United States: Who Bears The Burden Of Proving Prejudice For The Unintentional Spoliation Of ESI?

The new Federal Rule of Civil Procedure 37(e)(1) allows courts to order relief for the unintentional spoliation of Electronically Stored Information in the form of "measures no greater than necessary to cure the prejudice" to the innocent party. But who bears the burden of proving or disproving "prejudice" and –if the burden of proof falls on the moving party –how can one demonstrate the significance of information that was never in its possession?

In Living Color Enterprises, Inc. v. New Era Aquaculture, Ltd., 2016 WL 1105297 (S.D.Fla. March 22, 2016), the plaintiff filed a motion for sanctions as a result of the defendant's loss of text messages. In their briefs, the parties agreed that the amended Federal Rule of Civil Procedure 37(e) applied to the plaintiff's motion, which sought an order striking the defendant's pleadings, the entry of a default judgment, an adverse inference, and reasonable attorneys' fees and costs. The defendant conceded that his duty to preserve emails and text messages arose when the lawsuit was filed on September 5, 2014, and that he negligently failed to preserve his text messages, which were deleted because of a setting on his cell phone that automatically deleted his texts after 30 days.

In performing its analysis under Rule 37(e), the court initially asked these questions and answered all of them in the affirmative (at least in part):

  • Does the alleged spoliation involve ESI?
  • Was the allegedly spoliated ESI evidence that should have been preserved?
  • Was the allegedly spoliated ESI lost because a party failed to take reasonable steps to preserve it?
  • Is the allegedly spoliated ESI evidence that cannot be restored or replaced through additional discovery?

Having answered "yes" to all of these questions, the court then turned to the issue of whether the plaintiff suffered prejudice as a result of the lost ESI. Initially, the court noted that under the Advisory Committee's Note to Rule 37(e), "the rule does not place a burden of proving or disproving prejudice on one party or the other" as "determining the content of lost information may be a difficult task... and placing the burden of proving prejudice on the party that did not lose the information may be unfair." On the other hand, the Committee Note provides, "the content of the lost information may be fairly evident, the information may appear to be unimportant, or the abundance of preserved information may appear sufficient to meet the needs of all parties," so requiring the moving party to prove prejudice "may be reasonable in such situations."

Without expressly stating which party bore the burden of proving or disproving prejudice, it appears that the court nevertheless placed that burden on the plaintiff, the moving party. Specifically, the court noted that the plaintiff failed to explain: "any direct nexus" between the missing text messages and the allegations in the complaint; how the missing text messages would establish specific facts at issue in the case; why the missing texts were important; or why other information produced in the case was not sufficient to meet the plaintiff's needs. In short, the court found there to be no prejudice or, "if there was any prejudice to Plaintiff at all, it was so minimal that the Court does not find it necessary to order measures to cure the alleged prejudice."

The court then also found that the defendant was merely negligent in erasing the text messages, and that he did not act with "intent to deprive" the plaintiff of the information in the litigation. Specifically, the court opined that there was "nothing nefarious" about the defendant's "routine practice" prior to the litigation of activating (but failing to deactivate) a setting on his phone, which automatically deleted text messages after 30 days. Thus, the court found that sanctions for intentional spoliation were not warranted under Rule 37(e)(2). Accordingly, the court denied the plaintiff's motion for sanctions altogether.

This case continues to underscore the quandary that the moving party faces in establishing prejudice under Rule 37(e)(1): how can one who never had access to lost information prove its contents, that those contents were relevant, or that the loss of the information was prejudicial to the moving party's case? Courts and parties will continue to grapple with this conundrum, but based on the court's opinion in Living Color, it appears that at a minimum, courts may require the moving party to at least posit some nexus or connection between the importance of the lost ESI to the facts or claims in the case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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