An Essex County Judge recently ordered sanctions amounting to almost $850,000 for spoliation of evidence. The underlying action, Salerno Medical Associates v. Shukla, involved allegations of stolen proprietary information with the intention to open a competing revenue cycle management company. 

While the trial court judge ultimately did not find that the plaintiffs proved by a preponderance of evidence such underlying allegations, the judge awarded sanctions after finding that the defendants violated numerous court orders to preserve electronic evidence. 

The trial court had issued three court orders directing the parties not to destroy electronic evidence. First, the court entered an order enjoining and restraining Defendant Dr. Kushal Shukla from deleting or altering electronic information concerning the plaintiff. Two months later, the court entered another order requiring Dr. Shukla to restore and preserve all files contained in his email and other web-based accounts. Lastly, the court entered an order enjoining and restraining Dr. Shukla and co-Defendant Rajiv Pandya from deleting or altering any electronic documents relating to the litigation and concerning the plaintiffs.

During the 20-day trial, it became apparent to the trial court that Dr. Shukla deleted records of WhatsApp phone calls and more than 2,000 messages. The judge also found two anti-forensic software programs were used on Shukla’s laptop.

The judge concluded that the plaintiffs proved by a preponderance of evidence that Shukla and Pandya were fully aware of the three preservation orders in place, but proceeded to spoliate evidence and failed to restore and preserve that evidence in accordance with the orders.

Ultimately, based on the finding of spoliation, the judge assessed a sanction against the defendants, awarding almost $270,000 to the plaintiffs for investigative costs and about $575,000 to plaintiff’s law firm for investigative costs, in addition to reasonable attorneys fees.