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Plaintiff’s Motion for ESI Spoliation Sanctions Denied Without Prejudice Pending Further Discovery

Posted on September 14th, 2016

In Konica Minolta Business Solutions, USA Inc. v. Lowery Corporation d/b/a Applied Imaging Systems, Inc. et. al., Case No. 15-11254 (E.D. Mich., Aug. 31, 2016), Plaintiff sued Defendants (several former employees and their new employer, Lowery Corporation (“Lowery”), for unlawful taking of property and disclosure of confidential materials and trade secrets. The case was beset by discovery difficulty. Initial discovery orders were entered requiring Defendants to provide Plaintiff with mirror images of devices used at Lowery.  Later orders required the individual Defendants to provide mirror images of other devices. Defendants objected to these orders, and the court stayed discovery to permit the parties to come to a solution. Prior to the discovery stay, Plaintiff had filed a Motion for ESI Spoliation Sanctions. When the parties could not resolve the discovery issues, the court revisited the Motion.

The court applied Amended FRCP 37(e) in its determination, since the most recent motion for ESI spoliation sanctions was filed after the amended rules went into effect. Using the standard in amended FRCP 37, the court determined that Plaintiff did establish a duty to preserve and did establish that information was lost. Plaintiff had served litigation hold letters, and Defendant Lowery Corp. admitted that it had advised all individuals to preserve evidence. Plaintiff was able to show that individual Defendants deleted files and ran anti-forensic software on their computers three months after litigation began and prior to the imaging of the computers. However, the court found that further discovery was needed to determine the extent of the loss and the level of prejudice to Plaintiff. The court denied the Motion without prejudice to give the parties time to conduct further discovery to clarify the issues.

ILS – Plaintiff Electronic Discovery Experts

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