Advantor Systems Corp. v. DRS Technical Services, Inc., Plaintiff’s Suspicions Not Enough to Infer Evidence Spoliation, Sanctions Denied.

In this breach of contract case involving the disclosure of proprietary information, Plaintiff, Advantor Systems Corporation (“Advantor”) filed a motion for sanctions against the Defendant, DRS Technical Services, Inc. (“DRS”), for intentional bad faith spoliation of evidence.

Both Advantor and DRS are security technology companies providing services to the United States Air Force. In July 2013, Advantor and DRS entered into a Nondisclosure Agreement (“NDA”) in anticipation of responding to an RFP to work together on a project for the Space and Naval Warfare Systems Command (“SPAWAR”) in which DRS would be the contractor and Advantor, the subcontractor.

DRS was awarded the contract but contended that it could not use Advantor as a subcontractor as they had failed to provide information required for the RFP and were therefore not approved by SPAWAR Advantor alleged that DRS planned to “self-perform” on the contract by recruiting Advantor personnel after excluding them from the contract. Additionally, Advantor alleged that DRS wrote job ads specifically targeting its employees and then hired three Advantor employees in violation of the NDA. Advantor contended that one of the employees, Greg Larson, took proprietary information to DRS. Advantor sent a letter to DRS demanding that they immediately terminate Larson and preserve and return to Advantor any confidential or proprietary information in their possession. DRS terminated Larson’s employment and subsequently reformatted and reissued his laptop as part of their normal business routine.

Advantor filed suit on April 3, 2014, and after discovery commenced, the parties’ technical experts conducted an extensive investigation of Larson’s DRS computer’s hard drive. As a result of the investigation, much of Larson’s reformatted computer was determined to be “nearly unreadable.” In July, 2014, DRS produced “files” from the Larson computer most of which were unable to be opened due to the reformatting. In September 2013, Advantor’s computer forensic expert independently found a longer list of files. Based upon the file names, Advantor believed that the files contained proprietary information. On October 7, 2014, Advantor filed a motion for sanctions for the spoliation of evidence on Larson’s DRS computer.

In his affidavit, Larson stated that he sent eight files to DRS which they returned and that he did not believe the files were proprietary as they contained publicly available information. During his deposition, Larson indicated that he only used the DRS-issued laptop for three days and did not recall loading anything from his Advantor employment on his DRS laptop. Larson also testified that the file names found by Advantor’s expert on his DRS-issued laptop were names of documents he found on the internet or were authored by an entity other than Advantor.

In its analysis, the Court held that DRS had a duty to preserve the contents of Larson’s laptop once it received notice from Advantor that it was contesting the hiring of Larson. The Court noted that counsel for DRS stated that the failure to preserve the laptop was a “mistake” by in-house counsel. While it found DRS’s failure to preserve Larson’s laptop “mystifying,” the Court held that the decision did “not appear to the product of any actual intent to destroy specific evidence inasmuch as there is no indication that anyone from DRS ever knew what was on the laptop.” Advantor argued that it was “suspicious” that its computer forensics expert found files existing on Larson’s laptop that DRS’s expert did not find. However, the Court found that based upon Larson’s testimony and his brief employment at DRS, Advantor’s suspicions did “not rise to the level of inference that anything of significance was compromised.” Based upon the record, the Court found that there was “no real likelihood that important or protected files were ever on Larson’s DRS computer.” In conclusion, the Court held that Advantor had failed to demonstrate that there was any evidence on Larson’s laptop or that evidence on the laptop might have been critical to the case. Therefore, despite the “essentially unexplained reformatting” of Larson’s laptop, the Court denied the motion for sanctions.

Advantor Systems Corp. v. DRS Technical Services, Inc., 2015 WL 403308 (M.D. Fl. Jan. 28, 2015)

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