Trial Magazine

In any case, when material data goes missing, justice may be denied. For instance, commercial motor vehicle hours-of-service electronic data is often critical to proving what happened in driver fatigue cases brought under the Federal Motor Carrier Safety Regulations. Likewise, event data recorder information captured in a motor vehicle crash is often the most scientifically reliable data for accurately reconstructing that crash; worker schedules and reviews can be critical in an employment disparate treatment claim; and electronic medical record systems data can provide the “smoking gun” in a medical negligence case.

Spoliation is “the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.”¹ If material data loss has occurred in your client’s case, your remedy is seeking sanctions pursuant to Federal Rule of Civil Procedure 37(e).

As amended in 2015, Rule 37(e) dramatically changed how a party’s loss, destruction, or failure to preserve ESI may warrant sanctions. Obtaining sanctions for spoliation of ESI requires careful analysis of the rule, an understanding of relevant case law since the amendments, and vigorous case management during discovery.

All ESI in Any Format

There is no all-inclusive list of the types of ESI subject to Rule 37(e); the rule is intentionally broad in scope to accommodate changing technology. Data is created constantly, and formats are continually evolving. Information may be in the form of an electronically stored MSG email, PDF document, XLS spreadsheet, MPEG video file, MP3 audio file, JPEG picture, GPS location packet, and more. Any medium that stores data electronically is fair game in an ESI loss analysis and could be implicated in a quest for sanctions.

---

Any medium that stores data electronically is fair game in an ESI loss analysis and could be implicated in a quest for sanctions.

---

Data loss occurs both by design—under document destruction policies—and when a device that remains in use overwrites memory, leaving previously saved data unrecoverable. Some ESI loss is obvious; for example, when a big-box store cannot produce security footage of an incident that was recorded and electronically maintained. But it also can be less obvious: a memo produced in hard copy in discovery for which the word processing file and associated metadata is lost, or a PDF produced rather than the original JPEG file that can be brightened or enlarged.

But ESI can make or break a case. For instance, in one truck crash case, a rapid response team member arrived at the crash site before emergency services personnel and took pictures. The photos of the plaintiff’s pick-up truck were taken with very poor lighting, but by adjusting the lighting in the original PDF, the plaintiff suddenly became visible behind the wheel of the truck, unconscious. Those photographs became enormously valuable and changed the tenor of the case.

Spoliation Sanctions

Spoliation sanctions in federal court are an evidentiary matter.² Prior to 2015, standards concerning the availability of sanctions due to spoliation differed by circuit. In some circuits, a finding of simple negligence would support the sanction of an adverse inference jury instruction.³ In others, a party’s intent with respect to the loss of evidence controlled the analysis.⁴ Courts relied on their inherent authority or state law to determine when corrective measures for spoliation of ESI were appropriate.

Since 2015, courts now have a single, specific rule on sanctions: The party requesting the sanctions must show that ESI should have been preserved, ESI was lost, the loss was due to a failure to take reasonable steps to preserve the ESI, and the ESI cannot be restored or replaced through additional discovery.⁵ All four elements must be satisfied before the court can sanction any party under the rule.⁶ In addition, some courts have included a fifth showing: an “intent to deprive.”⁷

However, in practice, obtaining sanctions remains very nuanced and fact intensive. For instance, the rule does not apply when information is lost before a duty to preserve arises.⁸ Further, the rule applies only if the information was lost because a party failed to take reasonable steps to preserve it after that duty arose.⁹ Therefore, don’t focus only on the search for data in discovery but also on whether to pursue sanctions for lost ESI.

Duty to Preserve

The duty to preserve evidence, including ESI, arises when litigation is “reasonably foreseeable”¹⁰—the same standard for evidence retention that existed prior to Rule 37(e). While this is fact specific, note that you can essentially create the duty for an opposing party by sending a spoliation letter demanding the preservation of evidence relating to the claim. Putting all involved parties on notice in a spoliation letter while addressing the gravity of the claim for damages and expressing an intention to sue should meet the test for reasonable foreseeability in most courts.

