Rimkus Consulting Group Inc. v. Cammarata - Ballard Spahr LLP

Case 4:07-cv-00405 Document 450 Filed in TXSD on 02/19/10 Page 69 of 139
3. The Degree of Culpability
Destruction or deletion of information subject to a preservation obligation is not
sufficient for sanctions. Bad faith is required. A severe sanction such as a default judgment
or an adverse inference instruction requires bad faith and prejudice. See Condrey v. SunTrust
Bank of Ga., 431 F.3d 191, 203 (5th Cir. 2005); see also Whitt v. Stephens County, 529 F.3d
278, 284 (5th Cir. 2008) (“[A] jury may draw an adverse inference ‘that party who
intentionally destroys important evidence in bad faith did so because the contents of those
documents were unfavorable to that party.’” (quoting Russell v. Univ. of Tex. of the Permian
Basin, 234 F. App’x 195, 207 (5th Cir.2007) (unpublished))). 33
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Two cases illustrate the range of culpability. In GE Harris Railway Electronics, L.L.C. v. Westinghouse
Air Brake Co., No. 99-070-GMS, 2004 WL 5702740 (D. Del. Mar. 29, 2004), the court concluded that the
defendant’s employee acted in bad faith by destroying documents that were potentially incriminating, id. at
*4. The plaintiff had sued the defendant and its employee for patent infringement and trade secret
misappropriation. Id. at *1. The parties settled the case and a consent order was entered prohibiting the
employee for three years from involvement in selling any radio-based distributed power product
manufactured by his employer. Id. It was undisputed that the employee was aware of this prohibition. Id.
at *2. During that three-year period, the employee participated in a proposal to sell the product. Id. After
the plaintiff learned about this proposal, it moved for a contempt order. Id. at *1. The parties did not dispute
that the employee deleted computer files related to the proposal when he became aware that the plaintiff
might have concerns. Id. at *2. The court concluded that the employee’s destruction was “clearly motivated
by an intent to eliminate evidence that could potentially incriminate [his employer] in a contempt claim.” Id.
at *4. The court held that dismissal was improper because the prejudice to the innocent party was minimal
but adopted an adverse inference against the spoliating party. Id. at *4–5.
By contrast, in Pandora Jewelry, LLC v. Chamilia, LLC, No. CCB-06-3041, 2008 WL 4533902 (D.
Md. Sept. 30, 2008), there was insufficient evidence that the defendant deliberately deleted emails to find bad
faith. After the plaintiff filed suit, the court granted the defendant’s motion to quash a subpoena for records.
Id. at *1. The defendant then sent a letter to a number of the plaintiff’s customers. Id. The letter purportedly
misrepresented the court’s order granting the defendant’s motion to quash. Id. The defendant also sent this
“letter via email to a number of blind copy recipients.” Id. After the plaintiff filed additional claims, the
defendant contended that it no longer possessed the emails because it “changed its electronic server twice
during the litigation period or due to its email system forcing users to delete or archive emails every ninety
days.” Id. at *2. The court rejected the plaintiff’s motion for sanctions for spoliation. Id. at *6. There was
no evidence, “other than [the defendant’s] failure to retain the emails, that [the defendant] deliberately deleted
or destroyed evidence.” Id. at *9. Although the loss of the emails violated the preservation obligation, this
did not “necessitate a finding of willful or bad faith destruction.” Id. The court held that the defendant was
merely “grossly negligent in its failure to preserve evidence” but declined to impose an adverse inference
instruction or grant summary judgment because the innocent party failed to show that the lost documents were
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