On August 1, 2018, Judge Beetlestone (E.D. Pa.) granted Defendants’ motion for sanctions based upon unequivocal evidence that Plaintiffs manipulated and fabricated emails material to the litigation.  Although the Court imposed the drastic sanction of dismissing Plaintiffs’ complaint, the Court provided a detailed and instructive analysis supporting its ultimate conclusion.  The Court’s analysis, addressed below, can be read in full here.

Facts

The underlying matter arises from the sale of Second Opinion, Inc., (“SO”).  SO was a service business that connected lawyers representing personal injury plaintiffs with medical professionals who could serve as experts in litigation.  Plaintiffs entered into an agreement to purchase the assets of SO and eventually filed a lawsuit alleging fraud, misrepresentation and breach of contract against Howard and Wendy Weiss – the prior owners of SO and Defendants to the lawsuit.   The gist of the dispute was that the Defendants made false representations about the nature of SO and the assets the Plaintiffs were to receive pursuant to the purchase agreement.

In response to a letter request by the Defendants, the Court held a hearing on the record in December 2017 to decide a discovery dispute concerning whether Defendants’ interrogatories contained an impermissible number of subparts.  At that hearing, the Court was advised of a newly discovered issue – that there were a number of significant discrepancies between emails produced by Defendants and emails produced by Plaintiffs.

A forensic expert was retained to examine each party’s computer(s) and eventually the Defendants moved for sanctions.  In late June 2018, the Court received an ex parte fax from Plaintiff requesting dismissal of the suit, including the counterclaims filed by Defendants.

On July 5, 2018 the Court held a conference upon the record to discuss Defendants’ pending motion for sanctions.  During that conference Plaintiff – in a radical departure from his faxed letter– represented to the Court he had no knowledge of any counterclaim against him.  At the conclusion of the hearing, the Court scheduled another hearing to address the spoliation motion.

Spoliation

At its core, the issue boiled down to 7 emails and which, among them, were authentic.

For example, Email 3 – an email purportedly from Plaintiff to Defendant — stated, “[w]e are interested in cutting off training.  We are interested in taking over the business and moving it forward. We believe we can do this.”

Yet, Email 4  — an email sent at the exact same time as Email 3 and also from Plaintiff to Defendant stated, “[we] are not interested in cutting off training.  We are interested in taking over the business and moving it forward while still learning.  We believe we can do this.”

The forensic examiner testified that Email 3 was found only on Plaintiff’s computer and was a fabrication; and Email 4 was found on both Plaintiff’s and Defendant’s computer.  In what the Court observed was the most telling indicia of purposeful fabrication, is that Email 4 (the authentic email) was located in three different locations in Plaintiff’s computer, indicating that he had deleted the file.   Plaintiff testified but the Court found his testimony not credible, confused and riddled with inconsistencies.

Decision

In order to determine the appropriate sanction, a Court must weigh three factors:

(1) the degree of fault of the person who destroyed or altered the evidence;

(2) the prejudice suffered by the opposing party; and

(3) the existence of alternative sanctions.

In assessing these factors the Court concluded that Plaintiff “intentionally altered and manipulated evidence” and when confronted with the altered emails he “accused the Defendants of having manipulated the authentic emails.  [Plaintiff] actively deleted emails and the evidence shows that he continued to delete pertinent files as recently as…after the deposition when he was confronted with the fabricated emails.”  And so, the Court determined Plaintiff’s actions were intentional and willful.

The Court then determined that notwithstanding the early discovery of Plaintiff’s actions, the prejudice “was substantial.”  Specifically, Defendants had to hire an expert and expend significant sums of money (motion practice, full day of testimony).  Additionally, the fabricated emails materially assisted Plaintiff’s case against Defendants.  Such actions, said the Court, is a “wrong against the institutions set up to protect the public….fraud cannot be complacently tolerated…”  Thus, the Court found Plaintiff’s behavior threatened to undermine the public’s faith in courts and the discovery process.

