February 28, 2018 Practice Points

Rule 37 Sanctions Will Be Denied if No Prejudice Resulted from Destruction of ESI

An automatic ESI-destruction policy is not best practice.

By Nolan T. Herslebs

A court may impose sanctions on a party “for failing to preserve electronically stored information [ESI]” under Fed. R. Civ. P. 37(e). A finding of prejudice combined with intent to deprive another party of the ESI will almost guarantee sanctions. Where these elements are absent, as in Snider v. Danfoss, LLC, 2017 WL 2973464 (N.D. Ill. July 12, 2017), sanctions are usually denied.

Defendant Danfoss implemented a company policy to delete employee emails 90 days after the employment is terminated. Plaintiff Snider filed a motion seeking sanctions for the destruction of her company emails after her attorney sent Danfoss a preservation letter to preserve all relevant information pertaining to the legal action. The court found sanctions unwarranted after applying a five-part analysis dissecting Rule 37(e).

The court must consider five requirements before imposing sanctions: (1) the information was ESI, (2) there was anticipated or actual litigation, (3) ESI should have been preserved, (4) ESI was lost because the party failed to take reasonable steps to preserve, and (5) lost ESI was unable to be restored or replaced through additional discovery. If any of the five elements are missing, the court’s analysis stops and sanctions cannot be imposed under Rule 37(e). On the other hand, if all of the five elements are present, the court looks to the prejudice suffered by the party seeking the ESI.

The court determined that the plaintiff failed to show all the factors needed to justify sanctions. Although the entirety of the ESI could not be restored or replaced through additional discovery, some of the emails were replaceable by other evidence. In particular, the plaintiff’s emails to and from her supervisor and human resources representative during the relevant time frame were preserved. Fundamentally, the court concluded that the plaintiff’s motion for sanctions was doomed by the lack of prejudice to the plaintiff. Additionally, the plaintiff presented no evidence that proved Danfoss intentionally deprived the plaintiff of ESI.

The opinion highlights that an automatic ESI-destruction policy is not best practice. Although a motion for sanctions may be denied where no prejudice results, defense of the motion is costly.

Nolan T. Herslebs is a law student at Cumberland Law School in Birmingham, Alabama.

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