Crash Course: Court Provides Refresher on Rule 37(e) Spoliation Sanctions

A recent decision from the District of Arizona provided a refresher for litigants and judges alike in the framework under which electronically stored information (ESI) spoliation sanctions must be addressed pursuant to Federal Rule of Civil Procedure 37(e). The author of the opinion – District Judge David Campbell – expressed his frustration that Rule 37(e) continues to be ignored by some judges and litigants in the application and adjudication of motions seeking ESI spoliation sanctions. Judge Campbell’s frustration is easily understood, as he chaired the Advisory Committee on the Federal Rules of Civil Procedure during the 2015 revision to Rule 37(e). In Fast v. LLC, Judge Campbell seized the opportunity to meticulously explain each requirement of Rule 37(e) and then apply those requirements to adjudicate the spoliation claims before him.

In this case, involving sex and disability discrimination claims, the plaintiff claimed she was fired for lacking the technical skills required for her employment, and that male employees with lesser technical skills were retained by the defendants. At the close of discovery, the defendants asserted discovery violations against the plaintiff, seeking sanctions for the spoliation of relevant ESI under Rule 37(e) and for the failure to produce relevant information under Rule 37(c)(1).

Since the 2015 amendments to Rule 37(e), there has been controversy as to whether Rule 37(e) is the sole and exclusive remedy for the loss of ESI that should have been preserved for litigation. As previously discussed in this blog, Rule 37(e) provide remedies for spoliation of ESI, and a court may impose sanctions where a party fails to take reasonable steps to preserve such information and, as a result, discoverable ESI is lost or destroyed. For Rule 37(e) to be applicable: (1) a duty to preserve ESI must have arisen; (2) the ESI must be lost or destroyed; (3) the ESI was lost or destroyed as a result of the party’s failure to take reasonable steps to preserve it; and (4) the ESI cannot be attained through any other source.

After these four prongs are satisfied, and prejudice is demonstrated, the court can impose remedial or curative measures to address the spoliation under Rule 37(e)(1). However, if more serious sanctions are sought under Rule 37(e)(2), the court (or in some cases, a jury) must make an additional critical determination before imposing sanctions – whether the spoliating party intended to deprive the non-spoliating party of the deleted ESI in the case at bar. Applying this framework, Judge Campbell addressed five categories of ESI which the defendants claimed the plaintiff failed to preserve: (1) an unidentifiable number of Facebook posts; (2) 109 Facebook messages; (3) contents of a stolen iPhone; (4) contents of a deactivated email account; and (5) Telegram messages.

For each of these categories, Judge Campbell determined that the duty to preserve the ESI arose in May 2018 when the plaintiff began coordinating with her former GoDaddy colleague to gather Slack messages to help support a potential litigation against her employer. The plaintiff’s proactive gathering of evidence clearly established her reasonable anticipation to commence litigation and, thus, triggered her duty to preserve potentially relevant ESI.

Intent to Deprive

With a duty to preserve all categories of the above-referenced ESI, the court found the remaining prerequisites of Rule 37(e) were satisfied, as it was clear that the ESI was destroyed by the plaintiff’s actions or inactions, that the plaintiff failed to take reasonable steps to preserve the ESI, and that the lost ESI could not be recovered or replaced through additional discovery, except that 108 of the 109 Facebook messages were replaced through third-party discovery. Interestingly, Judge Campbell found that the plaintiff had a duty to preserve data on her stolen iPhone up to the date of its theft and, by not backing up her iPhone’s contents to iCloud, she failed to take reasonable steps to preserve that data.

Judge Campbell further determined that the destruction of each category of ESI prejudiced the defendants because the spoliated ESI related to the plaintiff’s emotional or medical condition, her job, or her termination. Thus, the availability of sanctions under Rule 37(e)(2) hinged on whether the plaintiff intended to deprive the defendants of the ESI.

For the stolen iPhone and the plaintiff’s deactivated email address, Judge Campbell found that, based on the circumstances through which the ESI was lost, the plaintiff lacked the requisite intent to deprive required to impose serious sanctions under Rule 37(e)(2). The plaintiff’s failure to back up her iPhone prior to its theft was an unforeseen event. Likewise, her deactivation of her email address, which was provided through her internet service, and cancellation of her internet service upon moving caused her to lose access to the account which resulted in the destruction of emails.

However, for the other three categories of ESI – Facebook Posts, one Facebook message, and Telegram messages – Judge Campbell found that the imposition of sanctions under Rule 37(e)(2) was available. Further, the defendants were able to establish prejudice through the plaintiff’s deposition testimony, and third-party discovery, to show that each category of deleted or lost ESI was relevant to the litigation, as the ESI generally related to her emotional or medical condition, her job, or her termination.

