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Spoliation Sanctions — Deletion of ESI Following Multiple Preservation Demands and Entry of Court Order Is Willful and Warrants Default Judgment

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Roadrunner Transp. Servs., Inc. v. Tarwater, 2016 U.S. App. LEXIS 4999 (9th Cir. Mar. 18, 2016):

John Tarwater appeals the district court's entry of default judgment and award of attorneys' fees in favor of his former employer, Roadrunner Transportation Services, Inc. Roadrunner cross-appeals the district court's compensatory damages award. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

1. The district court did not abuse its discretion by entering default judgment as a sanction for Tarwater's deletion of data from his laptop computers. See Leon v. IDX Sys. Corp., 464 F.3d 951, 957-58 (9th Cir. 2006) (describing standard of review for spoliation sanctions). There was ample evidence that Tarwater deleted emails and files on his laptops after receiving multiple preservation demands from Roadrunner, and even after the court explicitly ordered Tarwater to preserve "all data" on his electronic devices. In addition to Tarwater's own admissions, a third-party computer expert concluded that files on one of Tarwater's devices had been deleted and overwritten during the litigation, and that the deletions likely "bypasse[d] the [computer's] Recycle Bin" through a user-initiated process. [*3]  In light of the evidence of spoliation, and the nature of Roadrunner's claims, the district court did not clearly err in finding that Tarwater willfully destroyed the data, that Roadrunner had been deprived of its "primary evidence of Tarwater's alleged misappropriation and related misconduct," and that a less drastic sanction could not have adequately redressed the prejudice to Roadrunner. See Anheuser-Busch, Inc. v. Nat. Beverage Distribs., 69 F.3d 337, 348-55 (9th Cir. 1995).1

1   Even assuming that applying amended Rule 37(e) (effective December 1, 2015) to this case were "just and practicable," the district court's findings would lead to the same conclusion: Tarwater acted with the intent to deprive Roadrunner of the spoliated information's use in this litigation. See Fed. R. Civ. P. 37(e).

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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