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Negligent Spoliation Without a Showing of Prejudice: Sanctions or No?

Posted on July 24th, 2013

For a recent case that offers a twist on necessary elements for spoliation sanctions, see the memorandum decision dated June 10, 2013 in Sekisui America Corp. v. Hart, 2013 WL 2951924 (S.D.N.Y.).

One of the disputes at issue is whether sanctions were warranted against the plaintiff company for deleting a defendant’s email folder. The fact that the email folder was destroyed was undisputed, but plaintiff claimed it was an innocent mistake to free up space on the server. Defendants sought sanctions.

To warrant spoliation sanctions, the court noted the elements required by the Second Circuit:

  1. The party in control of the documents had a duty to preserve;
  2. The data was destroyed with a “culpable state of mind;”
  3. The evidence was relevant to a claim or defense.

The court notes that “mere” negligence can suffice for culpable state of mind, citing Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99 (2nd Cir. 2002). However, the court also noted that for the third element, sanctions are only warranted if the party can show it suffered prejudice as a result in addition to relevancy. The court cited efforts by plaintiff to mitigate any prejudice: it had printed out a number of emails prior to deleting the file, it searched other employees’ emails to find more, it searched and located an old laptop that defendant had used, and it ultimately produced 36,000 emails.

As defendants failed to produce or describe a single relevant missing email that prejudiced them, the court denied the motion for sanctions but offered defendants another crack at the bat: if they could demonstrate prejudice, they may renew the motion.

eDiscovery Extra: Will negligence culpability according to Residential Funding from the Second Circuit remain the law when the federal rules are amended? This was mentioned in a footnote in this case, and we will delve into this in our next blog!

ILS – Plaintiff Electronic Discovery Experts

UPDATE: U.S. District Court Judge Shira A. Scheindlin, author of the highly influential Zubulake series of cases, reversed this memorandum and order on August 15, 2013.

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