DaimlerChrysler Faces Claims Of Spoliation Of ESI

Posted by Gregg Mayer on Tuesday, April 1st, 2008   

A federal judge ruled in March that a plaintiff may bring spoliation claims against DaimlerChrysler Motors Company since the giant automobile manufacturer failed to implement a legal hold.

The case, Schmidt Pontiac-GMC Truck, Inc. v. DaimlerChrysler Motors Company, involves a breach of contract case. Essentially, Schmidt claims DaimlerChrysler breached a settlement agreement to let Schmidt open a Chrysler franchise.

Schmidt filed a lawsuit in 2004. At that time, DaimlerChrysler would have been under a duty to preserve all relevant electronically stored information (“ESI”).

During discovery of the litigation, Schmidt learned DaimlerChrysler had not preserved ESI. Schmidt filed a motion with the court to add a claim of spoliation against DaimlerChrysler. This is called a Motion To Amend. Schmidt alleged:

DaimlerChrysler (1) failed to implement a litigation hold to prevent the destruction of evidence after the complaint was filed…and (2) intentionally destroyed evidence, including replacing employee hard drives.

The court agreed with Schmidt, explaining that if DaimlerChrysler altered or replaced hard drives, then that would impact Schmidt’s ability to prove its case. Consequently, Schmidt is permitted to amend the initial complaint to add a claim for spoliation of evidence.

There has been, and probably will continue to be, discovery as to the destruction of evidence for the purposes of the adverse inference instruction. Any evidence developed in that regard might become known to the jury as a predicate for an adverse inference instruction.

Legal holds are crucial to avoid spoliation claims. CIOs must consult with legal counsel if ever any issues arise that might require preservation of ESI.

Court Sides With The Terminator In ESI Dispute

Posted by Gregg Mayer on Tuesday, April 1st, 2008   

In a class action lawsuit involving California Gov. Arnold Schwarzenegger, a federal magistrate sided with Schwarzenegger in denying plaintiffs’ request to observe computer databases.

The lawsuit, L.H. v. Schwarzenegger, is a class action involving juvenile parolees suing California over the parole revocation process. Schwarzenegger, as governor, is one of the named defendants.

The plaintiffs wanted the defendants to demonstrate the capabilities of the Ward Information Network (WIN) and the Offender Based Information Tracking System (OBITS), both of which are relevant to the litigation. Moreover, the plaintiffs wanted a list of scheduled trainings and to attend the trainings for the use of those two systems.

The magistrate on March 20 denied the request, explaining other means were available to obtain the same information. For example, the plaintiffs could ask an official from the state during a deposition about how the systems work.

Consequently, the defendants do not have to perform a demonstration of the systems. On hearing the news, Schwarzenegger reportedly said: “Hasta La Vista, Baby.”

Plaintiffs, however, did win a smaller ESI victory. The magistrate ordered certain electronically stored information in databases – such as ESI relating to appeals of parole revocation – to be disclosed to the extent the defendants had not already turned it over.

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