I previously wrote about how Federal courts are hitting litigants hard for getting rid of Electronically Stored Information (ESI) (“Kings of E-Storage Fined for Losing Emails, August 2010), well know State courts have jumped on the bandwagon and have started to set a trend as to the penalties they will impose for destruction of ESI. In summary, state courts are adopting a balancing test that states that the punishment ought to be measured by the level of intent in the destruction- the more intentional the destruction, the more serious the penalty.
ESI involves all manner of documents, communications, pictures, scans, and most importantly emails that are stored on a company’s computers. I have previously advised on these pages that companies need to adopt an ESI retention policy and adhere to it. Once a potential claim (or even a dispute) arises, all ESI related to that claim or dispute should be segregated and not destroyed until the dispute is resolved.
In Arohner v. Israeli Discount Bank of New York, which was decided in September 2010, the First Department (the appellate court covering Manhattan and the Bronx) set forth a standard for assessing the penalty for ESI spoliation:
(1) the party with control over evidence had an obligation to preserve it at the time it was destroyed; (2) the records were destroyed with a ‘culpable state of mind,’ and (3) the destroyed evidence was ‘relevant’ to the moving party’s claim or defense. A culpable state of mind,’ for purposes of a spoliation inference, includes ordinary negligence.
The court went on to find that because the hard drive in question was destroyed either intentionally or through gross negligence, the proper penalty was telling the jury that it could infer that the ESI on the drive would not help the defendant’s position or its defense. The court did not take the added step of adding an inference that the ESI would have helped prove the plaintiff’s claims.
That form of penalty was also what the Queens County Supreme Court did more recently in March 2011, in the case of Chambers v. 37-32 104th Street Realty Corp. which involved a defendant landlord testifying that she sent multiple letters to tenants advising them not open the windows in the building stairwells. When it came time to produce those letters, the defendant landlord responded that she could not because “the computers were no longer available and she did not keep copies.” That excuse caused the court to decide that the landlord was precluded from presenting any evidence showing that tenants were asked/advised to keep the windows on the landings closed/locked. A relatively straightforward penalty under the circumstances.
In April 2011, the Nassau County Supreme Court dealt with a recurring issue: What to do with defendants who have those surveillance video cameras that record everything that happens but then re-record over it when the tape or drive runs out? This issue comes up rather often these days in personal injury and criminal defense cases. Well Judge Randy Sue Marber in Wisniewski v. Pacoa, decided that since there was no evidence that the defendants intentionally erased the day of plaintiff’s accident from their surveillance video, that the court would not strike their answer or grant plaintiff summary judgment, as requested. In fact, the court imposed no penalty at all. Instead, the court left open the possibility that if further evidence developed to show that the video material was deleted intentionally, then the jury would be given an adverse inference instruction (of the type set out in Chambers, above). Interestingly in this case, the judge noted that while the plaintiff’s lawyer claimed that the letter he sent out to the defendant before the lawsuit was commenced should have put him on notice to check and preserve the tape, the letter was too vague and did not specify exactly what the plaintiff wanted the defendant to do. had plaintiff’s counsel drafted a more precise letter, perhaps the court would have decided differently and punished the defendant for ignoring it.
These case show that the ESI issue is here to stay and will be the subject of motion practice in many litigations in the future. Counsel on both sides need to be cautious in dealing with this issue and treat it with respect as it could be an easy way for your adversary to gain an advantage in even cases where they might not have a strong claim.