Commercial Division Blog

Posted: March 1, 2024 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Categories Commercial, Sanctions, Spoliation

Court Rejects Claim Of Impossibility Regarding Preservation of Evidence

On January 18, 2024, Justice Andrea Masley granted sanctions against defendant Charter Communications Operating, LLC (“Charter”) for spoliation of evidence.  The decision in Earthlink, LLC v. Charter Communications Operating, LLC, Index No. 654332/2020, rejected Charter’s claim that preserving recordings of millions of calls over several months was impossible.  The Court explained:

Charter insists that it was impossible to preserve the call recordings because Charter receives more than 20 million calls per month with each call lasting about 7.5 minutes which yields 2.3 million hours of recordings per month. (NYSCEF 183, Hosein aff  ¶6.) Each day, Charter uses 10 terabytes or 10,000 gigabytes of memory to save the day's calls. (Id. ¶7.) Suspending its document retention protocol of saving call recordings for 120 days would require a new storage architecture which would take months and cost millions to design and implement. (Id. ¶8.) Charter opines the number of hours of recorded calls would have been overwhelming: 16 million hours of calls for 7 months. [footnote omitted] (Id. ¶6.) Since call recordings are not searchable, this data would be useless to Earthlink. (Id.) Charter did not differentiate between Charter customers and Earthlink customers. (Id. ¶9.)

The court rejects Charter's argument and finds that Earthlink has satisfied the first prong. Hosein's statement that Charter could not possibly store so many recordings is undermined by Charter's production of 104,000 transcripts of such preserved calls, albeit for 24 hours. (See NYSCEF 244-256, Sampling of 104,000 transcripts; See also NYSCEF 258, Edward T. Logan, Esq. 11 October 13, 2022 aff.) In September 2020, Charter was required to "suspend its routine document retention/destruction policy." (Zubulake v UBS Warburg LLC, 220 FRO 212, 218 [SDNY 2003].) Charter was "under a duty to preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery and/or is the subject of a pending discovery request." (Id. at 217.) Implicit in Charter's excuse is its conscious and unilateral decision not to preserve the phone recordings. Such a burden does not excuse Charter's failure to preserve when Charter also failed to timely notify Earthlink giving it an opportunity to inspect. (Thiele v Oddy's Auto & Marine, Inc., 906 F Supp. 158, 162-63 [WDNY 1995] [action dismissed as a spoliation sanction against defendant who was denied the opportunity to inspect evidence before destruction of the alleged defective boat.])

Charter had a duty to preserve the call recordings at least until such time as it sought guidance from the court.

Accordingly, the court granted both an adverse inference and monetary sanctions against Charter. 

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