Category: Spoliation of Evidence

Rule 37 Dismissal Affirmed by Ninth Circuit

Rule 37 Dismissal Affirmed by Ninth Circuit

In Jones v. Riot Hospitality Group, LLC 95 F.4th 730 (9th Cir 2024), Rule 37 caused the dismissal of an employment discrimination case. According to an expert report, the plaintiff deleted text messages with her coworkers from her phone. Plaintiff challenged the dismissal and challenged the admissibility of the report of the expert who examined her phone and concluded that text messages had been deleted.

Rule 37(e) applies when ESI “that should have been preserved in the anticipation 735*735 or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery.” If the district court finds the loss prejudicial, it “may order measures no greater than necessary to cure the prejudice.” Fed. R. Civ. P. 37(e)(1). But, if the court finds that an offending plaintiff “acted with the intent to deprive another party of the information’s use in the litigation,” dismissal is authorized. Fed. R. Civ. P. 37(e)(2).

The district court found that Jones intentionally deleted relevant text messages with co-workers from 2017 and 2018 and coordinated with her witnesses to delete messages from 2019 and 2020. “Drawing reasonable inferences from the circumstances,” the court found that Jones did so with the intent to deprive Riot of use of the messages in this suit. Jones, 2022 WL 3682031 at *6; see also id. at *10. The court also found that the deleted messages could not “be restored or replaced through additional discovery.” Id. at *5; see also id. at *8-9. Applying the five-factor test for terminating sanctions articulated in Anheuser-Busch, 69 F.3d at 348, the court found dismissal warranted. Id. at *11-13.

…

Jones’ argument that the district court abused its discretion in not holding a Daubert hearing is also unconvincing. District courts are not always required to hold a Daubert hearing to discharge their reliability and relevance gatekeeping duties under Federal Rule of Evidence 702. See United States v. Jawara, 474 F.3d 565, 582-83 (9th Cir. 2007). Although Daubert sets out factors for district courts to consider when determining whether expert testimony is admissible under Rule 702, they are “illustrative,” and “the inquiry is flexible.” Wendell v. GlaxoSmithKline LLC, 858 F.3d 1227, 1232 (9th Cir. 2017) (cleaned up). And, “Rule 702 should be applied with a liberal thrust favoring admission.” Id. (cleaned up). The record makes plain that Kuchta had extensive technical experience in computer forensics, including independent research in the type of mobile phone spoliation analysis he conducted in this case. And his methodology— comparing the volume of messages sent and received between mobile phone pairs over time and looking for digital artifacts of deletions—is sound. Jones makes much of Kuchta’s acknowledgment that there is no industry standard for analyzing text message deletions but gives no plausible reason to doubt the reliability of his opinions.

The result was that the Ninth Circuit affirmed the dismissal of the case.

Comment: Clients need to understand that they will not be allowed to proceed with a lawsuit where text messages have been deleted. It simply won’t work. The case will be dismissed.

Case Dismissed for Deleting Text Messages

Case Dismissed for Deleting Text Messages

In Jones v. Riot Hospitality Group, LLC 95 F.4th 730 (9th Cir. 2024), the plaintiff’s case was dismissed for her actions in deleting text messages. The reasoning:

Jones contends that the district court erred in finding intent because Kuchta could not confirm that every deletion of a text message was intentional or quantify the intentional deletions. But there was ample circumstantial evidence that Jones intentionally destroyed a significant number of text messages and collaborated with others to do so. As the district court noted, Jones could not explain why messages to other employees at the bar were selectively deleted in 2017 and 2018. With respect to the 2019 and 2020 messages, the court pointed out that “while much of the content of the deleted messages is unknowable,” a screenshot of a 736*736 message sent by a witness to Jones but missing from Jones’ phone in its original form, “shows that Plaintiff deleted at least one message that had a direct bearing on her case.” Jones, 2022 WL 3682031 at *10. Moreover, Jones and one of the witnesses obtained new phones shortly after they were ordered to hand over their devices for imaging. Neither Jones nor the witnesses produced the earlier phones for imaging, effectively preventing discovery of messages deleted from those phones. The court’s conclusion “that [Jones] affirmatively selected certain text messages for deletion while otherwise preserving text messages sent around the same time” is supported by the record. Id.

