In a landmark opinion by Judge Lee H. Rosenthal, the court in Rimkus Consulting Group, Inc. v. Cammarata, 2010 WL 645253 (S.D. Tex. Feb. 19, 2010) (opinion) ordered an adverse inference instruction against a group of defendants for intentional spoliation of evidence. The facts of the case are pretty straightforward: A group of forensic engineers left Rimkus Consulting Group to set up their own competing business. After leaving the company, the employees filed suit in Louisiana seeking to nullify certain non-compete agreements. Rimkus filed a separate lawsuit in Texas, alleging that the defecting employees breached the non-competition and non-solicitation covenants in their written employment agreements and that they used Rimkus’s trade secrets and proprietary information in setting up and operating a competing business, US Forensics. Rimkus also alleged that the former employees engaged in activity which lead to spoliation of evidence. The court agreed that the defendants, former employees of Rimkus, had participated in intentional spoliation of evidence by failing to preserve relevant ESI, deleting ESI, and destroying laptops with relevant ESI. However, in declining to impose ‘terminating sanctions’ for intentional spoliation, the court held: “The sanction of dismissal or default judgment is appropriate only if the spoliation or destruction of evidence resulted in “irreparable prejudice” and no lesser sanction would suffice.” In liu of ‘terminating sanctions’, the court ordered an adverse inference instruction and for defendants to pay plaintiff’s attorneys fees and costs.
Judge Rosenthal acknowledged the recent Pension Committee case, but was careful to note the differences between the two cases:
“The focus of Pension Committee was on when negligent failures to preserve, collect, and produce documents–including electronically stored information–in discovery may justify the severe sanction of a form of adverse inference instruction. Unlike Pension Committee, the present case does not involve allegations of negligence in electronic discovery. Instead, this case involves allegations of intentional destruction of electronically stored evidence.”
Many commentators have suggested that the Cammarata decision may end up being equally as influential as the Pension Committee decision. For more analysis about the connection between the two cases, Mary Mack has written an excellent article, which can be accessed: here.
Before the ink was dry on Judge Scheindlin’s groundbreaking “no written legal hold = gross negligence” opinion in The Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities, et al., 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010) (Amended Order), subtitled “Zubulake Revisited: Six Years Later,” Judge Rosenthal, in Rimkus v. Cammarata, 07-cv-00405 (S.D. Tex. Feb. 19, 2010) drew careful lines around the court’s inherent power to sanction, even in the face of bad faith, and introduced the concept of preservation proportionality. Both opinions are available at the end of this article.