In Scalera v. Electrograph Systems, Inc. et al, (EDNY Sept. 29, 2009) the Magistrate Judge denied plaintiff’s motion for an adverse inference instruction. This is in contrast to Shukla v. Sharma (EDNY Aug. 21, 2009) (holding failure to implement a litigation hold constituted gross negligence leading to sanctions).
In Scalera, the court held that the haphazard litigation hold implemented by defendants’ counsel constituted negligence. A formal written litigation hold was not issued. Although, defendants' counsel did verbally tell some potential key players to preserve documents, counsel did not sufficiently communicate the need to preserve with defendants’ IT department. Despite some other recent holdings in the EDNY, the court did not believe that the failure to implement a written legal hold was grossly negligent or “bad faith”. In short, in the absence of gross negligence plaintiff needed to establish the necessary “relevancy” of the unpreserved ESI to obtain spoliation sanctions, including proving that the unpreserved ESI would have been favorable to plaintiff’s case. Plaintiff provided no evidence in support of its motion on this issue, so plaintiff’s motion for sanctions was denied.
As background, plaintiff was a former employee who brought a discrimination lawsuit under the Americans with Disabilities Act of 1991 (“ADA”) and the New York Human Rights Law based upon defendants’ alleged failure to accommodate her disability (eventually diagnosed with Pompe).
Specifically at issue in this case was defendants’ failure to preserve e-mails and ESI contained on the hard drives of former employees. In addition, the court focused on 1) the trigger event and 2) defendants’ “culpable state of mind” (as reflected by defendants’ failure to implement a proper legal hold.)
Regarding the trigger event, plaintiff argued that the duty to preserve was either when 1) she had first fallen at her job due to her disability and alleged lack of a handrail or 2) when she had filed her worker’s compensation claim. Plaintiff also argued that applicable ADA regulations required defendants to retain and preserve certain documents. Defendants countered that the trigger event was receipt of a notice of claim for discrimination from the EEOC.
The court rejected plaintiff’s arguments stating that 1) it was not reasonable for defendants to conclude that plaintiff needed a handrail, that her injury was due to the lack of a handrail and that as a result, plaintiff would bring a disability discrimination lawsuit; 2) plaintiff’s filing of a worker’s compensation claim did not put defendants on sufficient notice that she would be commencing a disability discrimination lawsuit; and 3) the ADA regulations may not be applicable since there is a factual dispute as to whether plaintiff actually requested an accommodation in the form of the installation of a handrail.
The court repeated the now familiar three prong test for spoliation sanctions. A party seeking an adverse inference instruction for spoliation of evidence must establish that: (1) “the party having control over the 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 party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.”
Next, the court tackled whether the e-mails or other ESI was “destroyed with a culpable state of mind”. Defendants’ counsel submitted an affidavit stating that when she learned about the litigation she spoke to the employees who dealt with plaintiff and told them “to retain any relevant documents”. She then collected copies of documents from Human Resources that she believed would be relevant. Finally, she relied upon defendants’ IT department’s claims that all documents, including e-mails were backed up. IT also searched the hard drives of relevant employees but not all. (Copies of both affidavits are available at the end of this article.)
The court held that defendants were negligent in preserving relevant ESI, specifically holding that no one had taken any active steps to preserve electronic documents until early 2007, almost two months after plaintiff EEOC charge was filed. This is two months after the trigger event when defendants’ duty to preserve had attached. The court also cited that fact that the searches of key employees’ hard drives were either never completed or were not completed until two months after the EEOC charge was received.
Citing Zubulake, the court stated:
"A party’s discovery obligations do not end with the implementation of a ‘litigation hold’ – to the contrary, that’s only the beginning. Counsel must oversee compliance with the litigation hold, monitoring the party’s efforts to retain and produce the relevant documents.” Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 432 (S.D.N.Y. 2004). The court in Zubulake set forth several steps that counsel should take “to ensure compliance with the preservation obligation”: (1) issue a litigation hold at the outset of litigation or whenever litigation is reasonably anticipated, (2) clearly communicate the preservation duty to “key players,” and (3) “instruct all employees to produce electronic copies of the their relevant active files” and “separate relevant backup tapes from others.” Id. at 433-34. As the Zubulake court noted, “[o]ne of the primary reasons that electronic data is lost is ineffective communication with information technology personnel.” Id. at 434.
Although the Scalera court held that defendants were negligent, it would not go so far as to say defendants were grossly negligent. Even though defendant’s omissions and ineffective communications directly resulted in the loss of some electronic data, that data was likely very limited based upon the specific circumstances concerning the accommodations purportedly requested by plaintiff. Thus, defendants’ omissions constituted negligence.
Since the court held that defendants were only negligent and not grossly negligent, plaintiff had to prove that the missing e-mails or ESI would have been relevant and favorable to her case. Plaintiff failed to provide any evidence resulting in the denial of plaintiff’s motion. Here is the court’s ruling:
I further find that Plaintiff has not submitted extrinsic evidence tending to demonstrate that the destroyed emails would have been favorable to her case. The emails that Plaintiff relies on as extrinsic evidence are, if anything, more favorable to Defendants’ position. See Pl.’s Mot., Ex. A at 000000341, Ex. C, Ex. 00635-637. These emails each show that Defendants provided Plaintiff with reasonable accommodations – by allowing her to use a different bathroom (Ex. A at 000000341), by permitting her to use the side door (Ex. C), and by purchasing a raised chair (Ex D 00635-637). Plaintiff has produced nothing, aside from speculation, as support for her claim that the destroyed emails would have shown that Plaintiff requested the installation of the handrail, that Defendants knew about Plaintiff’s difficulty in maneuvering the steps outside the side door, or that Defendants knew that Plaintiff needed a handrail.
For a copy of the memorandum and order, click here: Download Scalera Order. For a copy of the General Counsel's affidavit in support of her legal hold efforts, click here: Download Raffini Aff. For a copy of the IT Director's affidavit in support of his legal hold efforts, click here: Download Liendo Aff.
We thank Joohong Park for contributing this article.