Finally, the Court assessed the various sanctions available to it inherently and specifically pursuant to Rule 37.  The Court chose not to impose an adverse jury instruction as that would not remediate the prejudice to Defendants, would not deter this type of egregious conduct, and would be a minimal sanction where, as here, there was significant effort and costs imposed during the process.  In opting not to impose only a financial sanction the Court noted that doing so would convey the wrong message to litigants that money could cure one’s improper actions.   And so, according to the Court, based upon well-established law in the Third Circuit, the only remedy available that was proportional to the deleterious and egregious fraudulent conduct involved here was the outright dismissal of Plaintiffs’ claims.  Indeed, “[a] party’s resort to fabricated evidence justifies denial of all relief to that party.”

Conclusion

There is little that needs to be said about this decision, as we all understand the egregious and continual conduct that was at play in this matter and the need for swift and severe sanctions.  The decision, however, reminds us of the vast discretion a Court has when imposing sanctions.

Have questions?  Please contact me at kcole@farrellfritz.com.

In Youngevity Intl’s Corp. v. Smith (No: 16-cv-00704 [SD CA December 21, 2017]), defendants sought an Order pursuant to Federal Rules of Civil Procedure 26(g) and 37.  The Order required Plaintiffs to remediate an improper discovery production to pay for Defendants’ costs for bringing the motion to compel and for the cost to review various improper prior productions.  Specifically, in connection with the discovery of electronically stored information (“ESI”), Defendants proposed a three-step process by which: “(i) each side proposes a list of search terms for their own documents; (ii) each side offers any supplemental terms to be added to the other side’s proposed list; and (iii) each side may review the total number of results generated by each term in the supplemented lists (i.e., a ‘hit list’ from our third-party vendors) and request that the other side omit any terms appearing to generate a disproportionate number of results.”

Approximately one week later, Plaintiffs advised in writing that they were “amenable to the three step process described in your May 9 e-mail.”  The parties then exchanged lists of proposed search terms to be run through their own ESI and the ESI of their opponent.

Pursuant to the agreed-to three-step process, Defendants provided to Plaintiffs its “hit list.”  Plaintiffs, however, never produced its “hit list.”  Instead, Plaintiff produced two large caches of documents – the first consisting of approximately 1.9 million pages and the second production consisting of approximately 2.3 million pages.   Upon receipt by Defendants, it became clear that the productions had been bulk coded with a CONFIDENTIAL legend and in some instances also with an ATTORNEYS’ EYES ONLY designation.  The produced materials also contained non-responsive documents.  A few months later, defendants advised they inadvertently failed to produce an additional 700,000 documents due to a vendor error.  Although the parties attempted to resolve amicably their differences, they were unsuccessful.

As a result, Defendants’ filed the instant motion to compel proper production and for costs.

In granting Defendants’ motion, Magistrate Judge Jill L. Burkhardt concluded, “the record indicates that Youngevity did not produce documents following the protocol to which the parties agreed.”  Specifically, “Youngevity failed to produce its hit list … and instead produced every document that hit upon any proposed search term” thus conflating “a hit on the parties’ proposed search terms with responsiveness.”  Moreover, the Court observed “the parties negotiated a stipulated protective order, which provides that only the ‘most sensitive’ information should be designated as AEO.”  As a result, Judge Burkhardt gave the plaintiffs two options for correcting their discovery productions with specific deadlines:

“1) By December 26, 2017, provide its hit list to Defendant; by January 5, 2018, conclude the meet and confer process as to mutually acceptable search terms based upon the hit list results; by January 12, 2018, run the agreed upon search terms across Plaintiff’s data; by February 15, 2018, screen the resulting documents for responsiveness and privilege; and by February 16, 2018, produce responsive, non-privileged documents with only appropriate designations of “confidential” and “AEO” (said production to include that subset of the not-previously-produced 700,000 documents that are responsive and non-privileged); or

2) By December 26, 2017, provide the not-previously-produced 700,000 documents to Defendant without further review; pay the reasonable costs for Defendant to conduct a TAR of the 700,000 documents and the July 21, 2017 and August 22, 2017 productions for responsiveness; by January 24, 2018, designate only those qualifying documents as “confidential” or “AEO”; by that date, any documents not designated in compliance with this Order will be deemed de-designated.”

Judge Burkhardt also ordered Plaintiffs to pay for the reasonable expenses, including attorney’s fees, for bringing the motion and for the expenses incurred by Defendants “as a result of Youngevity’s failure to abide by the Stipulated Protective Order.”

