Applying Proportionality to Preservation, Court Grants Permission to Dispose of Computers

Lord Abbett Mun. Income Fund., Inc v. Asami, No. C-12-03694 DMR, 2014 WL 5477639 (N.D. Cal. Oct. 29, 2014)

Following an order granting summary judgment in their favor, the “Board Member Defendants” notified the plaintiff that they would no longer contribute to the cost of storing 159 computers, but refused to consent to allowing Plaintiff to dispose of them, arguing that Plaintiff should be required to preserve the computers until “after the Ninth Circuit has ruled on its appeal and any trial has been completed.”  The court declined to compel Plaintiff to bear the costs and burden of continuing to preserve, however, where discovery had closed, where there was no indication that the computers contained relevant information, and where the defendants had “numerous opportunities to test their belief that the computers may have evidentiary value, but [had] refused to act on them.”

This case “involves allegations of wrongdoing by Windrush School’s Board Members and Stone & Youngberg.”  During the litigation, 159 computers were stored at the cost of $500 per month, shared by the parties.  Despite the preservation effort, Plaintiff believed that the computers were unlikely to contain relevant information, based on the statement of Windrush’s attorney that the computers had only been used by teachers and students and on a “limited forensic review of a sample of the machines, which confirmed the accuracy of this representation.”  Notably, “[n]o party ever sought to search the Windrush computers, nor d[id] it appear that any defendant asked for further information about [the vendor’s] forensic review.”  When the court granted summary judgment in favor of the Board Member Defendants (“Defendants”) (and partial summary judgment in favor of another defendant) they announced that they would no longer contribute to the cost of preservation/storage, but also would not consent to the computers’ disposal.  Plaintiff offered to allow the defendants to “examine the computers and take any information they wish[ed], but the Board Member Defendants declined.”  Plaintiff sought an order permitting disposal.

As stated by the court, the issue before it “pertain[ed] solely to whether any party [had] a duty to continue to preserve the Windrush computers pending a potential trial on remand.”  The Defendants’ primary argument in opposition to disposal was that they were “not involved with handling the Windrush computers from the outset of this litigation,” and that they therefore did not have a “clear understanding of the process that [the vendor] employed in reaching its determination that the computers do not likely contain relevant information.”  They further argued that “in the event this case is remanded for trial, the parties have the right to access the original source of evidence for purposes of rebuttal and impeachment.”  Therefore, they argued, preservation should continue until after any appeal was resolved and any trial completed.

Taking up the question, the court reasoned that the preservation obligation pertains to information relevant to the parties’ claims and defenses and that there had “been no showing that the Windrush computers were ever used by likely custodians of relevant information” and thus, “no basis from which to reasonably conclude that the computers contain relevant evidence.”  The court further reasoned that discovery had closed and that Defendants had the opportunity to test their belief that the computers contained relevant information, but failed to do so.

The court turned next to Fed. R. Civ. P. 26(b)(2), the “proportionality principle,” acknowledging that “this district recognizes that the proportionality principle applies to the duty to preserve potential sources of evidence” and concluding that the burden of preservation in this case “outweigh[ed] the likely benefit of maintaining the computers where there ha[d] been absolutely no showing that they contain relevant evidence.”

Plaintiff’s request for an order permitting disposal of the 159 computers was granted.

A full copy of the court’s order is available here.