Spoliation Sanctions Proper for Failure to Implement Litigation Hold

28 Dec 2015

In Pegasus Aviation I, Inc. et. al. v. Varig Logistica S.A., 2015 NY Slip Op 09187, No. 153 (N.Y. App., Dec. 15, 2015), the New York County Supreme Court granted a motion for spoliation sanctions, striking Defendant Varig’s answer and ordering an adverse inference.  The other Defendants appealed, and the Appellate Division reversed. Plaintiff appealed the reversal.

At the trial court level, Plaintiff served discovery requests upon Defendants, including requests for ESI relating to its claims regarding the Defendants’ relationships to each other. Plaintiff was dissatisfied with the production. The court appointed a discovery referee, and during a meeting with the referee, Varig disclosed that it had experienced computer “crashes” that prevented it from producing what was requested. Varig also disclosed that from 2000 to 2008, it did not save emails in one place; rather, it kept emails on individual employees’ computers, which were wiped at the end of employment. Plaintiff sought spoliation sanctions, and the trial court granted the motion, stating that Varig failed to properly place a litigation hold and that the other Defendants were in control of Varig and were also responsible.  The appellate division then reversed, finding that Defendants’ actions did not rise to the necessary level of gross negligence.

Plaintiff appealed the appellate division’s reversal.  Upon that appeal, the appellate division reversed itself, concluding that, in fact, it had no reason to reverse the trial court’s finding.

ILS – Plaintiff ESI Discovery Experts