Deleting Files Costs $200,000 In Sanctions And Adverse Inference

Destroying evidence is always bad. Getting caught is often assured, and even worse. In the case of Clear-View Technologies v. Rasnick, et al., in the Northern District of California the severity and expanse of duties to preserve evidence have been further clarified. One thing the court makes clear, sometimes the only thing worse than a smoking gun, is a missing gun that has been thrown away leaving only traces of smoke.

As the court starts off:

Deployment of “Crap Cleaner” software—with a motion to compel pending. Lost media with relevant documents. False certification that document production was complete. Failure to take any steps to preserve or collect relevant documents for two years after discussing this very suit. Any one of these transgressions by Defendants … and their prior counsel might justify sanctions. Taken together, there can be no doubt.

Preservation of evidence is a duty, and it does not start when suit is filed.

“The duty to preserve evidence begins when litigation is ‘pending or reasonably foreseeable.’ Thus, ‘[s]poliation refers to the destruction or material alteration of evidence or to the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.’ This is an objective standard, asking not whether the party in fact reasonably foresaw litigation, but whether a reasonable party in the same factual circumstances would have reasonably foreseen litigation.”

This does not mean evidence must be preserved when a party learns about a suit or when a party is served with a complaint, it means the evidence must be preserved from the time when a reasonable person thinks they might be sued. The proverbial, “I’ll see you in court!” can result in a duty to preserve and further deletion may result in sanctions. (Or as the Court quotes, in this case, the statement “[K]eep it up and you’ll find [yourself] in court[.] Call Clyde again and I sue[.] Mark my words.”)   The standard is not subjective. This is an objective standard. Even if a party is not aware of their duty, ignorance is not an excuse.

But this case had it all. Laptops and cell phones were “lost.” Emails were deleted. Documents were not produced. And likely most damming element, parties installed and ran software called CCleaner or “Crap Cleaner” which was specifically designed to delete data in a manner that it could not be recovered. Having software that is designed to hide evidence might be suspect in and of itself, evidence of its use is something courts cannot overlook.

The result of this cover up was the court ruling:

Defendants and their prior counsel therefore are jointly and severally liable for the following fees, which the court finds reasonable in light of the extraordinary effort required to uncover this widespread abuse: … $212,320.

But even more significant than the money to be paid, was the court’s ruling on further sanctions.

All this warrants the adverse instruction that the unproduced material may be deemed to support [Plaintiff’s] contentions. The court orders the jury be instructed as follows:

Defendants have failed to prevent the destruction and loss of relevant evidence for [Plaintiff’s] use in this litigation. This is known as the “spoliation of evidence.”

I instruct you, as a matter of law, that Defendants failed to preserve evidence after its duty to preserve arose. This failure resulted from its failure to perform its discovery obligations.

You also may presume that [Plaintiff] has met its burden of proving the following two elements by a preponderance of the evidence: first, that relevant evidence was destroyed after the duty to preserve arose. Evidence is relevant if it would have clarified a fact at issue in the trial and otherwise would naturally have been introduced into evidence. And second, the lost evidence was favorable to [Plaintiff].


The result: everything missing or deleted, no matter how innocent it might be, is presumed to be favorable to plaintiff.

The full text of the opinion: Clear-View Technologies v. Rasnick, et al., 13-cv-02744 (N.D. Cal. May 13, 2015.)

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