Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Secs, No. CIV. 05-9016, 2010 U.S. Dist. LEXIS 1839 (S.D.N.Y. Jan. 11, 2010).

In this investor related action, the defendants, who were connected to a hedge fund that lost money, sought sanctions against the plaintiffs for failing to preserve and produce documents, including ESI, and for submitting false declarations regarding their collection and production efforts.

The Honorable Shira A. Scheindlin, who authored this opinion, reaffirmed in her opening paragraph her infamous Zubulake opinions by stating,

In an era where vast amounts of electronic information is available for review, discovery in certain cases has become increasingly complex and expensive. Courts cannot and do not expect that any party can meet a standard of perfection. Nonetheless, the courts have a right to expect that litigants and counsel will take the necessary steps to ensure that relevant records are preserved when litigation is reasonably anticipated, and that such records are collected, reviewed, and produced to the opposing party. As discussed six years ago in the Zubulake opinions, when this does not happen, the integrity of the judicial process is harmed and the courts are required to fashion a remedy. Once again, I have been compelled to closely review the discovery efforts of parties in a litigation, and once again have found that those efforts were flawed. As famously noted, "[t]hose who cannot remember the past are condemned to repeat it." By now, it should be abundantly clear that the duty to preserve means what it says and that a failure to preserve records - paper or electronic - and to search in the right places for those records, will inevitably result in the spoliation of evidence.

In this lengthy opinion, the Court addresses the issues of "how to define negligence, gross negligence, and willfulness in the discovery context and what conduct falls in each of these categories." In addition, after reviewing the law "governing the imposition of sanctions for a party's failure to produce relevant information during discovery" the Court summarizes the facts "regarding the discovery efforts - or lack thereof - undertaken by each of the thirteen plaintiffs against whom sanctions are sought, and then by an application of the law to those facts." 

She concludes by finding that "all of these plaintiffs were either negligent or grossly negligent in meeting their discovery obligations. As a result, sanctions are required."

(Read more and for a copy of the opinion click her)