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What Sanction is Warranted for Defendant’s (Almost) Total ESI Production Failure?

Posted on April 21st, 2014

In this employment discrimination case Knickerbocker v. Corinthian Colleges, Case NO. C12-1142JLR (W.D. Wash. April 7, 2014)., the duty to preserve evidence for Defendants arose when it received an EEOC Notice of Charge of Discrimination regarding the termination of Plaintiffs in May 2012. Plaintiffs sent a demand letter shortly thereafter and filed the action on July 3, 2012. Defendant had both inside and outside counsel working on the matter. By January 2013, only a meager defense production of ESI and documents had been tendered. Missing were Plaintiffs’ email communications from their employment that were in Defendant’s possession.

After some discovery conferences, the outside defense counsel represented to the court that Plaintiffs’ work email accounts were deleted after their terminations. When questioned about back-up tapes, counsel represented they could not get the tapes without shutting down the servers and therefore, it was prohibitively expensive. (Counsel’s representation would later prove to be false.)

Discovery continued and it was clear during depositions that key employees had not conducted any initial search. A defense witness also testified that Defendant Corinthian had failed to issue a litigation hold—at all.  Another defense witnesses testified that the emails are only deleted 30 days after an employee’s termination, while another contradicted his testimony, saying the email chains may be deleted before the 30 days are up.

The parties filed a stipulated Order that Defendants would conduct additional searches for ESI on their “back-up servers.” They produced an additional 1,000 documents after the Order. Defendant filed a Verification, signed by outside counsel, with the court that they had searched “all available electronic sources and/or servers…” However, it later became clear that the back-up tapes had not been searched at all.

Plaintiff filed its first Motion for Sanctions, seeking a default judgment for the egregious failures of Defendant’s discovery production. Defendant responded that its search was sufficient, that it deleted Plaintiffs’ email accounts before the duty to preserve evidence was triggered, and that the stipulated order only required it to search its back-up “servers,” not back-up “tapes.” (Even though it was not clear to plaintiff trial attorneys that Defendant sought to distinguish between the back-up servers and back-up tapes.) Will the court buy this argument? Is this a justifiable distinction? We continue our discussion of this case in our next post.

ILS – Plaintiff Electronic Discovery Experts

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