U.S. District Court rules data deletion policy warrants sanctions

A technician who won less than $10,000 in an employment discrimination case against Elkridge-based Dish Network Service Corp. is entitled to receive $37,309.50 in attorney's fees because his employer committed a gross spoliation of documents relating to his sexual harassment complaints.

U.S. District Judge Andre M. Davis awarded Dino Broccoli $21,212.50 for fees connected with his Maryland Wage Payment and Collection Act claims and another $16,097 relating to his September 2004 motion for sanctions in connection with discovery violations by Dish Network and its parent company, collectively referred to as Echostar.

Echostar clearly acted in bad faith in its failure to suspend its e-mail and data destruction policy or preserve essential personnel documents in order to - preserve the relevant documentation, Davis wrote. These bad faith actions prejudiced Broccoli in his attempts to litigate his claims and measurably increased the costs for him to do so.

Attorney Jerald J. Oppel, who represented Broccoli, called it a fairly straightforward spoliation opinion that should provide guidance to human resources personnel.

Here, they had notice that a complaint was made and they allowed their 'document retention policy' to delete all the documents, he said. I'm not even sure if there was a 'document retention policy.'

Broccoli filed suit in 2003 against Dish Network and its Colorado- based parent, Echostar Communications Corp., claiming he was subject to unwelcome sexual harassment by Dish Network's human resources administrator, Stacie Andersen. Broccoli complained to management and was later terminated from his position.

During discovery in September 2004, Broccoli filed a motion for sanctions, claiming Echostar failed to preserve documents critical to his case.

The court agreed, finding it clear beyond reasonable dispute that the company had been guilty of gross spoliation of evidence. It deferred an explanation of its ruling - and Broccoli's requests for fees as to the discovery violations - until after trial.

The March jury trial resulted in split verdicts. Broccoli prevailed on his breach of contract and Maryland Wage Payment and Collection Act claims. Echostar and Dish Network successfully defended the sexual harassment and retaliation claims, and Echostar and Andersen prevailed on the claim for tortious interference with prospective economic advantage.

In a memorandum opinion published this week on the fee issue, Davis noted that Broccoli had complained to his superiors - and to Anderson's supervisor, Tammy Fornelius - about Anderson's alleged advances as early as 2001. Fornelius denied that such a conversation ever took place, however, and related e-mails were purged as part of Echostar's system that automatically deleted old communications.

Though Broccoli forwarded a handwritten complaint to Anderson in November 2001 - asserting that his termination was due to her retaliation - and Anderson claimed to have forwarded it on to upper management, no one at Echostar recalled seeing this complaint prior to litigation.

[T]he evidence of a regular policy at Echostar of 'deep-sixing' nettlesome documents and records (and of management's efforts to avoid their creation in the first instance) is overwhelming, Davis wrote.

Applying the lodestar approach, the judge concluded that $16,097 was a reasonable fee for 84.2 hours of time expended by Broccoli's attorney's fees to overcome the effects of Echostar's discovery violations. Broccoli requested more than $26,000 for 123.6 hours.

The judge also deemed $21,212.50 reasonable for 103.1 hours of work on Broccoli's wage payment claims; Broccoli had requested $30,957 and 152.7 hours.

Common phenomenon

The judge rejected Echostar's claim for costs, concluding it was not a prevailing party under the Federal Rules of Civil Procedure. Although Echostar succeeded on the federal sexual harassment and retaliation claims as well as the tortious interference with prospective advantage claim - three out of five claims, in fact - the judge noted that the verdict appeared to be a compromise that was inconsistent with some of the findings.

Broccoli, the court noted, prevailed on the tortious interference claim in substance if not in form; the jury had found, for example, that Andersen improperly, intentionally and willfully interfered with Broccoli's prospective economic advantage by giving false and detrimental employment references after he left.

[T]his evidence is probative of both Andersen's tortious and retaliatory animus, Davis wrote.

But while the inconsistent verdict served to divest Echostar of its prevailing party status, the court refused to find it too irrational to stand.

Jury compromises are a common phenomenon within our legal system that rarely provide a basis for ordering a new trial, Davis wrote.

Counsel for Echostar declined to comment on the case.

WHAT THE COURT HELD

Case:

Dino Broccoli et al. v. Echostar Communications Corp., USDMD No. 03-3447. Published. Opinion by Davis, J. Filed August 4, 2005.