Conclusion

This case is another reminder of what appears to be the well-embraced theme in Federal discovery – cooperation.  The 2015 amendments made plain that cooperation between the parties and their attorneys during the litigation process to achieve orderly and cost-effective discovery is a priority.  Indeed, mutual knowledge of the relevant facts is essential to proper litigation; and therefore the process of obtaining those facts (i.e., discovery) should be a cooperative one.  Had counsel simply abided by the three-step process and stipulated protective Order it willingly entered, there would be no need to defend against (and foot the bill for) the motion to compel.

In Barcroft Media, Ltd. et al. v. Coed Media Grp., LLC, No. 16-CV-7634 (JMF) (S.D.N.Y. Sept. 28, 2017), Plaintiffs – providers of entertainment-related photojournalism and owners of celebrity photographs – interposed various intellectual property claims against Defendant Coed Media Group, LLC (“CMG”).  The claims related to the allegedly infringing use of certain celebrity photographs (the “Images”) on CMG’s pop culture and celebrity gossip websites.  Because CMG purportedly failed to preserve the “webpages” on which it displayed the Images, Plaintiffs filed a motion for spoliation sanctions pursuant to Federal Rule of Civil Procedure 37.

In deciding the sanctions motion, Judge Furman discussed the relevant provisions of Rule 37 and its 2015 amendment.  Specifically, the Court noted that a sanction may be imposed only if the ESI that should have been preserved is lost because a party failed to take reasonable steps to preserve it and the ESI cannot be restored or replaced through additional discovery.  Once that standard is met, the next step in the inquiry is to determine whether; (1) the non-offending party has been prejudiced from the loss of ESI; and (2) the offending party acted with the intent to deprive another party of the information’s use in the litigation. Even a cursory reading of the (not so newly) amended Rule 37 makes plain that mere loss of data alone is not enough for sanctions. Rather, loss coupled with a prejudice is necessary and, even then, the resulting sanction must only be as great as needed to cure the prejudice. Thus, only after a Court identifies a prejudice to the aggrieved party, may the Court order measures necessary to remediate that prejudice.

Against this backdrop, the Court concluded Plaintiff’s motion for sanctions was without merit and bordered on frivolous.  Specifically, the Court found there was no foundation for the imposition of any sanctions.

“Given the plain language of [Federal Rule 37(e)], Plaintiffs’ motion borders on frivolous, for the simple reason that they cannot even show that the evidence at issue was ‘lost.’ Several of the images are still hosted on CMG’s websites…And the record makes clear that Plaintiffs themselves possess copies of the other Webpages—in the form of screen captures taken when they displayed the Images (the ‘Screenshots’)…In fact, Plaintiffs themselves list the Screenshots as trial exhibits…Given that…, there is no foundation to impose sanctions under Rule 37(e).”

The Southern District went on to conclude that “Plaintiffs obviously cannot show prejudice ‘as [they] actually possess[ ] copies’ of the relevant evidence” and sanctions are not appropriate.[1]

This decision serves as an important reminder that practitioners need to remain current in their understanding of the Federal Rules and the standards articulated under those Rules.  Indeed, a sanction for lost ESI cannot be predicated merely upon loss alone.  Rather there must be a loss of relevant ESI coupled with a prejudice before sanctions may be imposed.

[1] Bear in mind the decision is limited to spoliation issues, not authenticity and best evidence.

In Eshelman v. Puma Biotechnology, Inc., No. 7:16-CV-18-D (E.D.N.C. June 7, 2017), Magistrate Judge Robert B. Jones, Jr., denied Plaintiff Eshelman’s motion seeking a jury instruction in response to Puma Biotechnology Inc.’s (“Puma”) failure to preserve (or identify in its litigation hold notice the need to preserve) internet web browser and search histories.  In denying Eshelman’s request, Judge Jones concluded that Eshelman was “not entitled to [either] a sanction pursuant to Rule 37(e)(1)” or “an adverse jury instruction as a sanction pursuant to Rule 37(e)(2).”

Case Background & Holding

This lawsuit involved alleged defamatory statements made by Puma in an investment presentation.  Eshelman brought a lawsuit and soon thereafter Puma issued a Litigation Hold Notice (“Notice”).  That Notice defined “documents” broadly to include electronically-stored information (“ESI”) but failed to reference specifically internet browser / search/or viewing histories.   The Notice did, however, advise Puma employees to err on the side of preservation if uncertain as to whether they were in possession of potentially responsive documents.   In May 2016, a few months after the allegedly defamatory investor presentation, Eshelman’s counsel sent a letter to Puma’s counsel requesting that Puma preserve, as relevant to this dispute, “web browser histories” of individuals involved in the drafting of the January 7, 2016 presentation.  Eshelman renewed this same request a few weeks later in his first demand for documents.

