A multi-part series reviewing decisions related to spoliation of ESI since the December 2015 amendments to the Federal Rules of Civil Procedure
In “When the Bough Breaks,” we discussed the December 2015 amendments to Federal Rule of Civil Procedure 37(e). In “Reasonable Steps to Preserve ESI,” we discussed available commentary and cases on what constitutes reasonable steps. In this Part, we review commentary and cases on intent to deprive.
As we discussed, one of the things the amendments to FRCP 37(e) were intended to do was resolve a circuit split that had arisen regarding the level of culpability that must be shown for the application of severe spoliation sanctions. The amendments resolved that split in favor of the higher standard but, in so doing, created new questions about establishing intent to deprive.
Answered and Asked
Specifically, a circuit split had arisen regarding the question of whether adverse inference instructions or dismissal could be based merely on some level of negligence or if intentional misconduct was required. The jurisdictional variations created uncertainty for litigants and, allegedly, increased preservation costs. The Advisory Committee on Civil Rules explained 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. [emphasis added]
The amended version of FRCP 37(e)(2) resolves this split in favor of the higher standard by requiring a showing that “the party acted with the intent to deprive another party of the information’s use in the litigation” for the application of adverse inference instruction, dismissal, or default judgment sanctions. 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. [emphasis added]
Although this rule change answered one question (and reduced the frequency of severe spoliation sanctions), it created two new questions. First, what showing of intent to deprive is sufficient to satisfy the rule? And, second, who should make the determination?
Decisions Discussing Intent to Deprive
Over the past four years, a variety of courts have had the opportunity to issue orders on motions for spoliation sanctions and to consider whether a party had “acted with the intent to deprive another party of the information’s use in the litigation.” Here is a sampling of those cases:
- Brown Jordan Int’l, Inc. v. Carmicle, Nos. 0:14-CV-60629, 0:14-CV-61415 (S.D. Fla. Mar. 2, 2016) – in this case, a party’s locking, losing, wiping, and resetting of a variety of computers, tablets, and smartphones containing relevant evidence combined with the party’s “lack of candor concerning these actions unquestionably constitute[d] bad-faith” leading to a finding of intent to deprive under FRCP 37(e)(2) [emphasis added]
- Cahill v. Dart, No. 13-cv-361 (N.D. Ill. Dec. 2, 2016) – in this case, the court declined to make a finding itself on the question of intent to deprive, and instead, it allowed the presentation of evidence regarding the spoliation and alleged intent to the jury, so that the jury could determine intent and apply a mandatory adverse inference if it found intent to deprive
- Omnigen Research et. al. v. Wang et. al., No. 16-00268 (D. Oregon, May 23, 2017) – in this case, defendants ”made their desktop computer unavailable by “donating” it. . . intentionally deleted thousands of document . . . intentionally deleted and refused to produce relevant emails from multiple email accounts . . . intentionally destroyed metadata,” and provided implausible explanations and excuses for these activities, leading to a finding of intent to deprive under FRCP 37(e)(2)
- Barry v. Big M Transportation, Inc., No. 1: 16-cv-00167-JEO (N.D. Ala. Sept. 11, 2017) – in this case, a party failed to preserve electronic vehicle data but “offered a plausible explanation for why it did not preserve the data,” which “even if mistaken, [was] consistent” with the party’s “insistence that it did not act in bad faith and had no intention of depriving,” leading to no finding of intent to deprive under FRCP 37(e)(2) [emphasis added]
- Eaton-Stephens v. Grapevine Colleyville Indep. Sch. Dist., No. 16-11611 (5th Cir. Nov. 13, 2017) – in this case, relevant ESI was lost despite retention “policy and rules” that should have prevented it, but “violation of a rule or regulation pertaining to document retention is not per se bad faith,” and no other evidence of intention was presented, leading to affirmation of the trial court’s decision not to find bad faith or apply an adverse inference sanction [emphasis added]
