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Judge Scheindlin Reversed Magistrate’s Ruling on Spoliation and Prejudice

Posted on August 26th, 2013

About a month ago, our blog discussed the case of Sekisui v. Hart, where a magistrate judge decided an electronic evidence spoliation issue. The magistrate issued a memorandum and order finding that while Sekisui acted “grossly negligent” in deleting emails and ESI after the duty to preserve evidence arose, the innocent party failed to demonstrate relevance or prejudice. Therefore, the magistrate denied sanctions.

A short summary of the case is that the plaintiff, Sekisui, acquired a company, ADI, from the defendants, the Harts. After sending a notice of claim alleging breach of contract, Sekisui deleted Hart’s emails and emails of an ADI former employee. After issuing a litigation hold after the emails were deleted, Sekisui failed to inform its own IT vendor. After the Complaint was filed, the IT vendor then permanently deleted the ESI.

Judge Shira Scheindlin, author of highly-influential plaintiff ediscovery cases, the series of Zubulake opinions, reversed the magistrate judge’s order in Sekisui v. Hart, 12 Civ. 3479, (S.D.N.Y. August 15, 2013). The court’s main points were:

1. There is no analytical distinction between destruction of evidence in “bad faith” or with “malevolence,” and destroying it “willfully.”

2. In this case, there was no question that the deleted emails were relevant. The emails were destroyed from defendant Hart, ADI’s former CEO, who later developed a cognitive disorder that rendered him unable to testify. The other deleted emails were from ADI’s employee in charge of FDA compliance, which was the basis of the underlying breach of contract claim.

3. When ESI is destroyed willfully, prejudice to the innocent party is presumed.

Not all federal courts are adopting these specific elements for spoliation of electronic evidence. In our next blog, we’ll review a district court case in the 10th Circuit that would not automatically assume prejudice for willful destruction of evidence.

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