Court Imposes Sanctions for Failure to Review Email and Preserve Data

In re Cheyenne Software, Inc., 1997 WL 714891 (E.D.N.Y. Aug. 18, 1997)

Plaintiff moved for various discovery sanctions, demonstrating, among other things, that defendants had failed to review potentially responsive email that had been previously provided to the SEC. The court ruled that defendants would be required to bear the cost of downloading and printing up to 10,000 additional pages of email responsive to key word searches requested by plaintiff. 1997 WL 714891, at *1.

Plaintiff also showed that defendants had destroyed documents stored in computer hard drives of various personnel. Opposing the requested sanctions, defendants argued that the could not “freeze” their business by maintaining all hard drives inviolate, but rather must erase and reformat their computer hard drives as people leave and as business needs dictate. Id. Defendants (including both inside and outside counsel) had undertaken various efforts to identify and preserve hard copies of relevant electronic files before the hard drives were erased. Id. at *2. The court noted that defendants could have preserved the documents by copying information from the drives to other relatively inexpensive electronic storage media. Prejudice was not clearly established however, since plaintiff could not identify with specificity any information that was unavailable. Monetary sanctions against the defendants were awarded: $5,000 to be paid to the court and $10,000 in attorneys’ fees to be paid to the plaintiffs as the reasonable expense of the motion. Id.