Failure to Proactively Preserve Data Leads to Sanctions

Europe v. Equinox Holdings, Inc.

S.D.N.Y. 3/21/22 7:00

Why This Case Is Important

Parties have a duty to preserve potentially relevant data when a party knows or should know that the evidence may be relevant to future litigation. When data is stored in specific locations without backup the likelihood of inadvertent deletion is high. In this case, the defendant failed to preserve relevant evidence and had no backup, which led to spoliation sanctions.

Overview

In this employee unlawful discrimination case, the plaintiff moved for spoliation sanctions against her employers, the defendants, for failing to preserve relevant data that, she alleged, supported her case.

The records in question were timesheets that showed the arrival and departure times of employees at the plaintiff’s work location. The defendants never produced time records for one of the months requested in e-discovery, September 2019. This was the month the plaintiff was fired-- allegedly for being late too frequently. The defendants explained that not all schedules could be located, but that prior monthly schedules would be sufficient to “ascertain whether others were late to work on any days in September.”

The plaintiff filed for an adverse inference instruction against the defendant based on the defendants’ failure to preserve the September 2019 timesheet.

Ruling

• Sanctions Granted in Part. The court ruled that the plaintiff could present evidence that the time sheet for September was lost. Additionally, the plaintiff could introduce evidence to support her claim that other employees’ “patterns or rate of lateness” was similar to that of the plaintiff during the time period before her termination.
• Request for Adverse Inference Instructions Denied. The court found no evidence that the defendants had an intent to deprive the plaintiff of the September 2019 timesheet. Even though the defendants had a duty to preserve and relevant evidence wasn’t preserved, pure negligence is not enough to warrant one of the harshest spoliation sanctions. 

Legal Analysis

By, David Cohen, Esq., Chair - E-Discovery Group, Reed Smith LLP

Defendants failed to preserve a relevant timesheet after the duty to preserve attached, but plaintiff failed to show, by clear and convincing evidence, any intent to deprive her of evidence—a prerequisite for adverse inference instructions under FRCP 37(e). The court reasoned that its evidentiary ruling should cure any prejudice.