Perez v. Metro Dairy Corp., No. 13 CV 2109(RML), 2015 WL 1535296 (E.D.N.Y. Apr. 6, 2015)

In this collective action seeking unpaid wages, overtime and other relief, Plaintiffs moved pursuant to Federal Rule of Civil Procedure (“FRCP”) 37 for spoliation sanctions attributable to Defendants’ failure to preserve, and ultimately produce certain relevant employment-related evidence, including, for example payroll records and W-2s.  Defendants objected to the motion on the grounds that their books, computers and the specific documents sought by Plaintiffs had been seized pursuant to an order of the Superior Court of New Jersey in a different case involving Farmland Diary.  Defendants further stated they had no opportunity to back up their data or make copies of their data prior to that seizure.

While the plaintiffs were able to conduct some limited discovery into these documents through the issuance of a non-party subpoena directed to Farmland Diary (indeed, approximately three hundred pages of payroll records were provided to Plaintiffs by Farmland) and conducted an inspection of the records in Farmland’s possession prior to filing the motion for sanctions, certain relevant records were no longer available.  In opposing the motion, Defendants argued that they had “no control over the records and were not complicit in their loss or destruction.”

Assessing Defendants’ duty to preserve and noting the failure of Plaintiffs or the court to identify case law addressing a comparable situation, the court reasoned that Defendants had not destroyed their records and found that “[u]nder the specific circumstances of this case … defendants did not have an obligation to copy their books and records before complying with the court order.”  The court also reasoned that even if Defendants did have an obligation to preserve, there was no evidence of Defendants’ requisite culpable state of mind and denied Plaintiffs’ motion for sanctions.