Sanctions for Spoliation and Destruction of Evidence in Michigan

In Martinez v. Gen. Motors Corp., No. 266112, 2007 WL 1429632, at *1 (Mich. Ct. App. May 15, 2007) Plaintiff was terminated due to his involvement in a chain of inappropriate email. Plaintiff contends the emails received were not welcomed, and he did not forward those emails to other colleagues. Contrary to Plaintiff’s contention, evidence suggested certain emails were infact forwarded from Plaintiff’s email. Majority of the time Plaintiff’s computer remained logged in with his credentials, even when he was not around. Therefore Plaintiff contends that others had access to his account and must have forwarded the controversial emails. Plaintiff specifically pointed out the ““the computer ‘go-to’ guy for the workers in the small car group,” was in charge of assisting other workers with computer troubleshooting, and therefore had access to the other employees’ passwords.” The computer ‘go-to’ guy testified that, he was “not sure” whether he or plaintiff had forwarded the inappropriate e-mails to his personal e-mail address, and that he simply could not recall whether he had confessed his involvement…”

To investigate the matter, Plaintiff filed a Motion to Compel to have his own expert extract data from Defendant’s hard drive and Lotus Notes E-Mail Server. Upon investigation Plaintiff discovered destruction of data from “Hard Drive 1” believed to be relevant to the case. Defendant pointed out that the initial discovery order of August 2004 merely required GM to produce “copies of existing e-mails sent or received by Plaintiff …” and did not mention hard drives or any other type of computer evidence. The hard drives were destroyed when the computers’ were reformatted by a third-party leasing company in the normal course of business. GM insists that it had no reason to believe prior to the trial court’s January 2005 digital discovery order that Plaintiff would seek discovery of any computer hard drive evidence in this case.

The court relied on Brenner v. Kolk, 226 Mich. App. 149, 159, 573 N.W.2d 65, 70 (1997) stating that, “if material evidence has been spoiled or destroyed by one party, the trial court must carefully fashion a sanction that denies that party the fruits of its misconduct, but that does not interfere with the party’s right to produce other relevant evidence.”

Court in Martinez went onto follow the rule Federal Courts across multiple jurisdictions have been citing, “Even when an action has not been commenced and there is only a potential for litigation, the litigant is under a duty to preserve evidence that it knows or reasonably should know is relevant to the action.” This rule has been heavily litigated in other jurisdiction, and lays down a broad duty to preserve. Parties bearing the burden of proof often face difficulty in halting regular work operations to preserve data – this process can be time consuming and costly. Implementing proper protocol and best practices can reduce the pain, but not relieve the stress. That being said, keep reading and we might have an exception to this general rule if you are dealing with the a duty to preserve question under Michigan Court Rules.

In Martinez, Defendant argues that the hard drives are not relevant, because all emails are stored on the internal Lotus system, and not on the external hard drive. Defendant failed to provide any evidence to back-up this claim; nonetheless, the court determined this issue irrelevant. Even if the emails were discovered, it will not increase or decrease the probability that Plaintiff actually forwarded those emails. The court went on to say, “Although a party is prejudiced by the destruction or spoliation of material and relevant evidence, it’s axiomatic that a party cannot be prejudiced by the destruction or spoliation of irrelevant evidence.”

As we know, it’s not always distinguishable whether evidence will be relevant to a specific case without actually reviewing the data. Litigators must be careful not to rely on this distinction and always uphold their duty to preserve any and all potentially relevant data. A question not addressed in by this case was whether intervention and destruction by a third-party will fall within the parameters of “routine, good-faith operation of an electronic information system.Mich. Ct. R. 2.313 (e), Since the actual destruction is not done by an automated electronic information system, but by a third party contractor. As suggested earlier, this exception may provide to be useful considering the limited storage capacity within most servers. Two important questions to ask are:

1. How Michigan courts apply “routine, good faith” exception.

2. Can the intervening actions of people be included in the “Operation of an electronic information system?”

Conclusion: Court upheld the trials court ruling and did not sanction defendant for failing to preserve.

RULE 2.313 FAILURE TO PROVIDE OR TO PERMIT DISCOVERY; SANCTIONS (ONLY RELEVANT PORTIONS OF THE RULE ARE CITED BELOW)

Mich. Ct. R. 2.313

(A) Motion for Order Compelling Discovery. A party, on reasonable notice to other parties and all persons affected, may apply for an order compelling discovery as follows:

(1) Appropriate Court. A motion for an order under this rule may be made to the court in which the action is pending, or, as to a matter relating to a deposition, to a court in the county or district where the deposition is being taken.

(2) Motion. If

(d) in response to a request for inspection submitted under MCR 2.310, a person fails to respond that inspection will be permitted as requested,

(5) Award of Expenses of Motion.

(a) If the motion is granted, the court shall, after opportunity for hearing, require the party or deponent whose conduct necessitated the motion or the party or attorney advising such conduct, or both, to pay to the moving party the reasonable expenses incurred in obtaining the order, including attorney fees, unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust.

(b) If the motion is denied, the court shall, after opportunity for hearing, require the moving party or the attorney advising the motion, or both, to pay to the person who opposed the motion the reasonable expenses incurred in opposing the motion, including attorney fees, unless the court finds that the making of the motion was substantially justified or that other circumstances make an award of expenses unjust.

(B) Failure to Comply With Order.

(2) Sanctions by Court in Which Action Is Pending. If a party or an officer, director, or managing agent of a party, or a person designated under MCR 2.306(B)(5) or 2.307(A)(1) to testify on behalf of a party, fails to obey an order to provide or permit discovery, including an order entered under subrule (A) of this rule or under MCR 2.311, the court in which the action is pending may order such sanctions as are just, including, but not limited to the following:

(E) Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

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