Legal Tech: A Closer Look At 3 Summer Cases Concerning Lost Data

Summer 2019 put some interesting case law into the books, some of which echoed the 2015 amendments to the Federal Rules of Civil Procedure. We'll take a look at three cases having to do with lost data and whether spoliation sanctions were levied. In two of these cases, the lack of proof of "intent to deprive" meant that courts wouldn't punish the litigants with sanctions, despite — in one case — a "woeful lack of proactivity" by both parties in taking their preservation obligations seriously.

Case 1: Expensive Production Request Deemed "Costly Fishing Expedition"

Pentel v. Shephard (D. Minn. Aug. 8, 2019)

Why This Case Is Important

If you're trying to get the court to compel production of data from your opponent, it is important to be specific about which requests they have failed to comply with, and why the requested information is relevant and proportional.

Overview

In this class-action privacy lawsuit, the plaintiffs sought to compel a non-party to produce information that would showcase what specific private data was improperly accessed by the defendants. In addition, the plaintiffs asked the defendants to review that data for responsiveness.

The non-party rejected to producing the requested information because it would be "unduly burdensome because of the volume of responsive information and the amount of redaction required to remove 'sensitive data.'" The non-party estimated that 306,600 pages would need to be reviewed, costing up to $190,000.

The plaintiffs claim that these requested documents are "essential" to the case.

Ruling

• Motion to Compel Production Denied. Based on the "massive burden" to the non-party and the defendants, the court ruled that the motion to compel was "not proportional to the needs of this case."
• "Costly Fishing Expedition." Even if the requested data was collected and reviewed, the plaintiffs would not be able to decipher if the data was accessed improperly. Because of this, the court ruled that the plaintiffs were "not well-positioned to speculate" the defendants' motive and thus found the request overly burdensome.

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Case 2: Plaintiffs' Motion for E-Discovery Sanction Goes Up in Smoke

Philmar Dairy, LLC v. Armstrong Farms (D.N.M. July 11, 2019)

Why This Case Is Important

An often-forgotten threshold factor for spoliation sanctions is that litigation must be reasonably anticipated. In this case, this key factor was overlooked and not proven by the moving party leading to the rejection of their spoliation claim.

Overview

In this breach of contract and fraud case surrounding a failed hay sale, the plaintiffs filed a motion for e-discovery sanctions against the defendants based on the loss of key evidence, cell phone photographs.

The plaintiffs contracted with the defendants to purchase hay. The defendants claimed that lightning caused a fire which destroyed some of the hay intended to be sold to plaintiff. As evidence of the fire, the defendants took cell phone pictures of the "smoldering, smoking embers." When asked for the photos, the defendants said that the photos were gone about "five cell phones ago."

Based on the loss of these photos, plaintiffs claim that defendants spoliated evidence by failing to preserve photographs of the smoking embers.

Ruling

• Motion for Sanctions Dismissed. The plaintiffs failed to prove two key things in making their case for e-discovery sanctions: 1) The defendants "knew or should have known litigation was imminent," 2) The defendant acted with the intent "to deprive Plaintiffs of the photos' use in future litigation."
• No Proof that Defendant Knew Litigation was Imminent. The plaintiffs contended that the alleged fire was sufficient to put the defendants on notice of litigation. The court stated that it's unlikely for the duty to preserve to be triggered "without any interaction with a potential adversary" and in this case the plaintiffs did not provide any communications that the plaintiffs intended to sue the defendants before the photographs were lost.
• No Intent to Deprive Plaintiffs of the Photos. Plaintiffs presented no evidence showcasing that the defendants intentionally lost the photos in question. Based on this lack of evidence, the court could not impose a default judgement or adverse inference instruction.

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Case 3: Parties Escape Spoliation Sanctions Even With a "Woeful Lack of Proactivity"

Wolff v. United Airlines, Inc. (D. Colo. Sept. 17, 2019)

Why This Case Is Important

Despite being reactive rather than proactive regarding their preservation obligations, the two parties in this case escaped spoliation sanctions — even though both parties showed a "woeful lack of proactivity, thoughtfulness or reasonableness in attempting to meet their preservation obligations."

Overview

In this employee termination/discrimination case, the plaintiff and the defendant both moved for spoliation sanctions against each other.

The plaintiff alleges that the defendant failed to preserve his company cell phone, company computer, and handwritten notebooks, all of which contained relevant evidence to the case. Based on this spoliation, the plaintiff sought a default judgement. The defendant argued that the plaintiff's cell phone was never received from the plaintiff when he left and that his computer was "repurposed."

On the other side, the defendant "likewise cries 'spoliation' because Plaintiff failed to preserve his personal cell phone," moving for an adverse inference instruction. The plaintiff justified not having his cell phone based on it either falling "into a lake when he was fishing, or he turned it in when he upgraded his phone."

Ruling

• Plaintiff's Motion for Spoliation Sanctions Denied. For the cell phone, the court ruled that the plaintiff never offered any evidence that the plaintiff's company cell phone was in their possession. For the company computer, the plaintiff's counsel admitted that they weren't aware of any relevant evidence being stored on the plaintiff's company computer.
• Defendant's Motion for Spoliation Sanctions Denied. The court rejected the plaintiff's motion because there was "a lack of evidence of an intent to deprive Defendant of the evidence allegedly contained on the personal cell phone."
• Fault on Both Sides Regarding E-Discovery Practices. Even though no spoliation sanctions were issued, the court was "troubled" by the e-discovery conduct of both the plaintiff and the defendant. Specifically the court took issue with the defendant's "failure to suspend its automatic deletion of emails" and the plaintiff's loss of his personal cell phone. Both were held to be unreasonable acts after the duty to preserve was triggered.

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Analysis

Although the parties involved in these cases were able to escape spoliation sanctions, it can't be denied that some level of judicial leniency was involved. This reinforces that, as long as courts have inherent authority to issue sanctions outside of Rule 37(e), preserving potential data sources remains a critical step in avoiding sanctions.

As far as our "costly fishing expedition," the Pentel case goes, Rule 45's requirement to avoid imposing an undue burden on a non-party echoed throughout the case, making it clear that litigants have limits on the amount of difficulty they can impose in complying with a given production request. Perhaps the plaintiffs would have been better off spending their summertime doing some real fishing.

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Mike Hamilton, JD is the Director of E-Discovery Programs at Exterro. With a legal and business background, Mike is experienced and passionate about creating thoughtful, out-of-the-box educational resources that help keep legal teams interested and on top of emerging need to know e-discovery issues.