This
case involves the destruction of personal files on an AS/400, a computer
used by IBM to work on a software project for ABC entitled Medical
Operations Management System (“MOMS”). When ABC terminated IBM’s
involvement in the MOMS project, IBM returned the computer to ABC as they
had initially received it, i.e. without any of the personal files created by
the IBM/ABC team during the duration of their work on the project. The
files were “both project-related documents and purely personal documents.”
ABC, which believed that the files were critical of IBM, alleged IBM
destroyed the files in anticipation of litigation and requested that the
court rule in favor of its motion to dismiss IBM’s counterclaims as a
sanction and, thereby, effectively enter default judgment in favor of ABC.
The
court denied ABC‘s motion for dismissal of IBM’s counterclaims under Rule 37
of the Federal Rules of Civil Procedure, since the destruction of files was
not in response to a specific discovery request. (The erasure of files
occurred prior to the filing of the case.) The court did leave open the
possibility for a jury instruction on the matter, however, stating that “ABC
may be entitled to a jury instruction explaining that destroyed documents
are presumed to be damaging to the party responsible for the destruction.”
This
case is an appeal from a jury verdict awarding Hertz damages amounting to
loss of profits from a computer failure after a Gaddis-Walker employee
improperly rewired the power supply to one of Hertz’s computer systems.
Gaddis-Walker’s arguments included a claim of spoliation of evidence in the
form of six computer boards that were damaged and destroyed after the
rewiring. Gaddis-Walker claims that this evidence was central to the issue
of whether the rewiring caused the computer failure and requested a jury
instruction “that if a party fails to preserve evidence, it may infer the
evidence was unfavorable to that party.” The lower court rejected the
requested jury instruction, stating that the destruction was not in bad
faith, and the Court of Appeals affirmed, holding “that absent a showing of
bad faith, failure to produce records is not sufficient to warrant a
spoliation or missing evidence instruction.”
The Court held that “a
discovery request aimed at the production of records retained in some
electronic form is no different, in principle, from a request for documents
contained in an office file cabinet. . . . [T]here is nothing about the
technological aspects involved which renders documents stored in an
electronic media ‘undiscoverable’.” Id. at 191.
In
response to the defendant drug company’s reluctance and delays to submit to
the plaintiff key emails stored on back-up tapes, the court ordered a sample
of said emails to be provided to plaintiff, with the potential for further
emails to be furnished -- at the expense of the defendant -- if the initial
emails proved valuable to the plaintiff’s case. Furthermore, the court 1)
sanctioned the defendant by ordering it to pay costs and fees associated
with the plaintiff’s efforts to pursue this line of discovery; and 2)
ordered sanctions that the jury be instructed on the “spoliation inference”
at the time of the trial.
See also
Electronic Discovery