In Dong Ah Tire & Rubber Co., Ltd. v. Glasforms, Inc., 2008 WL 4298331 (N.D. Cal. Sept. 19, 2008), the court issued an interim order seeking more information before ruling on defendant and a third party plaintiff's motion for terminating sanctions against a third party defendant for spoliation and destruction of documents.

Defendant Glasforms manufactures fiberglass insulator rods.  Third party defendant Taishan made the fiberglass which was distributed in the United States by third party defendants CTG.  Glasforms claims  the Taishan fiberglass was contaminated with graphite which caused the fiberglass to conduct electricity, a dangerous latent defect. 

Taishan's manager of quality assurance testified pursuant to Rule 30(b)(6) for three days in February 2008, but, according to the court, the deponent was unable to provide knowledgeable testimony on the majority of the topics, including Taishan's preservation efforts.  At issue in the case is when such efforts began and specifically what steps Taishan took to preserve documents.  The court ordered Taishan to conduct a diligent search and reasonable inquiry into each of Glasforms' requests for production and to produce internal email regarding the subject matter of the case, including communications between Taishan and CTG, relevant documents Taishan identified, but did not previously produce and documents for which no search was previously taken.  If no documents were found, Taishan was required to submit a declaration stating that a search was made for all responsive documents and detailing why responsive documents could not be produced or providing the circumstances by which the responsive documents were misplaced or destroyed. 

Taishan claimed it could not be expected to preserve "every conceivable relevant piece of evidence" because it did not anticipate litigation until six days before the complaint was filed.  The court found the time line was critical in the case, but that several entries were missing.  Based on the information at hand, the court held that the triggering event for litigation may have been as early as 2004.  The court also noted a discrepancy between Taishan's document destruction policy and what was actually preserved.  In addition, as members of the International Organization for Standardization, both Taishan and CTG were required to maintain records for a reasonable amount of time which they apparently did not do. 

The court reserved the issue of sanctions and ordered the continuation of the  of the 30(b)(6) deposition to determine what the parties knew with respect to the operative claims in the litigation and, more importantly, when they knew.