N.M. Oncology & Hematology Consultants v. Presbyterian Healthcare Servs. - No. 1:12-cv-00526 MV/GBW, 2017 U.S. Dist. LEXIS 130959 (D.N.M. Aug. 16, 2017)

Rule:

In order for a court to sanction a party for spoliation, the moving party must show by a preponderance of evidence that the other party destroyed evidence. In re Krause, 367 B.R. 740, 764 (D. Kan. 2007) 

Facts:

For alleged discovery violations, New Mexico Oncology and Hematology Consultants, Ltd. (“New Mexico”) seeks a default judgment or, in the alternative, an adverse jury instruction at trial. New Mexico requests that the Court sanction Presbyterian Healthcare Services et al. (“Presbyterian”) by ordering default judgment against them. New Mexico alternatively requests that the Court sanction Presbyterian by ordering an adverse jury instruction. New Mexico alleges that Presbyterian should be sanctioned for failure to implement a proper litigation hold. New Mexico alleges that Presbyterian's original May 2012 litigation hold was inadequate because (1) it did not account for the "email jail," a function which required that employees delete or archive emails when they run out of inbox space; (2) it covered only thirty-five employees and improperly excluded several key witnesses; (3) it allowed employees to determine which emails were irrelevant to the lawsuit and could be deleted; and (4) it did not apply to Presbyterian’s Live Exchange Server and therefore did not preserve documents deleted by individual employees.

Issue:

Was the evidence presented by New Mexico sufficient to show that Presbyterian intentionally deleted emails that should have been disclosed?

Answer:

No.

Conclusion:

Without question, New Mexico points out some imperfections with the litigation hold and its implementation. First, given the relative cheapness of digital storage, parties will have less and less justification to permit key employees to utilize discretion in the retention of ESI. Certainly, the best approach is to implement a server-side hold on all digital data utilized by key employees and to later use search algorithms to parse relevance. Second, in the light most favorable to Presbyterian, they failed to timely implement a server-side litigation hold. In fact, the Court is persuaded that either a server-side litigation hold never went into effect, or it was not properly applied. Relatedly, businesses that utilize email jail to conserve server space should shut down such features for employees subject to a litigation hold. Presbyterian failed to do so. Third, Presbyterian failed to adequately explain the reason for the delay between the first and second waves of litigation hold recipients. Certainly, the mere possibility of a settlement is insufficient. However, New Mexico failed to establish that these imperfections were a result of bad faith or that they resulted in the spoliation of evidence. New Mexico has not demonstrated by a preponderance of the evidence that Presbyterian intentionally deleted emails that should have been disclosed. While the errors in collection were either avoidable or immediately rectifiable, they were unintentional.