Court Denies Sanctions for Failure to Preserve Instant Messages

Court Denies Sanctions for Failure to Preserve Instant Messages

OCE North America v. Brazeau, 2010 U.S. Dist. LEXIS 25523 (N.D. Ill. Mar. 18, 2010)

Plaintiff sought to close an evidentiary gap in its trade secret case against defendant by filing a motion for sanctions and an adverse inference based on defendant’s admitted failure to save his instant messages. The court found that defendant had used his employer’s instant messaging system and did not save the messages until well after suit was filed. “Thus, the evidence shows that defendant had, and breached, a duty to preserve those messages.” Id. at *18.

However, the court found that defendant did not act in bad faith. First, defendant testified and claimed that there was no way to save his instant messages. Next he testified that the messages were in fact saved on company servers, just as emails were saved and once he learned that he could change default settings to save the messages, he did so. The Court ruled that because Plaintiff had not offered any evidence that defendant had knowledge that the Instant Messages were not being saved, plaintiff had failed to “prove that defendant’s actions were intentional, reckless or unreasonable.” Id.

In addition, an adverse inference was inappropriate because the existing 55,000 pages of documents produced by producer indicated that plaintiff had suffered little harm. The court stated that the evidence provided “scant evidence of misappropriation.” Therefore, “[g]iven the circumstances, it would be unreasonable…to infer that the missing messages ‘contained the ‘smoking gun’ . . . evidence’ of misappropriation.” Id. at *19.

Judge Scheindlin analyzes the law of spoliation

The Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 2010 U.S. Dist. LEXIS 1839 (S.D.N.Y. Jan. 11, 2010)

Plaintiff producers were a group of investors who had brought an action to recover $550 million lost as a result of the liquidation of two British Virgin Island hedge funds. In October, 2007, the Citco Defendants claimed that large gaps in plaintiffs’ document production had been found. Depositions were held and declarations submitted between October, 2007 and June 2008. As a result of this discovery, defendant requestors moved for sanctions, alleging that plaintiffs had failed to properly preserve and produce documents, and had submitted false declarations regarding their efforts.