September’s Notable Cases and Events in E-Discovery

[Editor’s Note: This article was first published September 25, 2024, and EDRM is grateful to Tom Paskowitz and Robert Keeling of our Trusted Partner, Sidley, for permission to republish. The opinions and positions are those of the author.]

This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:

1. A decision from the U.S. District Court for the Northern District of California admonishing the parties’ counsel for failing to engage in appropriate negotiations regarding the search terms to be applied to the defendants’ electronically stored information (ESI) and imposing specific meet and confer obligations on counsel
   
   
2. A decision from the U.S. District Court for the Eastern District of North Carolina denying a motion to compel the defendant to produce additional metadata because the defendant’s production was text searchable and therefore produced in a reasonably usable format
   
   
3. A ruling from the U.S. District Court for the Northern District of California denying in part a motion to compel responses to an interrogatory about the defendants’ document retention and litigation hold because the plaintiff had not made a showing of spoliation, but granting the motion in part to compel certain information that would assist with resolving discovery disputes between the parties
   
   
4. An opinion from the U.S. District Court for the Southern District of New York granting spoliation sanctions where the defendant added relevant custodians to its document hold three days after the custodians’ ESI was deleted but declining to find that the plaintiff established intent to deprive because the defendant presented credible explanations for the delay

1. A decision from the U.S. District Court for the Northern District of California admonishing the parties’ counsel for failing to engage in appropriate negotiations regarding the search terms to be applied to the defendants’ electronically stored information (ESI) and imposing specific meet and confer obligations on counsel.

In Humanmade v. SFMade, No. 23-cv-02349-HSG (PHK), 2024 WL 3378326 (N.D. Cal. July 10, 2024), U.S. Magistrate Judge Peter H. Kang addressed the obligations on parties in discovery to negotiate appropriate search terms for ESI.

In this action alleging claims for false advertising, unfair business practices, and related torts, Plaintiff claimed that Defendants misused a proprietary training program developed by Plaintiff and cut Plaintiff out of partnerships with cities and aid organizations.

During discovery, the parties agreed on five custodians for Defendants to use and “several” search terms to apply to the ESI of those custodians. Id. at *2. But the parties could not agree on seven additional proposed search terms because Defendants claimed that they yielded too high a hit count, thus making review of documents based on those seven search terms overly burdensome. Plaintiff complained that Defendants refused to disclose hit counts resulting from the seven disputed search terms and refused to negotiate revisions to those terms. There was apparently no dispute as to the relevance of Plaintiffs’ document requests or the seven additional proposed search terms.

Magistrate Judge Kang began his analysis with a lengthy discussion of proportionality under the Federal Rules. In particular, he noted that Federal Rule of Civil Procedure 26(b)(1) provides that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case,” and relevancy “is broadly defined to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.”

But Magistrate Judge Kang explained that even if relevant, information must be “proportional to the needs of the case” to fall within the scope of permissible discovery. Id. (quoting Rule 26(b)(1)). Quoting from the 2015 amendments to Rule 26(b)(1), he explained that the proportionality standard “impose[s] reasonable limits on discovery” and “guard[s] against redundant or disproportionate discovery by giving the Court authority to reduce the amount of discovery that may be directed to matters that are otherwise proper subjects of inquiry.” 

Magistrate Judge Kang further explained that evaluating the proportionality of a discovery request requires consideration of “the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to the information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Id. (quoting Rule 26(b)(1)). 

Finally, Magistrate Judge Kang noted that while the party seeking discovery bears the burden of establishing relevancy, once it does so the resisting party has the burden to show that the discovery should not be allowed, including to “specifically explain the reasons why the request at issue is objectionable and may not rely on boilerplate, conclusory, or speculative arguments.” In this regard, Magistrate Judge Kang stated that Courts have “broad discretion and authority to manage discovery,” including to determine relevancy for discovery purposes and to craft “discovery orders that may expand, limit, or differ from the relief requested.”

Turning to the application of these standards, Magistrate Judge Kang first concluded that it would be proportional to require Defendants to “run additional search terms, if appropriately drafted, and produce responsive ESI documents and materials” because there was no dispute over the relevance of Plaintiffs’ document requests. Id. at *3.

But Magistrate Judge Kang ultimately concluded that he could not rule on Plaintiffs’ motion to compel. He noted that neither party had submitted all seven of the disputed search terms in connection with the motion. He also expressed disappointment that the parties failed to engage in “the kind of communication during meet and confers which is expected and necessary for effective resolution of discovery issues.” He noted that “[e]xperienced counsel should be capable of and, indeed, are expected to resolve ESI and search term disputes typically without the need for Court intervention, because eDiscovery issues are common in the modern era and members of the bar are expected to be familiar with and capable of competently working through these kinds of issues.”