Send the spoliation letter to all known potential parties and actors, including insurers, and document the delivery and receipt of that letter. Tailor the letter to the case, and specify all known or suspected data involved—in both general and specific terms. Tie your written discovery to the demand letter by making identically numbered production requests for items identified in the spoliation letter. This practice keeps tracking the requests for preservation and production minimally confusing for the parties and courts.

Once you receive responsive materials, act quickly to determine whether anything is missing. Supplementation of any production should be sought as soon as practicable. In some cases, you will need an expert to help evaluate the completeness of the production.

Third-party data. What if the party benefiting from a potential loss of data does not possess the data at issue but has access to or control of it?

Third-party vendors store and maintain a lot of ESI. For example, telematics data from tractor-trailers is regularly maintained by a third-party service hired by the trucking company. In these instances, the trucking company can access or direct the use of the information, but the ESI is not in the trucking company’s possession; it’s in the possession of the third-party service. That party may want to quietly permit its third-party vendor to destroy evidence under the vendor’s data destruction policy. That destruction could occur without the party taking any affirmative action—arguably leaving it with “clean hands.”

The party that benefited likely will claim that the evidence loss was beyond its control and that sanctions are inappropriate. To counter such an argument, in your spoliation letter include a demand for preservation of data believed to be held by third parties and a demand that any third-party vendors be put on notice not to dispose of ESI.

---

In your spoliation letter, include a demand for preservation of data believed to be held by third parties and a demand that any third-party vendors be put on notice not to dispose of ESI.

---

For instance, many commercial motor vehicle carriers do not physically possess relevant fleet management data needing preservation in many cases. Instead, carriers often use an online portal to review the data, such as truck GPS location, speed, driver communications, and deadlines. Demanding that potential carrier defendants secure that third-party data can assist in ultimately winning sanctions for any failure to preserve the data in a litigation hold.¹¹

Showing Prejudice

For sanctions to be issued, the moving party must demonstrate that it has been prejudiced by the loss of ESI.¹² If there is prejudice, regardless of any intent by a party to deprive another of the evidence, curative sanctions can be ordered. Sanctions cannot be greater than necessary to cure the loss.¹³

Prejudice is expressly required for sanctions under Rule 37(e)(1), but courts have noted that in the context of Rule 37(e)(2)—when a party acted with an intent to deprive—prejudice is implied.¹⁴ Prejudice is also implied when the ESI was spoliated in bad faith.¹⁵

But it is critical to remember that under Rule 37(e)(1), there is no intent requirement and that “a party need not act willfully, deliberately, intentionally, or with any objective or subjective bad faith” to be subject to sanctions—the only question is whether the movant was prejudiced.¹⁶ To impose sanctions, the court must find prejudice or either intent to deprive or bad faith, in which case prejudice is implied.¹⁷

Prejudice is not defined in Rule 37. Some courts have taken the view that a party is prejudiced when the destroyed evidence was probative and affirmatively supported the moving party’s claims, while others require only a showing that the evidence was probative, a relevance standard.¹⁸ The latter view suggests prejudice when a party’s “ability to obtain the proofs necessary” for a claim is impacted.¹⁹

A relevant consideration is whether additional discovery can replace lost evidence. For instance, if photos were deleted from a phone, can they be recovered? Also consider the equities involved related to the cost of additional discovery or expert services due to the loss.

Because electronic data often is stored in multiple locations, loss from one source may be harmless when substitute information can be found elsewhere.²⁰ However, some courts have held that when the destruction of evidence causes one party “to spend additional resources to attempt to resolve [a] critical factual dispute,” that additional expenditure may constitute prejudice under Rule 37(e).²¹ This suggests that if the moving party incurs additional unnecessary costs to recover ESI, that may be sufficiently prejudicial to pursue sanctions under Rule 37(e)(1) for costs.

