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Case Law Catch-Up: Preventing eDiscovery Sanctions with Alternative Data

legal sanctions

Background

Is it possible to avoid sanctions when relevant evidence has been deleted during the course of litigation? On patent infringement case Via Vadis, LLC v. Amazon.com, Inc., the judge found that some circumstances do not demand punitive action. In this case, the plaintiffs moved for spoliation sanctions by claiming that the defendant intentionally destroyed relevant evidence over the six years since the lawsuit had been filed.

Of primary concern was data located in the defendant’s server logs, which they claimed documented how much the defendant had made from the patent infringement. The defendant argued that these deletions were in accordance with their data retention policies, but they did not contest that the data should have been preserved. While the defendant did not dispute that they should have taken reasonable steps to preserve the deleted data, their argument against sanctions rested on offering alternative evidence to the plaintiff in an effort to replace what was lost.

Ruling

The court found that the data deletions arose from ordinary and reasonable business practices and that any deletion of responsive data was unintentional. Therefore, sanctions were not justified. A key component informing this decision was that the defendant replaced the deleted data with evidence offering similar information. Due to this alternative data being produced, the court found that the defendant did not deliberately destroy missing data and stated, “Because Amazon has established that it has replaced the relevant information, and that the server logs were lost without Amazon’s ‘intent to deprive [Plaintiffs] of the information’s use in the litigation under Rule 37(e), Plaintiffs’ motion for spoliation sanctions is denied.”

Our Analysis

This case highlights the importance of providing alternative or complementary data to replace any information that has been inadvertently lost during eDiscovery. Showing an attempt to substitute missing evidence with data providing the same information helps to convince the courts that the deletion was accidental or unintentional rather than an insidious action taken to deprive opposing counsel of critical information.

It also underscores the text laid out in the Federal Rules of Civil Procedure Rule 37(e), that if electronically stored information (ESI) has been lost and cannot be replaced, the courts can enact sanctions if they find “that the party acted with the intent to deprive another party of the information’s use in the litigation” or that there is prejudice to the other party through the loss of ESI. This case demonstrates that all predicates of the FRCP Rule 37(e) must exist in order for sanctions to apply, and that acting in a cooperative manner can show courts that there was no intention to deprive information, thereby avoiding sanctions.

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