Puma’s counsel responded to the discovery demand that due to the internet browser the Company uses (i.e., Google Chrome®)  web browser history is automatically deleted after 90 days.  And so, the web browser history sought in the document demand was no longer available, nor did it exist at the time of the May preservation letter issued by Eshelman’s counsel.  Upon receipt of this response, Eshelman moved for “a jury instruction to mitigate the harm caused by the defendant’s failure to preserve electronically stored information.”

Judge Jones denied Eshelman’s motion concluding that “the plaintiff has not established one of the threshold elements of Rule 37(e)—namely, that the lost ESI ‘cannot be restored or replaced through additional discovery. . . .’”

Because Judge Jones believed “other avenues of discovery are likely to reveal information about the searches performed in advance of the investor presentation” the Judge concluded Eshelman was “not entitled to a sanction pursuant to Rule 37(e)(1).” Specifically, the Judge opined that Eshelman could seek information about the internet searches performed by the individuals who prepared the investor presentation through deposition testimony.

Moreover, Judge Jones further determined that a sanction was not warranted under 37(e)(1) or (2) because: (1) “the plaintiff has failed to make a sufficient showing of prejudice to support relief under Rule 37(e)(1)” and (2) Eshelman “failed to show that the defendant acted with the requisite intent to deprive him of the ESI in order to support the imposition of an adverse jury instruction under Rule 37(e)(2),” noting that “[a]t most, the circumstances indicate the ESI was lost due to the defendant’s negligence, but do not suggest the presence of intentional conduct. Negligence, however, will not support an award of sanctions under Rule 37(e)(2).”

Conclusion

This case serves as an important reminder that one’s legal hold notice must be drafted in a robust way (i.e., calling for all documents) that is also sufficiently granular such that it specifies exactly the types/categories of documents sought to be preserved.  Drafting an effective hold notice is an art that requires great thought.  Form/template notices –while a good starting point – should not be relied upon blindly.  Stay tuned for a coming blog on drafting effective hold notices.

Mueller v. Swift, (D. Col. 2017) 2017 WL 2362137

Some opinions just have it all, and Mueller v. Swift does not disappoint!  Indeed, in this lawsuit, Taylor Swift, the pop sensation who has been sweeping the nation, alleges she was the victim of sexual misconduct, assault, and battery.

What in the world do such allegations have to do with this blog you ask? Well, even the rich and famous sometimes have to confront issues of spoliated electronically stored information (ESI).

Relevant Facts: The scene is downtown Denver—the Pepsi Center—home of the Colorado Avalanche Hockey team, the Denver Nuggets Basketball team, and host to concerts and various social events year round. On June 2, 2013, it played host to one of the biggest stars of the last decade, Taylor Swift (“Swift”). KYGO radio station was one of the entities represented at a “meet and greet” with Swift just prior to Swift’s RED TOUR. The radio station representative, David Mueller (“Mueller”), was invited to pose for a photo with Swift during the meet and greet.   Swift alleges, and uses a photo as evidence, that Mueller reached up her skirt and touched her bottom inappropriately during the photo op.

As a result, KYGO was notified of the incident, and assured Swift’s entourage and representatives that an investigation would be undertaken and, Mueller dealt with accordingly.

Ultimately, Mueller was terminated from his position at KYGO and this civil suit ensued.

As it turns out, Mueller recorded his conversations with KYGO representatives during the meeting that ultimately led to his termination. When compelled to produce those recordings during discovery, it was revealed that Mueller edited the audio clips to reflect those portions he deemed “important.”

The Swift camp was not appreciative of Mueller’s editing “assistance” and advised the Court they were entitled to the 2 hours of audio recordings; not just the “important” soundbites. However, in response to Swift’s demand for the full audio recordings, Mueller interposed a number of reasons why that was not possible, many of which — in my opinion–defied reason.

