Intent to Deprive in a Very High Standard for Sanctions

Parties seeking sanctions for lost electronically stored information have been before Federal Judges for nearly a decade. The 2015 Amendments to Federal Rule of Civil Procedure Rule 37(e) requires that a party seeking sanctions must show there was an “intent to deprive” them of the lost ESI. Two recent cases highlight the challenges with successfully bringing these motions.

In one prisoner’s rights case, the prisoner sought an adverse inference instruction because the prison failed to preserve the prisoner’s recorded statement after an incident. The motion failed, because 1) the moving party did not show how the statement was relevant, because he could still testify about the incident; and 2) the moving party could not show any intent to deprive the lost recorded statement. Belanus v. Dutton, No. CV 12-00065-H-DLC, 2017 U.S. Dist. LEXIS 42623, at *49-50 (D. Mont. Mar. 23, 2017).

In a New York case, a party challenging a Magistrate Judge’s order cited the 2015 version of Rule 37(e), yet mixed in case law for the prior rule allowing sanctions when there was a culpable state of mind or negligence. Worse yet, the moving party brought their motion nine months after the current Rule 37(e) went into effect. Citibank, N.A. v. Super Sayin’ Publ’g, LLC, No. 14-Cv-5841 (SHS), 2017 U.S. Dist. LEXIS 38089, at *4-6 (S.D.N.Y. Mar. 1, 2017). The Court rejected these arguments, as those standards from the prior cases do not apply to the current Rule 37(e). Id.

Parties need a smoking gun that the opposing party had an “intent to deprive” them of electronically stored information. That can be an extremely high burden. For example, one Court found “an intent to deprive” text messages that had been lost, where one individual told the others, “[T]his is going to be a lawsuit. So you’ve got to be careful.” First Fin. Sec., Inc. v. Freedom Equity Grp., LLC, No. 15-cv-1893-HRL, 2016 U.S. Dist. LEXIS 140087, at *9 (N.D. Cal. Oct. 7, 2016). The Court found that “an explicit agreement to avoid communicating electronically suggests a shared intent to keep incriminating facts out of evidence.” First Fin. Sec., Inc. at *10.

While seeking sanctions might be harder under Rule 37(e), that does not mean parties can negligently lose electronically stored information without any ramifications. First, if a party has negligently lost ESI, that will likely harm their trustworthiness with the Court. Litigation is hard; it is harder if a Judge does not trust you. Secondly, attorneys could find they have potential ethical violations with their duty of candor to the Court, depending on what representations they made regarding the data in their case. Third, if the negligent conduct is egregious enough, do not be surprised if Judges refer attorneys to the State Bar for breaching their duty of competency.

Josh Gilliland is a California attorney who focuses his practice on eDiscovery. Josh is the co-creator of The Legal Geeks, which has made the ABA Journal Top Blawg 100 Blawg from 2013 to 2016 and was nominated for Best Podcast for the 2015 Geekie Awards. Josh has presented at legal conferences and comic book conventions across the United States. He also ties a mean bow tie.