• October 1, 2010

[UPDATE #2:  Mag. Judge Arthur J. Boylan’s $100,000 spoliation sanction against Southern Graphic Systems upheld by U.S. District Court Judge John R. Tunheim.]

[UPDATE:  Updating this drama that unfolded in June, see linked brief: the Plaintiff’s objections to Judge Boylan’s sanction (arguing that it did not go far enough and unfairly faulted plaintiff’s tactics in the litigation as a basis for not delivering the death-blow of default judgment on defendants).  The issue will now be before U.S. Judge John R. Tunheim (D. Minn.)]

If somebody “in corporate law” says, “Stop deleting,” you MIGHT stop deleting?

(Well, the deponent (a Chief Financial Officer) who so testified, was under oath, so he should get credit for testifying truthfully?)

From a case covered previously on Minnesota Litigator that noted the matter is being hard-fought, comes a $100,000 sanction for spoliation of evidence.  Plaintiff had sought a default judgment but U.S. Mag. Judge Arthur J. Boylan (D. Minn.) appears to have been only slight more disgusted with defendants’ conduct than with plaintiff’s in the litigation, so he stopped short of “the ultimate sanction.”

Cases between competitors over departed executives or employees trigger e-discovery imbroglios disproportionately relative to civil litigation generally, perhaps for obvious reasons.   So when a lawyer is retained because of a planned hiring, when does the duty to preserve evidence kick in?
Typically, the acquisition of a new employee from a competitor or even winning business from a competitor does not put a party on notice of potential litigation. Likewise, the retention of an attorney or covert activities undertaken in connection with acquiring new employees are not evidence that a party anticipated litigation. Plaintiff’s offer of proof as to the budgeted litigation expenses is too ambiguous for this Court to conclude that Defendant SGS was in fact budgeting for legal expenses. Finally, much of the remaining allegations are of questionable relevance.  Notwithstanding the aforementioned conclusions, Plaintiff met its burden of showing that Defendants SGS anticipated litigation in August 2008.
Based on this finding, Judge Boylan found bad faith and intentional destruction of evidence.  The deadline for objections to Judge Boylan’s Report and Recommendation is imminent…

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