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Is That Discovery or ESI You Want Really Lost?

Before you get all fired up and shoot off an email to opposing counsel with the obligatory threat of sanctions because his/her client did not preserve certain email messages, take a breather. You might not get those sanctions. Under the Federal Rules of Civil Procedure, documents and electronically stored information (“ESI”) is generally considered lost only if “it cannot be restored or replaced through additional discovery”–a nuance lost on many.

If ESI May Be Had From Other Sources, it May Not be “Lost”

A case from the sunny clime of Hawaii makes this point aptly. In Envy Hawaii LLC v. Volvo Car USA, LLC, Civ. No. 17-00040 HG-RT (D. Hawaii March 20, 2019), litigation arose between a car dealership and Volvo corporate. After Volvo found out the dealership did not preserve certain financial records and email, its attorneys sought spoliation sanctions under FRCP 37(e). However, the court declined sanctions because it did not believe the information sought was “lost” as defined by the Rules.

The court noted:

“Spoliation sanctions pursuant to Fed. R. Civ. P. 37(e) are generally only appropriate if the purportedly ‘lost’ electronically stored information may be retrieved from additional discovery or discovery from third-parties.”  (Citations omitted).

In declining to sanction the dealership, the court observed that the information Volvo wanted might be in the possession of others (such as the email service provider or the software company that hosted the missing financial information). The court pointed out that that email is not lost when one custodian deletes them but they are available from another custodian. (See, e.g. GPP, Inc. v. Guardian Protection Products, Inc., Case No. 1:15-cv-00321-SKO (E.D. Cal. July 7, 2016)(no sanctions for loss of email because the email messages in question was produced by another custodian)).

But, Even if ESI Not Technically “Lost”, There is Still a Duty to Preserve It

The gist of this post is that people need to reflect before blowing a gasket about deleted or irretrievable ESI. There is a good chance the same information may be had from other sources. But, there are a couple things to keep in mind.

While the Volvo opinion discussed above is level-headed, there are caveats. The court’s point that sanctions are unwarranted if information is not truly “lost” because it is obtainable from alternate sources is based on Committee Notes to 2015 amendments to the Federal Rules of Civil Procedure.

That note points out that “[b]ecause electronically stored information often exists in multiple locations, loss from one source may often be harmless when substitute information can be found elsewhere. The new rule applies only if the lost information should have been preserved in the anticipation or conduct of litigation and the party failed to take reasonable steps to preserve it. “

It is the second sentence that bears noting–even if ESI is not technically “lost” because it may be found elsewhere, that does not relieve a litigant’s duty to preserve relevant evidence. Even if the information is ultimately found elsewhere, a litigant could still be sanctioned for failing to preserve it. (See, e.g. TLS Management & Marketing Services, LLC v. Rodrigez-Toledo, Civil No. 15-2121 (BJM) (D.P.R. Mar. 27, 2017)(Party sanctioned for destroying a computer even though he transferred contents to an external drive before destruction)).

Also, while the judge partly denied Volvo’s request for sanctions over lost email because Volvo had not first tried to get them from the email service provider, that is generally easier said than done because the Stored Communication Act (SCA) prevents email service providers from providing the content of email messages without the user’s consent.

Bottom line: while sanctions may be warranted for the loss or failure to preserve ESI, pragmatism should not be lost. The focus should remain on obtaining the right evidence to prove or defend a case and should not be diverted in the pursuit of sanctions.

Posted on May 9, 2019 in E-Discovery, Electronically Stored Information (ESI), ESI preservation, FRCP, Sanctions, Spoliation of Evidence

About the Author

Chad Main is an attorney and the founder of Percipient. Prior to founding Percipient, Chad worked as a litigator in Los Angeles and Chicago. He is a member of the Seventh Circuit Electronic Discovery Pilot Program Committee and may be reached at cmain@percipient.co.