eDiscovery Daily Blog

Court Says Rule 37(e) Doesn’t Apply When Recording Was Intentionally Deleted: eDiscovery Case Law

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

In Hsueh v. N.Y. State Dep’t of Fin. Services, No. 15 Civ. 3401 (PAC) (S.D.N.Y. Mar. 31, 2017), New York District Judge Paul A. Crotty relied upon inherent authority to impose sanctions and determined “that an adverse inference is the appropriate remedy” for the plaintiff’s deletion of a recorded conversation with an HR representative, agreeing with the defendants that “Rule 37(e) applies only to situations where ‘a party failed to take reasonable steps to preserve’ ESI; not to situations where, as here, a party intentionally deleted the recording.”

Case Background

In this case arising from claims of sexual harassment at work, the plaintiff, at an April 2016 deposition, initially stated that she did not think she had recorded any conversations with an HR representative (Allison Clavery) from the company about her allegations, but eventually explained that she thought she had recorded one meeting with Clavery in either December of 2015 or January of 2016, and that she deleted the recording in “[e]ither the course of 2016 or 2015” because “the voice recording itself. . . was not very clear, so [she] did not feel it was worth keeping.”  As a result, in June and early July 2016, the defendants filed a motion for spoliation sanctions.

On July 11, 2016 — the day the plaintiff’s opposition to the spoliation sanctions motion was due — plaintiff’s counsel submitted a letter to the Court advising that “I received an e-mail from my client at 10:16 p.m. last evening, which contained an audio recording attachment of a meeting between my client and Allison Clavery.”  Plaintiff’s counsel noted that “the e-mail indicated that the recording had been recovered with the help of Plaintiff’s husband” and that plaintiff’s counsel stated that he was “awaiting any further instructions with regard to Defendant DFS’s motion.”  As a result, discovery was reopened and the plaintiff and her husband were deposed.  Despite recovery of the recording, the defendants continued to pursue spoliation sanctions, as they had only received materials relating to the plaintiff’s mental health history “over the past few weeks, despite requesting them back in December 2015.”

The defendants stated that it was unclear as to whether Rule 37(e) applied here, arguing that the audio recording might not be ESI and also arguing that Rule 37(e) applies only to situations where “a party failed to take reasonable steps to preserve” ESI; not to situations where, as here, a party intentionally deleted the recording.  The plaintiff, on the other hand, argued that, since the recording was restored, no sanctions were warranted.

Judge’s Ruling

With regard to the defendant’s argument that the recording is not ESI, Judge Crotty stated “The Court disagrees. The recording was made using a digital recorder, and was saved in a digital format.”

However, with regard to the defendant’s argument that Rule 37(e) doesn’t apply when the party intentionally deletes the recording, Judge Crotty said “This makes sense. The Committee Notes to the 2015 Amendment to Rule 37 explain that Rule 37(e) is meant to address ‘the serious problems resulting from the continued exponential growth in the volume of’ ESI as well as ‘excessive effort and money’ that litigants have had to expend to avoid potential sanctions for failure to preserve ESI…These considerations are not applicable here. It was not because Hsueh had improper systems in place to prevent the loss of the recording that the recording no longer existed on her computer; it was because she took specific action to delete it. The Court therefore concludes that Rule 37(e) does not apply.”

As a result, Judge Crotty, determining that “the Court may rely on its inherent power to control litigation in imposing spoliation sanctions”, ruled “that an adverse inference is the appropriate remedy” for the plaintiff’s deletion of the recording and granted the defendants’ motion for spoliation sanctions.

So, what do you think?  Should Rule 37(e) have applied here?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

print