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Parties Claim 10 Year Difference in When Duty to Preserve Evidence Arose  

Posted on March 6th, 2015

In the intellectual property and licensing dispute The Lunkenheimer Company et al. v. Tyco Flow Control Pacific Party, Ltd. et al., No. 1:11-cv-824 (S.D. OhioFeb. 12, 2015), the Southern District of Ohio considered when the parties’ duty to preserve evidence began. The parties differed in their opinions by over 10 years.

Intervenor/Counter-Defendant Klur alleged that a Rule 30(b)(6) deposition revealed a massive failure by one of the defendants, PFCP, to preserve, search, and produce evidence. Klur sought sanctions for PFCP’s discovery failures, asserting that the duty to preserve evidence began in 2002, a month after PFCP acquired the intellectual property license at issue. In support of its position, Klur put forth an email from 2002 in which a PFCP executive described the licensing dispute regarding license ownership, and stated that he had involved Tyco’s legal department in the dispute.

PFCP, on the other hand, asserted that the duty to preserve arose 10 years later in 2012 when PFCP answered the complaint and consented to US jurisdiction. In the alternative, PFCP alleged that the duty to preserve arose, at the earliest, in 2011 when plaintiffs filed the complaint. In support of its position, PFCP advised the court that Klur had accepted substantial payments for the license since 2002 and did not take any action until 9 years later.

The court also considered at what point PFCP, an Australian company with essentially no sales in the United States, could have reasonably anticipated litigation in the United States. The court concluded that, in the absence of evidence that PFCP could have reasonably anticipated litigation in the United States any earlier, the duty to preserve began when plaintiffs filed the complaint. Accordingly, the court ordered that PFCP only had a duty to preserve and produce relevant documents from 2011 onward. To the extent that any relevant emails existed only in archived databases, the court ordered PFCP to investigate and inform the court regarding the burden and costs involved with searching and recovering the archived emails.

The court ordered PFCP to produce relevant documents from 2011 forward, and declined to order sanctions against PFCP.

ILS – Plaintiff Electronic Discovery Experts

Did you know? A 2014 study estimates that 122,500,453,020 emails are sent every hour.

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