Terminating Sanctions Issued

Terminating Sanctions Issued for Two Email Purges During Case: eDiscovery Case Law

In Johnson v. Coos Cnty., No. 6:19-cv-01883-AA (D. Or. June 14, 2023), Oregon District Judge Ann Aiken, after having granted plaintiff’s motion to unseal its motion for sanctions, granted plaintiff’s motion for sanctions, with terminating sanctions issued against the Wellpath Defendants for conducting two email purges after a duty to preserve commenced and failing to notify plaintiffs or the Court for months.

Case Background

In this case involving the death of an inmate (Rocky Stewart) in the Coos County Jail, counsel for Stewart’s family sent an evidence preservation letter to counsel for Coos County and counsel for the Wellpath Defendants (which they acknowledged receiving). On April 19, 2018, Wellpath’s claims department opened a claim related to Stewart’s death, but Wellpath did not place a litigation hold on any email accounts in connection with the claim. In May 2018, counsel for Stewart’s estate sent a tort claim notice to Coos County and Wellpath. The Wellpath Defendants admitted that they received this tort claim notice but Wellpath did not place a litigation hold on any email accounts in connection with the claim.

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On June 20, 2018, counsel Mr. Stewart’s estate sent a request to Wellpath for all documents in Wellpath’s custody related to Stewart’s death. On August 30, 2018, an attorney representing Wellpath responded that it had no documents related to Stewart, despite Wellpath’s possession of documents connected to the review of Stewart’s death.

Despite the notifications sent to Wellpath (and acknowledged), Wellpath conducted two email purges. In the first one on March 8, 2019, Wellpath’s Chief Legal Officer sent a company-wide email announcing most emails (other than emails on a legal hold) would only be retained for one year and then permanently deleted. Wellpath reported that emails that fell outside of the retention period would be permanently deleted and email backups and archives would also be permanently deleted.

In a December 2019 deposition, Wellpath’s Chief Information Officer Robert Martin testified that the new retention policy was adopted in response to “costs and risks”, stating there were “discovery risks,” such as the case in which he was being deposed. Martin also acknowledged that the potential of bad emails out there was a factor Wellpath considered when implemented the email retention policy.

A second email purge was initiated in April 2020 for employees terminated longer than one year, which deleted all remaining emails for named defendant Patricia Sauerbry, who was the Wellpath nurse on duty when Stewart died. Yet, the Wellpath Defendants failed to acknowledge the emails were deleted over several communications between parties and the Court between July 2020 and July 2022.

Judge’s Ruling

In considering the Wellpath Defendants’ conduct, Judge Aiken stated: “Here, there can be no real question that the ESI at issue should have been preserved in the anticipation of litigation. At the time of the first purge of emails in March 2019, Wellpath had received an evidence preservation letter, a tort claim notice, and a letter from Plaintiff’s counsel concerning Mr. Stewart’s death. The second purge, which occurred in April 2020, is even more egregious in that it occurred after the Wellpath Defendants had filed their Answer and it deleted the email mailbox of a named party.”

Continuing, Judge Aiken added: “The Court is similarly satisfied that the Wellpath Defendants failed to take reasonable steps to preserve the email mailboxes at issue. The Wellpath Defendants admitted that they failed to place litigation holds on any of the deleted email mailboxes and Wellpath itself has presented evidence that the recovery or restoration of the deleted mailboxes and emails is impossible. The Wellpath Defendants argue that there are alternative methods of learning the contents of the mailboxes, such as deposing the witnesses, but Plaintiff has presented evidence that the Wellpath Defendants have already given contradictory information about the use of emails by the relevant custodians”, noting that Wellpath claimed email was only occasionally used by a key custodian, though she indicated that she wouldn’t have enough storage space to store emails for a year.

Considering whether there was intent to deprive, Judge Aiken referenced the case Estate of Moreno, where “Wellpath…provided medical services to a jail under contract and an inmate died while in custody…As here, emails relevant to the case were purged by the defendants after a document preservation request was sent and after discovery requests had been served on the defendants…The defendants concealed this fact through early discovery, resulting in motions to compel.”

Noting in that case that “the district court found that the destruction of the ESI had been intentional”, Judge Aiken stated: “The same general facts exist in this case…Indeed, the facts of this case are more egregious than those of Estate of Moreno because the Wellpath Defendants initiated a second purge of emails which destroyed the mailbox of Sauerbry, a named Defendant, after the Wellpath Defendants had filed an Answer and asserted affirmative defenses.”

Finding intent to deprive, Judge Aiken considered the Leon factors of: (1) the public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its dockets; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on their merits. She found that the first three factors weighed in favor of a terminating sanction and the fourth factor, which usually weighs against one, did not because the Wellpath Defendants’ actions “threatens to interfere with the rightful decision of the case”. So, Judge Aiken granted plaintiff’s motion for sanctions, with terminating sanctions issued against the Wellpath Defendants.

So, what do you think? Are you surprised that terminating sanctions were issued here? Please share any comments you might have or if you’d like to know more about a particular topic.

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