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“Rap Weasel” Forced to Honor $1 Million Reward Offered via YouTube – eDiscovery Case Law

It isn’t every day that eDiscoveryDaily has reason to reference The Hollywood Reporter in a story about eDiscovery case law, but even celebrities have eDiscovery preservation obligations during litigation.  In Augstein v. Leslie, 11 Civ. 7512 (HB) (SDNY Oct. 17, 2012), New York District Judge Harold Baer imposed an adverse inference sanction against hip hop and R&B artist Ryan Leslie for “negligent destruction” of a hard drive returned to him by the plaintiff after a $1 million reward was offered via YouTube.  On November 28, a jury ordered him to pay the $1 million reward to the plaintiff.

Reward Offered, then Refused

While Leslie was on tour in Germany in 2010, a laptop and external hard drive (that contained some of Leslie’s songs not yet released) were stolen.  Capitalizing on his popularity on social media, Leslie initially offered $20,000 for return of the items, then, on November 6, 2010, a video on YouTube was posted increasing the reward to $1 million.  The increase of the reward was also publicized on Leslie’s Facebook and Twitter accounts.  After Augstein, a German auto repair shop owner, returned the laptop and hard drive, Leslie refused to pay the reward alleging “the intellectual property for which he valued the laptop was not present on the hard drive when it was returned”.

Plaintiff’s Arguments as to Why Reward was not Warranted

Leslie attempted to make the case that when he used the word “offer,” that he really meant something different. He argued that a reasonable person would have understood mention of a reward not as a unilateral contract, but instead as an “advertisement” – an invitation to negotiate.

Leslie’s other argument was that, regardless whether it was an “offer” or not, Augstein failed to perform because he did not return the intellectual property, only the physical property.  Leslie claimed that he and several staff members tried to access the data on the hard drive but were unable to do so.  Leslie sent the hard drive to the manufacturer, Avastor, which ultimately deleted the information and sent Leslie a replacement drive.  The facts associated with the attempts to recover information from the hard drive and requests by the manufacturer to do the same were in dispute between Leslie, his assistant, and Avastor, who claimed no request for data recovery was made by Leslie or anyone on his team.

Judge’s Responses and Decision

Regarding Leslie’s characterization of the offer as an “advertisement”, Judge Baer disagreed, noting that “Leslie’s videos and other activities together are best characterized as an offer for a reward. Leslie ‘sought to induce performance, unlike an invitation to negotiate [often an advertisement], which seeks a reciprocal promise.’”

Regarding Leslie’s duty to preserve the hard drive, Judge Baer noted: “In this case, Leslie was on notice that the information on the hard drive may be relevant to future litigation and, as a result, had an obligation to preserve that information. Augstein contacted Leslie personally and through his attorney regarding the payment of the reward, and a short time later, the hard drive was sent by Leslie to Avastor….Leslie does not dispute these facts.”  As a result, Judge Baer found that “Leslie and his team were at least negligent in their handling of the hard drive.”

Citing Zubulake among other cases with respect to negligence as sufficient for spoliation, Judge Baer ruled “I therefore impose a sanction of an adverse inference; it shall be assumed that the desired intellectual property was present on the hard drive when Augstein returned it to the police.”  This led to the jury’s decision and award last month, causing the New York Post to characterize Leslie as a “Rap Weasel”, which Leslie himself poked fun at on Instagram.  Only in America!

So, what do you think?  Was the adverse inference sanction warranted?  Please share any comments you might have or if you’d like to know more about a particular topic.

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