Be Wise: Preserve Electronic Evidence That MAY Be Discoverable!

Although the decision is over a year old, in NACCO Materials Handling Group, Inc. v. Lilly Co. (No. 11-2415 AV, 2011 WL 5986649, W.D. Tenn. Nov. 16, 2011), the plaintiff brought a motion to prevent further spoliation of evidence due to inadequate preservation efforts being demonstrated by the defendant.
The original lawsuit alleged unauthorized and improper access to the plaintiff’s secure dealer website.   After initial 30(b)(6) depositions and e-discovery, there was evidence of data spoliation, and the plaintiff sought sanctions for both the failure to adequately prepare the 30(b)(6) witness and failure to take reasonable steps to preserve potentially relevant information.
In determining if sanctions were warranted, the court looked at a number of factors:
In order to determine if sanctions against Lilly are appropriate, the court must first determine (1) when Lilly’s duty to preserve evidence arose; (2) the scope of Lilly’s duty to preserve evidence; (3) whether Lilly’s litigation hold and search and collection efforts were sufficient; and (4) if not, whether sanctions should be imposed on Lilly… [p. 6]
The court found that Lilly’s duty to preserve arose no later than when they were served with the lawsuit.
The court next looked at scope, concluding that “given the allegations concerning computer access, which Lilly did not deny, Lilly’s duty to preserve potentially relevant ESI was very broad.” The court then considered the defendant’s preservation actions, identifying a number of shortcomings:
Upon being served with the lawsuit on February 25, 2011, Lilly took no immediate action whatsoever to preserve any data, electronic or paper. In addition, upon receiving the preservation letter, approximately twelve days later, Lilly failed to issue a written company-wide litigation hold. Instead, Clark simply circulated the litigation hold letter to seven Lilly employees out of Lilly’s 160 employees without any additional instruction. The failure to issue a written litigation hold is “likely to result in the destruction of relevant evidence.”
The court went on to cite additional shortcomings, including not notifying all the “key players” who had access the secure dealer website, and that no actions were taken to prevent deletion of emails or backup data.
 The court concluded:
In summary, after the duty to preserve was triggered, Lilly failed to timely issue an effective written litigation hold, to take appropriate steps to preserve any existing electronic records, to suspend or alter automatic delete features and routine overwriting features, and to timely and effectively collect ESI. Therefore, the court finds that Lilly breached its duty to preserve relevant evidence.
The court then considered the level of culpability (in this case, finding negligence) and

prejudice suffered (uncertain, but highly likely given the facts of the case). The end result: the court imposed preservation actions, additional discovery and monetary sanctions.

Let me restate that: the party who had the duty to preserve the data was  required to bear the costs  and sanctions because its preservation and collection efforts were woefully inadequate.
This duty cuts both ways. The plaintiff may have a duty to preserve certain electronic media, such as social media, e-mails etc.  How much effort and time do you want to enlist to find the information may depends on how significant the case is, of course.
Next week, I am going to bring up the issues of social media again. Undoubtedly, social media is very relevant but often times the plaintiff’s attorney will argue that it’s irrelevant or fails to lead to relevant information. How could the plaintiff’s own statements about his/her social activities before and after an accident NOT be relevant?
In the meantime, if you have some ideas on how you have successfully obtain social media and other electronic information from the plaintiff, please share with me.
If we can do anything to be of assistance to you, day or night, don’t hesitate to call.
Mark Perkins
Perkins & Associates, LLC
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