In Hsueh v. N.Y. State Dep’t of Fin. Servs., No. 15 CIV. 3401 (PAC), 2017 U.S. Dist. LEXIS 49568 (S.D.N.Y. Mar. 31, 2017), the Southern District of New York sanctioned Plaintiff after she intentionally deleted a digital recording of a conversation she had with an HR representative.

In this case, Plaintiff alleges that her former co-worker had sexually harassed her while she was working for Defendants. Plaintiff contends that she raised the sexual harassment with supervisors and others, and even though the harasser was warned to stay away from her, he continued to approach and contact her. Sometime thereafter, Plaintiff alleges she filed a formal sexual harassment complaint with Human Resources. She asserts that she was excluded from the subsequent investigation, and that when she tried to follow up, Human Resources failed to take her allegations seriously.

Plaintiff subsequently filed a lawsuit, and at her deposition, she initially stated that she did not think she had recorded any conversations with Human Resources, but conceded it was possible that she did. She eventually explained that she thought she had recorded one meeting, and that she deleted the recording because “the voice recording itself . . . was not very clear, so [she] did not feel it was worth keeping.”

Consequently, Defendants moved for spoliation sanctions against Plaintiff. When Plaintiff’s response to Defendants’ motion was due, Plaintiff’s counsel informed the court that Plaintiff had provided him with a recording of a conversation with the relevant HR representative and explained that it was recovered with the help of her husband. As a result, discovery was reopened and Plaintiff and her husband were deposed. Thereafter, Defendants continued to pursue spoliation sanctions.

The court first held that Federal Rule of Civil Procedure 37(e) did not apply in this case because this case involved the intentional, as opposed to inadvertent, destruction of evidence. Rule 37(e) applies only to situations where “a party failed to take reasonable steps to preserve” ESI – not to situations where, as here, a party intentionally deleted the recording. “It was not because [Plaintiff] had improper systems in place to prevent the loss of the recording that the recording no longer existed on her computer; it was because she took specific action to delete it.”

The court then stated that, “[b]ecause Rule 37(e) does not apply, the Court may rely on its inherent power to control litigation in imposing spoliation sanctions. A party seeking an adverse inference instruction based on the destruction of evidence must establish (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; and (3) that the destroyed evidence was relevant to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense. If these elements are established, a district court may, at its discretion, grant an adverse inference jury instruction insofar as such a sanction would serve the threefold purpose of (1) deterring parties from destroying evidence; (2) placing the risk of an erroneous evaluation of the content of the destroyed evidence on the party responsible for its destruction; and (3) restoring the party harmed by the loss of evidence helpful to its case to where the party would have been in the absence of spoliation.

The court rejected Plaintiff’s argument that sanctions were inappropriate because the recording had been restored and produced, since there was reason to believe that the produced recording was incomplete (including the length of the recording, that it cut off in mid-sentence, and Plaintiff’s husband’s concession that he could not be sure the recording was complete).

The court also concluded that Plaintiff deleted the recording in bad faith and acted with the intent to deprive Defendants of the use of the recording, citing several problems with Plaintiff’s explanations surrounding the recording and its deletion. For example, while Plaintiff asserted that she deleted the recording because she “could barely hear” it, that explanation was “seriously undermined by the fact that she agreed she could hear the recording when it was played during her second deposition.” In light of the “unconvincing reasons [Plaintiff] has given for deleting the recording, the Court concludes that [Plaintiff] deleted the recording to prevent [Defendants] from using it during the litigation. Thus, [Plaintiff] acted in bad faith in deleting the recording.”

The Southern District of New York ultimately sanctioned Plaintiff for spoliation of evidence, and in addition to granting an adverse inference jury instruction, the court also awarded Defendants their costs and attorney’s fees incurred in making the spoliation motion and in reopening discovery.

Before deleting or destroying employment-related recordings/documents/emails that you have in your possession, you should always first consult with a New York employment attorney to explore all potential consequences.

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