Liddle & Robinson Attorneys at Law New York City

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Treppel v. Biovail Corp. - 4/2/2008

Details: On April 2, 2008, the Honorable James C. Francis IV, United States Magistrate Judge, granted the request of former Banc of America Securities analyst Jerry Treppel to compel Biovail Corporation and its former CEO, Eugene Melnyk, to produce additional electronic discovery in his pending litigation against them. In so doing, the Court held that Biovail's efforts to preserve electronic evidence were inadequate. In particular, Biovail failed to preserve backup tapes in existence at the time it received notice from Mr. Treppel's counsel to preserve all relevant electronic information. Judge Francis deemed the defendants' inaction sufficient to constitute gross negligence or recklessness. To ameliorate the harm caused to Mr. Treppel as a result of these preservation failures, the Court ordered defendants to produce Mr. Melnyk's laptop to the plaintiff's forensic expert, who will, at the defendants' expense, conduct a thorough forensic examination in an effort to recover additional relevant e-mails that were deleted by Mr. Melnyk. Moreover, the defendants are required to restore and search six additional backup tapes, and to potentially pay the costs of additional discovery warranted by any further relevant evidence uncovered. In reaching its decision, the Court frequently cited Zubulake IV and Zubulake V, seminal decisions addressing a firm's obligations to preserve and produce electronic evidence, which this firm handled and which played a significant role in recent revisions to the Federal Rules of Civil Procedure dealing with electronic evidence. Although the Court declined to go so far as to grant an adverse inference instruction, Judge Francis noted that "[i]t seems quite possible, and even likely, that documents were destroyed as a result of the defendants' failure to preserve. As was the case in Zubulake V, additional evidence discovered on the backup tapes to be restored may well serve to satisfy the plaintiff's burden of establishing that at least some of the destroyed documents would have been favorable to his claims, thereby entitling him to an adverse inference instruction at trial." Click here to read the April 2, 2008 Memorandum and Order in Treppel v. Biovail Corp., et al.; 03 Civ. 3002 (PKL) (JCF). .

Jeffrey L. Liddle

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