By: Peter J. Halesey, Esq.
Published on: Mon 19th Feb, 2024 By: Campbell Durrant, P.C.
If your municipality has ever been a party to litigation, then it is likely that it received a letter instructing it to preserve documents pertaining to the litigation. These letters, commonly known as litigation hold letters, are routinely sent to parties in litigation and provide instructions as to the types of documents that must be preserved and instructions for doing so. Normally, these letters will caution that failure to preserve pertinent documents may result in negative consequences.
A recent employment discrimination case in the Northern District of Texas serves as a warning to municipal entities which ignore their duties to preserve documents (including electronic) in litigation. In Miramontes v. Peraton, Inc., the Plaintiff, Carlos Miramontes, sued his former employer, Peraton, Inc., based on a variety of claims including race and age discrimination after Miramontes was laid off. The employer asserted that the layoffs were a part of a company-wide reduction in force required by budgetary constraints following a merger and Miramontes contended that the reduction in force was pretextual.
As part of his lawsuit, Miramontes sent Peraton a litigation hold letter placing Peraton on notice of its duty to preserve all documents regarding Miramontes’ claims against Peraton including “information, data, emails, texts, attachments, and any other method or means of communications, internally and/or externally.” The letter further instructed Peraton not to allow deletion of the documents and also informed Miramontes’ direct supervisor to preserve communications related to Miramontes’ claims.
In discovery, Miramontes learned that his direct supervisor had sent text messages to another executive regarding Miramontes, which he had deleted after Peraton had received the hold letter. Miramontes’ supervisor claimed that the text messages simply referenced the hold letter and requested that the company’s Chief Legal Officer review the letter.
Miramontes subsequently filed a motion for sanctions requesting that the Court grant him summary judgment on his claims. Peraton also filed its own motion for summary judgment.
In analyzing the motions and, in particular, the request for sanctions, the District Court noted that it had the inherent power to sanction a party who abused the judicial process, which included the deletion of evidence (referred to as “spoliation”). The Court found that Peraton controlled the supervisor’s text messages and had been under an obligation to preserve them at the time of their destruction. Notably, the Court found that Peraton had control over the business information on its employees’ personal cell phones because the phones were routinely used for business purposes. The Court further found that the text messages were intentionally destroyed by the supervisor and, as such, Peraton was vicariously liable for the actions of the supervisor. Moreover, the Court determined that Peraton acted in bad faith because the text messages were destroyed after Peraton received the hold letter and were not deleted as part of a routine deletion policy.
After the Court found that spoliation had occurred, it turned to determining the appropriate sanctions for Peraton’s conduct. Although Miramontes requested summary judgment on his claims, the Court found that the requested sanction was too severe and instead denied Peraton’s Motion for Summary Judgement because a reasonable fact finder could find that the deleted text messages contained relevant information raising a disputed material fact pertaining to Miramontes’ claims.
Employers can learn an important lesson from this case. It is possible that the text messages that the supervisor sent were completely innocuous and revealed no evidence of discriminatory intent. Were that in fact the case, it is possible then that the failure to preserve these messages may have cost Peraton the chance to have the case dismissed. Accordingly, employers should carefully adhere to litigation holds and ensure that their supervisors do the same.
Takeaways:
• A District Court in Texas has denied an employer’s Motion for Summary Judgment as a sanction for failing to preserve evidence.
• The Court found that text messages were within the control of the employer despite the fact that the messages were on a supervisor’s personal cell phone.
• The Court found that, for the purposes of complying with discovery requests, an employer has control over its employees’ business-related text messages when: (1) the text messages were sent on a personal cell phone; (2) the employer did not issue company cell phones to its’ employees; and (3) the employees regularly conducted employer-related business on their personal cell phones.
• The employee was able to prove that the employer acted in bad faith where it knew of the litigation but did not instruct its employees to preserve text messages on their personal cell phones.
Bottom Line:
A ruling in a discovery matter by a Federal Court has opened the door to the possibility that an employer’s Motion for Summary Judgment in an employment discrimination case can be denied where the employer fails to properly preserve certain documents. It is possible that the innocuous deletion of text messages may have cost the employer its chance to have the case dismissed on summary judgment. All public employers should ensure that they are properly complying with their requirements of hold letters that they receive. Public employers should consult their Labor Counsel if they receive hold letters to determine the scope of their obligations and preserving documentary evidence to ensure that such a sanction is not imposed upon them.
