In Penberg v. Healthbridge Management, 2010 WL 2787616 (March 29, 2010), the United States District Court for the District of Eastern New York imposed sanctions on the plaintiff in an employment discrimination action for deleting electronic documents stored on a personal computer. 

The plaintiff worked from home to locate potential patients for admissions in long-term healthcare facilities operated by the defendant.  Although the defendant provided the plaintiff with a laptop for company use, the plaintiff opted to use two personal Macintosh computers to store, create and access work files.  The information consisted of patient and referral documents, contained social security numbers, addresses, phone numbers, salaries, and confidential health information.  Upon learning that the plaintiff maintained such information on personal computers, the defendant demanded it be returned, reminded him of his obligation to preserve documents and advised him of potential HIPAA violations.  When looking into the matter further, the defendant learned that plaintiff's home computers, and the documents contained therein, were exposed to the internet via a peer-to-peer sharing program such as Limewire.  The court ordered a computer forensic expert to examine the plaintiff's home computers who, in turn, determined that the plaintiff deleted nearly all documents after the defendants demand but prior to the forensic examination.

The court easily established both that plaintiff was under a duty to preserve documents and that the deleted documents were relevant.  Turning to culpability, the court noted that the Second Circuit permits sanctions based upon a finding of negligence.  Although the plaintiff argued that he deleted the documents out of concerns for continued disclosure through the internet in violation of HIPAA, the court found that he deliberately destroyed documents despite a pending motion addressing the specific documents at issue, and thus acted "willfully, deliberately and in bad faith."  The court opted to impose reasonable attorneys' fees as a sanction, instead of dismissal, because most of the deleted documents originally came from the defendant and alternative sanctions such as adverse inferences could adequately address any remaining issues.

As a side note, the defendant attempted to amend its' answer to include a tort counterclaim for spoliation.  Finding that "neither party [cited] to a single legal precedent, case or statute discussing whether a claim for spoliation is viable," the court denied the motion to amend and stated that "New York courts have traditionally remedied spoliation through litigation sanctions, rather than through claims for tort liability." 

For a copy of the opinion, click here.