Most lawyers (let’s be honest…all litigation lawyers) have had the unfortunate experience of getting an unfavorable ruling from a court, which they then have to pass on to their client. Those situations always make me psychically ill. I cannot imagine the torment Delta Airlines, Inc.’s counsel was in when they received an Order from the United States District Court for the Northern District of Georgia on August 3, 2015 (a Monday no less) requiring their client to pay $2,718,795.05 in sanctions for discovery abuses. I guess Delta was somewhat ready for it, given that it had previously been ordered to pay $4,775,664.85 for separate (but related) discovery missteps. Oh yeah, to add insult to injury, there was no evidence that Delta intentionally destroyed a single document.
This multidistrict litigation involves allegations that Delta and AirTran Airways, Inc. violated the Sherman Act by colluding to implement a “first-bag” fee. In February 2009, prior to the filing of any civil action, the Department of Justice served a Civil Investigative Demand (“CID”) upon Delta seeking information regarding its decision to impose this first-bag fee. In response to the CID, Delta’s legal department circulated a document-preservation and litigation-hold notice to twenty-two Delta employees. Delta collected information from those employees and produced the same to the Department of Justice. So far so good.
Then, in May 2009, Delta directed its IT folks – known as the “Computer Security and Investigative Response Team” (I’ll just call them IT folks) to copy the hard drives of these twenty-two employees for preservation purposes and upload the same onto a document-review program.
That same month (May of 2009), the first civil lawsuit was filed related to the first-bag fee. There were several class action lawsuits filed against Delta and AirTran, which were consolidated into the multidistrict litigation.
Thereafter, as the District Court put it, “this lawsuit turned into litigation about litigation: the time, energy, and resources spent on discovery abuses equals or exceeds those that have been dedicated to litigating the merits of the case.” This statement seems to be entirely accurate as the Plaintiffs filed four discovery sanctions motions in as many years.
The first sanctions motion alleged two discovery abuses against Delta: (1) that it failed to promptly instruct its IT folks to preserve email accounts from Delta’s normal deletion policy (remember Delta received the CID from the Department of Justice in February 2009 and did not instruct its IT folks to copy hard drives until May 2009) and (2) Delta failed to instruct its outside vendor to suspend its practice of periodically overwriting server backup tapes. Ultimately, the Court denied the first motion for sanctions because it determined that the February 2009 CID from the Department of Justice did not make civil litigation reasonably foreseeable and thus triggered no duty on Delta to preserve evidence. The Court also heavily relied on Delta’s representations that it had provided all the documents it had in its possession to the Plaintiffs.
The second motion for sanctions came about when Delta discovered it had additional documents responsive to the Plaintiffs’ request that were never produced. First, Delta discovered that its IT folks failed to upload the hard drives of the Delta employees onto a document-review program. Second, Delta discovered that a box of server backup tapes were located in what can hardly be described as an inconspicuous location: in what Delta’s IT folks called their “Evidence Locker.” The court commented “Really.” Well, Delta was ordered to pay $1,285,144.13 in fees and expenses incurred by the Plaintiffs in dealing with that discovery squabble.
The third motion for sanctions was filed as a result of Delta discovering yet more documents that had not been produced to the Plaintiffs. Delta “fell on the sword” and requested that the court appoint an independent discovery expert to have unfettered access to its files, e-mails and databases so as to make sure all relevant information was retrieved and produced to the Plaintiffs. Ultimately, Delta had to pay $3,490,520.72 to Plaintiffs’ counsel and the independent discovery expert.
The Plaintiffs filed their fourth sanctions motion based upon the 100-plus page report filed by the independent discovery expert noted above, alleging that Delta had destroyed evidence and concealed discovery abuses, among other things. The Court found that the Plaintiffs failed to show that Delta destroyed any documents, but assessed $2,718,795.05 in sanctions against Delta for the ongoing discovery abuses.
So, I’ve got out the calculator and added up these numbers several times. In total, Delta has been sanctioned $7,494,459.90 for discovery abuses, while there has been no showing that any relevant information was actually destroyed.
This case, while being a drastic example, shows that courts take discovery abuses very seriously. It also underscores the need for litigants to take prompt and exhaustive steps to preserve electronic information related to litigation, and to follow up periodically to make sure previously issued litigation holds and document preservation measures are being adhered to properly.