First, the laptop, on which the recording was stored, was a casualty of Mueller’s early morning routine and suffered an untimely death by a raging torrent of coffee.  Muller, in a desperate attempt to save the data, ran to Apple to try and repair or salvage what he could. Unfortunately, despite the Apple genius bar’s attempt to resuscitate the laptop, the computer — and all of its content — was gone.  But of course a man who worked for a radio station in the digital age was well versed in the benefits of backing up his data so Mueller’s external hard drive — the backup for his laptops — would necessarily have the full recording. While one may expect the recording to reside on the external backup, Mueller advised the external hard drive was lost by him a year or so before the case was filed. As a result, the full audio recording was no longer available.

As a result, Swift’s legal team moved the court for spoliation sanctions against Mueller. Most importantly, Swift wanted an adverse inference jury instruction. In simplest form, the adverse instruction proposed was to allow the jury to infer that whatever was stored on any device that suffered an early fate, was detrimental to Mueller’s causes of action.

The Colorado District Court, however, ruled that spoliation sanctions were reserved for instances where “there is proof that the party who lost or destroyed evidence did so in bad faith.” Relying on Tenth Circuit precedent, the Court stated, “Mere negligence in losing or destroying records is not enough because it does not support an inference of consciousness of a weak case.” Turner v. Pub. Serv. Co. of Colo., 563 F.3d 1136, 1149 (10th Cir. 2009). So, while the incidents that led to the destruction of the evidence were convenient, to say the least, without any evidence the recording was destroyed/modified in bad faith, foreclosed any adverse inference instruction against Mueller.

What does this case mean for E-discovery?

So, what’s the lesson?  When moving for spoliation sanctions under current Rule 37, be mindful the court is looking to punish bad faith conduct not merely negligent behavior.  Therefore, understand the facts and circumstances underpinning the spoliation and, if appropriate, advance the necessary arguments to support a finding of bad faith.

But, this case also reminds us that E-Discovery and ESI issues are everywhere. Indeed, they are not unique to corporate America but plague Hollywood starlets, mom and pop business owners, and individual litigants alike.  In today’s increasingly electronic age, it is a rare few who do not create/receive and/or store information electronically.

*A special thanks to Farrell Fritz Summer law clerk Philip Merenda for his research and drafting assistance with Taylor Swift and the Java-Dump:  An E-Discovery Tale.  Philip is a student at Georgetown University Law and anticipates receiving his J.D. in 2018.

Federal Rule of Civil Procedure 37 (along with others — Rules 1, 16, 26 and 34) was amended, effective December 1, 2015.

The amendment to Rule 37(e) was intended, in part, to ensure practitioners/litigants were fully aware of their preservation obligations, to ensure a uniformity of sanctions imposed upon parties and practitioners who failed to preserve discoverable electronically stored information (“ESI”), and to make adequate preservation a realistic goal, requiring that only “reasonable steps” be taken to preserve information. Indeed, the amendment requires a finding of intent or bad faith before sanctions can be imposed based upon spoliated information. (*)  Now, nearly a year after the enactment, it appears, from a review of the case law, that the amendment to Rule 37 (e) is effective in achieving its intended purposes.

Not only have federal court decisions involving sanctions declined since Rule 37’s amendment but, practitioners appear to be in better compliance with their preservation obligations since the amendment.

What Do the 2016 Statistics Look Like
Forty-nine federal decisions have cited Rule 37(e) since the Rule was amended. (**) Of these 49 decisions (20 of which did not apply Rule 37), thirteen decisions granted sanctions and sixteen decisions denied sanctions and/or reserved imposing sanctions. And so, sanctions were issued by courts approximately 40% of the time. Interestingly, the nature of the sanctions imposed spanned the gamut and included financial sanctions, adverse inferences, evidence preclusion, or a combination of sanctions. However, the most common sanction issued was an adverse inference.

Indeed, of the 13 decisions that granted sanctions:

• one decision entered a default judgment,
• three decisions precluded reliance upon certain evidence,
• seven decisions imposed monetary sanctions, and
• eight decisions imposed sanctions in the form of adverse inference sanctions. (***)

NB: some decisions imposed more than one type of sanction pursuant to 37(e).

