In 360 Security Partners, LLC v. Hammond, 2023 WL 1869633 (N.D. Tex. Feb. 9, 2023), a defendant tried to justify wiping a company laptop by asserting privacy concerns. The court did not accept that excuse. Instead, it sanctioned the defendant.
Defendant Hammond was the former CEO of the plaintiff. Plaintiff terminated Hammond and requested return of his company laptop. Hammond refused. Months of back-and-forth communications followed, and plaintiff’s counsel demanded preservation.
Hammond admitted that he wiped the laptop using a factory reset. The court wrote:
Hammond does not deny he reset the MacBook. Hammond claims he reset the computer to avoid “deeply personal information falling into [Plaintiffs’] hands. He claims the history of distrust between the parties caused him to make “an honest mistake . . . to protect his family’s privacy.” However, he claims he “did not believe that forensic experts would be unable” to recover the data on the computer. Instead, he thought “the computer would be limited to a forensic reproduction and [he] would have an ability to control dissemination of the information.” Finally, Hammond claims he possesses “a drive containing documents downloaded in part from the computer at issue through February 2022” that can “replace information that was on the [MacBook].” ….. [citations omitted].
The court found that the destruction was in bad faith. “Hammond was informed on numerous occasions by both Plaintiffs’ counsel and his own counsel of the importance of preserving the MacBook’s data.”
The court squarely rejected the so-called privacy concerns, writing:
“As to preserving his family’s privacy, Hammond had a simpler, Court-sanctioned option for preserving such interests. The parties previously agreed to an exhaustive protective order, which allowed the parties to “designate by written notice, either incorporated in the matter disclosed or separately, any Material as ‘Confidential’ if it believes that such Material contains confidential or proprietary information.”…
Finally, the court rejected Hammond’s “empty head, pure heart” defense: “As to Hammond’s ignorance to the permanent destruction of the MacBook data, the evidence suggests such ignorance is highly unlikely.” It wrote that the MacBook flashes a warning that a reset will erase all data and “[t]his cannot be undone.”
Finding bad faith, the court then imposed sanctions. The Docket reads:
MEMORANDUM OPINION AND ORDER: Motion for Sanctions filed by 360 Security Partners LLC, Jason Pinson is Granted in Part and Denied in Part. If the parties proceed to trial, the Court will include an adverse jury instruction regarding Hammond’s spoliation. Hammond is also ORDERED to pay Plaintiffs’ reasonable attorneys’ fees, costs, and expenses incurred in while pursuing the return of the laptop, conducting the forensic analysis of the computer, and pursuing this Motion. (Ordered by Judge Jane J Boyle on 2/9/2023) (svc) (Entered: 02/09/2023)
Interestingly, the litigants saw no need to address 360 Security Partners information governance policy. Did it permit or prohibit use of company laptops for personal matters?
Thanks to David McAfee for blogging about this case in CEO Sanctioned for Wiping Laptop Despite Duty to Preserve Data (bloomberglaw.com)(Feb. 10, 2023).
 I have written elsewhere that legal hold communications become discoverable when there is a prima facie showing of spoliation. The Honorable Paul W. Grimm, Michael D. Berman, et. al., “Discovery About Discovery: Does the Attorney-Client Privilege Protect All Attorney-Client Communications Relating to the Preservation of Potentially Relevant Information?,” 37 U. Balt. L. Rev. 413 (2008), and Discovery on Discovery – Steps Taken to Produce Documents.