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Failure to Create Data Distinguished from Spoliation and Not Subject to Sanction

Posted in CASE SUMMARIES

Getty Properties Corp. v. Raceway Petroleum, Inc., 2005 WL 1412134 (D.N.J. June 14, 2005)

In 1992, Defendant Third-Party Plaintiff Raceway Petroleum, Inc. (“Raceway”) leased a property from Plaintiff Getty Properties Corp. and Third-Party Defendant Power Test Realty, Co., Ltd. (collectively, “Getty”). The property had been used for a gas station by Getty from 1975 to 1992. Raceway began operating its gas station on the site in 1993. Both acknowledged in 1992 that the property was contaminated with gasoline, and Getty was to be responsible for the remediation of any contamination existing prior to the occupation by Raceway. In 1996, the New Jersey Department of Environmental Protection noted a gasoline discharge at the property. Getty sued Raceway, alleging that Raceway was responsible for contamination in September 1999. Raceway filed a counterclaim, and motions were filed seeking sanctions for discovery abuses.

Getty’s motion for sanctions included the allegation that Raceway failed to create and preserve alarm history reports from the computerized Veeder Root System. Such reports would contain information relating to the dates and times when alarms (including tank overfill alarms) had been triggered. Raceway only created and produced reports from November 27, 2002 to March 25, 2004, but the relevant time for gasoline discharge in this action is 1996 through 1999. Getty sought an adverse inference that Veeder Root records would have confirmed the gasoline leak, relying on the Zubulake decision where the Court created an adverse inference that email willfully deleted by the defendant was harmful to the defendant’s case. Zubulake v. UBS Warburg LLC, 2004 WL 1620866 (S.D.N.Y. Jul. 20, 2004.)

This case, however, is distinguishable from Zubulake. According to Raceway, the Veeder Root system does not automatically create alarm history print-outs, and print-outs are not made in the ordinary course of business. Raceway produced as many reports as were available once the Court ordered production of the data.

…[Zubulake] deals with the active deletion of data as opposed to the failure to create data. Raceway’s failure to create more reports than it used in the daily activities of its business is not the kind of willful action that discovery sanctions are intended to redress. As such, this Court will not sanction Raceway for failing to preserve Veeder Root reports.