Boeing Sanctioned for ESI Spoliation in Aircraft Industries Case
In Alabama Aircraft Industries, Inc. et. al. v. The Boeing Company et. al., Case No. 11-03577 (N.D. Ala., Mar. 9, 2017), Plaintiffs sued Defendants for use of proprietary information to outbid Plaintiffs on a contracting project. Plaintiffs have performed programmed depot maintenance for the U.S. Air Force’s KC-135 Stratotanker fleet since 1969. In 2004, Plaintiffs entered talks with Defendants to “team up” and bid jointly on the work in the future. The parties entered into an agreement to submit a joint proposal in which Plaintiffs would be the subcontractors. In 2006, Defendants terminated the agreement, stating it was no longer financially viable. The Air Force reopened the bidding process, and Plaintiffs and Defendants submitted their own bids. The Air Force accepted Defendants’ bid, and Plaintiffs sued in 2011 after contesting the bid and losing.
In 2006, Defendants’ corporate counsel reached an agreement with Plaintiffs’ counsel to retrieve all proposal-related information generated by Plaintiffs. In August 2006, Defendants circulated a notice to certain team members, requiring them to provide specified documents to the Law Department.
Two team members deleted the relevant ESI from another team member’s computer by moving it to the Recycle Bin and then emptying it, telling counsel that the team member had deleted his emails. Defendants informed the computer that the computer no longer exists. In 2007, Rabe, the corporate counsel for Defendants, removed two disks of ESI from secure storage and never returned them. Allegedly, they contained ESI provided to legal by employee Doug Lundy. Rabe claimed not to know what happened to the disks and claims not to recall removing them.
In 2007, the corporate counsel for Defendants later removed two disks of ESI from secure storage and never returned them. He later claimed to not to know what happened to the disks.
Plaintiffs sought spoliation sanctions for Defendants’ activities. The court looked at FRCP 37(e) with respect to ESI spoliation. The court determined that Defendants should reasonably have anticipated litigation and had a duty to preserve the ESI. The court found that the ESI could not be replaced or restored. The court found further that Defendants acted in bad faith, which shifted the burden to Defendants to show that Plaintiffs were not prejudiced by the destruction. Defendants did not meet that burden. Finally, the court held that Defendants acted with intent to deprive Plaintiffs of the information because the behavior was “unexplained” and “blatantly irresponsible.” The court ordered an adverse inference instruction such that the jury may presume the lost information was unfavorable to Defendants. The court also ordered Defendants to pay fees and costs.