FRCP 37(e) ESI Spoliation Sanctions (effective Dec. 1

Europe v. Equinox Holdings, Inc. (S.D.N.Y. 2022)

Mar 21 2022

Key Insight: Plaintiff brought a motion for sanctions alleging defendants failed to preserve a key piece of evidence (the September 2019 managers’ schedule from the month when she was terminated) in her employment discrimination suit. The court concluded that defendants should have taken steps to preserve the schedule in December 2019 when plaintiff notified defendants that she intended to initiate litigation, and they failed to do so. The court noted that the harshest sanction of adverse inference was not appropriate because it did not appear by clear and convincing evidence that the failure to preserve the evidence was done in order to gain an advantage in the litigation. The court ordered that plaintiff could present to the jury that the September 2019 schedule was lost and defendants could not compare her lateness to other employees in September 2019 or argue that her co-workers’ lateness in September 2019 was less than hers.

Nature of Case: Employment Discrimination

Electronic Data Involved: Business Documents

Case Summary

MasterObjects, Inc. v. Amazon.com, Inc. (N.D. Cal. 2022)

Mar 13 2022

Key Insight: Defendant filed a motion for sanctions based on violation of a prior discovery order and sought spoliation sanctions. The Magistrate Judge issued a report on the spoliation issue. Plaintiff’s law firm was attacked by hackers, which rendered files and mailboxes inaccessible without a recovery key set by the attackers. Both the FBI and the firm’s insurer advised the firm not to pay the hackers a ransom. The firm attempted to restore the data on its servers with some success but everything prior to the final months of 2016 has been lost. There were some printed copies of the archival copies of digital records but plaintiff’s counsel maintained it did not have a duty to keep a duplicate paper file of its digital records. The court noted that there was no evidence of any physical document (other than a copy of an electronically stored document) that was destroyed, and the spoliation doctrine does not require a party to maintain identical copies of documents. The court noted the data is not “lost” and exists on the hard drives and although access has been blocked, it can be accessed if a key is provided or a technological work-around is discovered. The court concluded there is no evidence the loss occurred because plaintiff’s firm failed to take reasonable steps to preserve it. Finally, the court found defendant could not establish prejudice and that there was an intent to deprive defendant of the evidence. It refused to apply a new kind of spoliation argument that plaintiff’s counsel’s firm “lost” its data because it refused to pay the ransom, finding “there is no logic or beneficial public policy in compelling a crime victim to pay ransom to a criminal in order to avoid being labeled a spoliator.”

Nature of Case: Intellectual Property

Electronic Data Involved: ESI

Case Summary

Hamilton v. Oswego Community Unit School District 308 (N.D. Ill. 2022)

Feb 25 2022

Key Insight: Plaintiffs sought a motion for sanctions based on spoliation of evidence based on defendants’ failure to preserve a photograph of their child’s bruise that was taken by the school nurse that led to a call to the DCFS hotline. The court found that defendants did not have a duty to preserve the photograph because it was not reasonably foreseeable the instant litigation would be forthcoming. At the time the nurse deleted the photo there was no indication that plaintiffs were contemplating litigation against the school for anything related to the nurse’s visit or the report to DCFS. As such, there was no duty to preserve the photo. Even if there was a duty to preserve the photo, the court found that plaintiffs were not prejudiced by its deletion.

Nature of Case: Civil Rights

Electronic Data Involved: ESI, Photographs

Case Summary

Emerson Creek Pottery v. Emerson Creek Events (W.D. Va. 2022)

Feb 18 2022

Key Insight: Plaintiff moved for spoliation sanctions against defendants relying on (1) an inadvertently disclosed email between defendant and his counsel discussing the preservation of emails, and (2) defendants did not produce a “mirror image” of the emails produced by third parties. Plaintiff contended the content of the email between defendant and his counsel is evidence that defendant failed to preserve ESI and defendant countered that it was part of a longer conversation between defendant and defense counsel about how defendants temporarily lost access to some of their emails during a server migration but later recovered them. The court denied plaintiff’s motion, finding that plaintiff failed to provide any evidence that defendants lost ESI and there was nothing to suggest that there were any additional emails that plaintiff had not received from defendants or third parties. If the court were to consider a remedy, the remedy requested by plaintiff was “draconian” and nearly the entirety of what defendants were expected to argue at trial, and the court would have to tailor a remedy to the particular discovery violation in question.

Nature of Case: Intellectual Property

Electronic Data Involved: Email

Case Summary

Gunter v. Alutiiq Advanced Security Solutions, LLC (D. Md. 2021)

Dec 28 2021

Key Insight: Defendant alleged that Plaintiff altered the wording of text messages and fabricated a series of text messages. Plaintiff also failed to produce relevant text message and falsely testified that such messages did not exists which was proved by a later forensic review. The Court had serious doubts regarding the text messages at issue. Plaintiff has no explanation for why his cellphone contains some text messages but not others. For these reasons, the Court ruled the text messages could not be used as evidence and the cost of the forensic review of the cell phone would be shifted to Plaintiff. However, the case would not be dismissed as there was not the “clear evidence necessary to conclude that Plaintiff fabricated the text messages.”

