Cognate Bioservices, Inc. v. Smith, No. WDO-13-1797, 2015 WL 5158732 (D. Md. Aug. 31, 2015)

Key Insight: Plaintiff accused Defendant, its former officer (CEO), of accessing and copying proprietary materials and providing them to another corporation; court found Defendant?s failure to preserve notebooks and the contents of a discarded smartphone to be willful (but not in bad faith) and the failure to issue a litigation hold resulting in the loss of ESI to be grossly negligent; relevance was presumed as to the willfully destroyed materials and was established as to the ESI lost as the result of the litigation hold failure but, after reasoning that the prejudice resulting from the loss of the notebooks was ?clear?-based on their contents-the court indicated that prejudice resulting from the loss of the smartphone and other deletions was ?more complicated? where the ESI may still exist (on a preserved laptop), indicating that if they could not be recovered, the destruction would be prejudicial and warrant sanctions; for willful destruction of notebooks, court recommended that the presiding judge consider an adverse inference; for loss of contents of smartphone and other ESI, court indicated the sanctions were the to be decided by presiding judge and would depend on whether the information could be obtained from another source (i.e., the level of prejudice); no spoliation found as to at-issue laptop where defendant returned the laptop to an employee of the corporate owner, but where that employee was notified to preserve the contents and thus it was unclear if any ESI was lost

Nature of Case: Misappropriation of proprietary information

Electronic Data Involved: Hard copy notebooks, emails/smartphone, ESI

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