Zapproved Case Summary IconBrown Jordan Int’l, Inc. v. Carmicle, Nos. 0:14-CV-60629 and 0:14-CV-61415, 2016 WL 815827 (S.D. Fla. Mar. 2, 2016).

In deciding whether spoliation sanctions were appropriate, a court recently had to determine whether to apply the amendments to Federal Rule of Civil Procedure 37(e). The court had deferred ruling on the plaintiffs’ spoliation motion because it could not determine how critical the lost evidence would be until the bench trial; shortly after the trial, the amended rules went into effect. The court decided that applying the amended rule “would be neither unjust nor impractical” because either way, an adverse inference was proper.

In this complex wrongful termination case, Christopher Carmicle, a high-ranking employee running two subsidiaries of a furniture company, repeatedly violated company policy by accessing his co-workers’ e-mail accounts. All employees had been given a generic e-mail password when the company transitioned to a new e-mail service in 2013. Thereafter, Carmicle reviewed and took screenshots of hundreds of messages from other employees’ accounts using his personal iPad. From reading the messages, Carmicle learned that the company was not performing well, that his expenses were under scrutiny, and that he was in danger of losing his job.

To save his job, Carmicle wrote a letter to the company’s board on January 20, 2014, suggesting that several company leaders were engaged in illegal and fraudulent activities. Ultimately, the board hired an investigator who learned of Carmicle’s unauthorized e-mail access and reported it to the board; he found Carmicle’s other claims meritless.

The day Carmicle sent the letter to the board, he bought a personal laptop and began to cover his tracks. The next day, he migrated company data from his work computer to his new laptop along with a data-destroying application, which he used “with some frequency.” On February 8, 2014, Carmicle wiped his company phone.

Carmicle’s employment was terminated on February 17, 2014 for unauthorized e-mail access and improper use of company funds. Carmicle insisted that he be permitted to take his personal laptop with him, but given the brouhaha over his excessive business expenses, the company required him to prove that he bought the laptop with his own money. On that day, counsel for both sides exchanged letters regarding the need to preserve data for litigation.

After he left work, Carmicle used the “Find My iPhone” application to remotely lock a company laptop, claiming he meant to lock his personal computer. Despite learning that he locked a company-owned laptop, he never tried to unlock it. Even after the trial, Carmicle still refused to share the PIN necessary to unlock the company’s computer.

Carmicle also asserted that he had lost data from numerous devices or the devices themselves. For instance, Carmicle remotely wiped his company iPad the day he lost his job. He claimed his son lost his personal iPad while on vacation. He could not remember whether he had discarded or damaged his personal iPhone. A forensic examination of his personal laptop in June 2015 showed that Carmicle had accessed almost every file on his laptop—2.4 million of them—within 48 hours of turning it over.

As a result of Carmicle’s spoliation, Brown Jordan filed a motion for sanctions, which the court granted. The court found that the duty to preserve arose on the day Carmicle was terminated, that Carmicle knew to preserve data because of his background and because he was represented by counsel, and that the lost evidence could not be “restored or replaced through additional discovery.” Finally, the court concluded Carmicle intended to destroy the evidence and thus presumed it would have been unfavorable to his case.

The court found that under the old or new rule 37(e), an adverse inference was necessary to punish Carmicle’s conduct. Under the old rules, the court would have sanctioned him using its inherent authority on because “Carmicle’s deliberate deletion and destruction of evidence and lack of candor concerning these actions unquestionably constitutes bad-faith litigation conduct.”

Brown Jordan Int’l, Inc. v. Carmicle, Nos. 0:14-CV-60629 and 0:14-CV-61415, 2016 WL 815827 (S.D. Fla. Mar. 2, 2016).

Takeaways

Regardless of which version of Rule 37(e) applies, acting in bad faith is always a recipe for sanctions. Every action Carmicle took regarding his devices and their data cast further suspicion on his motives, and what’s worse is that his counsel never intervened. Particularly when counsel are involved before a lawsuit commences, they should advise clients to preserve evidence and take precautions to ensure their hands are clean.

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