Nature of Case: Employment Discrimination

Electronic Data Involved: Text Messages

Case Summary

Fourth Dimension Software v. Der Touristik Deutschland GmbH (N.D. Cal. 2021)

Dec 15 2021

Key Insight: Plaintiff moved for sanctions against defendant alleging that it had a duty to preserve usage records for the software at issue in its breach of contract claim. The court found that defendant had a duty to preserve the usage records, it violated the duty by deleting the records, the deletion prejudiced plaintiff and defendant acted with intent to deprive plaintiff of the records’ use. The duty to preserve the records arose before the litigation was filed since (1) plaintiff gave notice to defendant of both license overuse and third-party use claims; (2) the parties proceeded to attempt to negotiate a settlement of the claims for nearly a year; and (3) plaintiff sent a letter in August 2018 stating that it intended to file a complaint. Shortly after receiving notice that plaintiff intended to file suit, defendant destroyed the records, supporting an inference that defendant intentionally destroyed the usage records. The court ordered that an adverse jury instruction would be an appropriate sanction for defendant’s conduct.

Nature of Case: Breach of Contract

Electronic Data Involved: Usage Records

Case Summary

FTC v. Noland (D. Ariz. Aug. 30, 2021)

Aug 30 2021

Key Insight: The day after learning about the FTC’s investigation, defendant Noland instructed his team to use encrypted communications platforms, Signal and ProtonMail, turn on the “auto-delete” function, and to stop using their previous work-related messaging platforms. During depositions, Noland and others failed to disclose the use of encrypted communications platforms and deleted the encrypted messaging apps from the phones so that no communications could be retrieved. The court granted the FTC’s request for an adverse inference based on defendants’ intentional spoliation of evidence under FRCP 37(e)(2), finding the most decisive factor in its analysis was the timing of installation of the apps – just one day after Noland learned the FTC was investigating him. There was a coordinated effort among Noland and his leadership team to deprive the FTC of the use of the encrypted messages in the litigation – by installing the app, using the “auto-delete” function, failing to disclose the use of the app, and deleting the app the day before the phones were to be examined – resulting in an “outrageous maneuver that raises a strong inference of bad faith.”

Nature of Case: FTC, Pyramid schemes

Electronic Data Involved: Encrypted messaging platforms

Case Summary

Novit v. Metropolitan School District of Warren Township (S.D. Ind. 2021)

Aug 24 2021

Key Insight: Plaintiffs filed a motion for sanctions on spoliation related to the video footage from a school bus where plaintiffs’ child suffered injuries. Defendant permitted plaintiffs to view the video of the incident and also produced the footage to plaintiffs in discovery. Plaintiffs later asked for extended video coverage from the date of the incident. Defendant did not have additional video because the bus hard drive had either been looped over, wiped clean, or used for parts. The court noted, “a spoliation sanction is proper only when a party has a duty to preserve evidence because he knew, or should have known, that litigation was imminent, and the movant demonstrates that the evidence was destroyed in bad faith, with the intent to deprive another party of the information’s use in the litigation.” Thus, the court found no evidence to support a blanket accusation of spoliation when defendant preserved the relevant footage, acted reasonably by saving the relevant portion, and placing the bus hard drive back into operation.

Nature of Case: Personal injury, Civil rights

Electronic Data Involved: Video footage

Case Summary

Manning v. Safelite Fulfillment, Inc. (D.N.J. 2021)

Aug 08 2021

Key Insight: Defendants filed a motion for spoliation sanctions under FRCP 37(e) based on plaintiff’s deletion of certain Facebook messages and emails. Plaintiff claimed he deleted the messages to free up memory on his mobile phone. The court adopted the magistrate judge’s report and recommendations, finding plaintiff’s failure to preserve certain ESI caused prejudice to defendants warranting relief, but did not conclude that plaintiff did so with an intent to deprive defendants the use of the information in litigation. Plaintiff had an obligation to preserve the ESI; he deleted certain messages after he filed his lawsuit; and took no affirmative measures to preserve the ESI despite a duty to do so. The court allowed the introduction of a jury question on the destruction of some of the ESI evidence but reserved ruling on harsher sanctions.

Nature of Case: Employment discrimination

Electronic Data Involved: Facebook, Email

Case Summary

Doe v. Purdue University (N.D. Ind. July 2, 2021)

Jul 07 2021

Key Insight: Defendants filed a motion for spoliation of evidence and sanctions after plaintiff failed to provide Snapchat data consistent with the parties’ joint stipulation and prior court orders, and deleted certain Snapchat files that were subject to the stipulation and orders. Plaintiff admitted he had deleted some files from his “memories” folder in Snapchat, but claimed they were irrelevant, and he did so to free up memory on his phone. The court found plaintiff was under a duty to preserve the Snapchat data and he breached that duty when he destroyed the data. Without the deleted files and believing plaintiff’s claim that he deleted the files to free up space and memory on his phone, the court could not find that plaintiff did so with the purpose of hiding adverse information and declined to dismiss plaintiff’s complaint. The court imposed monetary sanctions and ordered plaintiff to pay defendants’ attorney’s fees and costs associated with litigating the motion, and allowed defendants to introduce a limited jury instruction regarding the destruction of ESI.

Nature of Case: Civil Rights

Electronic Data Involved: Snapchat data

Case Summary

Tag:FRCP 37(e) ESI Spoliation Sanctions (effective Dec. 1