Motion for Sanctions for Spoliation Granted Under Federal Rules 37(e) and Rule 37(c)(1) – Part I
- ILS Team
In FAST v. GODADDY.COM, LLC, No. CV-20-01448-PHX-DGC (D. Arizona Feb. 2022), before the Court was Defendants’ motion for sanctions under Federal Rule of Civil Procedure 37(c)(1) and (e), which presented a multitude of alleged sanctionable conduct by Plaintiff. Part 1 of this post will focus on the Court’s analysis under Rule 37(e).
In February of 2018, Plaintiff injured her knee when she was an employee at GoDaddy. Plaintiff alleged she was pressured to return to work prematurely, and as a result, developed Complex Regional Pain Syndrome (CRPS). Her job was later eliminated. She asserted claims for sex and disability discrimination and Family Medical Leave Act (FMLA) retaliation.
In their motion, Defendants claimed that Plaintiff knowingly deleted relevant information from her electronic devices and failed to produce other relevant information in a timely fashion. Defendants sought sanctions under Rule 37(e) for failure to preserve ESI and sanctions under Rule 37(c)(1) for failure to produce.
Rule 37(e) “authorizes a court to sanction a party for losing or destroying ESI it had a duty to preserve.” If ESI should have been preserved in anticipation to litigation, a court: “(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or (2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may: (A) presume that the lost information was unfavorable to the party; (B) instruct the jury that it may or must presume the information was unfavorable to the party; or (C) dismiss the action or enter a default judgment.” Rule 37(e) only applies if the Plaintiff had a duty to preserve the ESI at issue.
With respect to when a duty arose, among other actions, as early as May 2, 2018, Plaintiff started coordinating with her coworker Lee Mudro to gather instant messages from her Slack account to use in potential litigation. By May 4, 2018, Plaintiff had retained counsel and sent a letter to GoDaddy complaining of the discrimination and wrongful termination. Plaintiff also confirmed via communications to Mudro her intent to sue on May 7, 2018.
Plaintiff argued that her duty to preserve did not begin until she retained her attorney to file the lawsuit in July 2020, and that the prior retention of counsel was only to assist her with a severance agreement from GoDaddy. The Court disagreed, stating that the duty can arise far in advance of formal retention of a lawyer or filing of lawsuit and begins when litigation is reasonably foreseeable and the parties know or should know the ESI may be relevant to the pending or future litigation. In this instance, the Court found that the duty began as early as May 2018 when she informed GoDaddy of her intent to sue.
With respect to specific acts of spoliation, Defendants alleged that Plaintiff failed to take reasonable steps to preserve (1) Facebook posts, (2) 109 Facebook Messenger messages to and from Ms. Mudro, (3) contents of her iPhone, (4) contents of her email account, and (5) Telegram Messenger messages between her and Ms. Mudro.
First, Defendants argued that Plaintiffs failed to preserve Facebook posts relating to her alleged treatment by, and termination from, GoDaddy. Plaintiff testified she deleted posts between 2018 and 2021 but was unsure the amount she deleted. She also conceded that she believed she did not delete anything relevant to the lawsuit.
The Court found “by a preponderance of the evidence that the prerequisites to sanctions under Rule 37(e) are satisfied for the deleted Facebook posts” and that Plaintiff had a duty to preserve relevant Facebook posts beginning in May 2018, she did not take reasonable steps to preserve them, and the posts cannot be restored or replaced through additional discovery. Having found a duty to preserve, the Court then examined whether the additional requirements for sanctions under Rule 37(e)(1) regarding prejudice and (e)(2) regarding intent were satisfied.
As to Rule 37(e)(1) and prejudice, the evidence showed Plaintiff’s intentional deletion of the Facebook posts deprived Defendants of relevant information, particularly given Plaintiff’s testimony that she deleted posts that had relevance to the lawsuit. Regarding Rule 37(e)(2) and intent, the Court found by a preponderance of the evidence that Plaintiff deleted with the intent to deprive, pointing to, among other facts, Plaintiff’s deliberate choice to permanently delete posts rather than archiving them and her knowledge that the posts could be useful to Defendants.
Second, Defendants argued Plaintiff failed to take reasonable steps to preserve 109 Facebook Messenger messages that she “unsent” between Plaintiff and Mudro. In response to a subpoena, Mudro produced the 109 instances where Plaintiff unsent her messages to Mudro which were still visible to Mudro because their time stamps remained, but the text was replaced with “this message has been unsent.” Because Plaintiff unsent them, Mudro was unable to produce the text.
Plaintiff argued that sanctions were not appropriate because (1) she did in fact produce all of the messages (although they were not produced until after her response to Defendant’s motion for sanctions), and (2) she thought a temporal limitation that applied to other discovery requests also applied to the subpoena served on Mudro, so she unsent the messages that were outside of the limitation.
