The March 22, 2012 Report and Recommendation from a federal magistrate judge in the case of Star Direct Telecom, Inc. v. Global Crossing Bandwidth, Inc., 2012 WL 1067664 (W.D.N.Y.) is a good reminder to everyone about taking evidence preservation obligations seriously.  In the case, the magistrate judge recommended that the plaintiff’s motion for sanctions on the grounds of spoliation be granted because:

  • There was no evidence that the defendant had instituted a litigation hold once the duty to preserve was triggered.
  • The defendant’s general counsel instructed one employee “to gather relevant evidence.” But, the defendant made no written record nor presented evidence as to how relevancy was determined and how the appropriate custodians were identified.
  • The defendant made no record of the custodians that provided documents in the process.
  • There was no evidence that the defendant “took steps to confirm the adequacy of its collection efforts.”
  • After learning that potentially relevant e-mails were not available from the company’s backup tapes, the defendant took no action to preserve the computers of two key employees.

The magistrate judge recommended against severe sanctions (the striking of defenses or adverse inferences) because the evidence failed to show the plaintiff was prejudiced by the loss email communications.  But, the court awarded monetary sanctions in the form of attorney’s fees and costs.  Still, the gross negligence finding, based in part on the company’s failure to issue a written litigation hold (or prove otherwise that a hold was issued), is not surprising in light of the case law.   Hopefully, the reader avoids learning about these sanction lessons the hard way.