Learning Care Group, Inc. v. Armetta, No. 3:13-cv-1540 (VAB) (D. Conn. June 17, 2016).

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Despite the plaintiff’s admission that it destroyed a laptop and thereby irretrievably lost “a number of” e-mails that a key employee had deleted, and the court’s finding that this behavior was “negligent and somewhat troubling,” the court only imposed sanctions of costs and attorneys’ fees under the old version of the Federal Rules of Civil Procedure (FRCP).

Defendant Carlene Armetta was previously an employee of the plaintiff, Learning Care Group (“LCG”). She provided marketing services for LCG, working as an independent contractor with the other defendants, David Armetta and Aspira Marketing Direct.

LCG’s Chief Marketing Officer, Stacy DeWalt, had been the “key point of contact” for the defendants. They claim she “approved a business arrangement” and was aware of commissions paid to them for their work with LCG, both of which were critical to their case. DeWalt left LCG in January 2013, before LCG filed this lawsuit. Following LCG policy, DeWalt’s laptop was slated for recycling several months before LCG commenced litigation. While LCG “typically” backs up its employees’ e-mails to a server, DeWalt had “deleted a number of e-mails that had not been backed up.” Those e-mails were permanently lost when her laptop was destroyed in October 2013, giving rise to this motion for spoliation sanctions.

The defendants maintained that LCG had a duty to preserve evidence beginning in August 2013, when LCG “launched an internal investigation” into their business relationship, and certainly no later than September 2013, when it filed the lawsuit. The defendants claimed LCG destroyed e-mails “containing crucial evidence to their case.” Despite arguing that they “would likely have been able to recover many of the deleted e-mails” from the laptop, the defendants did not submit any proof to this effect. Instead, they suggested that that DeWalt, as their “main contact at LCG,” clearly had information on her computer that would affect their case. However, they could only identify one e-mail to support that claim.

LCG admitted destroying the laptop, but it asked the court not to impose sanctions both because there was no proof that the laptop “contained relevant evidence” and because LCG “lacked the requisite state of mind” under the newly amended FRCP.

Considering all the circumstances, the court held that “there is enough evidence to conclude that the laptop contained information significant enough to warrant the imposition of sanctions.” The court concluded that the destruction of the laptop was “careless” but not grossly negligent or intentional because the LCG destroyed the laptop as a “routine business practice” in “the ordinary course of business.”

Even without bad faith, though, the court observed that “negligent or intentional acts . . . that ‘hinder discovery’ can support an inference that the evidence would have harmed the destroying party.” LCG waited nearly six months to confirm that the laptop had been destroyed, clearly delaying discovery. In addition, the court noted that “LCG’s document preservation practices are not ideal,” because the company relied on the server backup and never investigated the possible deletion of e-mails.

In choosing sanctions, the court refused to apply the 2015 FRCP amendments, finding it would be unjust since the matter was raised before the amendments became effective. Accordingly, LCG’s negligence was arguably sufficient to support an adverse inference instruction. But “given the relatively weak showing of relevance” and the limited prejudice to the defendants since they could obtain e-mails from third-party recipients, an award of costs and attorneys’ fees related to the spoliation would cure the prejudice suffered and deter future violations.

Learning Care Group, Inc. v. Armetta, No. 3:13-cv-1540 (VAB) (D. Conn. June 17, 2016).

 

Takeaways

The court made two interesting observations about the parties’ shortcomings. First, the court remarked that “LCG’s document preservation practices [were] not ideal.” The company should have preserved the laptop until it “carefully examined any courses of action that caused e-mails to be deleted from the server.” Second, when arguing whether the evidence on the lost laptop was recoverable, the defendants relied on an affidavit from their lawyer—not an IT expert. Although the “record [was] thin on this point,” the court sided with the defendants because LCG failed to address the issue. With expert testimony, LCG might have been able to defeat the defendants’ unsupported claim.