In Conlan Tire Co. v. Gonzales, No. 25-10701 (E.D. Mich. Mar. 10, 2026), Michigan District Judge Shalina D. Kumar, granted in part Plaintiff’s motion for preliminary injunction after imposing adverse inference sanctions and awarding reasonable fees and costs (including attorneys’ fees) for intentional spoliation of Yahoo emails (the intent of which became apparent after it came to light that Defendant asked ChatGPT about the ability to recover deleted Yahoo emails) that may have addressed a dispute over whether he executed a Confidentiality and Non-Solicitation Agreement.
Case Background and Judge’s Ruling
In this case involving a former employee of the plaintiff that was terminated and then joined a competitor, Plaintiff sought a temporary restraining order and preliminary injunction to stop customer and employee solicitation. Whether Defendant signed Plaintiff’s Non-Solicitation and Confidentiality Agreement in July 2022 as part of his employment with Conlan was the paramount issue in this case, despite Plaintiff having a copy of the Agreement with Defendant’s purported signature dated July 13, 2022.
As discussed in an earlier ruling in the case, Defendant declared that he “never agreed to nor personally signed” the agreement and had consciously decided not to sign it. He also asserted that he lacked electronic-signature capability in July 2022 and originally asserted that he still possessed the laptop and cellphone he used then.
Following a status conference on June 24, 2025, the Court entered an order requiring Yahoo authorization, access to Defendant’s Yahoo account, and access to relevant devices and iCloud data. Defendant supplied the authorization necessary for Yahoo to respond to the subpoena by June 27 but did not provide the forensic examiner access to his account until July 7.
As Judge Kumar noted in that earlier ruling: “The forensic examination of Defendant’s Yahoo account did not find emails attaching the signed Agreement to or from the parties. But the forensic examination of Gonzales’ devices revealed that on June 10, 2025, Gonzales used ChatGPT to research how and when deleted emails could be retrieved and produced by Yahoo under a subpoena…Gonzales queried ChatGPT on Yahoo’s ability to retrieve deleted emails: he asked if Yahoo could retrieve an email deleted from his Yahoo account a year ago, even if it were under a subpoena (no); he then asked how long an email permanently deleted today would be retrievable by Yahoo (at most seven days); and finally, he inquired if Yahoo maintains a log of permanently deleted emails (no user deletion history is maintained for individuals and permanently deleted emails are not tracked in an audit log).”
Judge Kumar stated: “if Gonzales deleted emails and emptied his trash folder on June 10th, he could be reasonably assured they would be unrecoverable no later than June 17th. Accordingly, even if Gonzales knew he would be required to provide access to his Yahoo account within 30 days, the information he gleaned from ChatGPT would not have dissuaded him from deleting email messages from his inbox and the trash folder that day.”
As a result, Judge Kumar, finding compelling evidence of intent to deprive under Rule 37(e), awarded reasonable fees and costs, including attorneys’ fees, incurred in litigating the existence of Gonzales’s emails. However, she deferred an adverse inference and additional signature-related fees because further discovery (which she ordered from Defendant, as well as a deposition from plaintiff’s HR coordinator) might replace the missing information.
In August 2025, Defendant acknowledged he traded in his 2022 cellphone, contradicting his earlier sworn assertion that he still possessed and used it. And, in September 2025, the examiner reported that the MacBook Defendant produced was not manufactured or sold until 2024, so it couldn’t have been the laptop he claimed to have used in July 2022.
As a result, in this ruling on March 10, 2026, Judge Kumar stated: “Whether the deleted emails or the information contained therein could otherwise be discovered was the only question preventing the Court from ruling on Conlan’s requested relief for an adverse inference under Rule 37(e)…The Court is now satisfied that Gonzales’ deleted emails ‘cannot be restored or replaced through additional discovery.’…The Court is also persuaded that the deletion of the emails, the most relevant evidence related to whether Gonzales signed the Agreement—the lone disputed issue in this case—prejudiced Conlan….Accordingly, the Court will presume that the lost information was unfavorable to Gonzales and will instruct the jury that it may presume the information was unfavorable to him.”
In this ruling, relying on the adverse inference, HR evidence, and contradictions in Gonzales’s declarations, Judge Kumar found Plaintiff likely to succeed on its contract claim and granted Plaintiff’s motion for preliminary injunction. She also found likely irreparable harm and that the remaining injunction factors favored Plaintiff. The injunction restricted servicing, soliciting, accepting, or diverting Conlan customer business; assisting others in doing so; recruiting Conlan employees; and using or disclosing Conlan’s confidential information. She prescribed limited responses to customer inquiries. Gonzales could continue working for the competitor subject to the restrictions. However, Judge Kumar denied fees and costs for pursuing the injunction.
So, what do you think? Was the court correct in granting costs and fees, an adverse inference instruction and the preliminary injunction? Please share any comments you might have or if you’d like to know more about a particular topic.
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