The Sanction of Dismissal – A Terminating Sanction that Costs a Party the Case

3 May 2016

Refusal to turn over evidence and spoliation of evidence are serious matters, and courts will often respond by ordering monetary sanctions against the offending party, or by ordering other types of sanctions, such as adverse inference instructions.

One rarely-used form of sanction, however, is the most serious – the sanction of dismissal or a terminating sanction.  For plaintiffs, a terminating sanction would be a dismissal of the case or vacatur of judgment; for defendants, it would be dismissal of a counter-claim or entry of a default judgment.  A party accusing another party of spoliation or other discovery abuses will often seek a terminating sanction, but it is rarely given; courts typically cite the public policy of litigating a case on its merits rather than ending the case for discovery violations.

Attorneys should be aware, however, that this sanction is available and that parties do regularly seek its application.  Counsel should always act diligently to ensure that their clients preserve electronic evidence and produce anything responsive to the opposing party’s discovery requests.

Recent Cases on Terminating Sanctions

  • Roadrunner Transportation Services, Inc. v. Tarwater, Case Nos. 15-55448 and 14-55529 (9th, Mar. 18, 2016) – In an unpublished decision, the 9th Circuit affirmed the lower court’s decision to enter a default judgment as terminating sanction against Defendant. The court found that Defendant had willfully deleted emails and computer files after a court order explicitly required him to preserve all data and documents.
  • Hausman v. Holland America Line-U.S.A., et. al., Case No. 13-0937 (W.D. Wash., Jan. 5, 2016) – After the court entered a $21 million judgment in Plaintiff’s favor, a witness came forward to allege that Plaintiff had willfully deleted a number of emails that had supported his personal injury claims. After an evidentiary hearing, the judge vacated the $21 million judgment and ordered a new trial.
  • Woodell v. Bernstein, et. al., Case No. 14-2836 (Cal. App., Dec. 30, 2015) – The court dismissed Plaintiff’s defamation case after finding that Plaintiff had engaged in delay of discovery and obstruction of Defendant’s attempts to access his cell phone. The court also found that Plaintiff had purposefully destroyed evidence on the cell phone.
  • Herman v. Herman, 2015 NY Slip. Op. 31205(U) (N.Y.S.C., NY Co., 2015) – The court entered a default judgment against Defendant after the court found he purposefully destroyed an email in violation of the ESI stipulation.
  • Watkins v. Infosys, Case No. 14-0247 (W.D. Wa., July 23, 2015) – In this employment discrimination case, the court found that Plaintiff wiped electronically stored information from her work computer before suing her employer and refusing to turn over the wiped files. The court noted that the sanction of dismissal requires the court to weigh a number of factors, including its need to manage its docket; the public interest in speedy litigation; the public policy in favor of deciding a case on the merits; and the availability of less drastic sanctions. Here, the court decided that although Plaintiff’s actions were a “close call,” it would decide the case on the merits, and it found summary judgment in favor of Defendant regardless. The court then entered a show cause order requiring Plaintiff to show why she should not be issued monetary sanctions.
  • Bates v. United States, Case No. 13-00051 (S.D. Ala., July 31, 2015) – Defendant, the U.S. government, sought dismissal as a sanction for Plaintiff’s failure to prosecute the case and her failure to properly respond to discovery requests. Although the court found that discovery was “poorly conducted,” partially because of Plaintiff, the court further found that the government was “complicit” in the discovery issues because it failed to file a Motion to Compel. The court cited several cases showing that sanctions are not appropriate when the party seeking the sanctions never filed a motion to compel what it sought.

Avoiding Discovery Sanctions Due to Mistakenly Deleted Files

Although courts very rarely grant terminating sanctions, they are available when egregious discovery abuse is found. Attorneys should clearly counsel their clients regarding the preservation of evidence, particularly electronic evidence contained in computers, hard drivers and mobile devices.  Forensic computer analysis can discover if and when a file was deleted or altered, and deleted files may be recoverable.

If you believe a client may have accidentally deleted important electronic files or if you believe a defendant in your case is engaging in spoliation, contact the eDiscovery experts at ILS today to discuss options for determining spoliation or restoring files.