Don't Make These E-Discovery Mistakes to Earn Sanctions!
Despite the 2015 amendments to the Federal Rules of Civil Procedure (FRCP)—specifically Rule 37(e), which raised the bar for severe sanctions by requiring a showing of "intent to deprive"—e-discovery sanctions remain a potent tool for judges.
While the "sanction apocalypse" feared a decade ago may have cooled, recent case law from 2019–2021 proves that courts will not tolerate negligence or bad faith when it comes to preserving Electronically Stored Information (ESI).
Five Red Lines: What Gets Parties Sanctioned?
Exterro’s review of recent rulings identified five specific behaviors that triggered spoliation sanctions:
- Ignoring the "Reasonable Expectation": In QueTel Corp v. Hisham Abbas, defendants destroyed a computer and deleted emails after receiving a cease-and-desist letter. Courts ruled that such a letter is sufficient to trigger the legal duty to preserve.
- Encryption Key Destruction: In Doubleline Capital v. Odebrecht Finance, the intentional destruction of encryption keys was treated as the destruction of the data itself, leading to adverse jury instructions.
- "Paper" Legal Holds: In Bolding v. Banner Bank, the party issued a legal hold but failed to follow through with actual technical preservation. A hold notice is useless if data retention policies continue to auto-delete relevant files.
- Ephemeral Messaging: Using apps like WhatsApp or Signal to sidestep preservation—even on contraband devices, as seen in FTC v. Vyera Pharmaceuticals—is increasingly viewed by courts as evidence of intent to hide data.
- The "Double Down" (Perjury): In Williams v. American College of Education, the court dismissed the case entirely after the party spoliated ESI and then lied about it under oath.
How to Stay on the Right Side of the Court
The common thread in these cases is that sanctions almost always stem from failures in the early stages of the EDRM (Preservation and Collection). To demonstrate "good faith" and a lack of "intent to deprive," organizations must implement a verifiable process:
- Automated Legal Holds: Move beyond manual emails. Use a system that tracks acknowledgments and sends automated reminders to custodians.
- Policy Suspension: Ensure that your IT department can immediately suspend auto-delete and data rotation policies for any custodian or data source placed on hold.
- Cross-Departmental Sync: Create a "Golden Triangle" of communication between Legal, HR, and IT to ensure that when an employee leaves or a device is decommissioned, legal holds are checked first.
- Documentation: Even if data is lost, having a documented, repeatable preservation policy can protect you. Courts are far more lenient toward "process errors" than "process absences."
Conclusion
Sanctions haven't disappeared; they have evolved. Judges now focus on the defensibility of the process. If you can prove you have a structured system in place to protect data, you significantly lower your risk of a catastrophic ruling.
Resource: White Paper: Don’t Get Sanctioned Like These Parties!
