Photo of Christian W. Marcelo

Alleged spoliation of evidence is unfortunately a somewhat common feature of many trade secret misappropriation cases. A recent district court order out of the Northern District of California, WeRide Corp. v. Kun Huang, highlighted just how serious the penalty for spoliation can be. No. 5:18-CV-07233-EJD, 2020 WL 1967209 (N.D. Cal. Apr. 24, 2020).

In WeRide, the defendant deleted entire email accounts, failed to disable its email server’s setting that automatically deleted all emails older than 90 days, and deleted relevant source code even after the court entered a preliminary injunction specifically enjoining the parties from destroying relevant documents. Taking into account the vast quantity of data deleted, along with the willful nature of the spoliation, the court granted sanctions of default, striking the defendants’ answers and directing judgment for the plaintiff.

WeRide serves as a reminder of the need to instruct and work with employees to avoid destruction of evidence. And while the destruction in WeRide was found to be willful, even seemingly innocuous or simply careless destruction of evidence can put a party at risk in litigation. Although default sanctions as in WeRide are uncommon, even adverse inference sanctions, monetary sanctions, or simply the burden of responding to spoliation allegations in front a judge or jury can be significant.