In Superior Production Partnership v. Gordon Auto Body Parts Co. (S.D. Ohio 2009) the Court ruled that sanctions were not appropriate absent evidence that any relevant information had been destroyed. The case involved predatory pricing and Superior Production d/b/a PBSI brought a motion for sanctions based upon the defendants failure to institute a legal hold and failure to conduct a thorough search for relevant information.
The Defendants had not instituted a formal legal hold and their search for responsive documents was limited to one database. The intial search did not include any emails or employee hard drives. Despite requests from PBSI, the Defendant had not instructed any employees to preserve relevant information while the litigation was pending. When this search resulted in a suspiciously small number of relevant documents, the Plaintiffs brought the motion for sanctions seeking the prodcution of employee hard-drives and to shift the costs of foresenically examining them to determine whether any relevant information was deleted. In the alternative, PBSI sought an adverse inference instruction based upon the intentional or negligent destruction of relevant information.
The Defendant argued that its standard document retention policy was sufficient to preserve relevant documents. The Defendant also pointed out that after the initial production, and after one of its key employees was deposed because of the limited number of documents produced, the Defendant issued a formal litigation hold notice to all employees. After a further search of email files and employee hard drives, some additional relevant documents were found and produced.
The Court began by noting that the Defendant's duty to preserve and produce relevant evidence was triggered by the filing of the lawsuit. Failure to meet that duty could result in sanctionable conduct. However, the Plaintiff failed to produce any evidence that relevant information had actually been destroyed by the Defendant's actions or its failure to act. Because of that lack of evidence, the Court declined to award either sanction the Plaintiff sought.
However, the important lesson is that the Court noted direct evidence that relevant evidence has been destroyed is often not present in sanctionable cases and discussed two alternative methods a party seeking sanctions can meet its burden. FIrst, "a certain group of relevant documents may exist only back to a particular point in time, and not beyond, creating an inference that the same documents did exist for earlier time periods but have simply been deleted." And second, "a party suspecting document destruction may show that it is the routine practice either of the defendant or other companies engaged in a similar business to maintain certain types of documents, but that no such documents have been produced by this defendant."
Regardless of the outcome, the Defendant's actions in this case were questionable at best. The Defendant clearly played with fire here by not instituting a legal hold. The Court left the Plaintiff the option of bringing the motion again in the future should it find any direct evidence of spoliation. The limited extent of the search also could have led to sanctions however this error was rectified by the subsequent steps to conduct a proper search of all potential sources of ESI.
Another important point is the Defendant's standard document retention policy. While the Defendant argued its document retention policy would prevent the destruction of relevant information, the opposite is more likely. The duty to preserve is often breached through the routine destruction of relevant documents when a party fails to suspend its document retention programs.
