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Finding Intent Under Amended Rule 37(e)

Wednesday, February 8, 2017

A review of the first year of cases under the amended spoliation sanctions rule reveals simpler analyses from judges and some relief from severe sanctions for litigants, but new ambiguities create uncertainty about reasonable steps, demonstrating intent, and inherent authority

In the first Part of this series, we reviewed the December 2015 amendments to Federal Rule of Civil Procedure 37(e) and the issues that amendment was intended to address.  In the second Part, we reviewed orders discussing “reasonable steps” to preserve that which must be preserved.  In this Part, we turn our attention to the requirement that an “intent to deprive” be found before the most serious sanctions can be applied.

INTENT TO DEPRIVE

As we noted in the first part, one of the things the amended version of the rule was intended to do was resolve a circuit split that was creating uncertainty and increased preservation costs.  The split was between jurisdictions where severe sanctions might be applied on the basis of some form of negligence and others where severe sanctions required a showing of intentionality.  As explained by the Advisory Committee on Civil Rules in its May 2014 Report:

Some circuits, like the Second, hold that adverse inference jury instructions (viewed by most as a serious sanction) can be imposed for the negligent or grossly negligent loss of ESI.  Other circuits, like the Tenth, require a showing of bad faith before adverse inference instructions can be given.  The public comments credibly demonstrate that persons and entities over-preserve ESI out of fear that some might be lost, their actions with hindsight might be viewed as negligent, and they might be sued in a circuit that permits adverse inference instructions or other serious sanctions on the basis of negligence.

The amended version of FRCP 37, in Subdivision (e)(2), attempts to resolve this split in favor of the higher standard requiring a showing of intentionality.  As explained in the Advisory Committee Notes to the 2015 Amendments:

This subdivision authorizes courts to use specified and very severe measures to address or deter failures to preserve electronically stored information, but only on finding that the party that lost the information acted with the intent to deprive another party of the information’s use in the litigation. . . .  It rejects cases . . . that authorize the giving of adverse-inference instructions on a finding of negligence or gross negligence.

The new 37(e)(2) also requires the same showing of intent for the application of dismissal or default judgment as a spoliation sanction.

2016 DECISIONS DISCUSSING INTENT TO DEPRIVE

Over the course of the first year under the amended rule, a number of courts had the opportunity to issue orders on motions for spoliation sanctions and to consider whether or not a party had “intent to deprive.”  Here is a representative sampling:

  • Bry v. City of Frontenac, 2015 U.S. Dist. LEXIS 169286 (E.D. Mo. Dec. 18, 2015) – evidence overwritten in accordance with standard operating procedures did not support a finding of intent to deprive
  • CAT3 LLC v. Black Lineage, 2016 WL 154116 (S.D. N.Y. Jan. 12, 2016) – intentional alteration of relevant documents supported a finding of intent to deprive
  • DVComm, LLC v. Hotwire Commc’ns, LLC, 2016 WL 6246824 (E.D. Pa. Feb. 3, 2016) – “double deleting” relevant files during the matter supported a finding of intent to deprive
  • Brown Jordan Int’l, Inc. v. Carmicle, 2016 U.S. Dist. LEXIS 25879 (S.D. Fla. Mar. 2, 2016) – loss of iPad and destruction of computer files while represented by counsel supported a finding of intent to deprive
  • Living Color Enters. v. New Era Aquaculture Ltd., 2016 U.S. Dist. LEXIS 39113 (S.D. Fla. Mar. 22, 2016) – negligent failure to deactivate the automatic deletion of text messages did not support a finding of intent to deprive
  • Marshall v. Dentfirst, 313 F.R.D. 691 (N.D. Ga. March 24, 2016) – loss of files during a company-wide upgrade process did not support a finding of intent to deprive
  • OrchestrateHR, Inc. v. Trombetta, 2016 U.S. Dist. LEXIS 51405 (N.D. Tex. Apr. 18, 2016) – deletion of emails, under alleged belief (mistaken) they were backed up on the server did not support a finding of intent to deprive
  • O’Berry v. Turner, 2016 WL 1700403 (M.D. Ga. Apr. 27, 2016) – failure to preserve ESI, reliance on a single hard copy, and loss of that hard copy supported a finding of intent to deprive
  • GN Netcom v. Plantronics, 2016 WL 3792833 (D. Del. July 12, 2016) – a supervisor’s emailed instructions to delete relevant emails during the course of the matter supported a finding of intent to deprive
  • First Fin. Sec., Inc. v. Freedom Equity Grp., LLC, 2016 WL 5870218 (N.D.Cal. Oct. 7, 2016) – deletion of text messages by multiple custodians supported a finding of intent to deprive

SUMMARY

The first year of orders considering “intent to deprive” shows a bit more variation than the orders considering “reasonable steps” we reviewed in the last Part.  Reviewing the orders listed above reveals that some courts have been very willing to infer intent from the circumstances of the preservation failure itself – some going so far as to comingle the intent to deprive analysis with the reasonable steps analysis (inferring intent to deprive directly from the lack of reasonable steps).  Other courts have interpreted the requirement strictly and looked for more direct evidence of intent to deprive.  It will take more time and decisions to see if this divergence coalesces back around a consensus approach or if we have traded one circuit split for another.

UPCOMING IN THIS SERIES

In the next Part of this series, our survey of 2016 spoliation sanctions decisions will look at the question of whether amended FRCP 37(e) is the sole source of authority for spoliation sanctions.

 

 

MATTHEW VERGA, JD
VP, Marketing Content
Advanced Discovery

Matthew Verga is an electronic discovery expert proficient at leveraging his legal experience as an attorney, his technical knowledge as a practitioner, and his skills as a communicator to make complex eDiscovery topics accessible.  A ten-year industry veteran, Matthew has worked across every phase of the EDRM and at every level from the project trenches to enterprise program design.  As VP, Marketing Content, for Advanced Discovery, he leverages this background to produce engaging educational content to empower practitioners at all levels with knowledge they can use to improve their projects, their careers, and their organizations.

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