Magistrate Judge Kang also took Defendants to task for failing to share “statistics on hit counts for the seven disputed search terms transparently with Plaintiff.” He explained that “[p]arties are both encouraged and expected to timely share eDiscovery statistics such as hit number results when they have a dispute over eDiscovery issues such as search terms.” He similarly chided Plaintiff for failing to “propose any alterations to, limitations on, or modifications to any of the seven disputed search terms when informed that they yield an excessive and unreasonably high number of hits (regardless of the details of the statistics).”

Based on these failures by counsel, Magistrate Judge Kang ordered the parties “to undertake the normal type of search term negotiation and resulting ESI production that they should have done without the need for Court intervention.” As part of this negotiation, he ordered (1) Defendants to provide Plaintiff with the hit count statistics resulting from running each of the seven disputed search terms against Defendants’ database of collected ESI; (2) Plaintiff to provide Defendants with a set of up to seven modified search terms to replace the original seven search terms, “where the modifications shall be made for the purpose of reducing the hit count to address overbreadth and undue burden”; and (3) Defendants to run the proposed modified search terms and report the document hit count statistics to Plaintiff. In this regard, Magistrate Judge Kang noted that the party in possession of the documents and ESI database from which discovery is sought is generally expected to “run test searches using the opposing party’s proposed search terms to see if they return a reasonable and mutually agreeable hit count (whether too high or too low).” 

Magistrate Judge Kang imposed additional obligations on the parties, including ordering lead trial counsel for the parties to meet and confer and negotiate “reasonably and in good faith regarding whether any further modifications to the search terms are reasonably warranted in light of the document hit count statistics.” Id. at *4. He also ordered the parties “to timely share eDiscovery statistics such as hit number results when they have a dispute over eDiscovery issues such as search terms (i.e., like the current dispute), and to timely and promptly propose and counterpropose modifications to search terms.” Magistrate Judge Kang also imposed on the parties specific procedures for production of the resulting ESI, including “privilege/clawback procedures for eDiscovery” and procedures for designating ESI as confidential. Id. at *4-5. 

Finally, Magistrate Judge Kang again admonished the parties’ counsel for failing to “effectively engage in the meet and confer process for resolving discovery disputes.” He noted that “[a]ble and experienced counsel, particularly lead trial counsel for the Parties here, are expected to and should know better how to resolve disputes of the kind raised herein and how to resolve them efficiently and without undue delay.” Id. at *6. He ordered the parties’ counsel to review and comply with the Court’s Guidelines for Professional Conduct, the Court’s Discovery Standing Order, and the Federal Rules of Civil Procedure, “particularly Rules 1 and 26.” He warned the parties that a future failure to “resolve discovery disputes in a reasonable manner consistent with Rules 1 and 26, as well as this Court’s directives and Orders,” could result in additional meet and confer procedures, including ordering lead counsel for the parties to meet and confer in person “at the San Francisco courthouse or other location.”

2. A decision from the U.S. District Court for the Eastern District of North Carolina denying a motion to compel the defendant to produce additional metadata because the defendant’s production was text searchable and therefore produced in a reasonably usable format.

In Bah v. Sampson Bladen Oil Company, Inc., No. 23-CV-00330, 2024 WL 3678337 (E.D.N.C. Aug. 5, 2024), U.S. Magistrate Judge Robert T. Numbers II addressed a party’s obligations with respect to the production of metadata and producing documents in a “reasonably usable” format.

Plaintiff in this action sued her former employer for race-based employment discrimination. Id. at *1. At the outset of discovery, the parties submitted a joint Rule 26(f) report in which they agreed that most ESI should be produced in TIFF format but that some types of ESI, such as Excel spreadsheets, PowerPoint files, and audiovisual files, should be produced in native format. The joint Rule 26(f) report provided that when a party produced ESI in TIFF format, the production “would also include metadata and searchable, extracted text,” but the report did not specify which metadata should be produced. The Court had adopted these provisions from the joint Rule 26(f) report.

When discovery commenced, Plaintiff served requests for production that did not specify the metadata that should accompany production, and Defendant eventually produced about 2,100 documents consisting of 13,000 pages in TIFF format and a “handful of documents in native format.” Defendant provided a load file with the production containing searchable, extracted text and 13 metadata fields.

