SDNY Dismisses Action After Finding Plaintiff Fabricated Emails
In Comlab, Corp. v. Kal Tire, et al., Case No. 17-cv-1907(KBF)(S.D. N.Y. September 11, 2018), the United States District Court for the Southern District of New York granted Defendant’s Motion for Terminating Sanctions on the grounds that Plaintiff willfully and in bad-faith fabricated and spoliated relevant evidence.
In this breach of contract action, Plaintiff allege that it executed a contract to provide services to Defendant yet never received payment for 16 particular invoices. Plaintiff produced the 16 invoices during discovery but Defendant asserted that it never received the contested invoices and hotly disputes their authenticity.
After Defendant received the contested invoices, Defendant requested documents “sufficient to identify the date(s) when Plaintiff sent” each of the contested invoices, as well as a copy of the letters/emails of transmittal. Further, Defendant’s document request included an instruction to “produce all ESI in singe-page .TIFF format, with native files, accompanying text files, and load files.” Plaintiff responded to that request by producing thirteen hard copy e-mails that it alleges to have sent (the “Subject Emails”).
In connection with its motion for sanctions, Defendant submitted a declaration stating that after receiving the subject emails from Plaintiff during discovery, Defendant was unable to locate the subject emails on its server. After it was unable to locate the subject emails on its server, Defendant made multiple written requests to Plaintiff for the native versions of the subject emails. Initially, Plaintiff agreed to produce the native versions of the subject emails. However, two days before the deposition of Plaintiff’s CEO, counsel for Plaintiff informed Defendant that it would not be able to produce the native versions of the contested emails because Plaintiff’s CEO “had to wipe the machine on which the native emails existed” due to a computer virus.
Based on its inability to independently verify the existence of the subject emails and Plaintiff’s inability to produce native versions, Defendant alleged that Plaintiff fabricated the subject emails and subsequently wiped his computer to hide the fact. As such, Defendant moved the court for terminating sanctions.
At the outset, the court holds that the “outright dismissal of a lawsuit…is within the court’s discretion” and has been deemed appropriate “if there is a showing of willfulness, bad faith, or fault on the part of the sanctioned party.” However, the court states that dismissal is a “drastic remedy” and “should be imposed only in extreme circumstances, usually after consideration of alternative, less drastic sanctions.”
Given the evidence, the court concluded that “by clear and convincing evidence” Plaintiff fabricated the subject emails and subsequently spoliated the evidence in order to hide that fact. Due to the serious nature of this transgression as well as the critical nature of the fabricated evidence to Plaintiff’s breach of contract case, the Court concludes that this action must be dismissed as a result.