While Plaintiff claimed that the unsent messages were eventually produced, at least one critical unsent message was not produced, which was a discussion in June 2019 between Plaintiff and Mudro which apparently contained a summary of the evidence that purportedly supported Plaintiff’s case. Plaintiff argued the message did not deal with evidence in the case and that it was a personal message meant for her husband. Yet, as noted by the Court, Plaintiff did not unsend the message until Sept. 2021, over two years later, shortly after Mudro’s deposition, which was inconsistent with Plaintiff’s claim that the message was originally meant for her husband. Plaintiff could not explain why if the personal message for her husband was sent in June 2019, why she waited two years to unsend it.
Accordingly, for the unsent message, the Court found that Rule 37(e) prerequisites were satisfied and that Plaintiff was under a duty to preserve it. However, under Rule 37 (e), failure to preserve sanctions were not available for the remaining 108 messages that were belated produced (although they could still be the subject of sanctions under Rule 37(c)(1)).
Having found that a duty to preserve existed for the unsent message, the Court then turned to whether Defendants were prejudiced under Rule 37(e)(1) and whether Plaintiff had the intent under Rule 37(e)(2). In both instances, the Court found that a preponderance of the evidence showed that the unsent message contained evidence relevant to the case thereby prejudicing Defendants, and that Plaintiff had the intent, particularly given Plaintiff’s admission that she unsent the message in September 2021 while at the same time that she was reviewing other messages in preparation for disclosure to Defendants.
Third, Defendants moved for sanctions for loss of data on Plaintiff’s iPhone, which Plaintiff claimed was stolen. Defendants argued Plaintiff had a duty to preserve all relevant information until litigation was over. The Court agreed, stating that it appeared that by failing to back up her iPhone, Plaintiff failed to take reasonable steps to preserve the ESI contained on the phone. While Plaintiff contended that she did the best she could, the Court noted that, among others, Plaintiff called herself “tech-savvy,” thus inferring she should have known how to back up her iPhone. The Court also cited precedent which held that failure to back up phones constitutes as failure to preserve relevant ESI. Accordingly, the Court found that Rule 37(e) was satisfied with respect to the loss of Plaintiff’s iPhone because she was under a duty to preserve its contents.
With respect to prejudice under Rule 37(e), Plaintiff argued that Defendants were not prejudiced because she already produced all the information that she deemed relevant. The Court rejected that argument stating that Plaintiff was not the one to determine what’s relevant. However, with respect to Rule 37 (e)(2) and intent, because Plaintiff produced documentation of her insurance claim for the loss of the stolen phone, and the stealing of the phone could not have been unforeseen or intended by Plaintiff, the Court could not find that Plaintiff acted with the intent to deprive.
Fourth, Defendants argued that Plaintiff failed to take reasonable steps to preserve the contents of her @cox.net email account. Plaintiff claimed she disconnected her Cox internet service when she moved to Florida, after which she could no longer access the account. While the Court found that she was still under a duty to preserve the email information and the loss of the data prejudiced Defendants under Rule 37 (e)(1), Defendants could not show that Plaintiff deactivated her Cox account with the intent to deprive.
Finally, at oral argument, Defendants argued that she deleted messages exchanged between her and Mudro on an application known as Telegram Messenger. Defendants’ claim was based on Facebook messages produced by Plaintiff in which discussions were held between Plaintiff and Mudro regarding the use of Telegram Messages. Plaintiff argued she never had communications with Mudro on Telegram Messages.
The Court was not convinced by Plaintiff’s contention; Defendants’ forensic expert showed that messages had been deleted. Plaintiff and Mudro also spoke on Facebook about their intentions to switch communication platforms from Facebook to Telegram. Plaintiff’s attorney also asserted that Plaintiff used Telegram to communicate with family members, which meant she had the application on her phone. The Court thus held that Plaintiff had a duty to preserve communications and failed to do so, satisfying Rule 37(e) sanctions.
The Court also found that Defendants were prejudiced under Rule 37(e)(1), given, among others, discussions where Plaintiff told Mudro to switch to Telegram because Facebook messages were no longer “safe” as a means to communicate. Finally, the Court also found that Plaintiff deleted the Telegram messages with the intent to deprive, given among others, that Plaintiff tried to conceal the existence of Telegram from Defendants by not disclosing the Telegram messages in response to any of Defendants’ discovery requests, her manual deletions of the exchanges on Telegram, and that Plaintiff did not provide the Facebook messages that referenced Telegram until after compelled to respond to Defendants’ motion for sanctions, and by that point, the Telegram messages were gone.