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When is Issue Preclusion Warranted for Failure to Produce ESI?

Posted on May 9th, 2014

Issue preclusion is the harshest sanction that can be imposed against a party—particularly when Defendant engages in evidence spoliation and does not have counter-claims to dismiss. For a case where a court considered issue preclusion as sanction against Defendant for ESI spoliation, see Ingrid & Isabel, LLC v. Baby Be Mine, LLC et al., Case No. 13-cv-01806-JCS(N.D.Cal. April 1, 2014).

A timeline is helpful in this case to flesh out the facts:

  • Cases were filed in 2006 and 2008, and they both resolved in settlement agreements
  • Plaintiffs filed the above-styled case in 2013 alleging breach of agreements
  • October 4, 2014 Defendants produced some ESI after two extensions
  • Plaintiffs alleged the defense production was insufficient, meet and confers did not resolve the issues
  • December 3, 2014 Defendants assert the production is complete
  • December 20, 2014 Court orders disclosure of search methods and further production within 30 days
  • January 21, 2014 Defendants submitted a declaration that they were in Europe and could not comply, they needed a computer expert to assist them
  • January 23, 2014 Defendants retained an expert
  • February 4, 2014 Defendants sent word that they would have further production
  • February 10, 2014 Plaintiffs filed a Motion for Sanctions for failure to comply with the December 20 Order
  • February 18-24, 2014 Defendants produced over 1,000 new documents

Plaintiffs sought attorney fees for the motion and the costs of travel as the depositions could not go as scheduled due to the delay, as well as an order for Defendants to disclose their hard drives and email accounts. Finally, they sought an order of issue preclusion preventing Defendants from opposing certain claims regarding the merits of the case.

It was clear to the court that Defendants failed to comply with the December 20 Order and therefore, Rule 37 monetary sanctions were mandatory. The court also agreed that Plaintiffs made a sufficient showing that full disclosure of all hard drives and email accounts for forensic examination was warranted in such an extreme situation.

So did the court order issue preclusion? In light of the documents (finally) produced and the order allowing for the full disclosure of all hard drives and email accounts, the court declined to order issue preclusion at that time. However, it was entered without prejudice, offering Plaintiffs the opportunity to renew the motion and the opportunity to file for an adverse inference instruction at a later time.

ILS – Plaintiff Electronic Discovery Experts


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