A recent decision from the Northern District of California granted case-terminating spoliation sanctions under Federal Rules of Civil Procedure 37(b) and 37(e). The decision in WeRide Corp. v. Kun Huang followed the defendants’ deletion of months’ worth of e-mails and entire e-mail accounts; permanent erasure of computer data, including source code; and use an ephemeral chat service that immediately deleted all sent and received instant messages. The case is a textbook example of what not to do to meet one’s obligations to preserve potentially relevant documents, information and things at the earliest sign of litigation.

Case Background and Procedural History

WeRide, a San Jose-based autonomous driving startup, filed the case after it terminated Jing Wang, its former CEO. Wang thereafter (1) founded WeRide competitor AllRide; (2) disparaged WeRide to investors despite his separation agreement’s non-disparagement clause; and (3) solicited WeRide employees, including Kun Huang. During the two months that he remained as WeRide’s director of hardware development, Huang downloaded significant amounts of WeRide data from its servers and his company laptop; solicited WeRide employees to work for AllRide; and, after WeRide discovered the solicitation and terminated Huang, completely wiped or deleted files from two WeRide laptops.