a formal comment to the Advisory Committee on Civil Rules regarding problems related to the preservation of information in litigation. The comment, which can be found here, pleads for a change in the current approach to preservation of electronically stored information (“ESI”), in which preservation obligations are largely created by individual courts on an ad hoc basis. This approach, LCJ points out, creates heavy burdens on litigants: The cost of preservation is too high, the risk of spoliation sanctions is too great, and the impact of ancillary litigation proceedings on discovery disputes is too debilitating. Substantive issues in many cases have become overshadowed by issues of preservation.

District Judge Overturns Part of Victor Stanley II Ordering Immediate Jail Time to a Defendant Based on a Possible Future Failure to Pay Spoliation Sanctions

As previously reported, in Magistrate Judge Grimm’s September 9, 2010, decision and order, often referred to as Victor Stanley II, defendant Creative Pipe, Inc. and its principal, defendant Mark T. Pappas, were sanctioned for intentionally violating the court’s preservation and production orders. Among other things, Magistrate Judge Grimm ordered defendants to pay plaintiff’s costs and attorneys’ fees allocable to their spoliation. Judge Grimm further ordered that Mr. Pappas be imprisoned for no more than two years, “unless and until” he pays the fee award. Judge Grimm regarded this sanction as “absolutely essential” in light of his conviction that, “[w]ithout the threat of jail time, … Plaintiff will receive a paper judgment that does not enable it to recover its considerable out-of-pocket losses caused by Pappas’s spoliation.” By Order dated September 30, 2010, the Honorable Marvin J. Garbis, U.S.D.J., entered Magistrate Judge Grimm’s September 9 order essentially verbatim, including that, “[p]ursuant to Fed. R. Civ. P. 37(b)(2)(A)(vii), Defendant Pappas’s acts of spoliation shall be treated as contempt of this Court, and as a sanction, he shall be imprisoned for a period not to exceed two (2) years, unless and until he pays to Plaintiff the attorney’s fees and costs that will be awarded ….” (Emphasis added.)

Gibbons E-Discovery Task Force Reaches New Heights

On October 28, the Gibbons E-Discovery Task Force hosted its fourth annual full day E-Discovery Conference, with more than 100 clients, in-house counsel and other contacts in attendance. Devoted to the latest developments in electronic discovery and corporate information management, this program included speakers who are among the most respected names in the e-discovery field, including former United States Magistrate Judges John Hughes and Ronald Hedges, e-discovery authority Michael Arkfeld, and representatives of leading corporations and e-discovery service providers. Among the Gibbons attorneys who presented and moderated panels were Task Force Chair, Mark S. Sidoti, Chair of the firm’s Employment Law Department, Christine A. Amalfe, and Task Force members, Luis J. Diaz, Phillip J. Duffy, Scott J. Etish, Lan Hoang and Jeffrey L. Nagel.

Federal Judge Rules Government Failed to Preserve Text Messages and Orders Adverse Inference Instruction in Criminal Case

On October 21, 2010, in the highly publicized New Jersey government corruption case U.S. v. Suarez, et ano., No. 09-932, 2010 U.S. Dist. LEXIS 112097 (D.N.J.), the Honorable Jose L. Linares, U.S.D.J., held that the FBI had a duty to preserve Short Message Service electronic communications (i.e., text messages) exchanged between its agents and their cooperating witness, Solomon Dwek, during the course of the investigation of defendants Anthony Suarez (mayor of Ridgefield, NJ) and Vincent Tabbachino (former Guttenberg, NJ councilman and police officer). Despite the lack of evidence of bad faith on the part of the government, because the text messages were not preserved, the Court found clear prejudice to defendants and ordered that the appropriate sanction was a “permissive” adverse inference jury instruction.

Gibbons to Host 4th Annual E-Discovery Conference – October 28, 2010

The Gibbons E-Discovery Task Force will host its fourth annual full day E-Discovery Conference on October 28, 2010, in the firm’s Newark, NJ office. Devoted to the latest developments in electronic discovery and corporate information management, this program will include speakers who are among the most respected names in the e-discovery field, including former United States Magistrate judges John Hughes and Ronald Hedges, e-discovery authority Michael Arkfeld, and representatives of leading corporations and e-discovery service providers.