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Delaware Supreme Court issues important e-discovery ruling

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The Judicial Update

July 29, 2011

Delaware: In Genger v. TR Investors the Delaware Supreme Court issued an important ruling on the matter of electronic records and discovery. The case heard by the Supreme Court stemmed from a case heard by the Court of Chancery in 2009 where now-Chief Chancellor Leo E. Strine, Jr. ordered the defendant, Arie Genger, to preserve information on his hard drive. Genger had his tech expert run a program that wiped all files from the unallocated free space on his hard drive and the TRI servers. This "unallocated free space" is the space on a computer not dedicated to running programs or applications and what the computer will use for temporary storage. Genger claimed that he was just attempting to preserve the privacy of his personal files. TRI claimed that he had violated the order to preserve information on the hard drives, Strine agreed, and sanctioned Genger, ordering him to pay TRI $3.2 million.

On appeal, the Supreme Court upheld Strine's sanction, finding that Genger had taken steps to destroy information he had been ordered to preserve. The court also addressed more largely the matter of unallocated free space. Justice Jacobs wrote, "To avoid future repetitions of the 'unallocated free space' issue presented here we suggest that the parties and the trial court address any unallocated free space question that might arise before a document retention and preservation order is put in place.In addressing that issue, the parties must be mindful that court-ordered discovery of electronically-stored information should be limited to what is 'reasonably accessible.' That determination, by its very nature, must be made on a case-by-case basis."[1]

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