FRCP 37(e) ESI Spoliation Sanctions (effective Dec. 1 – Page 2

Oro BRC4, LLC v. Silvertree Apartments, Nos. 2:19-cv-4907, 2:19-cv-5087 (S.D. Ohio, June 10, 2021).

Key Insight: Plaintiff sought a motion for spoliation sanctions based on defendant’s failure to prepare its Rule 30(b)(6) deponent to testify on topics related to ESI preservation and collection, and for spoliation sanctions related to the failure to preserve ESI. The court granted sanctions for defendant’s failure to prepare its 30(b)(6) designee, finding: “The production of an unprepared witness is tantamount to a failure to appear, and warrants the imposition of sanctions.” Defendant offered its head of IT as the corporate designee. He received the deposition notice less than 72 hours before the deposition, spent about 6 hours preparing to testify (approximately 10 minutes per topic), did not review any documents other than his own emails, and did not speak or communicate with other employees to gather information on the topics he was supposed to testify about. The court ordered a second 30(b)(6) deposition, required defendant to pay the reasonable costs and expenses associated with attending the second deposition and fees for plaintiff’s ESI consultant to attend, and awarded fees associated with having to bring the motion to compel. On the issue of failure to preserve ESI evidence, the court concluded it was premature to address this issue until the second 30(b)(6) deposition, which would cover topics relating to defendant’s litigation hold efforts.

Nature of Case: Breach of contract

Electronic Data Involved: ESI business documents and electronic devices

Case Summary

In re: CCA Recordings 2255 Litigation v. United States of America (D. Kan. 2021)

Jun 01 2021

Key Insight: Petitioners filed an action alleging the government violated their Sixth Amendment rights by recording their conversations and meetings with counsel while detained at Corrections Corporation of America (CCA). Petitioners sought spoliation sanctions against CCA, alleging an upgrade to the operating system where the recordings were saved wiped all metadata that would have shown if the US attorneys viewed the video recordings containing privileged communications. The court denied the motion, finding petitioners could not establish the threshold question: whether any metadata actually existed to show who logged in to view the recordings. “If there is no evidence that logging metadata ever existed, it could not have been intentionally destroyed to deprive petitioners of its use, and there can be no spoliation as it relates to that specific ESI relevant to petitioners’ claims.”

Nature of Case: Violation of Sixth Amendment Rights

Electronic Data Involved: Video Recordings

Case Summary

FTC v. Vyera Pharms., LLC (S.D.N.Y. June 1, 2021)

Jun 01 2021

Key Insight: Vyera’s company policy was to issue employees iPhones that were backed up through iCloud but one executive, Mithani, whose conduct was central to the government’s antitrust claims, had requested and received a Blackberry as his company phone, which had no systemic back up of text communications. Despite being under an obligation to preserve evidence, the executive confirmed deleting texts on his work and personal mobile phones before and after receiving a hold notice from Vyera, and wiped his work phone upon leaving the company. A forensic expert confirmed no data could be retrieved or restored from the Blackberry. The court concluded Vyera’s conduct constituted spoliation and warranted sanctions as plaintiffs were prejudiced by Vyera’s conduct and the former executive acted intentionally to deprive plaintiffs of discoverable information. The court declined to adopt an adverse inference sanction and instead adopted Vyera’s proposed sanction that it be precluded from calling the former employee to testify in its defense or introducing into evidence documents that he authored.

Nature of Case: Antitrust

Electronic Data Involved: Text messages

Case Summary

Edwards v. Junior State of Am. Found. (E.D. Tex. 2021)

Apr 23 2021

Key Insight: At issue were “racist and homophobic Facebook messages” one high school student allegedly sent to another high school student (plaintiff), both of whom were members of the defendant’s youth organization. Plaintiffs provided a partial .jpeg image (screenshot) of the alleged message and defendant requested additional ESI to authenticate the messages, namely HTML or JSON files, and associated metadata. Plaintiffs never objected to the discovery requests and failed to produce any documents for over a year. Plaintiffs then admitted through a digital forensics experts that the Facebook account had been permanently deleted and the native versions of the alleged messages had been destroyed. The court declined to dismiss the case under Rule 37(b)(2)(A) but applied Rule 37(e), finding that the native messages were relevant ESI and were deleted around the time plaintiffs had a duty to preserve them, and they could not be adequately replaced by the available screenshots. Therefore, plaintiffs would be precluded from offering any evidence about the alleged messages.

Nature of Case: Civil Rights

Electronic Data Involved: Facebook Messages

Case Su m mary

Doubleline Capital LP v. Odebrecht Fin., Ltd. (S.D.N.Y. 2021)

Mar 30 2021

Key Insight: Plaintiffs sought sanctions against defendants for intentionally destroying the encryption keys needed to access its internal “shadow” accounting system used to track illicit bribe payments to secure construction contracts. The court imposed sanctions against defendants under Rule 37(e)(1) to allow the jury to consider evidence surround the destruction of the encryption keys but declined to impose a mandatory adverse inference requested by plaintiffs under Rule 37(e)(2) because the moving party did not demonstrate that defendant destroyed the electronic evidence “with the intent to deprive the other party of the information’s use in the litigation” – with the required intent to be established by clear and convincing evidence.

