Lackadaisical Diligence During Discovery Results in Adverse Inference Ruling

Hollis v. CEVA Logistics U.S., Inc

N.D. Ill. May 19, 2022

Why This Case Is Important

Courts will no longer accept lackadaisical behavior when it comes to e-discovery activities. For examples, in this case, the defendant’s misrepresentations and mishandling of the plaintiff’s discovery request resulted in severe discovery sanctions.

Overview

In this wrongful termination case, the court ordered that findings of fact be read to the jury to make inferences on, after Defendant’s spoliation of video recordings resulted in the lack of key evidence.

After various employees provided different testimonies regarding an alleged altercation, the plaintiff requested that the defendant view video recordings to undo the plaintiff's wrongful termination. During the discovery process, the plaintiff sought the video evidence, but the defendant alleged that no such evidence existed. Despite this, the plaintiff’s supervisor pulled the evidence before termination and reviewed the contents of the recording.

Ruling

The court turned to Rule 37(e), in which “the sole source to address the loss of relevant ESI that was required to be preserved but was not because reasonable steps were not taken, resulting in prejudice to the opposing party.”

• Burden of Proof. The court ruled that while the movant typically is responsible for establishing that the evidence exists, the burden of proof “generally fall[s] on the party with better access to the information.” Because there was no evidence of effort to determine whether the evidence existed on the defendant’s end, the court determined that the defendant did not conduct proper discovery diligence.
• Definitive Evidence Aversion. The court ruled that Defendant acted with intent in not preserving or investigating the video because “the investigators did not want to know what the video might show… that they preferred to make their decision using only the witness statements and interviews.”
• Curative Measures. The court declined to impose sanctions but did impose curative measures, whereby the court provides facts to the jury along with instructions for factual application, including the circumstances surrounding the defendant’s handling of the discovery process and previous access to footage from a separate incident.

Legal Analysis

By, Hon. Andrew Peck (Ret.), Sr. Counsel, DLA Piper

It appears that the alternative explanation to intent to deprive, that of incompetence, was raised by the Court and not counsel. In too many cases, courts are punting the intent to deprive issue to the jury, which can be particularly problematic when (unlike in this case) the evidence on that may involve trial counsel.