The lineage of recent preservation failures

Understanding two fundamental guidelines will go a long way toward avoiding spoliation sanctions

Two recent cases, Pillay v. Millard Refrigerated Services, Inc. and Gatto v. United Airlines, Inc., et al., show that some kinds of preservation failures are being repeated despite multiple decisions over the course of many years sanctioning the same types of spoliation. Specifically, Pillay involved a failure to suspend automatic processes that periodically purge data and Gatto involved a failure to preserve social media content. More puzzling still is that these two cases are merely select examples drawn from the most recent case law; they are representative of a much more widespread failure to learn from history.

Pillay involved allegations that the defendant, Millard Refrigerated Services, violated the Americans with Disabilities Act. Pillay alleged that Millard terminated an employee named Ramirez because of a perceived disability and that Pillay was then terminated after voicing opposition to the decision. Pillay successfully moved for a spoliation inference based on the charge that Millard had destroyed critical evidence.

The spoliation in Pillay involved a failure to halt automatic processes set up to purge electronically stored information (ESI) regularly. From the beginning of e-discovery, the necessity of affirmative action to preserve ESI has been recognized as one of the most important differences between ESI preservation and the usually much easier task of preserving paper. Paper will not usually get up, walk away and dive into a shredder or trash disposal of its own accord. However, many systems that store ESI are set up to routinely purge certain data according to defined timetables or as needed (or even as a byproduct of the way they operate). For example, email servers are often configured to delete emails in certain folders on a regular basis and backup tapes are typically recycled according to a schedule.

In Pillay, the critical data was stored in a Labor Management System (LMS) that Millard used to track employee performance and productivity. Millard relied upon this data to justify the disputed terminations. Pillay claimed that Millard regularly manipulated the data to justify such termination. Unfortunately, the LMS routinely deleted data after one year, and Millard did nothing to suspend this deletion when its preservation duty in this case was triggered.

Many cases over the years have demonstrated that a failure to take action to avoid such routine destruction will be considered spoliation, where a duty to preserve exists. A document retention policy that mandates this kind of routine destruction may protect against spoliation allegations prior to the arising of a preservation duty, but the policy must be suspended once the duty is triggered. Courts have been issuing spoliation sanctions for failure to suspend automatic deletion of data even prior to the e-discovery amendments to the Federal Rules of Civil Procedure in 2006. Examples include Broccoli v. Echostar Communications Corp. (spoliation instruction based on failure to suspend policy under which all sent email deleted after 21 days) and MasterCard International, Inc. v. Moulton (spoliation inference for failure to suspend automatic deletion of email stored on servers).

Gatto was a personal injury action in which the ESI that was destroyed consisted of social media, in this case Facebook content. The facts surrounding the spoliation in Gatto are unusual and will not be discussed here in detail; what is relevant here is that the plaintiff knew that his Facebook content was at issue and that he took steps that resulted in the destruction of this content notwithstanding this knowledge. Whatever reasons were offered to justify this spoliation, the fact remains that insufficient care was taken to avoid spoliation of the social media content. As in Pillay, the court granted the request for a spoliation inference.

Notwithstanding that the rise of social media is seen as a modern phenomena, there are already so many cases where social media has played a role, and even where social media has been destroyed and featured in spoliation decisions, that it really should not come as a surprise that it falls within the scope of the preservation obligation (where relevant, of course). Moreover, the role of social media has been especially well publicized in personal injury cases like Gatto. See, e.g., Romano v. Steelcase, Inc., McMillen v. Hummingbird Speedway, Inc., Largent v. Reed. This is consistent with the all-inclusive definition of ESI codified in the Federal Rules of Civil Procedure almost seven years ago, in December 2006, which was expressly “intended to be broad enough to cover all current types of computer-based information, and flexible enough to encompass future changes and developments.”

There is no question that perfection is an elusive goal for ESI preservation, but following the guidance of past mistakes is a good way to stay on the right side of reasonable, proportional efforts. The spoliation inferences in Pillay and Gatto could have been avoided. Understand that it is well established that routine computer processes that routinely destroy data must be suspended when a duty to preserve arises.  Accept that when the FRCP says “ESI” there is no list of exceptions for particular sources of ESI, no matter how new or not-so-new, including social media. These e-discovery ships left harbor long ago.  Recognizing these two fundamental guidelines will go a long way to avoiding spoliation sanctions.

The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP.

Contributing Author

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Adam Cohen

Adam Cohen is a Principal with Ernst & Young LLP.  He is the co-author of the annually updated legal treatise “Electronic Discovery:  Law and Practice”,...

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