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Reviewing the Magistrate Judge’s Order in Electronic Discovery Spoliation Case

Posted on October 17th, 2012

In the recent case of Multifeeder Technology, Inc. v. British Confectionery Company Limited (2012 WL 4135848 (D. Minn.)) that we blogged about in our last post, the magistrate judge ordered a computer forensics expert to determine if defendant had engaged in spoliation. The forensic expert demonstrated that defendant in fact had purged files before the experts arrived, including using commercial wiping software, deletion of files and re-formatting of hard drives.  Based upon the forensic report, Plaintiff moved for sanctions on the grounds of spoliation.

The magistrate judge found clear and convincing evidence that the owners of defendant company, David Connolly, Jr. and Blair Connolly, engaged in intentional suppression of relevant information, including:

  • Six deletions of David’s computer which occurred after the issuance of the ESI Protocol Order;
  • Employing wiping software on David’s computer right before the forensics expert was slated to arrive;
  • Concealing the use of an encrypted volume from the computer experts, the plaintiff and the court; and
  • Deletions of email chains and communication from Blair’s personal laptop.

The magistrate judge recommended significant sanctions be imposed against defendant as the actions greatly increased litigation costs and prejudiced plaintiff. However, the magistrate judge also considered mitigating factors such as the fact that the terms of the contract could be determined without the spoliated evidence and that plaintiff could depose defendant employees to uncover further evidence.

The Magistrate recommended for sanctions:

  • An adverse inference instruction be given;
  • Defendant be held in civil contempt and ordered to pay $25,000 to the court and $475,000 to the plaintiff. (The number $475,000 was based on the costs of the independent computer forensics expert and some litigation fees.)

Both plaintiff and defendant filed objections to the magistrate judge’s recommendations, and the district court weighed in. Will the district court agree with the findings and the high monetary sanctions recommended by the magistrate? The answer may surprise you!

More on the district court’s ruling in the next blog and in the meantime, learn more about our plaintiff electronic discovery services or call us directly at 888-313-4457.

ILS – Plaintiff eDiscovery Experts

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