In Oakley v. MSG Networks, Inc., No. 17-cv-6903 (RJS) (S.D.N.Y. July 23, 2025), US Circuit Judge Richard J. Sullivan denied Oakley’s motion for spoliation sanctions, finding that MSG took reasonable steps to preserve the emails, attributing their loss to a “systemic technical glitch”, and also determined that Oakley failed to establish prejudice from the loss of the electronic or physical evidence.

Case Discussion and Judge’s Ruling

This case stemmed from an incident in February 2017 at Madison Square Garden (MSG) in which retired New York Knick Charles Oakley was forcibly removed from the stands at a New York Knicks basketball game.

In this dispute, Oakley alleged that MSG intentionally destroyed or negligently failed to preserve corporate emails from eleven current and former employees who were involved in his removal from the arena. Oakley argued that MSG’s explanation of a “systemic technical glitch” was unconvincing and that the loss of data pointed to “selective preservation” with nefarious intent. He proposed theories of deliberate deletion, including the use of a computer program called PowerShell for a “mass, simultaneous change.”

MSG contended that it took all reasonable steps to preserve the emails. This included:

• Legal Holds: Issuing the first legal hold notice on February 17, 2017 (nine days after the incident), followed by recurring reminders and another formal notice after the lawsuit was filed.
• Technical Holds: Implementing a technical legal hold through Microsoft’s Purview software, which was designed to override normal deletion protocols.
• Technical Malfunction: Attributing the loss of emails to a “systemic technical glitch” within the Microsoft environment that was beyond MSG’s control. This was supported by an investigation from expert forensics firm Nardello & Co., whose managing director, Joseph Pochron, concluded a glitch occurred “beyond a shadow of a doubt.”
• Lack of Prejudice: Asserting that Oakley was not prejudiced, as each of the Custodians submitted sworn declarations stating they did not recall sending or receiving any emails regarding the specific physical force or statements made to Oakley during the incident.

Judge Sullivan concluded that MSG’s actions of issuing multiple legal hold notices and using third-party archiving software constituted “reasonable steps to preserve” ESI under FRCP Rule 37(e). He also accepted the MSG expert’s conclusion that a software malfunction was responsible for the data loss. Judge Sullivan explicitly noted that Rule 37(e) “is inapplicable when the loss of information occurs despite the party’s reasonable steps to preserve,” such as when ESI is “destroyed by events outside the party’s control.”

Judge Sullivan also rejected Oakley’s arguments, as follows:

• The “selective preservation” theory was undermined because the glitch affected 79 other legal matters, not just Oakley’s. Furthermore, the emails of CEO James Dolan, whom Oakley considered a “crucial witness,” were not lost.
• The theory of deliberate deletion of four mailboxes was unsupported by evidence, with the MSG expert testifying there was “no evidence that… an individual went in and actively deleted those” inboxes.
• The PowerShell theory was dismissed as speculation, directly contradicted by the MSG expert’s testimony that the observed data loss was not “feasible even via PowerShell.”

As an independent reason for denial, Judge Sullivan found Oakley failed to establish he was prejudiced by the loss as he provided no evidence to contradict the sworn declarations from the MSG employees stating the lost emails did not contain relevant information.

Regarding Oakley’s allegation that MSG failed to preserve the corporate cellphones of two security executives, Judge Sullivan stated that he had “repeatedly ruled” in prior orders that “MSG’s document-production obligations extend only to its corporate emails and do not include corporate text messages.” Therefore, MSG had no preservation obligation for the phones under Rule 37(e). He added that Oakley “may not surreptitiously repackage his previously unsuccessful arguments… under the guise of a motion for spoliation sanctions.”

Regarding Oakley’s allegation that MSG spoliated a binder and an accompanying notepad with handwritten notes from CEO James Dolan (for which MSG stated that all documents from the binder had been produced individually and identified by their Bates numbers), Judge Sullivan found that Oakley failed to establish that any relevant, unproduced evidence was actually destroyed. He also found it “curiously” significant that Oakley’s counsel “did not ask Dolan a single question regarding the binder or notepad at Dolan’s deposition,” despite the video being publicly available and having been cited by Oakley in a court filing weeks before the deposition.

As a result, Oakley’s motion for spoliation sanctions was denied by Judge Sullivan.

So, what do you think? Are you concerned about the “systemic technical glitch” that MSG experienced in Microsoft Purview? Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of Minerva26, an Affinity partner of eDiscovery Today.

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