Counterclaim Dismissed with Prejudice as Sanction for Fabricated Email

24 Feb 2017

Sanction for fabricated emailIn Flextronics International, USA, Inc. v. Sparkling Drink Systems Innovation Center Ltd. et. al., Case No. 15-4904 (N.D. Ill., Feb. 9, 2017), Plaintiff sued Defendants for breach of contract, fraud and other claims stemming from a manufacturing agreement. Defendant Bueno is the owner of the two corporate Defendants. Defendant SDS-HK brought a countersuit for more than $280 million.

The day of the complaint, Plaintiff sent Defendants a letter formally terminating their agreement; Defendants responded by referring to a November 24, 2014 email between an employee of Plaintiff (Shaffer) and an employee of Defendant (Schwab) that purportedly altered the terms of the agreement. During discovery in the lawsuit, Defendants produced a version of the November 24 email but only insofar as it was included in an email from March 24, 2015. Defendants could not produce the native format as it could not be found, and Plaintiff could not find the email anywhere on its servers. Plaintiff demanded that Defendants admit the email was fabricated, but Defendants denied it. Defendants agreed to produce Schwab for a limited deposition and have him sign a declaration in exchange for Plaintiff’s agreement not to forensically examine Schwab’s computer. At the deposition, Schwab testified that the email was real, but over time, the story of how the email was created and destroyed changed. Plaintiff hired a computer forensics expert, who concluded the email was fabricated. Plaintiff sought a dismissal of the counterclaim with prejudice as a sanction for fabricated email.

The court held that the email was fabricated. It noted that the email could not be found in any of the accounts of the recipients and senders, and Shaffer had no memory of receiving it, nor did Schwab’s colleague. The revised agreement purportedly sent in the fabricated email was not signed by anyone, including Schwab. Finally, there was motive for Schwab to fabricate it to support SDS-HK’s counterclaim. Further, Plaintiff’s expert provided compelling technical evidence that Schwab’s testimony about the creation of the email could not be accurate. The court found the conduct willful and granted the motion, sanctioning Defendants by dismissing SDS-HK’s counterclaim with prejudice.

ILS – Plaintiff ESI Discovery Experts