Finally, speculation about what evidence may have existed in ESI is generally insufficient to establish prejudice.²² The moving party must provide “concrete, plausible suggestions as to any relevant ESI that was lost and thereby materially affected their substantial rights.”²³ When the movant “comes forward with a plausible, good faith suggestion as to what the evidence might have been,” that will suffice to show prejudice.²⁴

Intent to deprive. Rule 37(e)(2) allows for more serious sanctions when an intent to deprive the moving party of the evidence is shown.²⁵ What constitutes an intent to deprive varies wildly, but the one thing that the circuits seem to agree on is that a “showing of negligence or even gross negligence will not do the trick.”²⁶ Not even recklessness will satisfy the intent requirement of Rule 37(e)(2).²⁷

Courts have held that there is no intent to deprive when a party is not aware of a duty to preserve the ESI before destroying it²⁸ or when evidence is destroyed consistent with existing retention policies.²⁹ This is so even when recordkeeping practices are unreasonably short.³⁰ The timing of the destruction is an important factor, but timing by itself may not necessarily be enough evidence to establish intent.³¹ Similarly, there may not be an intent to deprive when a party “was not aware of the significance, if any” of the evidence in question³² or when ESI is negligently misplaced.³³

The spoliator’s subjective intent is highly relevant and is really the determining factor. For example, in a class action, the court found no intent to deprive when ESI was destroyed for “personal reasons” relating to another matter separate from the litigation.³⁴ A similar decision found no intent to deprive when the spoliator wiped a cellular device so “that his daughter had a working cell phone with all of her data intact,” rather than to deprive the adverse party of audio recordings contained on the phone.³⁵

Courts have inferred intent when a party has significantly failed in its obligation to preserve and collect ESI or when the data loss cannot be “credibly explained.”³⁶ One court inferred intent when the defendant “selectively preserved” certain security evidence in a premises liability case.³⁷ But if a party inadvertently destroys some of the ESI due to a “lack of sophistication,” courts may not infer intent based on a selective preservation argument.³⁸

Intent to deprive also may be found based on circumstantial evidence. For example, in a business dispute case when a company was to extract and deliver certain ESI from its computers to its law department for preservation and the contents of one key witness’s computer were inexplicably deleted, the court found circumstantial evidence of an intent to destroy the ESI.³⁹ And in a personal injury case involving railcar event data recorder ESI, the court inferred intent based on the defendant’s “repeated failure over a period of years to confirm that the data had been properly preserved.”⁴⁰

The Burden and Standard of Proof

The Advisory Committee Notes to Rule 37(e) provide that the burden of proof can be assigned by a court according to the equities involved.⁴¹ Generally, “the burden is on the moving party to show that spoliation occurred and what sanctions are appropriate.”⁴² However, much like the intent case law that has developed, the burden and standard of proof when seeking Rule 37(e) sanctions vary dramatically.

There is no uniform approach to the burden or standard of proof when pursuing sanctions under Rule 37(e). It is therefore critical to know the law in your jurisdiction. Some courts, led by the Second Circuit, have applied a clear and convincing evidence standard because of the severity of the sanctions imposed by Rule 37(e)(2).⁴³ The First,⁴⁴ Fourth,⁴⁵ and Sixth⁴⁶ Circuits also apply the clear and convincing standard. By contrast, the Third Circuit has articulated a preponderance of the evidence standard.⁴⁷ The Seventh,⁴⁸ Eighth,⁴⁹ Ninth,⁵⁰ and Tenth⁵¹ Circuits have all followed suit.

