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Sanctions

eDiscovery Case Law: Adverse Interference Sanction for Lost Text Messages

As the sources of electronic files continue to become more diverse, case law associated with those different sources has become more commonplace.  One ruling in a case last month resulted in an adverse instruction against the US Government for failing to preserve text messages.

In United States v. Suarez, (D.N.J. Oct. 21, 2010), United States District Judge Jose L. Linares considered adverse inference sanctions related to the Government’s failure to preserve text messages.  In this case, the F.B.I. should have retained text messages between a cooperating witness and F.B.I. agents because it was reasonably foreseeable that the text messages would be discoverable by defendants in later criminal proceedings. However, given the lack of evidence of Government bad faith in failing to impose a litigation hold on the text messages until seven months after its investigation ended, the court imposed the “least harsh” spoliation adverse inference instruction that would allow but not require the jury to infer that missing text messages were favorable to defendants.

A cooperating witness posed as a developer and, as instructed by Federal Bureau of Investigation agents, offered payments to local public officials in exchange for expediting his projects and other assistance. During the F.B.I. investigation, the witness exchanged Short Message Service electronic communications (text messages) with F.B.I. agents. In later criminal proceedings, the government notified the court that it had incorrectly stated that no text messages were missing. The court held a hearing at which F.B.I. agents and information technology specialists described F.B.I. procedures to preserve and retrieve data generated by handheld devices. Despite an F.B.I. Corporate Policy Directive on data retention and litigation hold policies, no litigation hold was in place when the cooperating witness was “texting” with agents.

In a “not-for-publication” decision, the court pointed out that the Government’s obligation under Fed. R. Crim. P. 16 to disclose information was more limited than its obligation under civil discovery rules. However, the text messages with the witness were “statements” under the Jencks Act that should have been preserved by the Government. The F.B.I. was “well-equipped” to preserve documents, and the U.S. Attorney “was aware of the importance of preserving documents relevant to the litigation and could have requested a litigation hold on the text messages from the inception of the investigation.” The request for a litigation hold was not made until seven months after the investigation ended and three months after the F.B.I. began searching its servers for missing text messages.

In determining sanctions, the court considered precedents in the civil cases of MOSAID Techs. Inc. v. Samsung Elecs. Co., 348 F. Supp. 2d 332 (D.N.J. 2004), and Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456 (S.D.N.Y. 2010). The court concluded there was “little evidence” of Government bad faith leading to loss of the text messages. On the other hand, evidence indicated the defense was prejudiced by the loss of text messages with the cooperating witness, whose credibility was “of paramount importance.” The court thus denied defendants’ request for the “relatively severe” sanction of suppression of the witness’s testimony and all tape recordings in which he was a party. However, an adverse inference instruction was appropriate under MOSAID criteria. The text messages had been within the Government’s control and were intentionally deleted by F.B.I. agents, and the U.S. Attorneys’ Office failed to take steps to preserve the messages. The messages were relevant to claims or defenses, and it was reasonably foreseeable by the Government that the messages would later be discoverable. The court concluded that the “least harsh” spoliation adverse inference jury instruction described in Pension Committee would be issued because Government bad faith had not been shown. Such an instruction would allow but not require the jury to infer that missing text messages were favorable to defendants.

So, what do you think?  Have you encountered a case where preservation of text messages was a critical component?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Sanctions and Other Things that Go Bump in the Night

Sunday is Halloween, so it seems appropriate to try to “scare” you before the big day.  Does this scare you?

“pervasive and willful violation of serial Court orders to preserve and produce ESI evidence be treated as contempt of court, and that he be imprisoned for a period not to exceed two years, unless and until he pays to Plaintiff the attorney’s fees and costs that will be awarded to Plaintiff as the prevailing party”

What about this?

“From this Court’s perspective, a monetary sanction of $150,000 should be sufficient to compensate Plaintiffs for their added expense and deter SanDisk from taking shortcuts.”

Or this?

“For his misconduct, Peal has already received a severe sanction in having his complaint dismissed with prejudice.”

How about this?

“A party does not need formal notice to know that spoliation of evidence and misrepresentations may lead to dismissal.”

Scary, huh?  If the possibility of sanctions keep you awake at night, then the folks at eDiscovery Daily will do our best to provide useful information and best practices to enable you to relax and sleep soundly, even on Halloween!

Of course, if you really want to get into the spirit of Halloween, click here.

What do you think?  Is there a particular eDiscovery issue that scares you?  Please share your comments and let us know if you’d like more information on a particular topic.

Happy Halloween!

Case Law: Spoliate Evidence and Go to Jail?!?

One of the most well-known cases in eDiscovery is Victor Stanley (VSI) v. Creative Pipe (CPI) and is a prime example of what NOT to do when conducting a search for relevant ESI in litigation – Victor Stanley, Inc. v. Creative Pipe, Inc., 2008 U.S. Dist. LEXIS 42025 (D. Md. May 29, 2008), – including not testing the search methodology, resulting in inadvertent disclosure of 185 privileged documents, and the waiving of privilege of same. If you’re not familiar with this case, Google it and you’ll find plenty of sites/articles that discuss its significance.

If that was a blow to Creative Pipe and their president, Mark Pappas, the order issued on September 9th for that same case (now widely referenced as “Victor Stanley II”) makes the May 2008 order pale in comparison.

Judge Grimm found that “Defendants…deleted, destroyed, and otherwise failed to preserve evidence; and repeatedly misrepresented the completeness of their discovery production to opposing counsel and the Court.” As a result, he ordered “that Pappas’s pervasive and willful violation of serial Court orders to preserve and produce ESI evidence be treated as contempt of court, and that he be imprisoned for a period not to exceed two years, unless and until he pays to Plaintiff the attorney’s fees and costs that will be awarded to Plaintiff as the prevailing party pursuant to Fed. R. Civ. P. 37(b)(2)(C).”

Ouch!

Clearly, Judge Grimm felt that Pappas’ and CPI’s behavior in this case over four years represented intentional destruction of evidence and he ruled accordingly on plaintiff’s motion regarding same. Perhaps his view of their actions can be summarized by footnote 19 in the order:

“CPI named one of its product lines the “Fuvista” line. Pappas admitted during discovery that “Fuvista” stood for “F**k you Victor Stanley,” (Pappas Dep. 22:20-24, Pl.’s Mot. Ex. 5, ECF No. 341-5), demonstrating that Pappas’s wit transcended sophomoric pranks such as logging into VSI’s web site as “Fred Bass” and extended to inventing insulting acronyms to name his competing products. When disclosed, the meaning of this acronym removes any doubt about his motive and intent. No doubt Pappas regarded this as hilarious at the time. It is less likely that he still does.”

So, what do you think? Is this the start of a trend – prison sentences for evidence spoliation? Or, is this an extreme example of clear intentional evidence destruction? Please share any comments you might have (including examples of other cases where sanctions included jail time) or if you’d like to know more about a particular topic.

More to come on this case in the future…