Additionally, there was a variety of “lost” ESI at issue in the various decisions. Specifically,

• Twelve decisions involved unpreserved email data,
• Four decisions involved unpreserved text messages,
• Three decisions involved unpreserved portable device data,
• Two decisions involved unpreserved videos,
• Two decisions involved unpreserved phone call recordings,
• Two decisions involved unpreserved Internet browsing history,
• One decision involved unpreserved social media,
• Twelve decisions involved unpreserved non-email business data.

While 49 federal court decisions, in less than a year, have referenced Rule 37(e), that number is far fewer than in years past. In fact, according to research sources, the number of sanction decisions in 2011 totalled 150; and in 2012 that number was 120. Thus, it would appear that sanction decisions are on the decline. Moreover, given that there are 900 sitting federal judges, one could argue that sanctions have not lightly been sought since the Federal Rules amendments.

FOOTNOTES:

* Although Judge Scheindlin’s Zubulake opinions (which made it explicit that parties have a duty to preserve evidence when litigation is imminent) were authored many years ago, lawyers and parties nonetheless continued to fail to preserve evidence.

** Those 49 cases are:
CAT3, LLC v. Black Lineage, Inc., 2016 WL 154116 (S.D.N.Y. 2016)
O’Berry v. Turner, 2016 WL 1700403 (M.D. Ga., Valdosta Div. 2016)
Matthew Enterprise, Inc. v. Chrysler Group LLC, 2016 WL 2957133 (N.D. Cal. 2016)
GN Netcom, Inc. v. Plantronics, Inc., 2016 WL 3792833 (D. Del. 2016)
Learning Care Group, Inc. v. Armetta, 2016 WL 4191251 (D. Conn. 2016)
Best Payphones, Inc. v. City of New York, 2016 WL 792396 (E.D.N.Y. 2016)
Nuvasive, Inc. v. Madsen Medical, Inc., 2015 WL 305096 (S.D. Cal. 2016)
Thomas v. Butkiewicus, 2016 WL 1718368 (D. Conn 2016)
Ericksen v. Kaplan Higher Education, LLC, 2016 WL 695789 (D. Md. 2016)
BMG Rights Mgmt. (US) LLC v. Cox Comms., Inc., 2016 WL 4224964 (E.D. Va., Alexandria Div., 2016)
Brown Jordan Int’l, Inc. v. Carmicle, 2016 WL 815827 (S.D. Fl. 2016)
Core Laboratories LP v. Spectrum Tracer Services, L.L.C., 2016 WL 879324 (W.D. Okl. 2016)
Internmatch, Inc. v. Nxtbigthing, LLC, 2016 WL 491483 (N.D. Cal. 2016)
Living Color Enterprises, Inc. v. New Era Aquaculture, Ltd., 2016 WL 1105297 (S.D. Fl. 2016)
Marshall v. Dentfirst, P.C., 313 F.R.D. 691 (N.D. Ga., Atl. Div.)
Marten Transport, Ltd. v. Plattform Advertising, Inc., 2016 WL 492743 (D. Kansas 2016)
Saller v. QVC, Inc., 2016 WL 4063411 (E.D. Penn. 2016)
Martinez v. City of Chicago, 2016 WL 3538823 (N.D. Ill., Eastern Div. 2016)
Fiteq Inc. v. Venture Corporation, 2016 WL 1701794 (N.D. Cal. 2016)
Accurso v. Infra-Red Services, Inc., 2016 WL 930686 (E.D. Penn 2016)
United States v. Woodley, 2016 WL 1553583 (E.D. Mich., Southern Div. 2016)
Marquette Transportation Co. Gulf Island, LLC v. Chembulk Westport M/V, 2016 WL 930946 (E.D. La. 2016)
Orchestratehr, Inc. v. Trombetta, 2016 WL 1555784 (N.D. Tex., Dallas Div. 2016)
Thurmond v. Bowman, 2016 WL 1295957 (W.D.N.Y. 2016)
Mazzei v. Money Store, 2016 WL 3902256 (2d Cir. 2016)
Brackett v. Stellar Recovery, Inc., 2016 WL 1321415 (E.D. Tenn., Knoxville 2016)
Bagley v. Yale Univ., 2016 WL 3264141 (D. Conn 2016)
Thomley v. Bennett, 2016 WL 498436 (S.D. Ga., Waycross Div., 2016)
Granados v. Traffic Bar and Restaurant, Inc., 2015 WL 9582430 (S.D.N.Y. 2015)
Dr Distributors, LLC v. 21 Century Smoking, Inc., 2016 WL 4077107 (N.D. Ill., Western Div. 2016)
Henry Schein, Inc. v. Cook, 2016 WL 3212457 (N.D. Cal. 2016)
Bruner v. American Honda Motor Co., 2016 WL 2757401 (S.D. Al., Southern Div. 2016)
In re Bridge Construction Services of Florida, Inc., 2016 WL 2755877 (S.D.N.Y. 2016)
Markey v. Lapolla Industries, Inc., 2015 WL 5027522 (E.D.N.Y. 2015) (Tomlinson, U.S.M.J.)
Dao v. Liberty Life Assurance Co. of Boston, 2016 WL 796095 (N.D. Cal. 2016)
Zbylski v. Douglas County School District, 2015 WL 9583380 (D. Colo. 2016)
Redwind v. Western Union, LLC, 2016 WL 1732871 (D. Or. 2016)
Stinson v. City of New York, 2016 WL 54684 (S.D.N.Y. 2016)
Whitesell Corp. v. Electrolux Home Products, Inc., 2016 WL 1317673 (S.D. Ga., Augusta Div. 2016)
Vay v. Huston, 2016 WL 1408116 (W.D. Penn. 2016)
Hammad v. Dynamo Stadium, LLC, 2015 WL 6965215 (S.D. Tex., Houston Div. 2015)
Official Committee of Unsecured Creditors of Exeter Holdings, Ltd. v. Haltman, 2015 WL 5027899 (E.D.N.Y. 2015) (Tomlinson, U.S.M.J.)
United States v. Woodley, 2016 WL 2731186 (E.D. Mich., Southern Div.)
Grove City Veterinary Service, LLC v. Charter Practices Inter., LLC, 2015 WL 4937393 (D. Or. 2015)
United States v. Safeco Ins. Co. of America, 2016 WL 901608 (D. Idaho 2016)
Coale v. Metro-North Railroad Co., 2016 WL 1441790 (D. Conn. 2016)
Fleming v. Escort, Inc., 2015 WL 5611576 (D. Idaho 2015)
Kissing Camels Surgery Center, LLC v. Centura Health Corp., 2016 WL 277721 (D. Colo. 2016)
McIntosh v. United States, 2016 WL 1274585 (S.D.N.Y. 2016)

