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Amended FRCP 37(e) Imposes Higher Culpability for ESI Spoliation Sanctions in 2016 Case Law

Posted on January 3rd, 2017

Amended FRCP 37(e) Case Law In December 2015, the Amended Federal Rules of Civil Procedure went into effect. One of the updated amendments included FRCP 37(e), Failure to Preserve Electronically Stored Information. The amendment raised the requisite intent to have the court order spoliation sanctions, including an adverse inference instruction and terminating sanctions. Attorney fees and costs may still be awarded if the ESI was lost or destroyed negligently, however.

So how did case law regarding lost or destroyed ESI shape up in 2016? Here’s the case law wrap up, which ran the gamut from excusing a lost hard drive trapped on a sunken barge to awarding $3 million in punitive spoliation sanctions—and everything in between.

Court Orders Spoliation Sanctions Under Amended FRCP 37(e)

  • GN Netcom, Inc. v. Plantronics, Inc., Civil Action No. 12-1318-LPS (D.Del July 6, 2016). $3 million punitive damage award and adverse inference instruction ordered as sanction under Amended FRCP 37(e) when the Defendant company’s VP told employees to delete emails and other electronic evidence after a litigation hold was entered, among other bad faith spoliation actions undertaken.
  • O’Berry et. al. v. Turner, et. al., Consolidated Case Nos. 15-00064/15-00075 (M.D. Ga., April 27, 2016). Court held Defendant trucking company acted with intent to deprive Plaintiffs of electronic data when it claimed to have inadvertently destroyed driver’s logs and information about the truck.
  • Brown Jordan International, Inc. et. al. v. Carmicle, Consolidated Case Nos. 14-60629 and 14-61415 (S.D. Fla., Mar. 2, 2016). Adverse inference instruction ordered under FRCP 37(e) when Defendant accessed 2.4 million files right before producing his laptop, “lost” his personal iPad and wiped his corporate iPad.

Court Denies Sanctions When Party Failed to Carry Requisite Burden of Proof

  • Richard et. al. v. Inland Dredging Company, LLC, Case No. 15-0654 (W.D. La., Sept. 29, 2016). Court denied adverse inference instruction under FRCP 37(e) when photographs Plaintiff alleged were lost were never shown to exist in the first place, the requisite intent was not shown, and if they did exist, they would have been lost when the computer hard drive went down with a sunken barge.
  • Applebaum v. Target Corporation et. al., Case No. 15-2198 (6th, Aug. 2, 2016). Sanctions motion denied under Amended FRCP 37(e) when party failed to show the alleged ESI data and documents ever existed or were destroyed.
  • McIntosh v. U.S. et. al., Case No. 14-7889 (S.D. N.Y., Mar. 31, 2016). Court denies applying Amended FRCP 37(e) retroactively. However, the court held Plaintiff had not fulfilled its burden to show duty to preserve and destruction with the requisite culpable state of mind even under the less-stringent FRCP 37(e) before the amendment.
  • Best Payphones, Inc. v. City of New York, et. al., Consolidated Case Nos. 1-3924, 1-8506, 3-0192 (E.D. N.Y., Feb. 26. 2016). Holding the lost ESI was the result of mere negligence, the court did not find an adverse inference instruction to be appropriate under the circumstances. The court did order attorney fees and costs for negligently breaching the duty to preserve evidence.
  • Marten Transport, Ltd. V. Plattform Advertising, Inc., Case No. 14-02464 (D. Kansas, Feb. 8, 2016). In denying Defendant’s request for spoliation sanctions against Plaintiff, it noted that Amended FRCP 37(e) was passed in part to reduce some of the pains of reducing ESI and that “reasonable steps,” not perfection, was required.
  • Nuvasive, Inc. v. Madsen Medical, Inc. et. al., Case No. 13-2077 (S.D. Cal., Jan. 26, 2016). The court vacated sanctions order which provided for an adverse inference instruction, because the actual trial was set to take place after the Amended FRCP 37(e) went into effect. Since Amended FRCP 37(e) has more stringent requirements for adverse inference instruction, the sanction was inappropriate as the party had merely negligent.

Split the Difference? Murkier FRCP 37(e) Opinions

  • Luz Gonzalez-Bermudez v. Abbott Laboratories PR Inc., et. al., Case No. 14-1620 (D. P.R., Oct. 9, 2016). Although Defendants did not take reasonable steps to preserve emails and Plaintiffs were prejudiced as a result, the court did not find intent under FRCP 37(e), and therefore denied the request for sanctions. However, the motion was denied without prejudice and Plaintiffs could revisit the issue at trial.
  • Konica Minolta Business Solutions, USA Inc. v. Lowery Corporation d/b/a Applied Imaging Systems, Inc. et. al., Case No. 15-11254 (E.D. Mich., Aug. 31, 2016). Court noted that Plaintiff was able to show Defendants deleted files and lost electronic data after a litigation hold letter was sent. The court denied the FRCP 37(e) motion for sanctions without prejudice, but only to conduct further discovery about the extent of the losses and to clarify the remaining issues.
  • Stinson et. al. v. City of New York et. al., Case No. 10-4228 (S.D. N.Y., Jan. 2, 2016). The court did not apply the amended FRCP 37(e), but ordered a permissive adverse inference instruction as spoliation sanction for gross negligence in failing to issue a litigation hold and implement it.

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