After receiving the production, Plaintiff complained that it was “completely unusable” because she could not “filter the documents by date and would instead need to search each specific date as text within the TIFF file,” which would be “extremely cumbersome and time-consuming” and would increase the chance that she overlooks relevant documents. Id. at *2. She also complained that the production lacked “Bates numbers” and “parent/child relationship fields.” Plaintiff requested that Defendant provide additional metadata, but Defendant disagreed with Plaintiff’s contentions and refused to do so.

Plaintiff then filed a motion to compel additional metadata, arguing that Defendant violated the Federal Rules of Civil Procedure when it did not produce ESI in its native format and that both the Federal Rules and the parties’ joint Rule 26(f) report required Defendant to provide all metadata fields available. Magistrate Judge Numbers addressed these arguments in turn.

With respect to Plaintiff’s argument that Defendant should have produced responsive ESI in native format, Magistrate Judge Numbers noted that this disregarded the parties’ agreement that “most ESI should be produced in TIFF format.” Id. at *3. He therefore rejected this argument.

Magistrate Judge Numbers similarly rejected Plaintiff’s argument that Defendant violated the joint Rule 26(f) report and Rule 34 by producing only some of the available metadata. He noted that the parties agreed in the joint Rule 26(f) report that ESI produced in TIFF format would “include metadata and searchable, extracted text.” He found that the report was ambiguous as to whether the reference to metadata meant “all available metadata” or something less. Id. at *4. 

To resolve this ambiguity, Magistrate Judge Numbers looked to Rule 34, under which a requesting party may request that the responding party produce ESI in a particular form and the responding party may object to the requested form if it “state[s] the form or forms it intends to use.” Id. (quoting Rule 34(b)(2)(D)). He explained that Rule 34 “encourages the parties to be explicit about issues related to the form of production for ESI,” whereby the requesting party “should explicitly state its desired form of production and the responding party should explicitly state the form in which it is willing to produce ESI.” Magistrate Judge Numbers also noted that these requirements “are designed to avoid the very problems confronting the Court and the parties here” by facilitating “the orderly, efficient, and costeffective   discovery of electronically stored information.” Id. (quoting the Advisory Committee Note to the 2006 Amendments to Rule 34).

Magistrate Judge Numbers also surveyed prior case law on the issue of metadata requests, summarizing these decisions as requiring “parties to address those issues explicitly and promptly.” In particular, “if a party wants metadata, it should ask for it. Up front. Otherwise, if the party asks too late or has already received the document in another form, it may be out of luck.” Id. (quoting Aguilar v. ICE, 255 F.R.D. 350, 357 (S.D.N.Y. 2008) (internal quotations omitted)).

Applying these standards, Magistrate Judge Numbers concluded that the parties’ use of the term “metadata” in their joint Rule 26(f) report, without more, entitled neither party to “all available metadata.” He explained that “a party who wants ESI produced in non-native format to be accompanied by all available metadata must say so.”

With respect to “how much metadata the parties must produce,” Magistrate Judge Numbers again looked to Rule 34, where in the absence for a request for a specific production form, the responding party “must produce ESI in a form or forms in which it is ordinarily maintained” or in a “reasonably usable form.” Id. (quoting Rule 34(b)(2)(e)(ii)). He concluded that because the parties’ joint Rule 26(f) report provided for production of most ESI in non-native format, those documents were required to “be produced in a reasonably usable form.” As a result, Magistrate Judge Numbers held that “unless a request for production contains more specific instructions, any ESI produced in non-native format must include enough metadata to be reasonably usable to the requesting party.”

Magistrate Judge Numbers then addressed whether Defendant had complied with its obligation to “produce ESI in a reasonably usable form.” Id. at *5. He explained that Rule 34 does not allow a party to produce ESI in “a different form that makes it more difficult or burdensome for the requesting party to use the information efficiently in the litigation.” Id. (quoting the Advisory Committee Note to the 2006 Amendment to Rule 34). Rather, “if the responding party ordinarily maintains the information it is producing in a way that makes it searchable by electronic means, the information should not be produced in a form that removes or significantly degrades this feature.” Id. Magistrate Judge Numbers stated that Plaintiff, as the requesting party, had the burden to show that ESI has not been produced in a reasonably usable format. 

Addressing Plaintiff’s arguments in support of her claim that Defendant’s production was not “reasonably usable,” Magistrate Judge Numbers found that Plaintiff was able to access, review, and text-search the ESI produced. He concluded that these facts undermined Plaintiff’s request for additional metadata.

