Sanctions for Spoliation in Nevada

If you are not careful to preserve and obtain responsive documents, TCPA litigation can quickly devolve into a (losing) discovery battle.  In Perrong v. Sperian Energy Corp., the Defendant, ECG, was not careful.  Now, ECG faces multiple discovery sanctions: two different fee awards and an adverse inference jury instruction.

So, what went wrong?

Lots:

  • ECG failed to pay the Plaintiffs’ fees and costs awarded as part of the Court’s earlier sanction for ECG’s initial failure to produce responsive documents.
  • ECG’s counsel initially represented that it would produce calling records.  “However, just before withdrawing from representation of ECG, that same counsel [told] Plaintiffs that it appeared ECG did not have calling records.”
  • ECG “did nothing” to obtain relevant call records until the Court ordered it to do so, and only many months into the litigation.  By then, many of the records did not exist.
    • The Court rejected ECG’s argument that it did not have control over the records because ECG “had the practical ability to obtain the documents” from a third-party.
  • Later, ECG disclosed a server in “India,” which the Court explained likely did not exist.  (The disclosure, the Court explained “turned out to be, at best, baseless”).
  • ECG, in short, “could not have been more cavalier about ensuring the retention of calling records” and failed to produce responsive documents.

Based on what the Court described as ECG’s “negligence” in preserving and obtaining relevant records, the Court entered “an adverse inference jury instruction that an offending party destroyed evidence.”  That sanction, the Court explained “tells the trier of fact that evidence made unavailable by a party was unfavorable to that party.”  In addition, the Court exercised “its inherent power” and granted Plaintiffs “an additional award of attorney’s fees and costs . . . associated with bringing the Motion and supporting the Motion with a Reply.”

The takeaway: A defendant facing a TCPA lawsuit should take its discovery obligations seriously.

 

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