Monday, October 29, 2012

Government Organizations can also be Sanctioned for Spoliation of Evidence

This from "The threat of evidence spoliation doesn’t only affect private parties but also extends to government organizations, such as cities or municipalities. Case in point is DMAC LLC and Fourmen Construction, Inc. v. City of Peekskill (S.D.N.Y Sept. 12, 2012). The district court ruled that the defendant, City of Peekskill, spoliated evidence by deleting relevant emails. This failure was due largely in part to the defendant not maintaining a “formal e-mail retention policy,” which left “sole discretion” to the defendant’s employees to decide for themselves whether to keep or dispose of emails. Along with awarding the plaintiffs, DMAC and Fourmen Construction, with costs and fees arising from bringing this motion, the court granted an adverse inference instruction, which allowed jurors to infer “that the City (defendant) negligently destroyed e-mails similar in nature to the ones produced, and that said e-mails would have been favorable to plaintiffs’ case.”

In this case, the plaintiffs brought suit against the defendant for stopping their real estate project allegedly due to illegal political reasons. During the discovery process, the defendant informed the plaintiffs that they had no formal email retention policy in place. As a result, a majority of the defendant’s employees had deleted pre-litigation emails concerning the subject matter relevant to the case. In response, the plaintiffs made discovery requests to third parties that surfaced several relevant emails from the defendant. Based on this finding, the plaintiffs filed a motion for sanctions against the defendant for spoliation of evidence under Federal Rules of Civil Procedure (FRCP)."

"The court deemed a failure to maintain a “formal e-mail retention policy” as de facto negligent. But beyond this, the court ruled that the defendant was grossly negligent because (1) the defendant ignored its obligation to preserve relevant emails when the duty to preserve was triggered, and (2) even with the defendant’s assurances that a legal hold was implemented when litigation began, testimony from one of the defendant’s employees refuted that claim. The employee stated that “at no time was she ever advised to preserve communications, including e-mails.”

Read the whole story here.

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