eDiscovery Case Law: Spoliate Evidence, Don’t Go to Jail, but Pay a Million Dollars
March 11, 2011
As previously referenced in eDiscovery Daily, defendant Mark Pappas, President of Creative Pipe, Inc., was ordered by Magistrate Judge Paul W. Grimm to “be imprisoned for a period not to exceed two years, unless and until he pays to Plaintiff the attorney's fees and costs that will be awarded to Plaintiff as the prevailing party pursuant to Fed. R. Civ. P. 37(b)(2)(C).”. Judge Grimm found that “Defendants…deleted, destroyed, and otherwise failed to preserve evidence; and repeatedly misrepresented the completeness of their discovery production to opposing counsel and the Court.”
However, ruling on the defendants’ appeal, District Court Judge Marvin J. Garbis declined to adopt the order regarding incarceration, stating: “[T]he court does not find it appropriate to Order Defendant Pappas incarcerated for future possible failure to comply with his obligation to make payment of an amount to be determined in the course of further proceedings.”
So, how much is he ordered to pay? Now we know.
On January 24, 2011, Judge Grimm entered an order awarding a total of $1,049,850.04 in “attorney’s fees and costs associated with all discovery that would not have been un[der]taken but for Defendants' spoliation, as well as the briefings and hearings regarding Plaintiff’s Motion for Sanctions.” Judge Grimm explained, “the willful loss or destruction of relevant evidence taints the entire discovery and motions practice.” So, the court found that “Defendants’ first spoliation efforts corresponded with the beginning of litigation” and that “Defendants’ misconduct affected the entire discovery process since the commencement of this case.”
As a result, the court awarded $901,553.00 in attorney’s fees and $148,297.04 in costs. Those costs included $95,969.04 for the Plaintiff’s computer forensic consultant that was “initially hired . . . to address the early evidence of spoliation by Defendants and to prevent further destruction of data”. The Plaintiff’s forensic consultant also provided processing services and participated in the preparation of plaintiff’s search and collection protocol, which the court found “pertained to Defendants’ spoliation efforts.”
So, what do you think? Will the defendant pay? Or will he be subject to possible jail time yet again? Please share any comments you might have or if you’d like to know more about a particular topic.