In the business litigation HMS Holdings Corp. v. Arendt, et al., 2015 NY Slip Op 50750(U) (Sup. Ct., Albany County, May 19, 2015), the New York Supreme Court in Albany County considered Plaintiffs’ accusations that two individual Defendants had spoliated electronic data.
At the outset of the litigation, the parties had stipulated that Defendants would provide forensic images of their personal and work computers, flash drives, smartphones, and all other digital devices. After Defendants provided the forensic images to Plaintiffs, Plaintiffs hired an ESI forensics expert to review the images. Plaintiffs’ expert alleged that Defendants Curtin and Lange (both licensed attorneys) had intentionally and deliberately destroyed relevant electronically stored information.
The expert concluded that Curtin had used a wiping software on his laptop six times in September 2014, after a litigation hold had gone into effect. Curtin claimed that he did this because his laptop had slowed down and he had tried to clean it up to perform better but the court did not find this explanation to be “worthy of belief,” concluding that, as an attorney, he knew better than to run such a program after a duty to preserve evidence arose. Curtin had also failed to produce a hard drive that had a considerable volume of relevant documents, claiming he could not find it. The court did not find this excuse to be credible either.
With respect to Defendant Lange, the forensic expert testified that he found a “Shadow Copy” of a data destruction tool that had removed approximately 5,300 files from her laptop. The court also heard evidence that Defendant Lange had failed to produce text messages from her iPhone. The defendant claimed that she purchased a new iPhone and that the store where she purchased it could not transfer data to her new phone; the forensic expert, however, uncovered data from her personal computer proving that she had plugged her old iPhone into her computer after she purchased the new phone. Based on this and other evidence, the court found that Defendant Lange had engaged in egregious intentional and willful spoliation of evidence.
Concluding that both Defendants Lange and Curtin had engaged in “egregious misconduct for which they bear a high degree of culpability,” the court ordered a mandatory adverse inference instruction that the trier of fact could draw the strongest possible adverse inference from Defendants’ bad faith actions. The court also awarded attorney fees, and forwarded a copy of the order regarding Defendant Lange to the New York State Committee on Professional Standards for attorneys.