Friday, February 3, 2012

Cloud Data and E-Discovery - Pay your bill or risk sanctions.

"Plaintiff Sanctioned for Negligence after Third Party Vendor Destroys ESI" from e-Discovery Case Law Update

"In Cyntegra, Inc. v. Idexx Laboratories, Inc. [pdf], CV 06-4170 (C.D. Cal. 2006), U.S. District Court Judge Philip S. Gutierrez, granted the defendant’s motion for an adverse inference instruction as a sanction holding that the plaintiff was negligent and failed its affirmative duty to preserve electronic information in the possession of a third-party.
The plaintiff alleged that the defendant engaged in unfair trade practices by prohibiting distributors from promoting or selling competing products. The plaintiff stored a majority of its documents on third-party servers and failed to make a payment to maintain the service after March 2006. The data storage vendor destroyed all of the plaintiff’s electronically stored information a short time later. The plaintiff filed its lawsuit in June 2006. The plaintiff made no effort to back up or retrieve the files prior to their destruction and was only able to produce 1,339 pages of emails found on its laptops. The defendant filed a motion for sanctions and the plaintiff countered that the deleted information was not relevant to the litigation or within its control. The court disagreed, finding the information highly relevant to the parties’ dispute and that the plaintiff could have reasonably anticipated litigation and had a duty to make the payment and preserve the information. The court ordered an adverse inference instruction as a sanction."

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