Spoliation: Dude, What Happened To My Computer?

By now, you have probably heard about how important it is to preserve evidence related to legal proceedings. If you fail to do so, you may receive serious monetary and/or evidentiary sanctions that could essentially gut your legal case.

For this reason, companies and individuals have begun to take great care in retaining relevant evidence not only in document form, but also as electronically stored information. Is this the end of the story? Indeed not.

The recent case of APC Filtration, Inc. v. Becker provides a classic example of how parties can get it wrong when it comes to maintaining evidence. In fact, this federal case from Chicago shows exactly how parties should not go about fulfilling their duties to preserve evidence.

In the APC Filtration case, the plaintiff company had asserted trademark misappropriation allegations against a competing company and its founder who had previously been the plaintiff's national sales manager. The defendants were unable to produce information during discovery bearing on contacts between the defendants and a former supplier for the plaintiff and between defendants and a significant prospective customer of the plaintiff. Why? Here is where the plot thickens.

The defendant founder of the competing company, within days of receiving the plaintiff's complaint, disposed of his computer. He did so by taking it 20 miles away to a construction site to get rid of it in a dumpster.

Doesn't look good, does it? The defendant founder argued that his conduct was proper because he had been told that his computer had crashed and that it was beyond repair.

The judge did not buy this excuse and found that the founder's conduct was in bad faith. The judge also determined that his conduct violated a court order that required production of all records of communications with the plaintiff's former supplier and prospective customer - records that may have been contained on the disposed and destroyed computer.

The plaintiff requested maximum sanctions, including a default judgment against the defendants. The court did not go quite that far, but did order the defendants to pay the plaintiff's attorney's fees and costs relating to the discovery proceedings - which included the cost of a computer forensics expert.

Perhaps even more significantly, the judge, as an evidentiary sanction, also deemed conclusively proven that the defendants sought to siphon away the supplier and prospective customer from the plaintiff, since evidence on that score was not preserved.

The judge decided not to enter a default judgment against the defendants, as requested by the plaintiff, because the plaintiff was able to obtain some of the documents that were likely present on the destroyed computer from third parties.

So, what is the lesson here? When faced with potential or actual legal proceedings, do not invent convenient reasons in your own mind to dispose of evidence related to those proceedings. Even if you have a knee-jerk fear that certain evidence may be negative to your side of the case, destruction of that evidence will have far greater adverse consequences than preserving and producing it.

Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP where he focuses on litigation matters of various types, including information technology and intellectual property disputes. His Web site is http://www.sinrodlaw.com and he can be reached at [email protected]. To receive a weekly email link to Mr. Sinrod's columns, please send an email to him with Subscribe in the Subject line.

This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.