In Genworth Financial Wealth Management, Inc. v. McMullan, 2010 WL 2195274 (D.Conn. 2010), the United States District Court for the District of Connecticut shifted 80% of the costs of forensic imaging done by a neutral, court-appointed computer forensic expert to the Defendants where the Court found the Defendants may have disposed of a personal computer after opposing counsel submitted letters instructing them to preserve all relevant documents in anticipation of litigation.

Genworth accused several former employees of acquiring proprietary data and information in advance of forming a competing entity and using such data and information to solicit Genworth's clients. Counsel for Genworth submitted a letter to the Defendants one month before filing suit informing them of their duty to preserve relevant documents.  In response to discovery requests, the Defendants failed to produce any emails, although later productions by third-parties revealed responsive emails utilizing Genworth's proprietary information.  Furthermore, the Defendants admitted to disposing of a personal computer.  Although the Defendants testified that the computer was disposed of prior to the letter from opposing counsel, emails recovered from third parties, appearing to be sent using the personal computer after the date of the letter, impeached the Defendants' testimony.

The Court rejected the Defendants' arguments that a computer forensic expert should not be ordered due to prohibitive costs where the Defendants retained their own expert while the motion for the appointment of a neutral expert for both parties was pending.  Furthermore, the Court found that the Defendants' expert was not asked to image all electronic devices and "[t]he totality of the circumstances under which the Defendants retained a forensic computer expert suggests an end run in furtherance of efforts by the Defendants to deny the discovery to which the Plaintiff is entitled."  Based on the Defendants' "apparent deceit, obstreperousness and destruction of relevant information, that the Defendants were required to maintain and preserve," the Court imposed 80% of the cost of the neutral forensic expert on the Defendants.

For a copy of the opinion, click here.