This past December, the intermediate appellate court for New York State issued a short, but important decision, Douglas Elliman v. Tal, Index No. 650440/12, 2017 N.Y. App. Div. LEXIS 9300 (1st Dep't Dec. 28, 2017), affirming the decision of a lower court granting the Defendants' motion for adverse inference. The Plaintiff was precluded from presenting evidence contradicting the fact that it agreed to Tal's dual licensure with another real estate brokerage firm.
The lower court did not abuse its discretion is presuming that a single deleted email message was relevant. "The record demonstrates that plaintiff acted with gross negligence in destroying ESI not only after commencement of the action triggered a duty to preserve, but after defendant Tal's deposition, in which she referenced an email exchange in which she allegedly advised plaintiff that she had started working at Itzhaki Properties, and requested dual licensure". Id. at *1. Spoliation sanctions were warranted.
The lower court, the New York State Supreme Court for the County of New York, issued a one page handwritten decision. See, NYSCEF Doc. No. 190, Decision, Douglas Elliman, LLC v. Tal, Index No. 650440/12 (Sup. Ct. N.Y. County June 14, 2017). However the record of the oral argument on the motion makes clear that the ESI destruction was substantial. See, NYSCEF Doc. No. 191, Hr'g Tr., Douglas Elliman, LLC v. Tal, Index No. 650440/12 (Sup. Ct. N.Y. County June 14, 2017) The email in question could have been recovered from servers which were destroyed after the suit was filed. The Plaintiff presented an affidavit that the servers were restored and no missing emails were identified, however Justice Ellen Coin concluded that, "back-up tapes are not an adequate substitute for the Legacy Servers, as they do not completely reflect the information that should have been stored on the Legacy Servers." Id. at 12:26 - 13:5.
The gross negligence referenced by the Appellate Division was related to the absence of systematic process for implementing litigation holds. "While plaintiff's counsel maintains he instructed plaintiff, albeit in other words, to put a litigation hold on documents involving this matter, the absence of a general policy especially given the frequency of litigation in plaintiff's business is egregious." Id. at 11:15 - 11:25.