Defendant’s Failure to Preserve Results in Sanctions, Including Order for Defense Counsel to Search All of Defendant’s Electronic Media and Hard Copy Files for Responsive Information

Northington v. H&M Int., No. 08-CV-6297, 2011 WL 663055 (N.D. Ill. Jan. 12, 2011); Northington v. H&M Int., No. 08 C 6297, 2011 WL 662727 (N.D. Ill. Feb. 14, 2011)

In this case, plaintiff sought sanctions for defendant’s failure to preserve and resulting failure to produce electronically stored information (“ESI”).  Upon finding that defendant’s efforts to preserve evidence had been “reckless and grossly negligent”, the magistrate judge recommended sanctions, including that defense counsel be required to conduct a thorough search for ESI and hard copy; that the jury be instructed regarding defendant’s failure to preserve; that defendant be precluded from defending itself by asserting an absence of discriminatory statements; and that defendant pay plaintiff’s reasonable costs and fees.  The recommendations were later adopted in full by the District Court.

Following her termination, plaintiff filed a Notice of Charge of Discrimination with the EEOC.  Defendant received notice of that filing five days later.  Thereafter, plaintiff filed suit alleging sexual and racial discrimination and a hostile work environment, among other things.  Specifically, plaintiff implicated the Terminal Manager at the facility at which she was employed and several other employees, including the manager’s girlfriend and her daughter. In the course of discovery, and following defendant’s admission that some potentially relevant ESI had already been lost, plaintiff brought a motion for sanctions for defendant’s failure to preserve.

Sparing the details, of which there are many, it was established that defendant had failed to adequately preserve potentially relevant ESI despite its obligation to do so.  For example, defendant did not issue a litigation hold or contact many of the employees implicated in plaintiff’s complaint until 15 months after the duty to preserve was triggered by its receipt of notice of plaintiff’s EEOC filing.  Nor did defendant immediately notify its information technology department of the need to preserve potentially responsive materials.  As a result of defendant’s failures, potentially responsive information was lost.  For example, following his resignation, the computer of the Terminal Manager was wiped clean, reassigned, and the hard drive was later discarded because of an alleged crash or virus.  The Terminal Manager’s emails were also deleted by the VP of Human Resources in accordance with his “regular business practice” (as were the emails of the manager’s girlfriend—another employee and accused harasser—following her departure from the company).  Another employee’s emails were lost when they were not migrated to a new system.  When steps were finally taken to ensure preservation, the employees implicated by plaintiff’s complaint were asked to search for and identify potentially relevant evidence without oversight.  Moreover, by that time, potentially responsive information had already been lost.

Accordingly the court addressed the questions of culpability and appropriate sanctions.  In its discussion of the controlling law, the court established that while bad faith was necessary for the imposition of an adverse inference, for example, bad faith “is not a precondition to the imposition of all forms of sanctions for discovery misconduct” and that “[d]epending on the sanctions imposed, ‘fault’—as opposed to bad faith—may form a sufficient basis for sanctions.”  The court went on to note that “‘[f]ault’ does not speak to the non-complying party’s disposition, but describes only the reasonableness of the conduct—or lack thereof—that eventually resulted in the violation.”

The court then determined that the evidence “overwhelmingly demonstrates that defendant was grossly negligent in its attempts to secure relevant documents.”  Specifically, the court found fault with defendant’s reliance on its employees—the same employees accused of participating in plaintiff’s harassment—to identify and preserve relevant evidence and also cited the delay in contacting those employees as well as defendant’s placement of unexplained limitations on preservation efforts (e.g. limited key word searches and date restrictions).  The “harm to plaintiff” that resulted from defendant’s failures, however, could not be definitively determined, despite the court’s concessions that there was a “‘distinct possibility’ that emails relevant to plaintiff’s case were destroyed.”

Because the record did not establish deliberate spoliation, the court declined to recommend dispositive sanctions but did recommend other sanctions, including that defense counsel be required to search all of defendant’s electronic media and hard copy files that might contain information responsive to plaintiff’s request.  Specifically, the court recommended that “counsel should not limit the key search terms to the three previously used by defendant, but must also include misspellings of plaintiff’s first name as well as other key terms reasonably related to each of the topics set forth in Request for Production V” and specified an appropriate date range for the searching.  The court also recommended that the jury be instructed that defendant had failed to uphold its preservation obligation and that defendant be precluded from arguing that the absence of discriminatory statements was evidence that none were made.  Finally, the court recommended that defendant pay the reasonable costs and fees for plaintiff’s preparation of the subject motion for sanctions.

Absent any objections from the parties, the recommendations of the magistrate judge were adopted in full by the district court on February 14, 2011.