The Fifth Circuit has taken the position that Rule 37 as amended “does not place a burden of proving or disproving prejudice on one party or the other, but rather leaves it within the court’s discretion to determine how best to assess prejudice in particular cases.”⁵² Similarly, the Eleventh Circuit has not yet articulated a standard of proof for Rule 37.⁵³

Courts have, however, recognized that the moving party does not necessarily know what was contained in the destroyed evidence—only the offending party knows that.⁵⁴ In those instances, after finding an intent to deprive, some courts have shifted the burden of proof to the offending party to show that there was no prejudice sustained by the moving party because of the destruction of evidence.⁵⁵ But ultimately, according to the Advisory Committee Notes, “the rule does not place the burden of proving or disproving prejudice on one party or the other.”⁵⁶ By design, “the rule leaves judges with discretion to determine how best to assess prejudice in particular cases.”⁵⁷

Case Planning

With early preparation, you can set yourself up for success in obtaining Rule 37 sanctions. Start by sending spoliation letters early. From the time of engagement, pursue cases with a goal of obtaining critical ESI—or ultimately sanctions, if evidence is missing or lost.

Once in litigation, Rule 26(f) requires you to report to the court any issues regarding disclosure, discovery, or preservation of ESI, including the form or forms in which ESI should be produced. The planning conference with counsel commences discovery under the rule—but you will not yet know what ESI exists, may exist, or has been lost. At the same time, you must be prepared to discuss ESI issues.

If the opposing party has not cooperated pre-litigation, negotiate as much time as possible for fact discovery under the scheduling order. “Running out the clock” is a common litigation tactic used by parties wishing to obfuscate and avoid discovery. If you suspect that certain ESI will be needed, address it in the planning meeting report. Disputes should be resolved by the court in fairness to all parties when the scheduling order is issued.

While obtaining sanctions for spoliated ESI is an increasingly uphill battle as the case law develops, these wins do occur. But you must be aggressive in your pursuit of both the lost ESI and fair sanctions.

---

Timothy Lange is the founder of The Lange Firm in Prospect, Ky., and can be reached at tlange@timlange.com. Jordan Jones is an attorney at Michigan Auto Law in Farmington Hills, Mich., and can be reached at jjones@michiganautolaw.com.

