In 2007, Plaintiff Rene Green (“Green”) brought a products liability lawsuit against Defendant Blitz U.S.A., Inc. (“Blitz”). At the conclusion of the evidence and before the jury returned a verdict, the parties entered into a high-low settlement agreement. The jury returned a unanimous verdict against the plaintiffs, resulting in a settlement figure at the low end of the high-low range; the case was closed on November 10, 2008.
Counsel for the plaintiff in the Green case, however, was also counsel in a related case out of the Western District of Texas where Blitz was also the defendant. Through discovery in the other case, and nearly a year after the trial in the Green case, counsel learned of documents that were not produced by Blitz in the Green case and promptly filed a motion in February of 2010. Green argued that Blitz failed to produce certain documents and also failed to preserve documents.
It was eventually revealed that Blitz had a single employee, Larry Chrisco (“Chrisco”), who from 2004 until 2007 was solely responsible for searching and collecting relevant documents in the ongoing litigation against Blitz. Chrisco, however, never instituted a litigation-hold of documents, did any electronic word searches for emails, talked with the IT department regarding how to search for electronic documents, and even admitted that "I am about as computer literate--illiterate as they get."
But this was not the end of Blitz's discovery abuses. As outlined by Judge Ward:
... Blitz made little, if any, effort to discharge its electronic discovery obligations. But Blitz also failed to preserve its electronic documents. Far from instituting a litigation hold on relevant electronic documents, Blitz actually asked its employees to routinely delete electronic documents. From 2004 through 2007, Blitz's IT department head, Paul Hale, routinely sent emails to all Blitz employees instructing them and encouraging them to delete email…
... Paul Hale admits that when he sent these multiple emails telling employees to delete their email, the employees were not told to retain email relevant to ongoing litigation. Additionally, during the Feb. 1, 2011 Show Cause Hearing, Larry Chrisco admitted that he never communicated any type of "litigation hold" request to the employees at Blitz…The Court denied Plaintiff's Motion to Re-Open the Case, but ordered Blitz to pay $250,000.00 in civil contempt sanctions to Green. The Court ordered “that Blitz has thirty (30) days from the date of the Memorandum Opinion & Order to furnish a copy of this Memorandum Opinion & Order to every Plaintiff in every lawsuit it has had proceeding against it, or is currently proceeding against it, for the past two years.” The Court issued an additional $500,000.00 sanction that will be tolled for 30 days from the date of the Memorandum Opinion and Order. According to Judge Ward, “At the end of that time period, if Blitz has certified with the Court that it has complied with the Court’s order, the $500,000.00 sanction will be extinguished.” To top it all off, Judge Ward ordered that, “for the next five years, Blitz is ordered that in every new lawsuit it participates in as a party, whether plaintiff, defendant, or in another official capacity, it must file a copy of this Memorandum Opinion and Order with its first pleading or filing in that particular court.” The Court expressed no opinion as to the manner in which a particular court may use or not use such copy.
Finally, to make matters worse, Blitz rotated its backup tapes every two weeks during this time period -- at such time the old backup tapes are permanently deleted -- so the deleted emails by the employees are permanently lost. Because of this systematic destruction of potentially relevant documents, it will never be known how much prejudice against the plaintiff was actually caused by Blitz's failure to preserve documents. The Court holds that Blitz's failure to preserve is sanctionable under the Court's inherent powers.
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