Court Dismisses Complaint and Sanctions Plaintiff for Fabricating ESI
The Southern District of New York recently issued significant sanctions in a case with a background story fit for Hollywood. In Carrington v. Graden, plaintiff brought claims against entertainment giants Paramount Pictures and Viacom, Inc. for sexual misconduct, unfair competition, fraud, misappropriation, federal antitrust violations, and New York State and City labor violations. Plaintiff attached various exhibits to his complaint that contained emails purportedly between defendants and non-parties. After it was discovered, through an arduous cat-and-mouse game between defendants and plaintiff, that plaintiff completely fabricated the emails that were presented in support of his claim, the court dismissed plaintiff’s claims with prejudice against all defendants and granted defendants’ application for attorneys’ fees and costs incurred in connection with their work regarding the authenticity of the emails.
At the onset of the litigation, defendants sent plaintiff’s counsel a preservation notice for electronically stored information (ESI) and documents, after noting that the documents plaintiff referenced and attached as exhibits to his complaint “appeared highly questionable and inaccurate.” Significantly, the emails were not produced as native-format email communications, rather, they were all produced as email forwards from plaintiff to his attorney. Defendants, as part of a pre-motion submission to the court in connection with their anticipated motion to dismiss, submitted affidavits from the individuals who were represented as having drafted and received the emails at issue, stating that the emails were in fact falsified.
In response to the affidavits, the court ordered discovery with regard to the authenticity of the questionable emails. An e-discovery vendor was selected to conduct a forensic analysis of plaintiff’s relevant email accounts and cellular devices, and found that none of the emails at issue were found in plaintiff’s email accounts in their native forms—only the forwarded versions of the emails that plaintiff attached to his complaint were found. Plaintiff subsequently explained that his email accounts had been “hack[ed],” causing the emails not to be found. Significantly, after defendants were given permission by the court to subpoena the internet service providers for plaintiff’s email accounts, it was confirmed that “Plaintiff had fabricated, destroyed, and misrepresented evidence.” Indeed, one email account had been deleted by plaintiff soon after the initial forensic analysis of that account—despite the court ordering both parties to preserve evidence. Additionally, another email account that plaintiff claimed to have been deactivated “for years,” was found to have been deactivated only one day after plaintiff filed his complaint and the emails at issue.
As such, in accordance with Federal Rule of Civil Procedure 37(b)(2)(C), which provides that when a party fails to act in accordance with its discovery obligations “the court must order the disobedient party . . . to pay the reasonable expenses, including attorney’s fees, caused by the failure,” and with the court’s inherent powers, the court imposed sanctions on plaintiff for his egregious conduct and dismissed the complaint with prejudice. In recognition that it required substantial expertise and resources to demonstrate that plaintiff’s evidential support was fabricated, the court awarded defendants attorneys’ fees and costs in excess of $500,000. We have blogged in the past about situations like this where courts have resorted their inherent authority, and aspects of Rule 37 other than section (e), to address e-discovery-related abuses – like evidence fabrication and manipulation – that do not fall within the stringent spoliation parameters of Rule 37(e). This is another of those cases.
While it should go without saying that it is never advisable to fabricate evidence in any venue, this decision provides guidance on the importance of a careful review of documents produced in discovery. As the use of email and other forms of electronic communication has skyrocketed, many seem to assume that ESI produced in discovery is authentic. This case should also serve as a reminder for parties to discuss the format of production and potential inclusion in an ESI protocol as early as possible. In particular, a requirement that documents be produced in their native format may have avoided much of the litigation costs incurred in this case in reviewing and investigating the documents fabricated by plaintiff.