Magistrate Judge Numbers next rejected Plaintiff’s argument that the lack of Bates numbers and parent/child metadata rendered the productions unusable. He noted that the parties’ ESI vendors appeared to agree that Defendant’s production included fields for “Production Beg Bates and End Bates along with Production Beg Attach and End Attach,” meaning that Defendant’s production included Bates numbers. Magistrate Judge Numbers also noted that Plaintiff did not dispute Defendant’s argument that “the production bates attach and production bates end metadata allows for the identification of documents that are attachments to others.”

Magistrate Judge Numbers next addressed whether the lack of metadata allowing Plaintiff to filter documents by date and to categorize documents by file type rendered Defendant’s production unusable. Id. at *6. He cited to several decisions supporting the proposition that in most cases, courts find that “a production is reasonably usable if it is text searchable.” Id. (surveying cases). He added that Rule 34’s Advisory Committee Notes support the position that whether a production is searchable aligns with the commentary: “If the responding party ordinarily maintains the information it is producing in a way that makes it searchable by electronic means, the information should not be produced in a form that removes or significantly degrades this feature.” Id. (quoting the Advisory Committee Note to the 2006 Amendment to Rule 34) (emphasis added by Court). 

Magistrate Judge Numbers concluded that Defendant’s production met the requirement that ESI be produced in a reasonably usable format because it was text searchable, and there was nothing in the record establishing that the production was less searchable for Plaintiff than it would be for Defendant. In this regard, he noted that Plaintiff was able to view the documents using her ESI vendor’s eDiscovery platform and search them for “specific dates and specific individuals.” He also noted that Plaintiff had failed to provide specific information about how her review would be impeded by the lack of the additional metadata, how much more onerous reviewing the production would be, or how additional metadata would streamline Plaintiff’s review of the documents. Id. at *7.

Ultimately, Magistrate Judge Numbers found that while Defendant’s production was not reviewable and searchable with the ease and sophistication that Plaintiff preferred, this was not required. Rather, Rule 34 requires only that when ESI is produced in a non-native format, the chosen form must be reasonably usable by the requesting party and does “not require that ESI be produced in the form the requesting party prefers or the one that is the most easily usable by the requesting party.” He concluded that Defendant complied with its obligations because Plaintiff did not request specific metadata fields in her requests for production and Defendant’s production was reasonably usable. Therefore, Magistrate Judge Numbers denied Plaintiff’s motion to compel additional metadata.

3. A ruling from the U.S. District Court for the Northern District of California denying in part a motion to compel responses to an interrogatory about the defendants’ document retention and litigation hold because the plaintiff had not made a showing of spoliation but granting the motion in part to compel certain information that would assist with resolving discovery disputes between the parties.

In In re Google RTB Consumer Privacy Litigation, No. 21-cv-02155-YGR (VKD), 2024 WL 3407069 (N.D. Cal. July 11, 2024), U.S. Magistrate Judge Virginia K. DeMarchi addressed the standards under Rule 26 for compelling a party to produce information regarding its litigation holds.

This nationwide data privacy class action was brought on behalf of Google account holders alleging that Google shares and sells users’ personal information with companies that participate in Google’s digital ad auction system, called Google Real-Time Bidding (RTB). 

In discovery, Plaintiffs served Google an interrogatory with multiple subparts seeking “extensive information about essentially everything Google did with respect to the retention and preservation of any information responsive to a claim or defense in this action.” Id. at *3. This included information regarding Google’s retention and preservation of Plaintiffs’ data in certain logs and its retention and preservation of logs or data sources that contain information “associating or linking information transmitted in Google RTB bid requests with personal Google accounts.” In response, Google offered to provide certain information regarding the logs, including (i) the standard retention period and any changes thereto during the class period; (ii) the data fields being preserved; (iii) the earliest date for which Google has any data available in these logs; and (iv) the earliest date for which Google has any data for the named plaintiffs available in these logs. The parties could not reach agreement, and Plaintiffs moved to compel.

Magistrate Judge DeMarchi began her analysis with a summary of the relevant portions of Rule 26, which provides that a party “may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Id. (quoting Rule 26(b)(1)). In addition, Rule 26(b)(2) provides that the Court may limit the extent of discovery otherwise permitted if it determines that the proposed discovery “is outside the scope permitted by Rule 26(b)(1).”

