Gutman v. Klein, 2008; Termination Sanction and Spoliation (E-Discovery)

Gutman v. Klein serves as a warning to everyone involved in e-discovery of the seriousness of misconduct. It’s also one of the funniest cases to read because of the fumbling testimony of the defendant’s “computer guy” (who was a relative of the defendant hired to give testimony about the electronic evidence) and the glaringly obvious signs of attempts to destroy electronic evidence from a laptop. The unprepared relative’s reply when asked what he was told to do with the laptop said.
“I don’t remember the exact wording. Whatever. I told him whatever. I did whatever I felt right to do, whatever.”
The court didn’t find the witness’ comments comical. When the defendant finally turned over the laptop as they were required to do, the case was hot to the touch, and one of the screws from the hard drive casing was missing — red flags of tampering with the contents.
Klein was put on notice about a litigation hold. Klein failed to notify employees of that hold. The failure to notify employees didn’t change his obligation to preserve evidence. The forensic examiner found among other things backdating of files, tampering with the computer, backdating of the system clock, backdating of the operating system installation, use of a scrubbing program, unrecoverable file deletion, thousands of files with the same create date, and a so-called “stolen” laptop.
The court indicated that this was such an intolerable case of misconduct that an adverse inference to the jury was not sufficient to compensate for the prejudice (harm) to the plaintiff. The court granted a default judgment in favor of the plaintiff, basically deciding the outcome based on the misconduct of the defendant.
This case goes another step. The sanction recommendations of Magistrate Judge Levy were adopted by Judge Cogan, and ordered that the court clerk send a copy of the order and the magistrate’s recommendations to the United States Attorney for possible criminal action.

The many lessons to be learned in this case are

The court can terminate your case in favor of the other side for misconduct.
Sanctions are cumulative.
tmp1B5-12Electronic discovery misconduct in a civil case could lead to a possible criminal case.
The computer maintains information that can detect misconduct. You had better have a good explanation for your actions. Think twice before using a relative as a witness.
Although this case is one of extremes, it goes to prove that you can’t always outsmart the forensic experts. Misconduct can have wide-reaching implications.

Next post:

Previous post: