In Pandora Jewelry, LLC v. Chamilia LLC, 2008 U.S. Dist. LEXIS 79232 (D. Md Sept. 30, 2008), the court awarded monetary sanctions against defendant for its deliberate stonewalling and foot dragging related to producing discoverable information.  However, the court declined to impose dispositive sanctions.

At issue in the case was plaintiff's claim that a series of communications sent by defendant to plaintiff's customers and clients contained false and misleading statements.  Plaintiff's lawsuit sought to recover damages for false advertising pursuant to section 43(a) of the Lanham Act, injurious falsehood, tortious interference with prospective economic advantage and unfair competition.  The defendant filed for summary judgment on all claims while plaintiff filed a motion claiming spoliation of evidence related to the several lost and deleted communications at issue in the case. 

According to the court, defendant failed to timely respond to discovery related to the lost and deleted documents that included emails.  In addition, defendant's FRCP Rule 30(b)(6) witness claimed to have no information about the contents of relevant emails or to whom the emails were sent, even though he was the company president and signed his name to many of the missing communications. While defendant acknowledged that it failed to preserve relevant evidence, it blamed its actions on the fact that it changed its electronic server twice during the litigation period and the fact that its email system forced users to delete or archive emails every ninety days.  The court held that defendant had a duty to preserve the deleted information and its failure to do so was grossly negligent.  The court ordered defendant to pay the reasonable cost incurred by the plaintiff in propounding certain discovery, preparing for and conducting the Rule 30(b)(6) deposition and one half the cost of preparing and submitting the motion for sanctions.  The court declined to award an adverse inference instruction or summary judgment, noting the plaintiff could not establish that the deleted information was relevant to its claims.   The court also granted defendant's motion for summary judgment.