Lack of Cooperation / Inaccurate Representations – Page 16

HMS Holdings Corp. v. Arendt, NO. A754/2014, 2015 WL 2403099 (N.Y. Sup. Ct. May 19, 2015)

Dec 01 2015

Key Insight: For one defendant?s repeated use of a cleaning software (?Disk Utility? and its ?Secure Erase Free Space? function) to delete files and loss of a relevant hard drive without an adequate explanation and for another defendant?s loss of relevant ESI, including her intentional deletion of information from the desktop registry and her disposal of her cell phone (which she notably was unaware had been automatically backed up each time it was connected to her computer), ongoing deletion of text messages (on her new phone), and misrepresentations about when the old phone was discarded, the court found that a mandatory adverse inference was warranted and rejected Defendants? argument that the court should decline to employ the adverse inference at the preliminary injunction state, reasoning that the objective of promoting fairness was best served by ?employing an adverse inference at all relevant states of the litigation?; court also ordered defendants to pay Plaintiff?s attorneys fees without seeking reimbursement from their new employer and indicated its intention to forward its decision to the NY Bar in light of one defendant?s status as an attorney

Nature of Case: Misappropriation of trade secrets, breach of “post-employment covenants”

Electronic Data Involved: ESI, hard drive, text messages (iphone)

DeCastro v. Kavadia, —F.R.D.—, 2015 WL 4619914 (S.D.N.Y. July 6, 2015)

Dec 01 2015

Key Insight: For defendant?s intentional deletion of emails using cleaning software and misrepresentations intended to cover up the same as well as defendant?s failure to produce documents over which he was found to maintain control and misrepresentations related to the same, the magistrate judge recommended a permissive adverse inference and that defendant and counsel, who ?exacerbated? the effects of defendant?s misconduct through incomplete or misleading representations to the court, be jointly and severally liable for plaintiff?s attorneys fees and costs incurred in bringing the motion for sanctions; district court rejected objections to the recommendations and adopted them in full

Electronic Data Involved: Emails, ESI

In re Delta/AirTran Baggage Fee Antitrust Litig., No. 1:09-md-2089-TCB, 2015 WL 4635729 (N.D. Ga. Aug. 3, 2015)

Dec 01 2015

Key Insight: Where Special Master declined to recommend spoliation sanctions but recommended $1,855,255.09 in monetary sanctions ?to compensate Plaintiffs for the additional time and expenses that they have incurred as a result of Delta?s failure to comply with discovery obligations,? including Defendant?s delayed identification and production of relevant evidence (including backup tapes and other ESI), the District Court agreed that monetary sanctions were appropriate but found that a higher amount was warranted and thus increased the monetary sanctions to $2,718,795.05

Nature of Case: Antitrust (Bag fees)

Electronic Data Involved: ESI, backup tapes

S.E.C. v. CKB168 Holdings, Ltd., No. 13-CV-5584 (RRM), 2015 WL 4872553 (E.D.N.Y. Jan. 7, 2015)

Dec 01 2015

Key Insight: Rejecting defendants? explanation that their failure to preserve was the result of a vendor?s refusal to continue assistance for the reason of non-payment, the court found that defendants? had a duty to preserve the information stored on the corporate server that began ?well before the vendor stopped providing services? and reasoned that it was defendants? obligation to ?take ?all necessary steps to guarantee that relevant data was both preserved and produced,?? and also found that defendants were ?at a minimum grossly negligent? for failing to preserve relevant evidence where there was no evidence of efforts to preserve a readable copy of the corporate server nor evidence that they sought modification of the freeze on their assets in able to make payments to the vendor; magistrate judge recommended sanction of an adverse inference

Nature of Case: Securities and Exchange Commission investigation (SEC)

Electronic Data Involved: Contents of corporate server / “back office data”

Clientron Corp. Devon IT, Inc., —F. Supp. 3d—, No. 13-5634, 2015 WL 5093084 (E.D. Pa. Aug. 28, 2015)

Dec 01 2015

Key Insight: For Defendants? discovery violations, including failure to adequately search for responsive evidence, failure to designate a 30(b)(6) representative for deposition, and admitted deletion of emails despite a duty to preserve, the court found that sanctions were warranted and imposed serious sanctions, including monetary sanctions, exclusion of evidence, and ?enforcing the judgement of the Taiwanese court? against Defendant, where Defendant?s litigation misbehavior may have rendered Plaintiff unable to prove its contractual claim in court

