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June 30, 2017 Practice Points

Steps to Consider Before Seeking Sanctions for Failure to Preserve and Produce ESI

Obtaining an award of sanctions is no easy task.

By Eric B. Levasseur and Jeanniece Jackson

In a recent decision highlighting the challenges in obtaining sanctions for a party’s alleged failure to preserve and/or produce electronically stored information (ESI), the Western District of Missouri refused to issue sanctions for allegedly destroyed ESI when the content was unknown and other routes to access this information were available. Zamora v. Stellar Mgmt. Grp., 3:16-05028 (W.D. Mo. Apr. 11, 2017). The court’s decision highlights that whether a court will impose sanctions is a discretionary, highly fact-dependent decision, with an increasingly narrow scope of discretion for sanctions of higher severity.

In Zamora, the plaintiff brought an action against two defendants for wrongful retaliation and discharge. In the course of discovery, the defendants alleged that after filing suit—and following a court order that the plaintiff produce her personal cell phones for copying to preserve a mirror image—the plaintiff nonetheless (1) deleted certain text messages, (2) failed to preserve six or seven phones, and (3) deleted a Facebook message sent from the plaintiff to the defendants’ employee. As a result of these actions, the defendants moved for sanctions, requesting either that the court dismiss the action, or issue an adverse-inference instruction.

Pursuant to Federal Rule of Civil Procedure 37(e), the party seeking sanctions for failure to preserve ESI bears the burden of establishing both prejudice and an intent to deprive the requesting party of the subject ESI. While the remedies for spoliated ESI are numerous, specifically as to adverse-inference instructions, a district court must make two findings before an adverse-inference instruction for spoliation is warranted: (1) There must be a finding of intentional destruction indicating a desire to suppress the truth, and (2) there must be a finding of prejudice to the opposing party. See Lincoln Composites, Inc. v. Firetrace USA, LLC, 825 F.3d 453, 463 (8th Cir. 2016). A court may determine intent based not only on direct evidence, but circumstantial evidence, witness creditability, motives of witnesses in a particular case, and other factors. See Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1035 (8th Cir. 2007).

Following a review of the parties’ respective arguments and the available evidence through discovery, thecourt decided that a finding of prejudice against the defendants was premature, noting that it was “unwilling at this point to base a finding of prejudice on speculation about the content of material that is not in the record, when at least some of the absent material is available through other discovery.”

The court noted in dicta that it did find that the record likely permitted a reasonable inference that the plaintiff was aware of the importance of preserving evidence and disregarded the necessity of preserving evidence in this case. However, the court did not find it necessary to analyze the plaintiff’s intent to deprive without a finding of prejudice. For these reasons, additional discovery was warranted, but the motion for sanctions was denied.

Despite what often might be perceived as the relative ease of pursuing sanctions based on a party’s perceived failure to properly preserve ESI, actually obtaining an award of sanctions is no easy task. Before pursuing a motion for sanctions for spoliated ESI, the moving party should consider whether the subject ESI is available through other sources, and whether a convincing argument for prejudice truly exists.

Eric B. Levasseur and Jeanniece Jackson are with Hahn Loeser & Parks, LLP in Cleveland, Ohio.

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