---

Notes

1. West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999); see also Silvestri v. Gen. Motors Corp., 271 F.3d 583, 590 (4th Cir. 2001).
2. Tesoriero v. Carnival Corp., 965 F.3d 1170, 1184 (11th Cir. 2020).
3. Glover v. Costco Wholesale Corp., 153 F. App’x 774, 777 (2d Cir. 2005); Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 101 (2d Cir. 2002).
4. See Chevron Corp. v. Donziger, 296 F.R.D. 168, 224 (S.D.N.Y. 2013); see also Nation-Wide Check Corp. v. Forest Hills Distrib., Inc., 692 F.2d 214, 217 (1st Cir. 1982).
5. Packrite, LLC v. Graphic Packaging Int’l, LLC, 2020 WL 7133806, at *2 (M.D.N.C. Dec. 4, 2020); Steves & Sons, Inc. v. JELD-WEN, Inc., 327 F.R.D. 96, 103–04 (E.D. Va. 2018); In re Ethicon, Inc., 2016 WL 5869448, at *2 (S.D. W. Va. Oct. 6, 2016).
6. Konica Minolta Bus. Sols., U.S.A., Inc. v. Lowery Corp., 2016 WL 4537847, at *2 (E.D. Mich. Aug. 31, 2016).
7. Moody v. CSX Transp., Inc., 271 F. Supp. 3d 410, 426 (W.D.N.Y. 2017) (citing CAT3, LLC v. Black Lineage, Inc., 164 F. Supp. 3d 488, 495–502 (S.D.N.Y. 2016)).
8. JS Sweet Co. v. Sika Chem. Corp., 400 F.3d 1028, 1033 (7th Cir. 2005).
9. Fed. R. Civ. P. 37(e) advisory committee’s note.
10. See Micron Tech., Inc. v. Rambus, Inc., 645 F.3d 1311, 1320 (Fed. Cir. 2011) (requirement that litigation be “reasonably foreseeable” to trigger a party’s duty to preserve evidence is not so inflexible as to require that litigation be imminent or probable without significant contingencies).
11. See Cyntegra, Inc. v. Idexx Labs., Inc., 2007 WL 5193736, at *5 (C.D. Cal. Sept. 21, 2007) (Courts have extended the affirmative duty to preserve evidence to instances when that evidence is not directly within the party’s custody or control, so long as the party has access to, or indirect control over, such evidence.).
12. Ungar v. City of New York, 329 F.R.D. 8, 13 (E.D.N.Y. 2018).
13. Fed. R. Civ. P. 37(e)(1).
14. Ungar, 329 F.R.D. at 15 (E.D.N.Y. 2018); O’Berry v. Turner, 2016 WL 1700403, at *4 (M.D. Ga. Apr. 27, 2016).
15. Ala. Aircraft Indus. v. Boeing Co., 319 F.R.D. 730, 743 (N.D. Ala. 2017).
16. Konica Minolta Bus. Sols., 2016 WL 4537847, at *3; see also Richard v. Inland Dredging Co., 2016 WL 5477750, at *4 (W.D. La. Sept. 29, 2016).
17. Goldrich v. City of Jersey City, 2018 WL 4492931, at *18 (D.N.J. July 25, 2018).
18. Ungar, 329 F.R.D. at 13; Sinclair v. Cambria Cty., 2018 WL 4689111, at *2 (W.D. Pa. Sept. 28, 2018); Goldrich, 2018 WL 4492931, at *10.
19. Konica Minolta Bus. Sols., 2016 WL 4537847, at *19.
20. Fed. R. Civ. P. 37(e) advisory committee’s note.
21. Moody, 271 F. Supp. 3d at 430.
22. Fuhs v. McLachlan Drilling Co., 2018 WL 5312760, at *15 (W.D. Pa. Oct. 26, 2018).
23. Id.
24. Sinclair, 2018 WL 4689111, at *2; see also TLS Mgmt. & Mktg. Servs. LLC v. Rodriguez-Toledo, 2017 WL 1155743, at *1 (D.P.R. 2017).
25. Ala. Aircraft Indus., 319 F.R.D. at 745.
26. Applebaum v. Target Corp., 831 F.3d 740, 745 (6th Cir. 2016) (citing 2015 advisory committee notes); see also Richard, 2016 WL 5477750, at *4 (“The Advisory Committee Notes regarding subsection (e)(2) reject cases that authorize the giving of an adverse-inference instruction on a finding of negligence or gross negligence.”).
27. Williford v. Carnival Corp., 2019 WL 2269155, at *12 (S.D. Fla. May 28, 2019) (“[The spoliating party] may have been reckless in not taking adequate steps to preserve the [ESI], and it may have even been grossly negligent. But that does not equate to an intent to deprive.”).
