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No Sanctions for Spoliation of Emails in Former Officers’ Personal Accounts Absent Evidence of Bad Faith or Prejudice

Posted in CASE SUMMARIES

Puerto Rico Tel. Co., Inc. v. San Juan Cable, LLC, No. 11-2135 (GAG/BJM), 2013 WL 5533711 (D.P.R. Oct. 7, 2013)

Plaintiff alleged that the defendant failed to preserve relevant emails from the personal accounts of three former officers (the CEO, General Manager, and Senior Vice President) and sought an adverse inference instruction.  While the court agreed that Defendant’s failure to locate certain emails was a breach of the duty to preserve and constituted spoliation, no sanctions were imposed absent evidence of bad faith or a demonstration of prejudice.

Addressing Plaintiff’s motion, the court concluded that Plaintiff had proffered “sufficient evidence” to establish that Defendant had “failed to preserve relevant emails within its control.”  Specifically, the court reasoned that Defendant “presumably knew” of its officers’ use of their personal email accounts where the officers had used those accounts “to manage the company for as long as seven years.”  Thus, the duty to preserve extended to those accounts.  (The officers remained employed by Defendant when the duty to preserve was triggered and left the company approximately one year later.)  Because Defendant admitted that it was unable to account for three responsive email chains from its former CEO’s personal account, the court concluded that spoliation had occurred.

Despite its conclusion, the court found Plaintiff’s request for sanctions “problematic on multiple fronts.”  In particular, the court cited the absence of bad faith and Plaintiff’s failure to demonstrate prejudice, which “counsel[ed] against” imposing an adverse inference.  In reaching this conclusion, the court noted that Defendant had issued a litigation hold to its employees within one month of being served with the complaint, including the former officers; that only three email chains were in fact “lost;” that the three email chains were recovered from other sources; and that the relevance of the email chains was not potentially damaging to the defendant.

The court acknowledged, however, that more information on the extent of the spoliation could come to light and opined that forensic analysis of the three former employees’ personal accounts “may be appropriate to determine whether critical emails ha[d] been deleted.”  Thus, Plaintiff’s motion was denied without prejudice.