- Leidig v. BuzzFeed, Inc., No. 16 Civ. 542 (VM) (GWG) (S.D.N.Y. Dec. 19, 2017) – in this case, the plaintiffs negligently allowed and caused a variety of ESI spoliation but provided explanations the court found plausible; the defendant argued that intent could be inferred from the actions taken, but the court was unpersuaded, leading to no finding of intent to deprive under FRCP 37(e)(2):
In other words, the intent contemplated by Rule 37 is not merely the intent to perform an act that destroys ESI but rather the intent to actually deprive another party of evidence. Buzzfeed has shown only the former type of intent. [emphasis added]
- Schmalz v. Village of North Riverside, No. 13-cv-8012, 2018 WL 1704109 (N.D. Ill. Mar. 23, 2018) – in this case, the defendant failed “to take any steps to identify and preserve the text messages in question,” behavior “certainly constituting gross negligence,” and the plaintiff argued that “intent and bad faith can be demonstrated by failing to take reasonable steps to preserve ESI,” but the court explains that “additional factors” demonstrating intent to deprive must also be shown, leading to no finding of intent to deprive under FRCP 37(e)(2) [emphasis added]
- BankDirect Capital Fin., LLC v. Capital Premium Fin., Inc., No. 15 C 10340 (N.D. Ill. April 4, 2018) – in this case, the magistrate judge recommended that the court decline to make a finding itself on the question of intent to deprive and, instead, allow presentation of evidence regarding the spoliation and alleged intent to the jury, so that the jury could determine intent (or, in the alternative, apply a permissive adverse inference)
- Goldrich v. City of Jersey City, No. 2:2015cv00885 (D.N.J. Sept. 19, 2018) – in this case, expert forensic analysis demonstrated that the plaintiff had lied about a virus causing ESI loss and had deliberately turned over the wrong laptop computer for forensic evaluation, and the court found that this “circumstantial evidence strongly support[ed] a finding that Plaintiff acted in bad faith,” leading to a finding of intent to deprive under FRCP 37(e)(2) [emphasis added]
- Univ. Accounting Serv., LLC v. Schulton, June 7, 2019 (D. Or. 2019) – in this case, a party admitted during his deposition to deleting materials so he “could legitimately say [he had] no access” and “because it’s exactly the type of damning information that UAS wants to catch me with,” leading to a finding of intent to deprive under FRCP 37(e)(2) [emphasis added]
- GN Netcom, Inc. v. Plantronics, Inc., No. 18-1287 (3rd Cir. Jul. 10, 2019) – in this case, “the District Court reasonably concluded that Plantronics acted in bad faith” based on the facts that a Senior VP “deliberately deleted an unknown number of emails in response to ‘pending litigation’ and urged others to do the same,” that “executives, including its CEO, were not truthful during depositions,” and that “the company was not willing to spend a nominal fee for its expert, Stroz, to fully assess the spoliation and create a final report,” each of which “was an intentional step to interfere with GN’s prosecution of its claims against Plantronics” [emphasis added]
- Wilmoth v. Deputy Austin Murphy, No. 5:16-CV-5244 (W.D. Ark. Aug. 7, 2019) – in this case, defendant and defendant’s attorney allowed the spoliation of relevant ESI and also engaged in “conduct which might readily be viewed as intentional deception,” including a “history of incomplete, evasive, or untrue discovery responses,” leading to a finding of intent to deprive under FRCP 37(e)(2) [emphasis added]
- Woods v. Scissons, No. CV-17-08038-PCT-GMS (D. Ariz. Aug. 14, 2019) – in this case, the court declined to make a finding itself on the question of a non-party’s intent to deprive, and instead, it allowed the presentation of evidence regarding the alleged ESI spoliation and intent to the jury, so that the jury could determine intent and apply a permissive adverse inference if it found intent to deprive
These decisions considering “intent to deprive” show a bit more variation than the decisions we reviewed regarding “reasonable steps.” Most of these decisions decline to infer intent solely from a lack of reasonable steps or other circumstantial evidence, but some are willing to draw that inference – particularly when failures have been egregious or when the explanations for them have been implausible, unbelievable, or untrue. Additionally, some courts prefer to allow the presentation of evidence regarding spoliation and intent to the jury so that they can answer the question of intent, especially when that evidence may also be relevant to other questions before the jury.
Upcoming in this Series
In the next Part, we will continue our review of ESI spoliation with a discussion of courts’ inherent authority to apply sanctions.