“Lost” in Reality: A Real-Life Example of Rule 37(e)

Legal consequences abound at every corner in healthcare. Each month this blog discusses examples of what those consequences can be.


In June I discussed a decision out of the District of Hawaii that denied a motion for sanctions. In that case, the court denied the motion because the electronically stored information (ESI) in issue, although not preserved by the plaintiffs (the alleged spoliators), might have been stored with third parties which maintained the ESI on behalf of the plaintiffs and therefore might not have been “lost” within the meaning of Rule 37(e). Another case, Mafille v.Kaiser-Francis Oil Co., Case No. 18-CV-586-TCK-FHM (N.D. Okla. May 21, 2019), gives us another example of what “lost” means.

In Mafille, an employment discrimination action, the plaintiffs sought sanctions against the defendant for its failure to preserve a computer one plaintiff had used in the course of her employment which had been supplied by the defendant. After that plaintiff’s termination of employment—and despite preservation demands made by her attorney—the defendant gave the computer to a charity and the data on it was presumptively destroyed. The plaintiffs (the terminated employee and her husband) argued that the computer might have had a “treasure trove” of relevant information and they had been “irretrievably prejudiced” by its loss.

Nonetheless, the Mafille court denied the plaintiffs’ motion for sanctions. Although the court found that the computer should have been preserved and the defendant was “solely and entirely at fault for failing to take reasonable steps to preserve the computer *** that finding does not necessarily equate to an award of the sanctions ***.”

Why not? Because there had not been a showing of prejudice by the plaintiffs. The decision states:

“Defendant asserts that sanctions are not appropriate because Plaintiffs have not demonstrated they have been prejudiced by the loss of Mrs. Mafille’s work computer. According to Defendant, a policy was in place requiring that materials be uploaded to Defendant’s LAN Server daily. As a result, there should not have been relevant materials on the subject computer that are not also accessible on the LAN Server. Defendant also asserts that it has requested Plaintiffs to identify what items were on Mrs. Mafille’s computer so an attempt can be made to recover the items from the LAN Server, but Plaintiffs have not identified any such items.

Before an order of sanctions may be entered, there must be a showing of prejudice. *** In this case there has been no showing that any information necessary to the prosecution of Plaintiffs’ claims or necessary to counter the defenses asserted is unavailable to them. In the absence of such a showing the court must find that Plaintiffs have not suffered any prejudice as a result of the destruction of Mrs. Mafille’s work computer.”

The Court denied the defendant’s motion without prejudice but subject to reassertion “if through discovery it is determined that some specific evidence is beyond Plaintiffs’ reach because of what the court views as Defendant’s clear failure to preserve Mrs.Mafille’s work computer” (footnote omitted).

What lessons might be learned from this decision? First, as mentioned in the column post from June, it is important to understand the nature and location of ESI relevant to a particular litigation. That means that you should have a data map or some equivalent that enables you to find an alternate source of data that might be deleted from the most obvious one, assuming that you maintain data at multiple locations or on a backup (which raises separate questions about “minimization” of data that we can address another time). But, most importantly, you should recognize the importance of preservation of ESI and take steps to implement the duty to preserve.

 

**Editor’s Note: The views expressed in this column are those of the author alone and should not be interpreted otherwise or as legal advice.

Ron Hedges, JD, is a former US Magistrate Judge in the District of New Jersey and is a writer, lecturer, and consultant on topics related to, among other things, electronic information. He is a Senior Counsel with Dentons US LLP.

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