Cruz v. G-Star Inc. (S.D.N.Y. September 30, 2019) shows that the 2015 amendments to the FRCP e-discovery rules helped the spoliating party escape sanctions due to the duty to preserve, and FRCP 37(e)’s more stringent standards for imposing e-discovery sanctions.
In this alleged discrimination case, the plaintiff requested e-discovery spoliation sanctions against her former employer, the defendant, for deleting the plaintiff’s emails and SAP account. The magistrate judge recommended that the court give an adverse inference instruction based on the following:
• The duty to preserve arose when plaintiff first complained to HR
• When this duty arose, the defendant did not suspend its document retention policy, leading to the destruction of relevant emails and SAP account data central to the case
In district court, the plaintiff objected to the magistrate judge’s ruling, arguing that “the remedy of adverse inference does not fit the wrong.”
- District Court Overrules Magistrate Judge. The district judge determined the magistrate judge’s findings that there was a duty for the defendant to preserve plaintiff’s email was “clearly erroneous,” citing that the plaintiff never articulated claims that would make a reasonable person believe a lawsuit was likely.
- Defendant Must Believe the Plaintiff Would Sue. Even though the defendant sought legal advice about the plaintiff’s complaints while working for the defendant, this “does not demonstrate that one believes litigation is imminent.”
- SAP Account Data Spoliated. Based on a “glitch” in the defendant’s database the plaintiff’s SAP account data was not preserved, but the plaintiff never proved that the defendant acted with intent to deprive, meaning an adverse inference sanction was not warranted. The district court remanded the case back to the magistrate judge to determine if the plaintiff had been prejudiced by the loss of the SAP account data.
Expert Opinion from David Cohen, Esq., Chair - E-Discovery Group, Reed Smith LLP
This decision reminds that no duty to preserve evidence arises at least until a party should know that evidence may be relevant to future litigation, but, as soon as litigation is reasonably anticipated, companies should implement timely holds and carefully investigate data sources to ensure that relevant information is preserved.
Case Law Tip:
Download this guide to understand the rules and requirements for e-discovery practices under the FRCP.