Key Ingredients for Sanctions: The Duty to Preserve and Intent to Deprive

Preparing a successful motion for spoliation over lost ESI is like preparing a fine meal. Attorneys can find themselves in the role of a master chef, who needs to mix exotic ingredients to win over a food cretic. Except for the attorney, that food cretic is a judge and the complex ingredients are proving 1) the party with the alleged lost electronically stored information had a duty to preserve at the time the data was lost; and 2) electronically stored information that was subject to the duty to preserve was actually lost.

Applying Rule 37(e)

An employer sued former employees who started a new company for breach of fiduciary duty and misappropriation of trade secrets. The Plaintiff claimed the Defendants communicated with each other via personal email accounts about starting their new company while still employed by the Plaintiff. The email service providers included Comcast and Heritage Makers. The Plaintiffs sought sanctions for the alleged loss email messages, deleted data from work issued laptops, and deleted Facebook posts. Youngevity Int’l Corp. v. Smith, 2017 U.S. Dist. LEXIS 200048, at *5-6 (S.D. Cal. Dec. 4, 2017)

Was there a Duty to Preserve?

The Plaintiff failed to establish the Defendants had a duty to preserve the data on their work issue laptops. The Defendants deleted data on their laptops in late October or early November 2015. The lawsuit was not filed until March 23, 2016. The Plaintiffs argued the Defendants should have reasonably anticipated a lawsuit, because they “conspired” to start their new company. Youngevity, at *11-12.

The Court rejected the Plaintiff’s argument, because 1) there was no evidence litigation was anticipated; and 2) the Court would have to accept Plaintiffs’ factual allegations as true, which were disputed facts for the jury to ultimately decide. Youngevity, at *12.

Was Any ESI Lost?

The Court stated the Plaintiff failed to offer any evidence that any ESI was actually lost. One Defendant testified she did not recall deleting any Facebook posts; another stated he would produce his Comcast emails if asked for them. As to the former employee with the Heritage Makers domain, the Plaintiff was able to recover 95 messages from their own servers. There was no explanation as to the number of emails found or whether there was evidence that emails existed and had been deleted. Youngevity, at *13.

The Court further explained as to the other Defendant with Comcast emails, the Plaintiff had not demonstrated that the emails could not be found elsewhere [in theory, sent to other people]. Id.

Was there Intent to Deprive?

The Court found that the Plaintiff failed to demonstrate the Defendants acted with the intent to deprive for any purported, but not proven, lost Comcast emails. As such, adverse inference instructions could not be awarded. However, the Court noted there had been prejudice because of representations made in Court about the ESI, thus the Plaintiff could subpoena Comcast, Facebook, and other third parties, they did not propound earlier because of the Defendants’ representations in prior hearings. Youngevity, at *13-14.

Bow Tie Thoughts

Federal Rule of Civil Procedure Rule 37(e) has given Courts straightforward analysis for sanctioning a party over lost ESI. The first issue is whether there a duty to preserve? Next is was any ESI lost? Finally, did the party act with the intent to deprive?

Parties bringing a motion under 37(e) understandably could feel they are trying to prove a negative for ESI that was lost. It is unlikely a party with lost ESI will admit in a deposition that they purposely destroyed data with the intent to keep the other side from having it in discovery. Short of that miracle depo, the party bringing the motion must show the ESI once existed. One strategy to accomplish this requirement is to have an affidavit from a forensic expert that could show ESI once existed and that it was deleted on a specific date. An expert affidavit explaining when files were deleted from a Dropbox account, or partial email threads with missing attachments, has a stronger likelihood of success then merely claiming there is lost ESI.

The party arguing ESI has been lost should be sure they have propounded a request for production for that ESI. It is very difficult to bring a motion to compel, or a motion for sanctions, if there was no discovery request for the sought ESI. Moreover, an inadequate discovery response could be evidence that ESI once existed and has been lost. That by itself is likely not enough for sanctions, but it is a start for Rule 37(e) analysis.

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.