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American Eagle Outfitters, Inc. v. Lyle & Scott Limited

September 27, 2007


The opinion of the court was delivered by: Magistrate Judge Caiazza


Having considered the parties' submissions on the Defendants' Motion regarding spoliation (Doc. 67), the court will grant the Motion to the extent described below.

At the onset, the undersigned notes that this is not the typical case of alleged spoliation. In connection with settlement negotiations, the Defendants agreed to provide the Plaintiffs certain documents to conduct due diligence ("the Due Diligence Documents") regarding the potential acquisition of L&S by AE. Before the documents were exchanged, the parties entered an agreement under which AE was required to destroy the Due Diligence Documents if it declined to acquire L&S. Once it became clear the acquisition would not go through, the Defendants requested the destruction of the Due Diligence Documents and proof of the same. See Defs.' Mot. (Doc. 67) at 5-6.

The Plaintiffs fulfilled their duty under the parties' agreement, but the Defendants have identified one AE agent who went too far in destroying documents. See id. at 2 (discussing Christopher Fiore's destruction of all L&S-related documents). On this basis, L&S seeks a scorched-earth investigation regarding the twenty-three recipients of the purge order to determine whether they also went overboard in following the instructions.

The equities presented in this situation leave both parties with legitimate arguments and concerns. On the one hand, there is clear evidence that one of AE's employees went too far and destroyed materials beyond the Due Diligence documents. On the other hand, AE may rightfully feel it has been "sandbagged" by L&S, given its obligation to destroy documents and the Defendants' subsequent allegations of spoliation.

Although the court is sympathetic to L&S's concerns, the undersigned is determined not to allow the spoliation issue to become an unending "sideshow" that prevents an adjudication of the underlying claims. The question, then, is how to determine whether additional non-Due Diligence documents were destroyed and what consequences should follow.

Consistent with the court's instruction, Plaintiffs' counsel have provided responses to four areas of inquiry presented at the September 4, 2007 conference. See text Order dated Sept. 4, 2007. The parties should not read too much into the court's adoption of the questions posed, as they essentially echoed the inquiries as presented by counsel. In any event, the court will address the purported deficiencies in the Plaintiffs' responses.

Question (a): What instructions were given regarding the non-retention of documents that were or have become relevant to this lawsuit?

The Defendants request that AE produce all written instructions issued by Ms. Strohm regarding the destruction of documents. See Defs.' Mot. at 2-3. Regardless of whether the court's September 4th Order contemplated such production, the court agrees that it is appropriate.

Accordingly, the Plaintiffs shall produce copies of all written instructions, and any follow-up clarifications, regarding document destruction.*fn1

The Defendants also request the production of any communications made by AE agents regarding the instructions and any confirmation(s) that destruction took place. Again, this information is relevant and necessary to determining whether other individuals exceeded the scope of the purge instruction. The Plaintiffs shall produce any such materials, although they may redact any unrelated communications protected by the attorney-client privilege.

Next, the Defendants state "concerns that [the] Plaintiffs are narrowly construing the Court's Order to pertain only to documents destroyed that [the] Plaintiffs deem 'are or have become relevant' to the litigation," and counsel requests that AE "answer Question (a) with regard to any destruction of documents during the pendency of this lawsuit related to [L&S] in any matter." Defs.' Mot. at 3. It seems apparent, however, that the parties have a clear understanding of the spoliation issues presented. Simply put, the question is whether agents of AE exceeded the scope of the required document purge and destroyed materials regarding L&S beyond those provided for Due Diligence. There now exists no basis for believing that AE destroyed documents relevant to this litigation beyond the context of the Due Diligence agreement, and the Defendants' concerns regarding the Plaintiffs' interpretation of the court Order appear unfounded.*fn2

Finally, the Defendants ask that the thirteen AE lawyers who received purging instructions submit their own answers to Question (a), state an inventory of what documents were returned or destroyed, state whether they were involved with the possible purchase of L&S, state whether or not they received Due Diligence Documents, and supply copies of all communications with Ms. Strohm (or anyone else) relating to the same. Id. at 4. These requests overlap with much of the other relief sought and, to the extent Defense counsel calls upon thirteen individual lawyers to become intricately involved in the spoliation investigation, such efforts would be overbroad and unduly burdensome.

Plaintiffs' trial counsel has acted, and shall continue to act, as the clearinghouse for ...

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