Archive - March 23, 2017

Sanctions Imposed for Loss of ESI Transferred in Sale of Business
Belanus v. Dutton (D. Mont., 2017)

Sanctions Imposed for Loss of ESI Transferred in Sale of Business

ILWU-PMA Welfare Plan Bd. of Trs. v. Connecticut Gen. Life. Ins. Co., No. C 15-02965 WHA, 2017 WL 345988 (N.D. Cal. Jan. 24, 2017)

In this case, ESI was lost when Defendant’s parent company sold another of its companies—on whose servers Defendant’s ESI was inexplicably stored—resulting in the transfer of that company’s servers and the ESI thereon to the third-party buyer. Concluding that Defendant failed to take reasonable steps to preserve the at-issue data, the court rejected Defendant’s argument that clauses in the sale agreement providing for “reasonable access to business information” including for “litigation purposes” and requiring the parties to retain information until the sixth anniversary of the agreement and not to destroy such information without notifying the other party were sufficient, particularly where despite such clauses, the information was not, in fact, available.  While the court concluded that additional information was required to proceed with a full Rule 37(e) analysis, it reopened discovery and ordered monetary sanctions to address the prejudice already established.

Read More

Belanus v. Dutton (D. Mont., 2017)

Key Insight: Security footage was overwritten before notice of lawsuit, so no spoliation; no intent to deprive found.

Nature of Case: Prisoner civil rights

Electronic Data Involved: Security video footage, audio recording, medical records

Keywords: video footage, deleted footage, spoliation sanctions

View Case Opinion

Copyright © 2022, K&L Gates LLP. All Rights Reserved.