Spoliation Leads to Severe Sanctions

The significant growth in the volume and complexity of e-discovery has brought about an inevitable increase in scrutiny over the obligation to preserve and produce relevant electronically stored information. Given the sheer number of cases that now involve large amounts of ESI, the escalating trend of asserting and defending claims of spoliation should come as no surprise.

The attendant threat of sanctions -- ranging from awards of attorney's fees and costs to default judgment -- provides yet another compelling reason for counsel and clients alike to work toward good-faith compliance with e-discovery obligations.

It is now clearer than ever that parties who shirk their obligations to preserve and produce ESI do so at great peril. A recent opinion from the Southern District of New York sounds a clear warning that courts, in their wide discretion to impose spoliation sanctions,[FOOTNOTE 1] may regard the destruction of relevant evidence to be serious enough to warrant sanctions that effectively may be dispositive of a claim or defense.

In Arista Records LLC v. Usenet.com, 2009 WL 1873589 (S.D.N.Y. June 30, 2009), Judge Harold Baer held that the appropriate sanction, in light of a record replete with "strong evidence of extreme wrongdoing" by defendants throughout the course of discovery, was to preclude the wrongdoers from asserting their affirmative defense during the remainder of the case. Because that defense constituted the very grounds on which defendants premised their motion for summary judgment, Baer dismissed defendants' motion as moot and went on to grant summary judgment for plaintiffs on all claims.

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Source: law.com
By: H. Christopher Boehning and Daniel J. Toal