Applying these standards, Magistrate Judge DeMarchi first concluded that Plaintiffs had not met their burden of demonstrating that they required “detailed information about Google’s litigation holds in this and other litigations.” Id. at *3. In particular, she found that Plaintiffs should be able to readily discern whether Google timely preserved potentially relevant data based on Google’s agreement to produce information concerning its “standard data retention periods, changes made to those periods, and the earliest dates for which it has preserved data” in the relevant logs.

Magistrate Judge DeMarchi rejected Plaintiffs’ argument that they had made a “preliminary showing” of spoliation by Google sufficient to “overcome the attorney-client privilege that typically protects litigation holds from discovery and to obtain other information about how Google implemented its litigation holds.” She concluded that Plaintiffs had not made a preliminary showing of spoliation or any other showing sufficient to justify this discovery and stated that “[a]t most, there is a dispute about what Google was required to preserve or produce.” In reaching this conclusion, she distinguished two cases Plaintiffs relied on in making their argument: In re Cathode Ray Tube Antitrust Litigation, 2014 WL 5667882, at *2, *3-*5 (N.D. Cal. Jan. 27, 2023) (where the Defendant admitted it failed to timely preserve relevant information for eight months, relied exclusively on an “oral” litigation hold, acknowledged that it misunderstood the scope of what should be preserved, and then failed to document its preservation efforts in any manner) and Thomas v. Cricket Wireless, LLC, 2020 WL 7344742, at *1-*2 & n. 3 (N.D. Cal. Dec. 14, 2020) (where the Defendant had already conceded that it did not retain legacy databases covering a time period relevant to the litigation even though it was on notice of its obligation to preserve at least some of the data).

Magistrate Judge DeMarchi reached a different conclusion regarding Plaintiffs’ request for another subpart of the interrogatory requesting information about the “retention period(s) … and any changes to the retention period during the class period” for logs “capable of associating or linking information transmitted in Google RTB bid requests with personal Google accounts … including log(s) or data source(s) or decryption or encryption keys whereby [G]oogle maps or links various identifiers to each other.” Id. at *4. She noted that the parties had an ongoing dispute regarding the distinction between what constituted a “decryption key” and whether Google had a duty to preserve and produce such keys. Google also argued that Plaintiffs had obtained fully responsive information during a Rule 30(b)(6) deposition, although Plaintiffs questioned the completeness and accuracy of the testimony and other information Google had provided. Under these circumstances, Magistrate Judge DeMarchi concluded that requiring Google to provide a “precise answer” to this part of the interrogatory would “resolve unnecessary disputes regarding Google’s retention and preservation of decryption keys,” and she ordered Google to do so.

4. An opinion from the U.S. District Court for the Southern District of New York granting spoliation sanctions where the defendant added relevant custodians to its document hold three days after their ESI was deleted but declining to find that the plaintiff established intent to deprive because the defendant presented credible explanations for the delay.

In Kosher Ski Tours Inc. v. Okemo Limited Liability Co., No. 20-cv-9815, 2024 WL 3905742 (S.D.N.Y. August 22, 2024), U.S. District Judge Vincent L. Briccetti addressed spoliation sanctions for ESI lost because of delay in identifying relevant custodians who should be subject to a document preservation obligation.

This action involved claims that Defendant had breached a lodging agreement with Plaintiff to provide lodging at one of its ski resorts, after Defendant informed Plaintiff that it could not accommodate the reservations outlined in the lodging agreement due to business disruptions caused by COVID-19. Id. at *1. On October 7, 2020, Plaintiff’s counsel sent a demand letter to the general counsel of Defendant’s parent company threatening a lawsuit and stating that Plaintiff intended “to explore in discovery whether there were other improper motives for the sudden termination of the lodging agreement.” Plaintiff filed the lawsuit on October 19, 2020.

During discovery, Plaintiff learned that Defendant had not retained ESI for two of its employees — Wendy Ackerman and Amy Morgan. Defendant claimed it became aware of litigation with Plaintiff “on or about October 23, 2020” and placed a legal hold on employees reasonably believed to have information relevant to the breach-of-contract claim asserted in Plaintiff’s complaint on October 30, 2020. However, after further investigation, Defendant learned that Ackerman and Morgan might have relevant information about the parties’ claims or defenses and added them to the legal hold on January 20, 2021 — 93 days after the suit was filed. At that time, Okemo had a maximum email retention period of 90 days, meaning that Ackerman’s and Morgan’s emails were deleted before the legal hold was extended to them. Plaintiff filed a motion for spoliation sanctions based on these facts.

