Plaintiff’s Efforts to Preserve and Produce Email and Electronic Records Were Untimely and Inadequate; Court Invites Motion for Sanctions

Reino de Espana v. Am. Bureau of Shipping, 2006 WL 3208579 (S.D.N.Y. Nov. 3, 2006)

This litigation arose from the casualty of the Prestige off the coast of Spain in November 2002, which caused a large oil spill. In this opinion, the court granted defendant ABS’s motion to compel the production of email and other electronic records prepared by various governmental agencies that were involved in the response to and investigation of the spill. In addition, the court invited ABS to seek sanctions for Spain’s apparent failure to preserve relevant evidence.

Opposing the motion to compel, Spain argued that the electronic records ABS sought simply did not exist, and that other records were privileged. After reviewing the parties submissions, the court found that a determination could not be made based solely on the parties’ written submissions and affidavits. It concluded that an evidentiary hearing was necessary to determine the availability, if any, of additional electronic records, and to resolve material factual disputes concerning Spain’s email systems and use of email. Although Spain moved to limit the scope of the hearing to the technical nature of its email systems and use of email, arguing that issues related to the preservation or destruction of email should not be addressed, the court directed the parties to be prepared to address all issues surrounding the motion. During the two-day evidentiary hearing, both parties presented expert witnesses who testified about Spain’s email systems and the availability of electronic records. Spain also presented three government officials who testified about their particular agency’s email system and its use of email.

The court granted ABS’s motion to compel, finding that the requests for production were not overbroad or burdensome, and that Spain’s search for responsive material was inadequate. It criticized the search for records conducted by the government:

Alonso-Mencia testified that the Merchant Marine’s search for records related to the Prestige consisted of 1) requesting that individuals voluntarily disclose records, and 2) searching a limited number of computers and workstations. This approach was simply not adequate because, over time, additional computers and workstations had to be searched for records concerning the Prestige. If the agency had performed a diligent discovery search of all possible sources-individual computers, workstations, and email addresses from the onset, subsequent searches would not have been necessary. It is not clear whether emails and electronic records were among the records the Merchant Marine initially collected and preserved. Since the Merchant Marine does not have a central server where electronic records could be stored or preserved, any existing electronic records and email communications would have been located in individual computers and workstations. The Merchant Marine, however, failed to conduct a comprehensive computer-by-computer search. Instead, only a limited number were searched. The timeliness of the search is also at issue. Some computers were first searched in 2004-more than a year after the casualty period. The failure to conduct a timely and effective search for electronic discovery records undermines Spain’s position and indicates that evidence related to the Prestige was likely lost.

It found the legal hold issued by the State Society of Salvage and Marine Safety also inadequate:

On January 29, 2004, more then a year after the casualty, SASEMAR issued a notice directing individuals to voluntarily preserve records related to the Prestige. Despite this untimely notice, Bregon asserts that records were preserved because SASEMAR officials know that they have an obligation to preserve records without being reminded or directed to do so, and that preservation is generally encouraged. This assertion is not supported by the record. SASEMAR’s policy concerning email storage is vague. Individual users determine how long emails are preserved. Individual users are responsible for downloading their emails and electronic records, and storing them. Although SASEMAR’s 2004 preservation notice directed individuals to preserve records related to the Prestige . . . SASEMAR failed to coordinate or oversee the process.

The date of the preservation notice – more than one year after the casualty – coupled with the failure to conduct a timely computer-by-computer search for electronic discovery records, strongly indicates that evidence related to the Prestige has been lost.

The court also found the government’s attempt to limit its search for electronic records to just two agencies was improper, and negatively impacted the court’s ability to fairly adjudicate the merits of the case:

This case concerns one of the largest oil spills in history. The response to the Prestige casualty involved coordination from numerous agencies and ministries. For the Court to make a determination with respect to this case, it must consider all the evidence. It is, therefore, necessary to have a complete record. Spain has failed to show that it conducted a timely and diligent search for electronic records, and that all electronic records have been produced. The failure to conduct an adequate search for electronic records inhibits the prosecution of this case, and adversely affects both parties’ claims.

The court observed that, while ABS’s motion was brought as a motion to compel production of evidence, a central issue was whether Spain had appropriately handled the records that were requested. It noted the evidence presented at the hearing showed that Spain failed to place a timely and adequate litigation hold in its agencies and ministries. It found that the failure to act timely supported the allegation that the lack of electronic records was a function of the failure to adequately preserve evidence, and not an indication that such records simply did not exist. The court was pessimistic that additional electronic records could be found: “Given the nature of Spain’s email systems and its failure to timely search for and preserve evidence, the records probably would no longer exist. It may, therefore, be futile to order Spain to conduct a diligent computer-by-computer search.”

The court granted the motion to compel, and invited ABS to file an application requesting the relief, remedy, or sanction it deems appropriate in light of the court’s findings.