Rajesh Idnani v. Venus Capital Management, Inc.

Notable Items:

Plaintiff: Rajesh Idnani
Defendant: Venus Capital Management, Inc.
Venue: Commonwealth of Massachusetts Superior Court, Suffolk, SS

Material Facts:

Case was filed March 2010. ... to complete document discovery by May 1, 2011, with other fact discovery ... by September 20, 2011.
Defense counsel advised his clients both in writing and orally of the need to preserve all records.
Within days, Defendant's CEO, Vikas Mehrotra, decided to review and discard whatever he determined not to be relevant to the litigation.... [spoilation]
No copies were made. No records as kept of what was thrown out.
This decision was in direct violation of instructions received from his own counsel.
A full recounting of the facts is available below

Procedural History:

None.

Petitioner's Claim(s):

Defendant engaged in fraudulent and otherwise wrongful conduct intended to deprive the Plaintiff of obtaining the benefit of that [the] arbitration award.
Defendants have intentionally destroyed evidence and seek sanctions, including default judgement ....

Issues:

Holding(s) and Disposition:

Held: Defendant acted willfully and in bad faith to destroy evidence.
Disposition: 1) Defendant pays fees and costs for this motion. 2) at trial of the plaintiff's claims, the Court will permit plaintiffs to introduce evidence o Mehrotra's conduct.

Rationale

Majority Opinion

Once a litigant knows or reasonably should know that evidence might be relevant ... the law imposes on that litigant a duty to preserve such evidence ....
... the judge should impose the least severe sanction necessary to remedy the prejudice to the nonspoilating party ....
... there is no question that the conduct was willful.
Whether there are alternative sources for the information and how important the documents would have been to the plaintiffs ... are both key considerations ....
... plaintiff's counsel have conceded ... that the plaintiffs already have substantial evidence to show that defendants intentionally closed down one hedge fund and opened another ... to cheat the plaintiffs out of the fees they had own in the arbitration.
Accordingly, the material which was destroyed would not appear to go the heart of the plaintiff's case.
[finds for plaintiffs as noted in resolution]
A full description of the rationale is available below

Full Recounting of Facts

Case was filed March 2010. ... to complete document discovery by May 1, 2011, with other fact discovery ... by September 20, 2011.
Defendants retained Evidox Corporation...collected, processed, and searched a large volume of electronic files made available to it by defendants.
Defense counsel advised his clients both in writing and orally of the need to preserve all records.
In April 2011, Evidox arranged to come to the offices of the defendant to collect hard copy files.
Within days, Defendant's CEO, Vikas Mehrotra, decided to review and discard whatever he determined not to be relevant to the litigation.... [spoilation]
Four and a half 36-inch file dablinets and three or four standard sized cabinet drawers. 18,720 to 51,600 pages of material.
No copies were made. No records as kept of what was thrown out.
This decision was in direct violation of instructions received from his own counsel.
Claim of "regular cleanup" or "free up storage space" is not credited by this court.
July 7, 2011, defense counsel, Anthony Bongiorno informed this court and opposing counsel that his own clients had destroyed document which were responsive to the pending Rule 34 request.
Anthony Bongiorno withdrew from the case. New counsel secured for the defense.
Plaintiffs filed the instant motion.
A list of the material facts is available above

Majority Full Argument

Once a litigant knows or reasonably should know that evidence might be relevant ... the law imposes on that litigant a duty to preserve such evidence ....
... the judge should impose the least severe sanction necessary to remedy the prejudice to the nonspoilating party ....
... there is no question that the conduct was willful.
... decide to take the action that he did even after being specifically told by his attorney to retain records itself suggest that he many have had something to hide.
Whether there are alternative sources for the information and how important the documents would have been to the plaintiffs ... are both key considerations ....
... plaintiff's counsel have conceded ... that the plaintiffs already have substantial evidence to show that defendants intentionally closed down one hedge fund and opened another ... to cheat the plaintiffs out of the fees they had own in the arbitration.
Accordingly, the material which was destroyed would not appear to go the heart of the plaintiff's case.
[finds for plaintiffs as noted in resolution]
The core of the rationale is available above