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Missing Audio Recording Results in Spoliation Sanctions

Posted on May 25th, 2015

Defendant accused Plaintiff of spoliating a recorded conversation between Plaintiff’s FRCP 30(b)(6) witness and Plaintiff’s former branch manager in Compass Bank v. Morris Cerullo World Evangelism, Civil No. 13-CV-0654-BAS(WVG)(S.D. Cal. May 8, 2015).

Defendant had propounded discovery requests for plaintiff ESI that sought any audio recordings regarding the line of credit at dispute in the lawsuit. Plaintiff produced no audio recordings. During the deposition of Plaintiff’s FRCP 30(b)(6) witness, the witness testified that she had spoken to the former branch manager on the telephone regarding the line of credit, and that the telephone call was recorded. When Defendant questioned Plaintiff regarding the existence of the audio recording, Plaintiff stated that it had searched for the audio recording but could not locate it.

Defendant subsequently filed a motion for sanctions, presenting evidence that Plaintiff had only searched one of the witness’s work phone numbers, when she actually had two phone numbers.

The Southern District of California considered the issue and concluded that at the time the call occurred (February 2013, the same month that Plaintiff had filed the lawsuit), Plaintiff had an “unqualified” duty to preserve evidence.  The court also held that Plaintiff could not “reasonably dispute” the relevance of the audio recording. The court ultimately held that Plaintiff had a culpable state of mind when it willfully failed to disclose the phone call, failed to search and produce the phone call, and willfully withheld such evidence from Defendant. Although the court declined to order terminating sanctions, it did order a mandatory adverse inference instruction which could not be rebutted by Plaintiff. The court also ordered attorney fees and costs to Defendant.

ILS – Plaintiff Electronic Discovery Experts

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