Compagnone v. MJ Licensing Company
- Ona Wang
- 1:18-cv-06227-OTW
- U.S. District Court · Southern District of New York
- 3
In Compagnone v. MJ Licensing Company, Judge Wang ordered an evidentiary hearing because the record was insufficient to decide sanctions for possible email loss.
Ralph Compagnone and the defendants involved in the dispute over missing electronically stored information and requested sanctions.
What happened
In Compagnone v. MJ Licensing Company, Ralph Compagnone asked for sanctions that could end the case, based on concerns about missing emails and other electronically stored information. The defendants’ submissions raised questions about whether they had preserved relevant information.
The court identified unresolved questions about any litigation hold, the steps taken to prevent information loss, whether the missing material could be recovered elsewhere, and the defendants’ server transition. The court said it could not decide the sanctions request on the existing record.
Judge Wang ordered an evidentiary hearing for August 9, 2022, and directed the defendants to submit sworn statements and the parties to file a joint letter identifying hearing witnesses by July 29, 2022.
The detailed version
- Compagnone v. MJ Licensing Company · No. 1:18-cv-06227-OTW
- Ona Wang
- July 13, 2022
Background
Ralph Compagnone sought case-terminating sanctions against the defendants. The sanctions request concerned possible loss or failure to preserve electronically stored information, including emails and communications among the defendants. The opinion states that the defendants’ state of mind was relevant to the request.
The court noted several concerns in the defendants’ written submissions. Those submissions appeared to imply that no litigation hold—a direction to preserve potentially relevant information—had been imposed. Declarations by Dash and Russo stated that they had a practice of deleting emails relatively promptly to conserve device storage, apparently while the lawsuit was pending. An unsworn communication attached to Russo’s declaration suggested that MJ Licensing’s pre-2017 electronically stored information had been lost and not preserved, and did not address whether backups existed during the company’s transition between servers. The submissions also indicated that Margaretha Rady had been confined to a medical facility since Thanksgiving 2020, raising questions about whether her email accounts had been searched. The court further noted that any email search may have been limited to messages that included Compagnone.
Unresolved Issues
The court identified factual gaps concerning whether and when a litigation hold was imposed; whether reasonable steps were taken to prevent the loss of electronically stored information; whether the missing information could be restored, replaced, or obtained from another source; when XMLA began hosting services for MJ Licensing; and what efforts the defendants or XMLA made to preserve or restore the information.
Ruling and Directions
The court held that it could not decide Compagnone’s pending sanctions motion on the existing record. It ordered an evidentiary hearing for August 9, 2022, at 3:00 p.m. in Courtroom 20D at 500 Pearl Street in New York. The defendants were directed to submit sworn statements addressing the factual gaps by July 29, 2022. The parties were also directed to file a joint status letter by that date identifying the witnesses who would testify at the hearing. The order did not decide the sanctions motion itself.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.