Failure to Suspend Retention Policy Leads to Severe Sanctions

Meta Platforms, Inc. v. BrandTotal Ltd.

N.D. Cal. June 6, 2022

Why This Case Is Important

With the vast amounts of data organizations store and collect, it can become difficult to know when to suspend document retention policies and preserve the data those policies govern for litigation (or other reasons). In this case, the defendant’s failure to suspend their retention policies lead to spoliation and sanctions.

Overview

In this data privacy case around illegally collecting digital data, the plaintiff sought an adverse inference sanction against the defendant for deleting information relevant to the case.

During the discovery process, the defendant permitted the deletion of data from a log that was set for automatic deletion. As a result of the defendant’s failure to suspend their 30-day document retention policy, they failed to reserve data relevant to the matter. Based on deposition testimony, the defendant knew about the impending automatic deletion of this data and did nothing to stop it.

As a result, the plaintiff moved for spoliation sanctions against the defendant.

Ruling

• E-Discovery Spoliation Sanctions Issued. The district judge sanctioned the defendant for failing to preserve the relevant log data, because the data was relevant to the case and could not be replaced or recovered. Therefore the defendant had an obligation to preserve it.
• Adverse Inference? The court grappled with the issue of whether an adverse inference instruction was warranted. Under Rule 37(e), the court could have found that there wasn’t an intent to deprive plaintiff of the data, since the defendant may have thought the logs were not relevant to the litigation. Instead, the court relied on its inherent authority. The judge instructed the jury that “that [Defendant] had a duty to preserve its Rapid7 logs from October of 2020 through October of 2021 but failed to do so.” The jury could then consider that the deleted data may have been unfavorable to the defendant.

Legal Analysis

By, David Cohen, Esq., Chair - E-Discovery Group, Reed Smith LLP

This is not the first case where a judge avoided the sanctions limitations of FRCP 37(e) by instead relying on his “inherent authority.” Such rulings raise the stakes to avoid even negligent loss of electronic evidence from failing to suspend an automatic deletion protocol applicable to a non-traditional data source.