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Case Law Alert: Check with Third Parties before Asking for Spoliation Sanctions

Created on May 17, 2019


Director of Marketing at Exterro

Clearly understanding the requirements for spoliation sanctions under Rule 37(e) will save you a lot of time, especially when you haven’t confirmed whether data is irretrievable or not. Unfortunately, the defendant in Envy Hawaii LLC v. Volvo Car USA LLC learned this lesson the hard way by not following up with third parties who might have had copies of the requested data.

Overview

In this contract case between a local car dealership and their national distributor, the defendant filed a motion for spoliation sanctions based on the plaintiff not preserving “Google e-mail accounts and electronic dealer management system records.”

Leading up to this motion the parties had engaged in over 2 years of litigation. The defendant wanted (1) financial and accounting records and (2) email accounts from two key custodians. Even though the data requested was not preserved by the plaintiff, the plaintiff contends that the data is still available via third parties, Google and CDK Drive.

Ruling

  • No Spoliation Proven. The court denied the defendant’s motion for spoliation sanctions because the data they requested was never proven to be “lost.” Only lost (e.g., “irretrievable from another source”) data can warrant spoliation sanctions under FRCP 37(e).
  • No Follow Up with Data Repositories. The court took issue with the defendant never following up with third parties who may have maintained backup, duplicative copies of requested data. Since the defendant never confirmed that the data was lost and irretrievable, the court found no basis for spoliation sanctions.
  • The Door Is Not Closed. The defendant may still issue subpoenas for requested information from third parties, and if the information is not retrievable then spoliation sanctions may apply.

Expert Opinion from Nancy Patton, Esq., CEDS, Senior Solutions Consultant, Exterro

A party who requests sanctions pursuant to FRCP 37(e) has the burden of proving that the ESI is irretrievable. Sanctions were denied because the Defendant did not seek discovery directly from a third-party (i.e., Google) who is probable to have the “lost emails” and therefore was unable to demonstrate that spoliation occurred.

Case Law Tip

Don’t waste your time or the court’s with inappropriate sanctions motions. Learn the necessary requirements for spoliation sanctions under Rule 37(e) now.