Plaintiff D'Onofrio filed a lawsuit against her former
employer, Defendant SFX Sports Group, Inc. ("SFX") claiming she was
discriminated against based on her sex under the District of Columbia Human
Rights Act, the Equal Pay Act, and the District of Columbia Family Medical Leave
Act. She also alleged retaliatory termination and hostile work environment.
In early September 2006, the parties encountered their
first of what would prove to be many discovery disputes. The Honorable Judge
Bates urged the parties to resolve their disputes and ordered that they meet
pursuant to a discovery order. After several meetings and several requests
for judicial intervention, the issue was referred to Judge Facciola for an
evidentiary hearing of the spoliation of electronically stored information.
Two weeks after Plaintiff's termination, she sent a
letter to SFX's parent corporation, Clear Channel Communications, Inc.,
stating that "the company and its subsidiaries and related entities . . .
must take every reasonable step to preserve this information until the final
resolution of this matter." See D'Onofrio v. SFX Sports, No. 06-687, * 15
(D. DC 2010).
Despite this letter, SFX's managers still "scrapped"
Plaintiff's work computer. Plaintiff maintained that thousands of documents
relevant to the litigation were destroyed. She testified that she kept
back-ups of her electronic files on both disks and in hard copy in her
office, but that no efforts were made by Defendant to locate the back-ups or
hard copies. Accordingly, during one of the many order meetings, Defendant
agreed to make their computer server available to Plaintiff's electronic
forensic expert to search for deleted and old documents. That process is
estimated to have cost Defendant over $10,000.
The electronic forensic expert discovered thousands of
documents responsive to discovery requests. The Court granted a two week
window for the Defendant to review the documents for privilege and produce
the non-privileged documents. Defendants filed a 568-page privilege log
containing 9,412 entries asserting attorney client privilege, work product,
or proprietary/private information. Accordingly, the Court conducted an
in
camera review of the documents and Defendants agreed to permit Plaintiff to
test the validity of the privilege log using statistical sampling. The
instant Motion for Sanctions and Request for Spoliation Instruction
followed.
The Plaintiff contends that SFX's failure to preserve
evidence has prejudiced Plaintiff, despite the thousands of documents
discovered by Plaintiff's expert. She requested that the Court enter default
judgment, order payment of her attorneys' fees, and/or impose an adverse
inference for the missing evidence.
At the evidentiary hearing, Defendant argued that
Plaintiff failed to put Defendant on notice of the impending litigation, and
therefore, Defendant's obligation to impose a litigation hold never came to
fruition. It was SFX's position that by sending the letter to SFX's parent
company, SFX was never placed on notice. The Court rejected this argument
because the letter clearly stated that the notice applied to "all
subsidiaries." Accordingly, Defendant SFX had the obligation to preserve
potentially relevant information.
The fact that Defendant failed to preserve evidence was
established conclusively. Therefore, the Court's analysis moved to what, if
any, sanctions were appropriate. The Court explained that sanctions fall
into two broad categories - issue-related and punitive. Issue-related
sanctions include adverse evidentiary determinations and preclusion of the
admission of evidence. There must be a showing by a preponderance of the
evidence that the party's misconduct has tainted the evidentiary resolution
of the case. On the other hand, punitive sanctions are awarded after a
showing by clear and convincing evidence that a party engaged in intentional
misconduct, and includes dismissal or default judgment, contempt orders,
attorneys' fees, and fines.
The award of default judgment requires proof by clear
and convincing evidence that the Defendant acted in bad faith when it
destroyed Plaintiff's computer. This sanction must be applied sparingly and
only after other sanctions have been applied without avail. Here, Defendant
destroyed evidence but took affirmative steps to remedy the situation by
providing access to their server. As a result, thousands of documents were
recovered. Thus, insufficient evidence of bad faith existed and a default
judgment was not awarded.
Plaintiff's request for attorneys' fees, another
punitive sanction, also required clear and convincing evidence showing,
which the Court did not find. The Court also balanced the proportion of the
harm to the prejudice sustained. Taking all of the discovery disputes over
this litigation's three-year history, the total legal fee bill amounted to
over $1,000,000. The Court was not willing to order that amount in damages
to the Plaintiff, in light of Defendant's remedial efforts.
Finally, Plaintiff requested an adverse inference jury
instruction that would instruct the jury it could infer from the loss of
evidence that the evidence would have been detrimental to the Defendant. The
proper instruction would have accounted for the Defendant's remedial
efforts, too. The primary issue was that the parties did not agree on what
remained lost and, more importantly, the significance of what was lost.
Plaintiff contended significant evidence was lost,
while Defendant argued that only minimal, insignificant evidence was lost,
if any at all. Accordingly, the Court reserved judgment on the issue of
adverse inference sanctions and remanded to the lower trial court for an
evidentiary hearing geared towards identifying the nature of the lost or
destroyed evidence, specific items that Plaintiff claimed were missing, what
happened to Plaintiff's computer, and what was stored on the local hard
drive of the computer.
Top
