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Plaintiff Spoliation at Issue After Mediated Settlement Dictated ESI Destruction

Posted on March 24th, 2014

In the business tort case Oros & Busch Application Technologies, Inc. v. Terra Renewal Services, Inc. Case No. 4:12CV00959 ERW (E.D.Mo. March 6, 2014), plaintiff ESI and spoliation is at issue. Plaintiff and Defendant are competing environmental clean-up businesses. To very briefly summarize the facts: Defendant’s former employees, Golden and Timby, went to work for Plaintiff. After working for Plaintiff for a few years, Defendant offered them another job in its employ and Golden and Timby accepted (which Plaintiff alleged violated an anti-competition agreement, among other things.)

Plaintiff filed a Complaint alleging a number of business torts against Golden and Timby. Plaintiff informed Terra of the lawsuit and invited Terra to attend the mediation. Terra attended the mediation, but voluntarily left before the session was over. Plaintiff was able to reach a mediated settlement with Golden and Timby.

Plaintiff then filed an Amended Complaint against Defendant Terra, alleging tortious interference with a contract and civil conspiracy. Some of the ESI at issue in both cases was confidential business documents of both Plaintiff and Defendant that Golden and Timby had in their possession.

Defendant filed a Motion for Sanctions for Spoliation of Evidence. The Motion alleged that in the mediated session from the lawsuit against Golden and Timby, Plaintiff specifically requested that Golden and Timby destroy their computers, hard drives and other electronic devices. Defendant Terra alleged that contained on these drives was emails and documents that showed Plaintiff knowingly misappropriated Defendant’s confidential information to compete against them.

Defendant bolsters its allegations with three facts:

1. Plaintiff did not dispute that the mediated agreement required Golden and Timby to destroy their computers and hard drives;

2. Plaintiff did not dispute that it moved to add Terra as a party prior to the agreement (the underlying theory being the duty to preserve evidence was in full force); and

3. Plaintiff did not dispute that ESI was destroyed as a result of the agreement.

Defendant argued that in consideration of these three points, sanctions in the Eighth Circuit were warranted for intentional destruction of evidence. But is the case as cut and dry as Defendant claimed? The court ultimately DENIED Defendant’s Motion for Sanctions despite these three undisputed facts. We will explore why in our next blog post!

ILS – Plaintiff Electronic Discovery Experts

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