Court-appointed expert assisted in reviewing electronic evidence for the court, in Gutman v. Klein, _ F. Supp. 2d _, No. 03 CV 1570 (E.D.N.Y. Oct. 15, 2008).
The consequences of failing to preserve and tampering with electronic evidence during the discovery phase of a case can result in sanctions. A recent case, decided in the Eastern District of New York, has resulted in a recommendation for the ultimate sanction: entry of default judgment. The case also highlights the court’s use of a court-appointed expert to assist in addressing the tampering evidence claim.
The Gutman case involved a federal fraud and RICO action based on the alleged misappropriation of millions of dollars by a real estate business partner. During discovery, Magistrate Judge Robert M. Levy ordered defendant Klein “to advise opposing counsel ... of the location of all desktop and laptop computers under [his] dominion and/or control” and to provide access to the plaintiff’s counsel and expert for imaging. Gutman, _ F. Supp. 2d at _. When access was requested, the defendant initially refused to provide his laptop. After the laptop was obtained for imaging, the plaintiffs noticed the lap top was hot and missing a hard drive screw.
The plaintiffs informed the court of the suspected tampering. The magistrate judge ordered a court-appointed forensic expert (Stroz Friedberg, LLC) to examine the laptop, under FRE 706. The court expert reported that a laptop user had visited websites concerning data deletion two days before the imaging, downloaded a data deletion program, and deleted several files from the laptop. Evidence was found that files were also copied onto the hard drive prior to the imaging. Some files were recovered but others were not. The court forensic expert concluded that the evidence discovered on the laptop was:
“indicative of the behavior of a user who was attempting to permanently delete selected files from the machine and then cover up the chronology of system changes occurring in the hours and days just prior to a forensic preservation…. The fact that documents considered privileged or irrelevant were deleted irretrievably while others not marked as privileged were deleted and...copied back, suggests that the wide-scale data deletion and time stamp alteration may have been conducted with a privilege review in anticipation of the production of so-called non-privileged data.”Gutman, _ F. Supp. 2d at _. The court gave the plaintiff an opportunity to respond and no convincing explanation was furnished. The defendant had hired an individual to locate data on the laptop, when the modifications were made, purportedly as an effort to find other ways to find information. The defendant claimed he did not learn of these events until the matter was raised in court. The individual and defendant testified at a hearing and the court found their testimony was not credible in light of the discovered facts.
On the issue of sanctions, the court concluded a spoliation claim had been established and the defendant was responsible for loss of evidence on the laptop. The defendant had willfully violated his obligation to preserve the laptop contents. Based on the facts of the case, the Magistrate Judge recommended the ultimate civil sanction, entry of default judgment. As the Magistrate Judge concluded: “Under such exceptional circumstances, the only appropriate non-monetary sanction is a default judgment in plaintiffs' favor, pursuant to Federal Rule of Civil Procedure 37(b)(2)(A)(vi) and the court's inherent powers.” The court also recommended awarding attorneys’ fees related to the laptop matter, but rejected the plaintiffs’ request for additional punitive monetary sanctions. The recommendations will be considered by Eastern District Judge Brian Cogan.
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