Nature of Case: Securities Fraud

Electronic Data Involved: Encryption Keys

Case Summary

Brown v. SSA Atlantic (S.D. Ga. 2021)

Mar 16 2021

Key Insight: Defendant filed a motion to compel and for sanctions regarding plaintiff’s failure to identify and produce Facebook account information. Plaintiff had deleted or deactivated and failed to disclose the existence of his multiple Facebook accounts. The court found that the ESI was not “spoliated” since plaintiff only deactivated, not deleted, his Facebook accounts. However, the court found plaintiff’s conduct “troubling” and ordered plaintiff to produce account data for each Facebook account he maintains or maintained, whether deactivated or not, and if defendant finds that substantive information was lost or destroyed, it could renew its motion for spoliation sanctions.

Nature of Case: Personal injury

Electronic Data Involved: Facebook

Case Summary

Mahboob v. Educational Credit Management Corp. (S.D. Cal. 2021)

Mar 01 2021

Key Insight: Plaintiff brought a (potential) class action lawsuit against Defendant for invasion of privacy based on Defendant recording phone calls without the consent of the other party. After bringing the suit, Plaintiff discovered that the call data and recordings had been deleted. Plaintiff filed a Motion for Sanctions against Defendant were both forms of ESI based on intentional spoliation of evidence.

Defendant had placed a legal hold on requested data but also failed to suspend its data retention policies. Plaintiff’s Motion for Sanctions regarding deleted call data was purportedly delayed by Plaintiff because the litigation was stayed for approximately two years while an appeal was pending. The Court found that Plaintiff’s Motion for Sanctions regarding the deleted call data was untimely, and therefore, denied it on such grounds.

The Court partially granted and denied Plaintiff’s Motion for Sanctions regarding the deleted call recordings, finding that Defendant should not have deleted the call recordings, but did not do so intentionally. Plaintiff was awarded attorney’s fees for having brought the Motion, but the Court declined to impose a sanction of a jury instruction regarding spoliation because the call recordings per se were not relevant to proving Plaintiff’s case.

Nature of Case: Invasion of Privacy

Electronic Data Involved: Phone Calls, Phone Call Data

Case Summary

Holloway v. County of Orange (C.D. Cal. 2021)

Jan 20 2021

Key Insight: The court granted defendants’ motion for sanctions based on spoliation of evidence based on plaintiff’s deletion of his Facebook account. “Plaintiff had an obligation to preserve his Facebook account, he deleted the account with a culpable state of mind, and the account was relevant to Defendants’ claims.” The court further ordered that an adverse inference jury instruction was appropriate.

Nature of Case: Civil Rights

Electronic Data Involved: Social Media, Facebook

Case Summary

Cretacci v. Hare

Jan 20 2021

Key Insight: A party must explicitly request all possible remedies it seeks. Courts will not impose unrequested sanctions even if it determines lesser sanctions were warranted. Plaintiff only requested a default judgment sanction which requires that Defendants intentionally lost or destroyed data so it could not be used in litigation. Because there was no finding of intent, a default judgment sanction could not be issued. A lesser sanction of “measures no greater than necessary to cure the prejudice” could have been imposed because Plaintiff was prejudiced by the loss of ESI and there is no intent requirement. However, no sanctions were issued because such sanctions were not requested.

Nature of Case: Civil Rights

Electronic Data Involved: Video

Case Summary

DR Distributors v. 21 Century Smoking, Inc. (N.D. Ill. 2021)

Key Insight: The court granted plaintiff’s motion for sanctions but declined to find “intent to deprive” under Rule 37(e), instead applying Rule 26(g) for failing “to make a reasonable investigation to ensure that [defendant] provided all available responsive information and documents.” The court issued sanctions and curative measures under Rules 37(a), 37(b), 37(c) and 37(e)(1). This 256-page sanctions opinion arises from ESI issues beginning at the outset of protracted litigation involving infringement claims over similar trademarks for e-cigarettes. Defendants and their counsel were sanctioned for multiple failures to preserve and collect ESI, including: failure to preserve messages from web-based email and chat applications; failure to turn off auto-delete functions on messages; defense counsel’s failure to follow-up with written hold instructions to preserve relevant ESI and take steps to collect messages from web-based applications; defense counsel’s failure to perform custodial interviews to identify likely sources of ESI; defense counsel’s failure to understand that relevant emails may be found in both corporate and personal email and mistakenly believed that data within the web applications would be saved to corporate hard drives; failure to disclose the existence of relevant ESI; defense counsel offered false testimony about the existence of ESI; and defense counsel’s failure to supervise defendants in self-collected ESI.

Nature of Case: Trademark infringement (Lanham Act)

Electronic Data Involved: Email, Instant messages

Case Summary

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