Reckless and Grossly Negligent Failure to Preserve Results in Sanctions for Defendant

Jones v. Bremen High School Dist. 228, 2010 WL 2106640 (N.D. Ill. May 25, 2010)

Despite receipt of plaintiff’s EEOC claim alleging employment discrimination, defendant failed to institute a litigation hold.  Instead, defendant identified three individuals likely to possess responsive information and asked them to identify and preserve relevant evidence.  Some of the individuals identified were substantially involved in the alleged discriminatory treatment of the plaintiff.  Despite this failure, defendant eventually produced most of the requested information, although some email was deemed likely to have been lost forever.  Finding defendant’s preservation efforts “reckless and grossly negligent”, the court ordered sanctions.

Following a long period of alleged discrimination, plaintiff sued defendant.  Defendant received notice of plaintiff’s EEOC charges on or before November 30, 2007, thus triggering its duty to preserve.  Despite that, defendant failed to issue a litigation hold and instead instructed individual employees, some of whom had been accused of harassing the plaintiff, to identify and preserve relevant evidence.  There was no evidence presented that their assessment was guided by counsel.  It was not until the spring of 2009 that all employees were finally placed under litigation hold.  Despite that failure, in October of 2008 defendant began automatically saving all emails from district users in a searchable archive.  Accordingly, all potentially relevant emails created thereafter were preserved.  Any email purposefully or automatically deleted prior to that could not be recovered, however.  Prior to October 2008, employees had the ability to permanently delete emails from the system.

Also of note during discovery was defendant’s decision, when ordered to produce its document retention policy, to instruct its technological director to put in writing the district’s email retention policy, rather than producing a document retention policy discovered by plaintiff posted on the district’s website.

Plaintiff deemed defendant’s responses to discovery insufficient noting an absence of emails expected to have been produced and filed a Motion for Sanctions.  Thereafter, defendant produced a large volume of additional documents thus filling the “gaps” in production.  Despite the delayed production, however, the danger that relevant emails were deleted remained because defendant failed to immediately place a litigation hold and because employees had the ability to permanently delete emails from the system.

Beginning its analysis, the court laid out the appropriate legal standards and noted that in the Northern District of Illinois, “failure to issue a litigation hold is not per se evidence that the party breached its duty to preserve”, rather, “reasonableness is the key to determining whether or not a party breached its duty”.  Accordingly, the court determined that defendant breached its duty to preserve by failing to immediately issue a litigation hold to “all employees who had dealings with plaintiff” and by relying on only a few individual employees to identify and preserve responsive email:

It is unreasonable to allow a party’s interested employees to make the decision about the relevance of such documents, especially when those same employees have the ability to permanently delete unfavorable email from a party’s system.  As one court has noted, "simply accept [ing] whatever documents or information might be produced by [its] employees," without preventing defendants from clearing the hard drives of former employees, was improper.  Most non-lawyer employees, whether marketing consultants or high school deans, do not have enough knowledge of the applicable law to correctly recognize which documents are relevant to a lawsuit and which are not.  Furthermore, employees are often reluctant to reveal their mistakes or misdeeds.  [Citation ommitted.]

The court also rejected defendant’s argument that placing a proper litigation hold would have resulted in burden to the defendant and noted the troublesome nature of defendant’s failure to produce the document retention policy posted on the district’s website.   The court then determined that plaintiff had been harmed by the delayed production of documents as well as the possibility that emails had been permanently deleted.

Finally, turning to defendant’s level of culpability, the court determined its actions were reckless and grossly negligent, but not willful.  Specifically, the court found fault with defendant’s reliance on employees, particularly those “whose conduct was in question in the lawsuit”, and with defendant’s initial efforts to obtain documents from only three employees.  The court also questioned defendant’s failure to produce the document retention policy, calling it “another example of the defendant’s negligence in handling preservation and production of electronic documents in this litigation.”

Declining to impose an adverse inference absent evidence of deliberate efforts to conceal, the court granted the following sanctions:

1) the jury in this case should be told that the defendant had a duty to preserve all email concerning plaintiffs’ [sic] allegations beginning in November 2007, but did not do so until October 2008.  Accordingly, defendant will be precluded from arguing that the absence of discriminatory statements from this period (November 2007 until October 2008) is evidence that no such statements were made; 2) defendant will be assessed the costs and fees of plaintiff’s preparation of the motion for sanctions; and 3) plaintiff will be permitted to depose witnesses concerning emails produced on May 14, 2010 if it so chooses.  Defendant will pay for the cost of the court reporter for those depositions.