Delaware Court focuses on 'unallocated space'.
Experts said the decision in Genger v. TR Investors, LLC reveals the increasing level of sophistication with respect to identifying and preserving electronically stored information (ESI) that courts expect parties embroiled in litigation to achieve--and that courts nationwide are increasingly imposing a higher level of sophistication and understanding when determining e-discovery obligations.
In Genger, the Delaware Supreme Court upheld severe sanctions against a litigant who knowingly and intentionally spoliated evidence despite a court order. The decision turned on the destruction of unallocated space on a computer hard drive.
Every computer hard drive has "allocated" space that is assigned by the system to hold specific programs, documents, applications, and other data. "Unallocated" space is the part of the hard drive that is considered empty be cause no data has been purposefully stored there.
However, computers use unallocated space for temporary storage of transient data. So when a file is intentionally deleted by a user, the data is typically not erased from the hard drive. The computer marks hard drive locations associated with the file as unallocated space, which makes the space available to be overwritten with new data. That means files that have been deleted but not yet overwritten with new data can often be recovered using forensic technology.
In Genger, however, the defendant intentionally wiped the unallocated space of a relevant hard drive--making it impossible to recover those files even with forensic methods--despite the Delaware Chancery Court's previous "Status Quo Order" that prohibited both parties from "tampering with or in any way disposing of any related documents, books or records."
The plaintiffs subsequently identified several documents and/or e-mails that should have been found, and there was evidence suggesting that the unallocated space of Arie Genger's (founder and chief executive officer of Trans-Resources, Inc.) work computer had been wiped with a program called "SecureClean."
Genger said he had been worried that unencrypted high-security documents not related to the case existed on the unallocated space, so he had agreed with his company's technology consultant's recommendation to wipe it.
The Chancery Court had found that Genger violated the Status Quo Order and concluded that the plaintiff wiped the unallocated space not only to protect the high security documents but also to limit the information available to the plaintiff. As a result, the court:
* Increased Genger's burden of proof from a "preponderance of the evidence" to "clear and convincing evidence"
* Ruled that Genger's uncorroborated testimony would not be permitted to establish any material fact
* Awarded the plaintiffs $750,000 in attorney's fees plus an additional $3.2 million in compensation for expenses stemming from investigating and litigating Genger's spoliation In upholding the Chancery Court decision, the Supreme Court noted that Genger was not so much sanctioned for failing to preserve his unallocated free space, but rather for taking affirmative steps to destroy it. In fact, the court indicated that the outcome might have been different if the defendant had had a data retention policy that provided for regular wiping of unallocated space for business purposes.
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|Publication:||Information Management Journal|
|Date:||Nov 1, 2011|
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