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Everything Old is New Again: New Sources for Spoliation Sanctions

A recent case in the Middle District of Tennessee highlights the scope and limits of spoliation sanctions under amended Rule 37(e). In Benefield v. MStreet Entertainment, LLC, 2016 WL 374568 (M.D. Tenn., Feb. 1, 2016), the plaintiff alleged that defendant had engaged in sanctionable conduct by failing to preserve text message evidence. The defendant argued that “a requirement to preserve text messages from private cellular phones is unduly burdensome and an invasion of privacy,” excusing them from any duty to preserve the text messages. The situation was complicated by the defendant’s late discovery that a vendor had, in fact, extracted text messages from one witness’s device dating from the relevant time frame. The parties agreed that these messages were not intentionally withheld from production.

In considering the plaintiff’s motion for sanctions, the court cited Rule 37(c), which provides: “If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Arguably, this citation applies only to the defendant’s failure to disclose the contact information for a witness, but the opinion is not clear.

Further, the court cited a pre-amendment decision from the Sixth Circuit providing that “a federal court’s powers include broad discretion to craft proper sanctions for spoliated evidence.” Adkins v. Wolever, 554 F.3d 650, 651 (6th Cir. 2009). The court held, in part, that “the court will give a spoliation instruction to the jury, should this matter proceed to trial,” based on the failure to preserve text messages.

In light of the substantial amendments to Rule 37(e), effective December 1, 2015, this analysis is interesting for what it does not do. In short, the court declined to apply Rule 37(e) to a case that would seem to fit well within its parameters.

Rule 37(e), as amended, applies squarely in cases where a party has failed to preserve electronically stored information. Because the Court found that: (1) the text messages should have been preserved; (2) the defendant failed to take reasonable steps to preserve the text messages; and (3) the text messages could not be restored or replaced through additional discovery; and that the defendant apparently did not act with intent to deprive the plaintiff of the information, subsection (e)(1) would be the only source for sanctions. Subsection (e)(1) would require the court to find that the plaintiff was prejudiced from the loss of the text messages and would enable the court to “order measures no greater than necessary to cure the prejudice.”

Rather than applying the 37(e) analysis, the Benefield court opted to apply 37(c), which was not amended in 2015. The court also relied on a pre-amendment Sixth Circuit opinion that cites the court’s “inherent power to control the judicial process” as a source of spoliation sanctions. See Adkins, 554 F.3d at 652.

For litigants, then, the spoliation waters may be murkier than ever. The courts clearly have – and will utilize – other sources for sanctions, whether in the rules or in case law, despite the amendment to Rule 37(e). The Committee Note to Rule 37(e) specifically states that the amendment “authorizes and specifies measures a court may employ if information that should have been preserved is lost, and specifies the findings necessary to justify these measures,” and “forecloses reliance on inherent authority or state law to determine when certain measures should be used.” It remains to be seen if those goals are, in fact, accomplished by the amendment. Benefield is an early case, but it may signal a move away from Rule 37(e) and a new emphasis on other sources of sanctions for spoliation and discovery abuses.

Valerie Diden Moore

Valerie Moore