Unclear Preservation Obligations Leads to Spoilation Sanctions

Safelite Group, Inc. v. Nathaniel Lockridge, et al.

S.D. Ohio 12/22/22 8:00

Why This Case Is Important

While the fact of a legal hold being issued is not privileged, in most cases, legal hold letters are generally considered privileged and not subject to discovery. However, that can change if there is evidence that spoliation may have occurred.

Overview

In this civil suit, plaintiffs brought action against a competitor and former employee, William Billingsley, alleging misappropriation of trade secrets and interference with its employment contracts and business relationships. During discovery, Billingsley testified that he had deleted documents from his personal email account after January 7, 2022, despite being advised by his counsel on December 24, 2021, to preserve all documents in his possession relative to his employment with plaintiff. He also claimed to have notified his counsel that his emails were set to auto-delete after 30 days but “all relevant documents had been printed out and preserved.”

Plaintiff later claimed to have discovered evidence of spoliation when another defendant produced a relevant email thread involving Billingsley’s personal email account, which had not been produced by Billingsley. Plaintiff then issued a subpoena to Billingsley’s counsel seeking their communications with Billingsley about his preservation obligations and any legal hold notice in connection with plaintiff’s lawsuits. Billingsley moved to quash the subpoena.

Ruling

• Considering Spoilation Sanctions. To grant plaintiffs’ motion for production of the legal hold notice, plaintiffs must satisfy these three conditions for spoilation sanctions: (1) the party with control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the accused party destroyed the evidence with a culpable state of mind; and (3) the evidence destroyed is relevant to the other side’s claim or defense.
• Spoilation Beyond Speculation. The court ultimately found that plaintiff had met its burden of making a preliminary showing of spoliation sufficient to support its request for production of the legal hold notice. Billingsley’s own testimony that he deleted documents from his personal email account after he had been advised not to by his counsel and the email thread obtained from another defendant supported the courts conclusion that circumstances “combine to elevate the issue of spoliation beyond the level of mere speculation.”
• Motion to Quash Denied. The court rejected Billingsley’s argument that any deleted documents were “innocuous and unrelated to the allegations of plaintiff’s complaint,” finding that it would not take Billingsley at his word that he deleted only documents unrelated to plaintiff’s claims.

Legal Analysis

By, Angie Nolet, Corporate Counsel, Redfin, and Co-founder and host, Discovery Chicks Podcast

This ruling emphasizes two trends: (1) evidence of intent increasingly drives spoliation findings, and (2) non-lawyers’ relevance determinations tend to land litigants in hot water. Here, the evidence of intent was that Billingsley, the spoliating litigant, deleted emails after being advised of his preservation obligations. Billingsley’s “conclusory suggestion” that the spoliated evidence was “innocuous and unrelated” to the case proved unpersuasive: the Court rejected this claim, citing his lack of legal training and inability to apply the legal term “relevance” to th case. The Court stressed that his interpretation could exclude legally relevant evidence, where the legal profession’s expansive reading wouldn’t.