Via Vadis, LLC v. Amazon.com, Inc. reiterates the fact that the burden to succeed on spoliation sanctions under FRCP 37(e) is very high. Courts will refer to the business judgment rule if the party accused of spoliating evidence did not act with any bad intent and if the requesting party was not prejudiced. Here the court found that sanctions were not warranted because the data deletion resulted from ordinary and reasonable business processes, any deletion of responsive data was inadvertent, and the deleted data was replaced with other data providing similar information.
In this patent infringement case, the plaintiffs moved for spoliation sanctions, arguing that the defendant engaged in “intentionally and continuously” destroying evidence related to their case “for at least six years after this case was filed.”
The data in question was contained in the defendant’s “seeder and tracker logs,” which were routinely deleted in accordance with the defendant’s retention policies. This information, the plaintiff contended, documented the amount of revenue the defendant generated from the alleged patent infringement.
The defendant did not contest that (1) this data should have been preserved, (2) the data was lost and (3) the data was lost because the defendant did not take reasonable steps to preserve it. But the defendant argued that it produced other evidence to the plaintiff, which replaced the lost evidence.
- Motion for Spoliation Sanctions Denied. The court ruled that the defendant replaced the deleted information and therefore sanctions under Rule 37(e) were not warranted.
- Alternative Evidence Produced. The defendant did not contest that (1) this data should have been preserved, (2) the data was lost and (3) the data was lost because the defendant did not take reasonable steps to preserve it. But the defendant argued that it produced other evidence to the plaintiff, which replaced the lost evidence.
- No Intent to Deprive.The court also went onto state, “Because Amazon has established that it has replaced the relevant information, and that the server logs were lost without Amazon’s 'intent to deprive [Plaintiffs] of the information’s use in the litigation' under Rule 37(e), Plaintiffs’ motion for spoliation sanctions is denied.”
Expert Opinion by David Cohen, Esq., Chair - E-Discovery Group, Reed Smith LLP
This opinion highlights the significance of the 2015 amendments to FRCP 37(e), particularly what has since been referred to as the “no harm-no foul” revision: if electronic evidence is lost inadvertently, and that loss causes no prejudice to the requesting party, sanctions will not be granted. This revision to Rule 37(e) limits the use of sanctions motions for tactical purposes, but the defendant here was fortunate to find another source for the inadvertently deleted information.
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