Failure to Implement Pre-Suit Litigation Hold Warrants Spoliation Sanctions and Adverse Jury Instruction

The magistrate judge recommended sanctioning defendant with an adverse jury instruction for spoliation and rejected defendant's argument that it did not have to impose a litigation hold until plaintiffs filed suit. "Defendants’ duty to preserve documents arose [a year and a half before plaintiff filed suit] when Plaintiffs notified Defendants of a potential lawsuit against them should they decide to market their alleged infringing product. . . . Plaintiffs show that one of Defendants’ key senior employees . . . indisputably destroyed email communications due to Defendants’ failure to put in place a litigation hold. . . . [Her] communications are especially probative of the claims at issue in this litigation because her current and past employment with Defendants involved the design, development, and testing of the products accused of infringing on the Patents-In-Suit."

Zest IP Holdings, LLC, et. al. v. Implant Direct MFG, LLC, et. al., 3-10-cv-00541 (CASD November 25, 2013, Order) (Gallo, M.J.)