MPCT Solutions Corp. v. Methe
MPCT Solutions Corp. v. Methe
1999 WL 495115 (N.D. Ill. 1999)
July 2, 1999

Kocoras, Charles P.,  United States District Judge

Scope of Preservation
Failure to Preserve
Sanctions
Spoliation
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The Court found that the Preservation of Evidence Order had been violated when approximately 1520 pages of information from Methe's laptop were deleted between June 8 and June 13. The laptop was then "defragged," preventing the retrieval of the deleted data and the parties from examining the contents of the laptop.
MPCT SOLUTIONS CORPORATION, Plaintiff,
v.
James METHE Defendant
No. 99 C 3736
United States District Court, N.D. Illinois, Eastern Division
July 02, 1999
Kocoras, Charles P., United States District Judge

MEMORANDUM OPINION AND ORDER

*1 This matter is before the Court on MPCT Solutions Corp.'s (“MPCT”) Motion for Sanctions. For the reasons set forth below, that motion is granted. This Court hereby issues a preliminary injunction barring James Methe from contacting or servicing the MPCT clients that are the subject of the pending preliminary injunction motion.
I. Preservation of Evidence Order
On June 7, 1999, this Court granted MPCT's Ex Parte Motion for an Order Preserving Evidence. In pertinent part, that Order directed the following:
Defendant, James Methe, Nominal Defendant, Gresham Computing PLC, and John Walker are hereby ordered not to destroy or conceal, and to otherwise preserve any documents and tangible items—in any medium—which directly or indirectly concern or reflect the allegations in plaintiff's Verified Complaint for Injunctive and Other Relief, including evidence of (i) Gresham's solicitation, recruitment or hiring of James Methe and John Walker; (ii) James Methe's and John Walker's work assignments for and on behalf of Gresham; (iii) James Methe's and John Walker's communications with financial institutions for and on behalf of Gresham and/or plaintiff; (iv) James Methe's and John Walker's employment with plaintiff; and (v) James Methe's communications with plaintiff's employees concerning employment with Gresham and other third parties.
This Order was supported by evidence that John Walker, another ex-MPCT employee, while still in MPCT's employ, was discovered by another MPCT employee in London with Mr. Methe, just blocks from Gresham's offices. At that time, Mr. Methe had already left MPCT to join Gresham. On Sunday, April 25, 1999, just several days have being discovered in London, virtually all the data on Mr. Walker's laptop was destroyed.
Although it was not part of the information before this Court when it issued its Preservation of Evidence Order, this Court has now learned that at approximately 6:30 a.m. on Sunday, April 25, Mr. Walker used his keycard in an attempt to gain access to MPCT's Chicago offices. By that time, however, his keycard had been deactivated and security informed not to let Mr. Walker into MPCT's offices during non-business hours.
II. Motion for Sanctions
On June 28, 1999, the parties appeared in court on Plaintiff's Emergency Motion for Sanctions, Including a Default Judgment as to Liability, a Preliminary Injunction, and Such Other Relief as This Court Deems Appropriate. The following facts came out of the June 28 court appearance, Mr. Methe's deposition, and other submissions:
1) Plaintiff's counsel sent to James Methe by overnight mail a copy of this Court's June 7 Preservation of Evidence Order. Mr. Methe received that Order no later than June 8.
2) Mr. Methe may have discussed the terms of that Order with his wife on June 8.
3) Between June 8 and June 13, approximately 1520 pages of information from Mr. Methe's laptop were deleted.
4) According to Mr. Methe, he copied all the relevant information from his laptop to another computer and printed those files. Mr. Methe then deleted the files from his laptop.
*2 5) According to Mr. Methe's attorney, James D. Adducci, Mr. Methe transferred the files to another computer and then deleted files from the laptop on Mr. Adducci's advice. Mr. Adducci stated that he did not believe that the transfer and subsequent deletion were a violation of this Court's Preservation of Evidence Order.
6) On June 13, Mr. Methe's laptop computer was “defragged,” preventing the retrieval of deleted documents.
7) According to Mr. Methe, his wife defragged the computer as part of a weekly defragging routine.
8) Less than 1520 pages of documents printed from Mr. Methe's laptop have been turned over to the plaintiff.
III. Sanctions
On these facts, this Court has no choice but to conclude that this Court's Preservation of Evidence Order has been violated. We do not know now, nor may we ever know, if any information was deleted from the laptop and not turned over to Plaintiff's counsel. We do know, however, that Mr. Methe deleted files from the laptop after he had notice of this Court's Preservation of Evidence Order. We also know that the deleted information and other possible evidence is no longer recoverable because the computer was subsequently defragged.
This Court needs no further information to sanction Mr. Methe. What is called for at this time is a preliminary injunction barring James Methe from contacting or servicing the MPCT clients that are the subject of the pending preliminary injunction motion. This Court recognizes that such a preliminary injunction is broader in scope that the restrictive covenant at issue in that the covenant only prohibits Methe from selling competitive products and services to his former customers. The expansion is justified, however, by the seriousness of the violation of this Court's Order and the difficulty in sorting out which of Gresham's products and services are competitive to MPCT's.
Discovery may proceed on all matters in this case, not just matters relating to the destruction of evidence. Because Mr. Adducci is claiming that Mr. Methe's actions were on his advice, MPCT is free to take discovery on that issue. This Court is not at all certain, however, that such discovery will inevitably lead to the disqualification of Mr. Adducci. In any case, that issue is not ripe for determination. MPCT may also take discovery on Mr. Methe's discussions with Mrs. Methe with respect to topics relating to the destruction of evidence.
Because undisputed facts form the basis for the sanctions, no evidentiary hearing is required. To reiterate, these undisputed facts are as follows: this Court entered a Preservation of Evidence Order on June 7; Mr. Methe received a copy of that Order no later than June 8; between June 8 and June 13, hundreds of pages of documents were deleted from the laptop computer; the laptop was defragged on June 13, thereby preventing the recovery of the deleted data; less than the total number of pages deleted have been turned over to the plaintiffs. The deletion of files and defragging of the laptop also prevents the parties from carrying out the process for examining the contents of the laptop that was the subject of extensive discussions in open court on June 22.
IV. Conclusion
*3 It is these facts upon which this Court bases its sanctions. This Court has not found that Mr. Methe intentionally violated the Order, but no such finding is required. The Order was violated by Mr. Methe, intentionally or not, and the result is sanctions in the form of a preliminary injunction.
It is so ordered.