Smahi v. STMicroelectronics, Inc.

Background

Rachid Smahi was employed by STMicroelectronics, Inc. from October 2021 until late June 2023. He alleges that ST harassed and retaliated against him for objecting to unlawful conduct, discriminated against him because of a disability, physically assaulted and verbally abused him, and failed to pay all wages owed. His operative second amended complaint asserts 14 causes of action under state and federal law.

Smahi filed the lawsuit in Santa Clara County Superior Court on December 22, 2023. ST removed it to the federal court on December 28, 2023. After Smahi produced documents in July 2024 that ST said included internal company documents concerning the same projects, ST amended its answer to add counterclaims involving alleged trade-secret violations.

Dispute over electronic information

ST asked Smahi to provide his devices and accounts for a forensic examination to evaluate the alleged retention and possible transmission of ST’s confidential and proprietary documents. The examination occurred on October 1–3, 2024. According to ST, the investigation showed that Smahi restored his iPhone, reset his computer to factory settings, deleted an iCloud account and a Gmail account, and failed to disclose another Hotmail account. ST also said Smahi’s USB drive had first been dropped into a pool and was later broken into pieces and discarded.

Smahi disputed many of ST’s facts and characterizations. He said the USB drive accidentally fell into a swimming pool and was discarded before any discussion of imaging his devices. He also said that the computer had been wiped months earlier to prepare it for sale and did not contain the retained documents or related information. Smahi asserted that ST’s counsel told him he did not need to wait before destroying documents and later requested that he delete confidential or proprietary documents. He said he understood the forensic examination was intended to confirm that he no longer possessed the retained documents, not to provide access to unrelated personal and family accounts. He attributed some late-September deletions to concern that someone was attempting to hack his account.

Sanctions ruling

ST sought case-ending sanctions under Federal Rule of Civil Procedure 37(e), including a directed verdict on ST’s counterclaims, judgment against Smahi on his claims, and monetary sanctions. Rule 37(e) addresses the loss of electronically stored information that should have been preserved for litigation and cannot be restored or replaced through additional discovery. The most serious sanctions require a finding that the party acted with the intent to deprive the opposing party of the information’s use in the litigation. Lesser sanctions require prejudice and must be no greater than necessary to cure that prejudice.

The court denied ST’s motion for sanctions without prejudice to resubmission after further factual development. It could not find by a preponderance of the evidence that sanctions were warranted because material factual conflicts existed about whether Smahi had a duty to preserve the information, whether the information was lost because he failed to take reasonable preservation steps in light of the alleged hacking, and whether he had the intent required for case-ending sanctions. The court said resolving the intent issue would require credibility determinations that could not be made on the existing record. It identified a possible deposition of Smahi and an evidentiary hearing as examples of further factual development.

The court also stated that even if ST eventually established the requirements for sanctions, Rule 37(e) gives the court discretion over whether and what sanctions to impose. The court expressed skepticism that terminating sanctions against Smahi’s affirmative claims would be appropriate even if ST ultimately proved spoliation, meaning the improper loss or destruction of evidence.

Motion to strike

The court granted ST’s motion to strike Smahi’s separately filed evidentiary objections because they did not comply with Civil Local Rule 7–3(a), which requires such objections to be included in the party’s brief. The court nevertheless considered the substance of those objections because Smahi also raised their central points in his opposition brief. The court allowed declarations and other evidence submitted by ST, including a revised declaration from ST’s litigation counsel and a declaration from the forensic investigator.

Sealing rulings

The court explained that judicial records are generally subject to a strong presumption of public access. A party seeking to seal records generally must provide compelling reasons supported by specific facts that outweigh the public’s interest in access.

The court found compelling reasons to seal the materials filed at Docket Nos. 53 and 65 and granted those sealing requests. It granted in part ST’s request at Docket No. 61 as to proposed redactions to Exhibit B of the Erlewine declaration, but denied the rest of that request because ST had not provided compelling reasons to seal public documents, Smahi’s discussion of public documents, and other nonconfidential materials. The parties were ordered to file the documents on the public docket within 14 days, using only the redactions allowed by the order.

Disposition

Judge P. Casey Pitts denied ST’s motion for sanctions without prejudice, granted ST’s motion to strike, and granted in part and denied in part ST’s sealing motions.