Court Denies Plaintiff’s Request For Adverse Inference Due To Plaintiff’s Failure to Demonstrate Defendant’s Intent

9 Aug 2019

In Drivetime Car Sales Company, LLC v. Pettigrew, No. 2:17-cv-371(S.D. Ohio April 18, 2019), the Judge granted in part and denied in part Plaintiff’s motion for an adverse inference sanction against Defendant Pauley Motor on the grounds that Plaintiff failed to sufficiently demonstrate that Defendant Bruce Pauley intentionally failed to take reasonable steps to preserve text messages when he switched to a new phone.

This case stems from Plaintiff’s allegations that Defendants were conspiring to purchase vehicles at artificially inflated rates from Pauley Motors. During the course of discovery, Defendant Pauley Motors stated in its interrogatory responses that no texts messages existed between representatives of Defendant Pauley Motor and Defendant Pettigrew. However, at a later deposition, Defendant Bruce Pauley stated on record that he had previously exchanged text messages with Defendant Pettigrew, but was unable to produce such text messages because he obtained a new phone. Further, Defendant Bruce Pauley stated that he had not preserved the contents of his previous phone despite being put on clear notice to do so via a litigation hold letter previously issued by Plaintiff.

In response, Plaintiff requested that the Court impose a mandatory adverse inference that the content of the lost text messages was unfavorable to Defendant Pauley Motor.

In considering the motion, the Court stated that “Pauley Motor does not dispute that it had an obligation to preserve text messages between its representatives and Pettigrew or that it failed to take reasonable steps to preserve them…DriveTime has also established that the text messages cannot be restored or replaced through additional discovery, because neither Pettigrew nor the wireless carriers for Pauley Motor’s representatives have access to them either…Thus, in order to obtain the mandatory adverse inference it seeks under Rule 37(e)(2), the only additional requirement under the Rule is that Pauley Motor acted with the intent to deprive DriveTime of the text messages’ use in the litigation when it failed to preserve them.”

However, Judge Smith went on to state that: “Although Bruce Pauley failed to take reasonable steps to preserve the text messages when he switched to a different phone, there is no evidence that he did so intentionally beyond DriveTime’s speculation. This is not sufficient to impose a mandatory adverse inference under Rule 37(e)(2).”  As a result, Judge Smith determined that “DriveTime has not sufficiently demonstrated that Pauley Motor acted with the requisite intent.”

But the Court did note that “less severe sanctions are available to DriveTime under Rule 37(e)(1) upon a finding of prejudice.”  Judge Smith stated that “the Court will order curative measures under Rule 37(e)(1)… In this case, the Court finds it appropriate to order that DriveTime will be permitted to introduce evidence at trial, if it wishes, of the litigation hold letter and Pauley Motor’s subsequent failure to preserve the text messages. DriveTime may argue for whatever inference it hopes the jury will draw. Pauley Motor may present its own admissible evidence and argue to the jury that they should not draw any inference from Pauley Motor’s conduct.”