Case Law

Court Grants $3,000,000 in Punitive Damages for ESI Spoliation

Delaware

GN Netcom, Inc. v. Plantronics, Inc., 2016 U.S. Dist. LEXIS 93299 (D. Del. July 12, 2016) In this antitrust case, the plaintiff motioned the court to grant sanctions for ESI spoliation. In 2012 upon notice of a possible dispute, a litigation hold was put in place notifying the defendant’s employees of their duties to preserve evidence. One of the defendant’s senior employees disregarded the hold by deleting many of his own emails, and sent emails instructing other employees theirs. In total, the senior employee permanently deleted more than 40% of his own emails. Using the newly amended FRCP 37(e), the court found that this activity satisfied the requirements of Rule 37(e), and that sanctions were warranted. The court rejected the defendant’s argument that it should not be subjected to sanctions because the company took steps to inform its employees of their preservation duties, and the court labeled the defendant’s argument as a “perverse interpretation” of Rule 37(e). Because the conduct in question was especially egregious, the court went beyond Rule 37(e) and granted $3,000,000 in punitive damages, in addition to evidentiary sanctions, and costs for the “nearly 18 months of discovery to get [to] the bottom of the deletion story.”

Keywords: Email, Rule 37(e), Treble Damages, Intent to Deprive, Preservation, Bad Faith