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Plaintiffs Win Case In Electronic Evidence Tampering

November 10, 2008

How far would a motivated individual go to alter electronic information used in legal proceedings? The case Gutman v. Klein answers this question.

The case that started as a claim in 2003 by Aryah Gutman, who accused his real estate partner Zalman Klein and others of “misappropriating millions of dollars”, has since led to a 2008 motion by Gutman, who is seeking justice for Klein’s alleged destruction of electronic evidence. According to a summary of the case:

“Gutman charges in his complaint that Klein’s ‘discovery games’ began in 2004, when he ‘furtively’ replaced a laptop containing documents evidencing his role as “the kingpin of the conspiracy to rob’ Gutman.”

Based on evidence presented by Gutman’s legal team, the court concluded that Klein downloaded a file deletion program, backdated specific programs and files and then reinstalled computer software on his laptop prior to producing it during discovery. U.S. Magistrate Judge Robert M. Levy concludes:

    “According to Stroz Friedberg [Stroz Friedberg, LLC, court-appointed forensic expert], taken together, the sum of this evidence is ‘indicative of the behavior of a user who was attempting to permanently delete selected files from the machine and then cover up the chronology of system changes occurring in the hours and days just prior to a forensic preservation.’ In light of the sophistication of the Klein laptop user who performed these acts, Stroz Friendberg concluded that ‘[t]he fact that documents considered privileged or irrelevant were deleted irretrievably while others not marked as privileged were deleted and . . . copied back, suggests that the wide-scale data deletion and time stamp alteration may have been conducted with a privilege review in anticipation of the production of so-called non-privileged data.’ It is unlikely that the changes made to the Klein laptop in the days preceeding its imaging occurred accidently.”

Based on this information Magistrate Judge Levy has recommend entering a default judgment against Klein for destroying and falsifying electronic evidence. This case appears to be headed in Gutman’s favor, but it highlights two critical points:

    1. Courts now understand the serious issue presented by electronic records tampering. If confirmed by the Eastern District of New York, Gutman v. Klein will mark the first time the U.S. Court of Appeals for the Second Circuit has awarded a default judgment on the basis of tampering with electronic evidence.
    2. The Court is not shying away from severe sanctions for document tampering. According to Magistrate Judge Levy: “First, lesser sanctions would not adequately deter misconduct of this severity. … This is especially true where, as here, the court has previously imposed lesser sanctions on the responsible party for other discovery misconduct. … Second, the most serious forms of spoliation merit the harshest sanctions, and in this case, the destruction of evidence was of the worst sort: intentional, thoroughgoing, and (unsuccessfully) concealed.”

We have long argued that tampering with electronic records (either maliciously or inadvertently) presents one of the most significant new issues in e-discovery. For the Second Circuit Court of Appeals to recommend a default judgment in this case shows that the Court recognizes the severity of destroying and falsifying electronic evidence and time stamp alteration. We’re staying posted to this case to see if the Eastern District of New York confirms Magistrate Judge Levy’s recommendation, and we recommend you do the same.

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