The Duty to Preserve E-Data or Else
By now, it should be known that a company has a duty to preserve electronic data that may be relevant to a pending or threatened litigation, regardless of its normal policy.
This means that it must implement procedures, when necessary, to suspend the deletion, overwriting, or other destruction of potentially relevant electronic data from its computer hard drives, back-up tapes, portable electronic devices, and removable media (e.g. CDs and DVDs). For example, a company's duty to preserve e-data may be triggered when it: 1) receives a demand letter identifying a specific claim; 2) is notified of a government investigation; 3) is served with a subpoena; 4) is served with a complaint; or 5) receives discovery requests.
A company must preserve e-data that it knows or reasonably should know: 1) is relevant to the matter; 2) is reasonably calculated to lead to the discovery of admissible evidence; 3) is reasonably likely to be requested during discovery; and/or 4) is the subject of a pending discovery request. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216-17 (S.D.N.Y. 2003).
Because the sanctions for spoliation of evidence may be draconian, it is prudent to assume the duty has been triggered and to be over inclusive with the preservation efforts. A company's internal miscommunications or inadvertent destruction of e-data may not serve as a defense; the company must take every reasonable step to preserve this information. For information on drafting a "litigation hold letter" to inform company personnel of their preservation obligations, please see Vol. I, No. 3 (March 2007) of this newsletter. At the very least, a litigation hold notice should be sent to the IT director, data custodians, and any persons directly or indirectly involved in the underlying events.
Assumption of the Risk a Slam Dunk - NY
Plaintiff sued a city to recover for injuries his sixteen year old son sustained while playing basketball on a public court. The son collided with a pole supporting the backboard. Plaintiff claimed that the city had negligently placed the poles too close to the end line of the court, creating what plaintiff called a "collision hazard." The lower court agreed with plaintiff. The appeals court, however, thought it sounded like goal tending. According to the appeals court, plaintiff's son assumed the risks inherent in playing on an outdoor basketball court, including those associated with the court's construction, and any open and obvious conditions on it. The support poles were clearly visible. The risk of colliding with them was "perfectly obvious" and exactly the type of harm inherent in playing basketball on that type of court. See, e.g., Trevett v. City of Little Falls, 806 N.Y.S. 2d 323 (Sup. Ct. 2005)
University Not Liable For Rented Dorm Room - Mass.
To provide its students with additional dorm space, Northeastern University rented eight units in a thirty two unit apartment building (the "Building") near its campus in Boston. The Building had two doors that led to the street. The first provided access to the lobby; the second was locked unless opened from the inside. From time to time, residents of the Building propped the second door open. Each apartment inside the Building also had a lock. James Cassidy and his three roommates were among the Northeastern students who lived in the Building. One evening, another tenant of the Building allowed three men to enter. One of Cassidy's roommates let them into the apartment where they restrained the roommates and, in the course of robbing the apartment, shot Cassidy. Cassidy later died. Northeastern could be liable for Cassidy's death only if it had breached a duty of care. Any applicable duty of care would either have been assumed by Northeastern or arisen from societal customs and norms. Customs and norms may give rise to a duty of care only where the risk at issue is foreseeable and where the defendant has the ability to prevent it. The court decided that a duty of care did not exist in this situation. Cassidy's murder was not foreseeable. Although, in the six months prior to Cassidy's murder, there had been four reported burglaries in the Building, there was no evidence of violent crime. Too, the court noted, the mere fact that Northeastern knew of prior criminal activity in the area did not render all future criminal activity foreseeable. The court also held that, as Northeastern did not own the Building, it was not in the best position to have taken steps to secure Cassidy's safety. Doyle v. Gould, No. 2003-2773-C (Mass. Sup. Ct. April 2007)
Going in Coverage CERCLAs in RI
Finding the location to be contaminated by dioxin, PCBs, Volatile Organic Compounds (VOCs), semi-VOCs, and metals, the EPA declared an area near the Woonsocket River in North Providence, RI to be a Superfund site and Emhart Industries, a potentially responsible party. Emhart held an insurance policy with Century Indemnity Company (a successor in interest to two defunct companies), which imposed upon Century a "duty to defend any suit against the insured on account of bodily injury or property damage." In the course of conducting suit, Emhart spent a significant amount of time and money pursuing other potentially responsible parties. Century claimed these monies were not spent in the course of defending the suit and, even if they did have a duty to defend, that duty did not extend to the search for other parties.
The court disagreed. Pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), a responsible party's liability for cleanup costs is joint and several unless that party can prove that the harm is divisible. (At least one court has noted that this is "rarely, if ever, possible".) CERCLA does however, contain a statutory right to contribution from other potential responsible parties. Therefore, the U.S. District Court concluded that Emhart's pursuit of those parties was defensive in nature and recoverable if a duty to defend were established. Emhart Indus., Inc. v. Home Ins. Co., 2006 US Dist Lexis 63144 (D.R.I. Aug. 2, 2006)
