Court Denies Spoliation Motion and Request for Evidentiary Hearing on Party’s E-Discovery Preservation Methods

O’Brien v. Ed Donnelly Enters., Inc., 2006 WL 2583327 (S.D. Ohio Sept. 5, 2006)

In this suit brought under the Fair Labor Standards Act, defendants had produced over 8,000 documents consisting largely of plaintiffs’ work schedules and time punch and payroll records, including Time Punch Change Approval Reports (“TPCA Reports”) related to plaintiffs. The TPCA Reports were printed from defendants’ computer system, referred to as the “in-store processor” or “ISP.” The reports were printed automatically by the ISP as part of the closing paperwork each day, and were regularly kept and maintained by defendants as paper files. The information contained in the TPCA Reports was stored in the ISP in electronic form for 72 days. In addition, defendants backed-up the ISP nightly, using one of three rotating backup tapes. Each backup tape contained information for the preceding 72 days. The tapes were overwritten every three days so that, at most, the backup tapes combined contain information for the preceding 74 days. Defendants attested that the tapes were intended solely for disaster recovery.

Plaintiffs moved for sanctions based upon defendants’ alleged failure to maintain certain TCPA reports, and sought the following relief: (1) an adverse inference that the lost or destroyed TCPA Reports would have been unfavorable to defendants, (2) an order granting plaintiffs fees and costs incurred in connection with this motion for sanctions, and (3) for an evidentiary hearing regarding the ineffective methods employed by defendants and their counsel to preserve electronic data and documents.

Defendants admitted that, while they intended “to keep all TCPA Reports, [they were] not able to locate the TCPA Reports for a small fraction of the days during the years for which the plaintiffs requested documents.” Defendants did not realize until after the lawsuit was filed, and as documents were being gathered in response to plaintiffs’ discovery requests, that any TCPA Reports were missing from their paper files. Defendants contended that, except for one TPCA Report, the Reports “were created (and the electronic information overwritten) well before th[is] lawsuit was filed.” Therefore, defendants contended, they “simply had no obligation to preserve these records.” With regard to one TCPA report in particular, defendants argued that its loss or destruction was inadvertent, and not the result of any effort to prevent disclosing evidence detrimental to them. They noted that the plaintiff to whom the missing report related did not opt-in to the lawsuit until January 14, 2005, nearly one year after the missing TCPA Report was generated.

The court found defendants’ arguments “well taken,” and found that there was “absolutely no basis for inferring that defendants intentionally lost or destroyed the one TPCA Report at issue.” Given this finding, the court further rejected plaintiffs’ request that the court conduct an evidentiary hearing regarding “the ineffective methods employed by defendants and their counsel in preserving electronic data and documents.”