Court Orders Adverse Inference Instruction Where Plaintiff Intentionally Deletes Relevant Audio Recording

13 Apr 2018

In Hseuh v. The New York State Department of Financial Services, No. 15 Civ. 3401 PAC (Dist. Ct. S.D. N.Y. 2018) the United States District Court in the Southern Division, New York, determined that FRCP 37(e) did not apply when the party involved intentionally deleted a recording.

Tiffany Hseuh (“Hseuh”) alleges that her former co-worker at the New York State Department of Financial Services (“DFS”) began to sexually harass her in January 2014. She says that she reported his conduct with supervisors and others at the DFS starting in July 2014, but that even though he was warned to stay away from her, he continued to approach and contact her. Around August 8, 2014, Hsueh alleges she filed a formal sexual harassment complaint with Human Resources. Hsueh filed discrimination charges against the DFS with the Equal Employment Opportunity Commission (“EEOC”). She seeks damages for losses resulting from the alleged unlawful employment practices as well as compensatory damages for mental, emotional and physical injury, distress, pain and suffering and injury to her reputation.

On December 21, 2015, the DFS sent Hsueh a discovery request for all documents concerning Plaintiff’s physical and/or emotional condition from January 1, 2005 through the present, including but not limited to documents concerning any physical and/or emotional conditions for which Plaintiff was treated for or counseled during that period.

In her April 20, 2016 deposition, Hsueh said that she did not think she had recorded any conversations with the HR representative, but conceded it was possible that she did. She eventually explained that she thought she had recorded one meeting but had deleted the recording because it was not very clear and she felt not worth keeping.

Once the DFS signaled it planned to file a motion for spoliation sanctions, the Plaintiff located the missing recording. Hsueh takes the position that the instant motion is governed by Fed. R. Civ. P. 37(e). The Court may impose spoliation sanctions pursuant to Fed. R. Civ. P. 37(e) if electronically stored information (“ESI”) that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery. Where the party that failed to preserve the ESI, or acted with the intent to deprive another party of the information’s use in the litigation, the Court may instruct the jury that it may or must presume the information was unfavorable to the party or dismiss the action or enter a default judgment.

Defendant argues that Rule 37(e) does not apply. First, Defendant argues that the audio recording might not be ESI. The court disagrees. Plaintiff made the recording using a digital recorder and saved it in a digital format. The DFS also argues that Rule 37(e) applies only to situations where a party failed to take reasonable steps to preserve ESI but not to situations where, a party intentionally deleted the recording. The court agrees. It was not because Hsueh had improper systems in place to prevent the loss of the recording that the recording no longer existed on her computer; it was because she deleted it. The Court therefore concludes that Rule 37(e) does not apply.

Hsueh does not dispute that she should have preserved the recording (or that she failed to take reasonable steps to preserve it). Instead, she argues that because the recording has been restored or replaced, no sanctions are warranted.  Hsueh was under an obligation to preserve the recording; the recording was undoubtedly highly relevant to Hsueh’s claim against the DFS; and Hsueh acted in bad faith, and with an intent to deprive the DFS of the use of the recording, in deleting it. Therefore, the Court grants Defendant’s motion for spoliation sanctions in the form of an adverse inference instruction and also grants costs and attorneys fees.