While intent to deprive may be the most difficult prong under Rule 37(e)(2) to establish, the defendants were able to clear this hurdle and show the plaintiff’s intent to deprive. The court weighed heavily against the plaintiff the fact that she was technically savvy and knew how to preserve the posts and messages, and that her deletion or failure to save the posts or messages that were harmful to her case was intentional.

Further, the plaintiff’s purported reasons for deleting the ESI were unpersuasive and the timing of the deletion – always a critical determinant where (e)(2) sanctions are sought – was much more than a mere coincidence. For example, with regard to the Facebook messages, the plaintiff admitted to utilizing the “unsend” feature to recall 109 messages she previously sent to one of her colleagues while she was reviewing her Facebook messages in preparation for disclosing them to the defendants – evidencing her intent that she did not want the defendants to receive the unsent messages. And, while the circumstances around the “disappearance” of the plaintiff’s Telegram messages remained unknown, Judge Campbell dismissed the plaintiff’s contention that the messages were deleted due to her account’s inactivity beginning December 2018 – which still post-dates her duty to preserve – because she accessed her account as recently as October 2021. Instead, considering the plaintiff’s course of conduct concerning the Facebook posts and messages and the fact that she failed to disclose the existence of the Telegram messages in her written discovery response, Judge Campbell determined she deleted these Telegram messages with the intent to deprive the defendants of the ESI.

Sanctions Imposed

In light of the findings noted above, Judge Campbell concluded that Rule 37(e)(2) sanctions were authorized for: (1) the plaintiff’s deletion of Facebook posts; (2) the plaintiff’s “unsending” (deletion) of one Facebook message; and (3) the plaintiff’s deletion of her Telegram messages. Judge Campbell, however, declined to impose the ultimate sanction of dismissal because other, lesser sanctions adequately alleviated the prejudice suffered by the defendants. He explained that the plaintiff’s discovery misconduct did not deprive the defendants of the ability to put forth a meaningful defense because the destroyed ESI did not relate to the plaintiff’s underlying employment law claims, but to her damages claims. Instead, Judge Campbell imposed sanctions in the form of: (1) an adverse inference jury instruction for the Facebook posts, the one Facebook message, and the Telegram messages; (2) monetary sanctions for some, or all, of the defendants’ attorney fees related to resolving issues concerning the plaintiff’s discovery misconduct; and (3) an order permitting the defendants to conduct a forensic review of the plaintiff’s electronic devices to determine whether any spoliated – or yet to be produced – ESI was recoverable. Judge Campbell also addressed the availability of sanctions under Rule 37(c)(1) for the plaintiff’s alleged failure to produce ESI in accordance with Rule 26(e). Rule 37(c)(1) prohibits a party from using withheld information at trial unless the failure was substantially justified or harmless. The defendants alleged that the plaintiff failed to produce certain emails, audio recordings, and Facebook messages in response to their requests for production. Particularly, instead of downloading and producing unaltered Facebook messages, the plaintiff re-typed and revised certain messages and deleted what she deemed to be irrelevant messages.

Judge Campbell rejected the defendants’ argument that Rule 37(e) provided the exclusive remedies for the plaintiff’s discovery misconduct because Rule 37(e) provides exclusive sanctions for ESI spoliation, not failure to produce ESI as asserted by the defendants under Rule 37(c). Ultimately, Judge Campbell found sanctions authorized under Rule 37(c)(1) because the plaintiff’s failure to produce each category was not harmless nor substantially justified. The plaintiff had the ESI within her possession, custody, and control, failed to produce this information prior to the close of fact discovery, and thus deprived the defendants of its use during depositions. Judge Campbell determined that the plaintiff’s undisclosed relevance “redactions” of almost 500 Facebook messages did not warrant dismissal, as all withheld information was eventually produced; however, the defendants would be allowed to inform the jury of these undisclosed “redactions.”

Fast highlights a party’s obligations under Rule 37 – particularly its duty to preserve ESI when litigation becomes reasonably anticipated. This includes ensuring the contents of all electronic devices or third-party hosted accounts (i.e., email) are properly backed up, after the duty to preserve is triggered, to prevent the imposition of sanctions – or to a lesser degree, curative measures under Rule 37(e)(1) – in the event the party loses access to these devices or accounts through foreseen or unforeseen events (i.e., the court’s finding that the plaintiff violated her duty to preserve by failing to back up her iPhone prior to its theft).

Additionally, Fast reminds litigants of the significant hurdles that must be cleared when seeking sanctions under Rule 37(e)(2), and that the availability of Rule 37(e)(2) sanctions will more than likely require the use of circumstantial evidence to demonstrate a spoliator’s intent to deprive (in the absence of an admission of wrongdoing). As shown in Fast, a moving party may utilize the spoliator’s past discovery misconduct throughout the case to evidence their intent to deprive their adversary of relevant ESI.

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