United States District Court, N.D. Georgia, Atlanta Division
OPINION AND ORDER
WILLIAM S. DUFFEY, JR. UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff HCC Insurance
Holdings, Inc.'s (“HCC”) Motion for
Spoliation Sanctions .
case arises out of Defendants Valda Flowers'
(“Flowers”) and Michael Remeika's
(“Remeika”) resignation from non-party HCC Life
Insurance Company (“HCC Life”) and their
operation of a competing business, Creative Risk
Underwriters, LLC (“CRU”) (together with Flowers
and Remeika, “Defendants”). On September 16,
2015, HCC initiated this action, claiming that Flowers, at
the direction of Remeika, misappropriated HCC's trade
secrets to establish CRU and compete with HCC.
August 11, 2015, 8, 683 emails from Flowers' HCC Life
email account were moved to her H: Drive on HCC's
network. (Mot. at 3). 1, 384 of those emails were then deleted.
(Id.). HCC claims this activity was suspicious,
including because Flowers had never moved emails to her H:
Drive before, her email box was nowhere near full capacity,
and she deleted emails from this email box on the same day.
(Mot. at 3-4). HCC's former employee, Shalla Miguez,
testified that she helped Flowers move the emails after
Flowers asked her to help clean up her inbox, and to show her
how to create folders to save relevant emails. (Miguez Dep.
[92.8] at 63:17-65:2).
Hot Sheet Activity
August 12, 2015, Flowers copied around 500 “Hot
Sheets” from HCC Life's underwriting drive to her
H: Drive on HCC's network, and then to the local C: Drive
of her HCC computer. (Mot. at 5). HCC claims this activity
was suspicious because it was not part of her job duties to
update HCC's Hot Sheets, and because, prior to August 12,
2015, Flowers only had four Hot Sheet folders located in the
C: Drive of her HCC computer. (Id.). Defendants
claim that updating Hot Sheets was part of Flowers'
regular job duties, and note that, on the same day the Hot
Sheets were moved, Flowers received an email requesting that
all Hot Sheets be updated. Defendants also note that
Flowers' history of working with Hot Sheets shows she
often copied them to her local HCC computer. (Resp.  at
August 20, 2015, the night before she resigned, Flowers
deleted over 500 Hot Sheets from the C: Drive of her HCC
computer. HCC claims this activity is suspicious because a
forensic review of Flowers' past practices showed no
evidence of any other mass deletions of documents. (Mot. at
5-6). Defendants note that all of the “deleted”
Hot Sheets were in the recycle bin of Flowers' HCC
laptop, and that HCC had the ability to retrieve the files.
(Resp. at 7).
Return of HCC Computer
Friday, August 21, 2015, Flowers emailed her resignation
letter to her supervisor at HCC Life. That afternoon, HCC
Life's Human Resources Manager, Tim Swoger, called
Flowers three times to request that she return her HCC
computer. (Mot. at 6). Flowers returned her computer around
4:15 p.m. that day, after asking Mr. Swoger whether she could
keep her HCC computer over the weekend. (Id.). HCC
claims this activity was suspicious, including because
Flowers logged into HCC Life's networks remotely after 10
p.m. the night before she resigned, and again throughout the
day of her resignation. (Id. at 6-7). Defendants
contend that Flowers was attempting to access the HCC network
to complete her expense report, because she had $1, 272.00 in
reimbursable expenses and she had not submitted an expense
report since June 2015. (Resp. at 7-8).
husband, Jeff Flowers, is an experienced IT professional with
35 years of experience, and he assisted CRU with IT matters.
(Mot. at 7). HCC claims Mr. Flowers helped Flowers
misappropriate HCC trade secrets. HCC claims Mr. Flowers
“could have utilized several methods to transfer
HCC's trade secrets to [Flowers'] personal devices
without leaving any evidence on her HCC computer, ”
including by using Gmail, using Citrix, or by imaging the
hard drive of Flowers' HCC computer. (Mot. at 7).
Duty to Preserve Timeline
August 27, 2015, Flowers received a “preservation
notice” letter from HCC, requesting Flowers to retain
all electronic evidence, including electronic storage
devices. Mr. Flowers was aware that Flowers received the
letter. (Resp. at 10-11). On September 17, 2015, Flowers
received a copy of the Complaint in this action and was aware
that (a) HCC was requesting Flowers turn over her personal
laptop and all electronic storage devices; and (b) that all
electronic data on Flowers' personal computer was
required to be retained. On September 21, 2015, the Court
held a hearing on HCC's request for a temporary
restraining order. The same day, the Flowers were informed
that the Court ordered Ms. Flowers to produce her personal
computer for examination by a neutral forensic examiner (the
“Neutral”). (See Mot. at 8-9).