What happens when an executive under a legal hold within a company sends out emails that advise others under the same hold to “please delete immediately” upon reading? That company is slapped with a $3 million sanction.
In 2012, GN Netcom, Inc., a company that specializes in hands-free communications solutions, filed a lawsuit against another consumer electronics company, Plantronics, alleging its “Plantronics Only Dealer” program, which prevented independent dealers from marketing competing products, violated federal anti-trust law and unfairly limited competition.
During discovery, the plaintiff learned that the defendant engaged in serious misconduct and filed a motion for sanctions, which was granted in part last month.
The court order reveals that the motion arose from the “intentional and admitted deletion of emails by Don Houston, Plantronics’ Senior Vice President of Sales and a member of its 12-person executive committee.” Examples of Houston’s violation of the legal hold include:
- “I would suggest everyone immediately delete this message.”
- “Please delete this entire string of emails for everyone that has been copied ASAP!”
- “Team this is an inappropriate email. please delete immediately.”
According to the order, not only did Houston instruct others to delete emails, he also deleted his own — some 40 percent from November 2013 to February 2014. And he didn’t just delete the emails, he double-deleted: from his legal folder and then his deleted files folder. In a later deposition, he stated he had “made a mistake,” but he could not recall if he had deleted his own emails or not.
With regard to reasonable steps to preserve ESI, the court determined that “Plantronics’ extensive document preservation efforts do not absolve it of all responsibility for the failure of a member of its senior management to comply with his document preservation obligations.” And that because of Houston’s misconduct, his repeated refusal to acknowledge it and “Plantronics’ repeated obfuscation and misrepresentations related to Mr. Houston’s email deletion and its investigation of it,” the defendant had acted in bad faith to deprive the plaintiff of discovery. Furthermore, the court found that Plantronics had not persuaded it that GN Netcom’s inability to access Houston’s deleted couldn’t “plausibly be thought likely to affect the outcome of the trial.”
Therefore, the court imposed a sanction on Plantronics of $3 million payable to GN Netcom. It also concluded that the only sanction under Rule 37(e)(2) that was warranted was “an instruction to the jury that it may — not that it must — presume that the information missing from Plantronics’ production was unfavorable to Plantronics.”