A Manhattan real estate company was sanctioned an estimated $100,000.00 for its failure to implement a litigation hold and misrepresentations to the court about missing e-mails. The case of Einstein v. 357 LLC, N.Y. Sup. Ct. Manhattan Co., No. 604199/07, 11/4/09 is significant because it is the first time that a New York State court has weighed in on the need to implement a litigation hold. Citing a host of well known cases from the Southern District of New York, the judge took defendants' to task for defendant's failure to take any steps to preserve e-mail following the initiation of litigation.
The court held that:
"[T]he failure to implement any litigation hold, not only after the commencement of litigation, but also after this court's repeated warnings that counsel should 'read [their] client the riot act', was grossly negligent and rises to the level of 'culpable conduct' required for a finding of spoliation."