Destroying evidence can have tremendous and devastating consequences for the party at fault. As this case shows, given the severity of the spoliation of data, courts will award harsh judgments like permanent injunctions and terminating sanctions.
In this copyright infringement case, the U.S. 4th Circuit Court of Appeals was asked to review a district court judgement which sanctioned the defendants with a permanent injunction for data spoliation.
The plaintiffs contended that the defendants stole source code from the plaintiffs. After the plaintiffs sent a cease and desist letter, the defendants destroyed his computer that retained relevant information about the case. When the plaintiffs requested information regarding the source code, the defendants initially contended that they had no relevant information. Subsequently the defendants admitted during a deposition that his computer had been destroyed.
By the end of discovery, the plaintiffs had found that they deleted “thousands” of potentially relevant files just before the plaintiffs forensically imaged defendant’s data sources.
The court sanctioned the defendants for spoliation and imposed a permanent injunction. The defendants appealed the ruling.
• Court Affirms Ruling. The 4th Circuit Court of Appeals affirmed the District Court ruling and found that a permanent injunction was the correct ruling.
• Notice. The defendants had notice, via the cease and desist letter that there was a reasonably anticipated likelihood of litigation. This action should’ve triggered the defendants’ duty to preserve all potentially relevant information, which they didn’t.
• Severity of the Ruling. To justify the severe punishment of a permanent injunction the court stated, “No less drastic sanction would adequately address the prejudice suffered by QueTel (plaintiffs) or adequately deter the type of spoliation that occurred in the case.
Download the PDF version of QueTel Corp v. Hisham Abbas case law alert here.
It is interesting that the Court of Appeals did not cite Rule 37(e) at all, because this clearly was a case where there was intent to deprive under 37(e)(2). Destroying the computer (and hence the ESI contained in it), not disclosing that in response to an interrogatory, and also deleting defendant’s source code control system and lying about that—easy. Ask for case ending sanctions. When the spoliator is the plaintiff, dismissing the case is appropriate; here, where the defendant was the intentional spoliator, a permanent injunction was the correct remedy.