Broccoli, et al. v. Echostar Communications Corp., et al., 229 F.R.D. 506 (D.Md. 2005)
Dino Broccoli (“Broccoli”) sued Echostar Communications Corp. and Dish Network Corp. (collectively referred to as “Echostar”) and Stacie Andersen (“Andersen”) in connection with employment discrimination. He claims that Andersen, a human resources manager at Echostar, created a hostile work environment via sexual harassment, caused termination of his employment because he rebuffed her advances, and subsequently provided false and defamatory employment references. Broccoli prevailed on claims of breach of contract and violation of the Maryland Wage Payment and Collection Act, but not on claims of sexual harassment and retaliation under Title VII of the Civil Rights Act of 1964 nor tortious interference with prospective economic advantage.
Broccoli sought attorneys’ fees and Echostar filed a bill of costs asserting that it had prevailed. The court addressed these matters and also provided an explanation for its earlier granting of Broccoli’s motion for discovery sanctions, which resulted in an adverse spoliation of evidence jury instruction and limits on Echostar’s ability to present certain evidence. Broccoli was awarded attorneys’ fees, which included $16,097 for efforts resulting from Echostar’s discovery violations and spoliation of evidence. Since Echostar was not found to be a prevailing party and, in the alternative, because of Broccoli’s modest means, Echostar was not awarded costs.
The court found Echostar’s email/document retention policy “extraordinary.” All items in the “sent items” folder which are more than seven days old are automatically routed to the “deleted items” folder. All items in the “deleted items” folder which are more than 14 days old are automatically purged and become irretrievable. They are not stored elsewhere. There are no backups. Electronic files belonging to former employees are completely deleted 30 days after an employee leaves.
The court found that “under normal circumstances,… [the retention policy] may be a risky but arguably defensible business practice undeserving of sanctions.” However, Echostar clearly acted in bad faith by failing to suspend document destruction and preserve essential documents after being put on notice of potential litigation. Notice became effective as early as January 2001. Broccoli’s superiors testified that they began receiving complaints of sexual harassment at this time (both orally and via email), and passed these complaints along to their own superiors. Broccoli testified that he met with a Human Resources manager (Andersen’s superior) in July 2001, but was told not to put the compliant in writing and that she would take care of the matter informally.
Andersen admitted that she had received a document from Broccoli which included the allegation that his termination was due in part to complaints that he had made regarding harassment by Andersen. This document had been hand delivered by Broccoli on November 28, 2001, shortly after he learned of his impending termination. Andersen says that she gave it to upper management. However, nobody in upper management remembers having seen it prior to this litigation. “In short, the evidence of a regular policy at Echostar of ‘deep-sixing’ nettlesome documents and records (and of management’s efforts to avoid their creation in the first instance) is overwhelming.”
Dr. Grace Kim, Broccoli’s girlfriend, sent an email on December 21, 2001 to Echostar executives alleging that Broccoli’s dismissal was due to discrimination by Andersen. Echostar claims that it was first made aware of the complaints upon receipt of Dr. Kim’s letter and had no obligation to preserve documents contrary to its normal document retention policy before then. The court disagreed, finding that Echostar had actual notice as early as January 2001 when grievances were communicated to supervisors as per the Zubulake decision. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217.
None of the email between Broccoli, Broccoli’s supervisors, and upper management regarding the complaints had been preserved. Echostar admitted that it never issued a company-wide instruction to suspend the destruction of relevant documents. Indeed, it did not even save Broccoli’s email for the 30 days prior to his termination after receiving his written complaint and Dr. Kim’s letter.
The court found that management had a duty to preserve employment and termination documents when it learned of the potential litigation, but little had been preserved and subsequently produced. Also, the lack of a paper trail documenting Broccoli’s interaction with his supervisors and co-workers helped Echostar with its impeachment of Broccoli’s former supervisors and was prejudicial. “Echostar clearly acted in bad faith in its failure to suspend its email and data destruction policy or preserve essential personnel documents in order to fulfill its duty to preserve the relevant documentation for purposes of potential litigation.”