Judge Briccetti began his analysis by quoting Rule 37(e), which provides for various sanctions when a party fails to take reasonable steps to preserve ESI that should have been preserved in anticipation of litigation, and when that ESI is lost and cannot be restored or replaced through additional discovery. He explained that Rule 37(e) requires “a three-part inquiry”: (i) whether “a party failed to take reasonable steps to preserve ESI that should have been preserved in the anticipation or conduct of litigation”; (ii) whether “there has been prejudice to another party from loss of the information, in which case the Court may order measures no greater than necessary to cure the prejudice”; and (iii) regardless of prejudice, “whether the destroying party acted with the intent to deprive another party of the information’s use in litigation,” in which case the Court may consider the imposition of the sanctions listed in Rule 37(e)(2). Id. (quoting Rule 37(e)).

Judge Briccetti noted that the “[t]he obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” In particular, he explained that the duty to preserve is triggered “[w]hen counsel receives a communication explicitly stating a party intends to initiate a lawsuit.”

With respect to demonstrating prejudice from the loss of information, Judge Briccetti explained that Rule 37(e) “does not place a burden of proving or disproving prejudice on one party or the other,” but the inquiry “necessarily includes an evaluation of the information’s importance in the litigation.”

Finally, with respect to the appropriate sanctions for spoliation under Rule 37, Judge Briccetti noted that Rule 37(e)(1) permits “forbidding the party that failed to preserve information from putting on certain evidence, permitting the parties to present evidence and argument to the jury regarding the loss of information, or giving the jury instructions to assist in its evaluation of such evidence or argument.” Id. (quoting from the Advisory Committee Notes to the 2015 amendment to Rule 37(e)(1)). He further explained that a party seeking sanctions under subsection (e)(2) bears the burden to show by clear and convincing evidence that the alleged spoliator acted with the intent to deprive the movant of the information for use in the litigation. Id. at *3. Intent may be inferred when a party has significantly failed in its obligation to preserve and collect documents or when the data loss cannot be credibly explained other than by bad faith.

Turning to the merits of Plaintiff’s spoliation motion, Judge Briccetti first concluded that Defendant had failed to take reasonable steps to preserve ESI that should have been preserved in anticipation of this litigation. He found that Defendant’s duty to preserve was triggered when it received the October 7, 2020, demand letter and at that point had a duty to “preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery and/or is the subject of a pending discovery request.” Because “Ackerman and Morgan attended weekly management meetings in the months leading up to the termination of the lodging agreement,” Judge Briccetti found that Defendant “knew or should have known that Ackerman[’s] and Morgan’s emails were relevant or potentially relevant” to Plaintiff’s breach of contract claim.

Judge Briccetti also concluded that Plaintiff was prejudiced by the loss of Ackerman’s and Morgan’s emails. Id. at *4. He noted that Ackerman and Morgan participated at weekly meetings when relevant discussions regarding the lodging agreement occurred and that chat messages produced in discovery showed that Ackerman and Morgan used email to communicate about the meetings during the relevant time period. Based on these facts, Judge Briccetti found that Ackerman’s and Morgan’s ESI “could have been helpful in documenting the contemporaneous reasoning behind [Defendant’s] decision to terminate the lodging agreement — information that is relevant to the breach of contract claim.”

However, Judge Briccetti found that Plaintiff had not shown “by clear and convincing evidence” that Defendant acted with the intent to deprive it of using Ackerman’s and Morgan’s emails in the litigation. Judge Briccetti noted that one possible inference that may be drawn based on the evidence was that Defendant intentionally allowed the 90-day retention period to expire because the litigation hold on Ackerman’s and Morgan’s ESI was instituted 93 days after the complaint was filed, effectively ensuring that all pre-litigation ESI had been deleted. But he found that this evidence did not rise to the level of clear and convincing, because the delay could also credibly be explained by the fact that Defendant’s initial investigation did not reveal their involvement.

But Judge Briccetti concluded that Defendant’s conduct with respect to preserving Ackerman’s and Morgan’s emails was sanctionable under Rule 37(e)(1). In particular, he found that the appropriate remedy would be to allow “the parties to present evidence to the jury concerning the loss and likely relevance of information and instructing the jury that it may consider that evidence, along with all the other evidence in the case, in making its decision.” Id. (quoting from the Advisory Committee Notes to the 2015 amendment to Rule 37(e)(2)). Judge Briccetti noted that he would also “specifically instruct the jury that it may consider such evidence.”

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