No Sanctions for Deletion of Email Folder Belonging to “Perhaps the Key Witness” Absent Evidence of Prejudice
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Sekisui Am. Corp. v. Hart, No. 12 Civ. 3479(SAS)(FM), 2013 WL 2951924 (S.D.N.Y. June 10, 2013)
In this case, the court considered Plaintiff’s “at least” negligent deletion of “the entire active email folder of an important witness—perhaps the key witness—at a time when [it] obviously knew that it might commence a lawsuit,” but declined to impose the requested adverse inference—or any sanction—absent a sufficient showing that “relevant information potentially helpful to [the defendants] [wa]s no longer available.”
“This case arises out of a corporate marriage gone bad.” In 2009, Plaintiff acquired a privately-held company (“ADI”) controlled by Defendants Richard Hart (“Hart”) and his wife and initially employed Hart as its chief executive officer. In October 2010, however, Plaintiff terminated Hart’s employment and informed Defendants of its intent to seek damages for “various alleged wrongs.” In May 2012, Plaintiff filed a complaint for damages.
Despite notifying Defendants of its intent to seek damages in October 2010, Plaintiff failed to implement a litigation hold until January 2012 and also failed to notify the outside vendor managing its computer operations that it needed to preserve relevant electronically stored information until nearly three months after the suit was filed. In the interim, in 2011, Plaintiff’s human resources and office manager (“Taylor”) authorized the vendor to “erase the email folders of several ADI employees, including Hart, who obviously was a key player” in the acquisition. “The ostensible reason for Taylor’s decision to delete Hart’s emails was that ADI’s servers ‘were regularly experiencing problems due to storage availability issues.’” According to Plaintiff, the deletions were not intended to spoliate evidence, but rather were a “good faith effort to free up space” on the email server “which was continuing to receive junk mail in Hart’s account despite his departure from the firm.” Before the deletion, Taylor printed any emails she deemed “pertinent to the company.” Plaintiff conceded the deletion was a “serious mistake” but noted that its “counsel made full disclosure” after learning of Taylor’s actions. Moreover, after its counsel “learned of the destruction,” Plaintiff “undertook a search of several alternative sources” and recovered at least 36,000 “Hart emails.”
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