Nature of Case: Breach of contract

Electronic Data Involved: ESI, email

Health Mgmt. Assocs., Inc. v. Salyer, No. 14-14337-CIV-ROSENBERG/LYNCH, 2015 WL 12778793 (S.D. Fla. Aug. 19, 2015)

Dec 01 2015

Key Insight: Court granted motion to compel forensic examination of Defendant?s ?personal computer devices and his personal email account? where Defendant claimed that his mobile phone was damaged, that a thumb drive was lost, and that his laptop stopped working, and where Defendant failed to search his email and gave inaccurate ?representations? about it; court admonished Plaintiff ?to give special care? to Defendant?s privacy and ordered that Defendant was allowed to be present for the search, and that the search criteria be prepared in advance and chosen to limit the scope to matters ?directly relevant to its claims for relief?

Electronic Data Involved: Forensic examination of computer, devices, email

United States v. Dish Network, LLC, No. 09-3073, 2015 WL 5970446 (C.D. Ill. Oct. 13, 2015)

Dec 01 2015

Key Insight: For defendant?s failure to preserve and produce relevant evidence, copies or versions of which were discovered on a third party?s hard drive (e.g. correspondence between Defendant?s employee and the third party that were not preserved and produced by the defendant), the court found that Plaintiff ?suffered some prejudice? and thus sanctioned Defendant by taking it as ?established fact? that Defendant had similar communications with all of its ?Order Entry Retailers? (of which the relevant third party was one) of the same ?substantive type and quantity? as those discovered on the third party?s hard drive

Nature of Case: FTC Investigation: TCPA

Electronic Data Involved: ESI, email

United States v. Vaugh, No. 14-23 (JLL), 2015 WL 6948577 (D.N.J. Nov. 11, 2015)

Dec 01 2015

Key Insight: In this criminal case, a pro se defendant sought sanctions, including dismissal of the indictment, for the Government?s failure to preserve text messages relevant to its investigation. Upon examination of the facts, including the Government?s acknowledged failure to preserve certain texts and constantly changing explanations surrounding that failure as well as the ?different level of diligence? applied to different text messages (care was taken to preserve messages belonging to a cooperating witness), the court determined sanctions were warranted. Accordingly, the court ordered that the Government would be precluded from using any text messages in its case-in-chief and reserved judgement until trial regarding the propriety of an adverse inference instruction.

Nature of Case: Criminal

Electronic Data Involved: Text messages

F & J Samame, Inc. v. Arco Iris Ice Cream, SA?13?CV?365?XR, 2015 WL 4068575 (W.D. Tex. Jul. 2, 2015)

Dec 01 2015

Key Insight: Court granted in part plaintiff?s motion for attorneys? fees, where defendant had used software to wipe a PC and a laptop, deleting and overwriting more than 62,000 files, and violated a court order, and stalled the discovery process. Court denied in part plaintiff?s motion for sanctions, however, instead granting leave for new depositions, saying that while its order ?does not address the loss of evidence that may establish willful infringement,? the alleged infringing materials ?are available for the jury to assess whether infringement has incurred or not.?

Nature of Case: Trade dress and Trademark infringement

Electronic Data Involved: Email and ESI on hard drive

H.M. Elecs., Inc. v. R.F. Techs., Inc., No. 12cv28840-BAS-MDD, 2015 WL 4714908 (S.D. cal. Aug. 7, 2015)

Dec 01 2015

Key Insight: For multiple discovery violations by Defendant and counsel, including improper certification of discovery responses pursuant to Rule 26(g), failure to issue a litigation hold or appropriately supervise discovery, and intentional deletion of responsive materials and delayed production, the court imposed multiple discovery sanctions, including attorneys? fees and costs, issue sanctions, and an adverse inference; notably, the court indicated sanctions would have been imposed under New Rule 37(e), because the court found that the at-issue ESI was lost with the intent to deprive Plaintiff of the information?s use in the litigation; Update: Compensatory sanctions vacated by District Court upon determination that parties? settlement mooted the issue of compensatory sanctions (—F.Supp.3d—, 2016 WL 1267385 (S.D. Cal. Mar. 15, 2016))

Nature of Case: Trademark infringement, false designation of origin, trade dress infringement, trade libel, unfair competition and interference with prospective economic advantage

Electronic Data Involved: ESI

Tag:Lack of Cooperation / Inaccurate Representations