28. Ungar, 329 F.R.D. at 12–13.
29. Packrite, 2020 WL 7133806, at *8; see also ML Healthcare Servs., LLC v. Publix Super Mkts., Inc., 881 F.3d 1293, 1307–08 (11th Cir. 2018) (no intent to deprive when video footage was discarded consistent with document retention policies).
30. Borum v. Brentwood Vill., LLC, 332 F.R.D. 38, 48–49 (D.D.C. 2019).
31. Karsch v. Blink Health Ltd., 2019 WL 2708125, at *22 (S.D.N.Y. June 20, 2019).
32. Williford, 2019 WL 2269155, at *12.
33. Schmalz v. Vill. of North Riverside, 2018 WL 1704109, at *6 (N.D. Ill. Mar. 23, 2018).
34. Borum, 332 F.R.D. at 48.
35. Ellis v. Hobbs Police Dep’t, 2020 WL 1041688, at *6 (D.N.M. Mar. 4, 2020).
36. Karsch, 2019 WL 2708125, at *22; Lokai Holdings v. Twin Tiger USA LLC, 2018 WL 1512055, at *8 (S.D.N.Y. Mar. 12, 2018).
37. Culhane v. Wal-Mart Supercenter, 364 F. Supp. 3d 768, 774 (E.D. Mich. 2019).
38. Franklin v. Shelby Cty. Bd. of Educ., 2021 WL 5449005, at *10 (W.D. Tenn. Nov. 22, 2021).
39. Ala. Aircraft Indus., 319 F.R.D. at 734, 746.
40. Moody, 271 F. Supp. 3d at 432; see also Ronnie Van Zant, Inc. v. Pyle, 270 F. Supp. 3d 656, 668–71 (S.D.N.Y. 2017) (intent inferred when text messages between defendants were lost); OmniGen Research v. Wang, 321 F.R.D. 367, 373–76 (D. Or. 2017) (intent inferred when a computer was disposed of and the relevant email and metadata were deleted); First Fin. Sec., Inc. v. Freedom Equity Grp., LLC, 2016 WL 5870218, at *3–6 (N.D. Cal. Oct. 7, 2016) (intent inferred when a party deleted text message and phone records and failed to disclose ESI in appropriate format); O’Berry, 2016 WL 1700403, at *4 (intent to deprive inferred when the ESI was transcribed in a single printed sheet of paper and the document was later lost). However, see Living Color Enters. v. New Era Aquaculture, Ltd., 2016 WL 1105297, at *6 (S.D. Fla. Mar. 22, 2016) (court declined to find intent absent bad faith or prejudice relating to deleted text messages.).
41. 2015 Advisory Notes to Rule 37(e).
42. Goldrich, 2018 WL 4492931, at *7.
43. Charlestown Capital Advisors, LLC v. Acero Junction, Inc, 337 F.R.D. 47, 52 (S.D.N.Y. 2020); CAT3, LLC, 164 F. Supp. 3d at 498–99.
44. Postle v. SilkRoad Tech., Inc., 2019 WL 692944, at *7 (D.N.H. Feb. 19, 2019); Wai Feng Trading Co. v. Quick Fitting, Inc., 2019 WL 118412, at *7 (D.R.I. Jan. 7, 2019).
45. Knight v. Boehringer Ingelheim Pharm., Inc., 323 F. Supp. 3d 837, 860 (S.D. W. Va. 2018).
46. Franklin, 2021 WL 5449005, at *9.
47. Freidman v. Phila. Parking Auth., 2016 WL 6247470, at *6 (E.D. Pa. Mar. 10, 2016).
48. Torgersen v. Siemens Bldg. Tech., Inc., 2021 WL 2072151, at *4 (N.D. Ill. May 24, 2021); Williams v. Am. Coll. of Educ., Inc., 2019 WL 4412801, at *11 (N.D. Ill. Sept. 16, 2019).
49. Danielson v. Huether, 2021 WL 217706, at *3 (D.S.D. Jan. 21, 2021).
50. Fast v. GoDaddycom LLC, 340 F.R.D. 326, 336 (D. Ariz. 2022).
51. Ellis, 2020 WL 1041688, at *5.
52. Peals v. QuikTrip Corp., 2021 WL 2043185, at *5 (E.D. Tex. May 21, 2021).
53. Silverstein v. Boehringer Ingelheim Pharm., Inc., 2020 WL 13119102, at *7 (S.D. Fla. Aug. 5, 2020) (“Because I would deny the pending Motion under either standard, I need not decide whether a higher standard applies to any of the relief being sought.”).
54. Ala. Aircraft Indus., 319 F.R.D. at 743.
55. Id. at 744; Micron Tech., Inc. v. Rambus Inc., 917 F. Supp. 2d 300, 319 (D. Del. 2013).
56. 2015 Advisory Notes to Rule 37(e).
57. Id.