*** Of the 19 cases in which sanctions were not granted, the reasons for denying sanctions varied. Indeed, courts declined to impose sanctions because the party “took reasonable steps” to preserve data; party was not harmed by the fact the ESI was missing; there was insufficient evidence of bad faith; and the missing data was “restored through other methods.”

Perez v. Metro Dairy Corp., No. 13 CV 2109(RML), 2015 WL 1535296 (E.D.N.Y. Apr. 6, 2015)

In this collective action seeking unpaid wages, overtime and other relief, Plaintiffs moved pursuant to Federal Rule of Civil Procedure (“FRCP”) 37 for spoliation sanctions attributable to Defendants’ failure to preserve, and ultimately produce certain relevant employment-related evidence, including, for example payroll records and W-2s.  Defendants objected to the motion on the grounds that their books, computers and the specific documents sought by Plaintiffs had been seized pursuant to an order of the Superior Court of New Jersey in a different case involving Farmland Diary.  Defendants further stated they had no opportunity to back up their data or make copies of their data prior to that seizure.

While the plaintiffs were able to conduct some limited discovery into these documents through the issuance of a non-party subpoena directed to Farmland Diary (indeed, approximately three hundred pages of payroll records were provided to Plaintiffs by Farmland) and conducted an inspection of the records in Farmland’s possession prior to filing the motion for sanctions, certain relevant records were no longer available.  In opposing the motion, Defendants argued that they had “no control over the records and were not complicit in their loss or destruction.”

Assessing Defendants’ duty to preserve and noting the failure of Plaintiffs or the court to identify case law addressing a comparable situation, the court reasoned that Defendants had not destroyed their records and found that “[u]nder the specific circumstances of this case … defendants did not have an obligation to copy their books and records before complying with the court order.”  The court also reasoned that even if Defendants did have an obligation to preserve, there was no evidence of Defendants’ requisite culpable state of mind and denied Plaintiffs’ motion for sanctions.