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Cybersecurity Compliance

Court of Appeals Reaffirms That Intentional Spoliation Is Grounds for Dismissal

Why This Alert Is Important

The severe consequences of intentional spoliation (in this case, conspiring to deprive the opposing party of relevant evidence by deleting text messages) are reaffirmed by the U.S. Court of Appeals for the Ninth Circuit in this case.

Overview of the NY DFS Cybersecurity Regulation Amendment

In this Title VII Civil Rights suit, defendants found text messages during discovery that seemed to show the plaintiff had “abruptly stopped communicating with people she had been messaging almost daily.” The evidence (a spreadsheet from a third-party imaging vendor) showed that messages between the plaintiff and her co-workers had been deleted from her phone. 

When deposed, the co-workers testified that they had texted with the plaintiff, but the plaintiff didn’t comply with a court order to produce the messages. When a forensic specialist discovered messages containing stipulated search terms, the plaintiff’s attorney responsible for producing them to the defendants did not do so. 

Defendants moved for terminating sanctions on the basis of the forensic expert’s report said “an orchestrated effort to delete and/or hide evidence subject to the Court’s order has occurred.” The Court dismissed the case with prejudice on the basis of plaintiff’s “intent to deprive” defendants of ESI, and the plaintiff appealed. 

Ruling Summary

  • FRCP 37(e) applies. Rule 37(e) applies when ESI “that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery.” If the loss prejudices the case, the court may order “measures no greater than necessary to cure the prejudice,” but the court may dismiss the case if the offending party “acted with the intent to deprive another party of the information’s use in the litigation.
  • Intent to deprive established. Since plaintiff had taken multiple actions to delete relevant ESI, including deleting messages from 2017 and 2018 and coordinating with witnesses to delete messages from 2019 and 2020, the court’s “reasonable inferences” included the conclusion that the plaintiff intended to deprive defendants of this relevant ESI.
  • Dismissal of case affirmed. The plaintiff contended that her conduct was neither willful nor prejudicial. The appeals court explained that “a district court may consider circumstantial evidence in determining whether a party acted with the intent required for Rule 37(e)(2) sanctions,” citing the “ample circumstantial evidence that [Plaintiff] intentionally destroyed a significant number of text messages and collaborated with others to do so” and plaintiff’s violations of court orders as evidence the district court’s decision was justified.

Plaintiff appealed the case dismissal, alleging that defendants failed to show prejudice from plaintiff’s failure to preserve evidence. In response, the Court highlighted a sometimes overlooked nuance of FRCP 37(e). While a showing of prejudice is a prerequisite to relief under Rule 37(e)(1), this case was dismissed based on section 37(e)(2), which governs remedies for intentionally depriving an opposing party of evidence. That section of the rule does not require any specific showing of prejudice because prejudice can be inferred from the intentional destruction. 

David Cohen, Partner, Reed Smith

Case Law Tip

Avoid discovery missteps, mishaps, and mistakes that can potentially lead to sanctions by familiarizing yourself with the recent e-discovery sanction cases. Download the Exterro whitepaper Don’t Get Sanctioned Like These Parties

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