In Beard Research, Inc., et. al. v. Kates, et. al., 2009 Del. Ch. LEXIS 94 (Ct. of Chan. Del. May 29, 2009), Vice Chancellor Parsons denied plaintiffs' request for a default judgment, but granted their motion for an adverse inference instruction and attorney's fees.

Plaintiffs contended that an ex-employee's laptop was irretrievably altered after a duty to preserve evidence had arisen and that the ex-employee and his subsequent employers are both responsible for the alteration.  While employed with plaintiffs, Michael Kates purchased a laptop for both business and personal use.  Shortly before he left plaintiffs' employ, Kates made a PowerPoint presentation to defendant ASDI to demonstrate his capabilities and included certain information regarding plaintiffs' intellectual property.

In response to discovery, Kates admitted that sometime after the commencement of litigation, he deleted all emails and data from his hard drive.  Kates also claimed that his computer crashed multiple times and he reformatted his hard drive and reinstalled its system software.  Plaintiffs' sought direct access to defendants' computer systems so they could search for Kates' ESI.  Defendants, in turn, asked Kates how to go about retrieving emails from his personal computer and asked him specifically not to "trash" the computer.  At some point, Kates gave his computer to defendants' e-discovery vendor to see if they could fix the problem.  The vendor could not fix the computer and did not make a copy of the computer hard drive, but instead returned the computer to Kates.  Kates installed a new hard drive on the computer and did not recall what happened to the old one. The court ruled that Kates had a duty to preserve his hard drive and intentionally got rid of it during the litigation process.  As a sanction, the court declined to enter a default judgment, but agreed to draw an adverse inference instruction as to the subject matter of the presentation made by Kates to ASDI.  The court further awarded plaintiffs' their attorney's fees and expenses for preparation of the briefing and expenses associated with the inspection of Kates' hard drives.