The U.S. District Court for the District of Maryland, in an 89-page opinion, has provided a detailed discussion of a litigant’s preservation duties and the standard a court should use in determining the sanctions resulting from the spoliation of evidence. In addition to setting forth a ruling in a case involving the rare situation where a litigants’ admitted destruction of evidence was both undeniable and prejudicial to the plaintiff, Judge Grimm provided a comprehensive review of the law of each circuit on preservation and spoliation. Victor Stanley, Inc. v. Creative Pipe, Inc., Civ. No. MJG-06-2662 (D. Md., Sept. 9, 2010) (Grimm, J.).
The defendant, Mark Pappas, the president of Creative Pipe, failed to implement a litigation hold; failed to preserve his external hard drive, files and emails; purposefully deleted electronically stored information (ESI) after plaintiff filed suit and again after the court ordered him to preserve such information through the issuance of several orders; ran software programs to permanently remove files; and failed to preserve ESI when replacing a server. The court ultimately granted a default judgment on the copyright infringement claim, but also found Pappas in contempt of court, and ordered that he be imprisoned for up to two years unless and until he pays the plaintiff’s attorneys’ fees and costs involved in litigating the discovery issues. Additionally, although the court concluded that it was unable to order defendants Pappas and Creative Pipe to pay a fine to the court, it indicated "[i]f such a sanction were reasonably available … this case would be the poster child for demonstrating its appropriateness."
Rather than merely discussing the facts of the case in the context of the law of the District of Maryland and the U.S. Court of Appeals for the Fourth Circuit, the court referenced a more general concern of litigants "regarding the lack of a uniform national standard" on preservation obligations and the applicable sanctions for failing to preserve ESI. The court noted that corporations often must take into account the standards of numerous jurisdictions in creating document retention and preservation policies and "cannot look to any single standard to measure the appropriateness of their preservation activities, or their exposure of potential liability for failure to fulfill their preservation duties." The court therefore addressed the law of other regional circuits in its application of the law to the facts of the case, resulting in a detailed analysis akin to a law review article on the subject. Additionally, the court attached a 12-page chart setting forth the standards for each circuit (with accompanying citations) in a concise, easy-to-review format.
Practice Note: While this opinion presents a cautionary tale of what can occur if a litigant disregards his/her preservation duties, it will likely be cited as a source for litigants wanting to compare the e-discovery standards in different jurisdictions, particularly litigants who face concurrent litigation in several courts sitting in venues throughout the country. While Judge Grimm is obviously not in a position to impose a uniform standard for e-discovery, and litigants therefore still face "multiple, inconsistent standards," his opinion provides an authoritative resource as to what those standards are.