Reserving Judgment on Spoliation Pending Supplemental Briefing, Court Demands Answers to Eight Specific Questions

Dong Ah Tire & Rubber Co., Ltd. v. Glasforms, Inc., 2008 WL 4298331 (N.D. Cal. Sept. 19, 2008)

In this breach of contract litigation over allegedly non-conforming goods, Glasforms moved for sanctions against third-party defendant Taishan Fiberglass for the spoliation and destruction of documents.  Taishan had previously been ordered to produce a knowledgeable and fully prepared witness or witnesses to testify about ten topics not adequately addressed in the prior Rule 30(b)(6) deposition.  In addition, Taishan was ordered to search for and produce all documents responsive to Glasform’s requests for production, including relevant internal email communications. 

The court found that the record regarding Taishan’s discovery conduct presented “a troubling picture,” as “[l]ikely relevant materials appear to be either missing or not the subject of an appropriate search.” At the same time, the court found that the record did not answer the question of whether intentional and improper spoliation of evidence had occurred.  First, the court found it “difficult to peg who knew what when,” in terms of anticipating litigation.  Second, there appeared to be a discrepancy between Taishan’s document destruction policy and what was preserved.  For instance, a Taishan witness admitted that certain records had been destroyed, but the document destruction policy required that those records be preserved until at least the second half of 2006.  Further, the witness could not confirm whether the records were destroyed before or after litigation began because the records authorizing destruction had also been destroyed.  The court observed:  “Taishan has not explained why selective documents that just so happen to be important to the present litigation were destroyed in violation of Taishan’s document destruction policy.”

As a result, the court concluded that further information was required in order to determine what, if any, sanctions should be assessed against Taishan.  The court stated that the parties would need to address “specifically by declaration or other admissible evidence” the following questions:

(1)  Why was the document destruction policy not followed?
(2)  Who was responsible for not following the document destruction policy?
(3)  When were the items identified above destroyed, and when were they
supposed to be destroyed under the document destruction policy?
(4)  When did Taishan and CTG select their counsel for events relating to this
(5)  What further facts and dates can be added to the general timeline noted
above based on evidence submitted after this Court’s August 25, 2008 Order?  Such evidence would come from, but is not limited to, documents that were found, lost/destroyed documents that were found, and the new Rule 30(b)(6) deposition(s).
(6)  Explain why should the letter from Calvin Li, in which he admitted
graphite contamination, should/should not be the date of “anticipated litigation” for purposes of determining sanctions.
(7)  Explain why the seventeen point report should/should not be the date of
“anticipated litigation” for purposes of determining sanctions.
(8)  How does the destroyed/lost evidence relate to the party’s respective claim
or defense?

The court ordered the parties to file supplemental briefing to address the questions:  “(1) what was destroyed; (2) when it was destroyed; and (3) when Taishan could have reasonably anticipated litigation.”  The court stated it would determine the need for additional hearings regarding sanctions upon receipt of the parties’ supplemental materials.

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