District Court Awards Sanctions for Spoliation of Evidence

The defendant in this lawsuit allowed a key item to be destroyed and sold for scrap – after it had notice that the item was relevant to discovery requests. The court ordered an award of attorney fees and costs and also permitted plaintiff an adverse inference instruction to be read to the jury.

This is a breach of contract case. TVI sued Harmony Enterprises and alleged that a baler manufactured by Harmony was defective. Defendant sold the baler for scrap.

It is undisputed that Defendant had control over the Mt. Vernon baler when it sold it for scrap, and Defendant does not dispute that the Mt. Vernon baler was relevant to this litigation. (See Dkt. No. 30 at 1, 7-9.) Defendant argues that it did not have an obligation to preserve the Mt. Vernon baler and could not have acted with a culpable state of mind because Plaintiff asked Defendant to dispose of it on October 3, 2017. (Dkt. No. 30 at 8-9; see Dkt. No. 20 at 8.) But Plaintiff’s initial request was followed by multiple indications that Defendant had a duty to preserve the Mt. Vernon baler, including Plaintiff’s October 10, 2017 letter reserving its right to pursue legal or equitable remedies related to the Mt. Vernon baler’s failure and Defendant’s own inspection of the Mt. Vernon baler that revealed unnecessary welds that contributed to its failure. (See id. at 2-4, 31-32; Dkt. No. 21 at 14-15, 25.) Further, Defendant shared a summary of its inspection with its counsel, who may have informed Defendant of the possibility of future litigation. (Dkt. No. 21 at 20-22.) All of this occurred while Defendant was still in possession of the Mt. Vernon baler. (See Dkt. No. 21 at 19.) Thus, Defendant was on notice of its obligation to preserve the Mt. Vernon baler, and consciously disregarded that obligation when it sold the Mt. Vernon baler for scrap. See Apple Inc., 888 F. Supp. 2d. at 989, 998; Surowiec, 790 F. Supp. 2d at 1005.[2] The Court finds that Plaintiff has carried its burden of establishing that Defendant spoliated the Mt. Vernon baler….

Defendant had exclusive control over the Mt. Vernon baler, was on notice of the obligation to preserve it, and consciously disregarded its obligation by selling the baler for scrap. See supra. Plaintiff has been substantially prejudiced by Defendant’s destruction of the Mt. Vernon baler, as Plaintiff cannot conduct its own examination following Defendant’s disclosures about the reasons for the baler’s failure during discovery. See Apple Inc., 888 F. Supp. 2d at 992.[3] Thus, the Court finds that an adverse jury instruction regarding Defendant’s spoliation of the Mt. Vernon baler is an appropriate sanction. The instruction shall inform the jury that Defendant was on notice that it had an obligation to preserve the Mt. Vernon baler, that Defendant destroyed the Mt. Vernon baler before Plaintiff could inspect it, that the Mt. Vernon baler was relevant to Plaintiff’s claims, and that an inspection of the Mt. Vernon baler would have corroborated Plaintiff’s claim that it was defective.

Defendant then moved for reconsideration. That motion was denied. The explanation:

Defendant moves for reconsideration of the Court’s order, arguing that the Court committed manifest error in imposing its spoliation sanction and awarding Plaintiff attorney fees. (See generally Dkt. No. 42.) ….Defendant contends that the Court committed manifest error when it found that Plaintiff is entitled to an adverse jury instruction following Defendant’s spoliation of the Mt. Vernon baler. (Dkt. No. 42 at 10-13.) Defendant argues that the Court erred by looking only to Defendant’s conscious disregard of its discovery obligations to determine that Defendant’s degree of fault warranted an adverse jury instruction. (See id. at 10-12.) But the Court’s order looked beyond Defendant’s conscious disregard in finding that an adverse jury instruction was warranted. Specifically, the Court considered: Defendant’s exclusive control over the Mt. Vernon baler; Defendant’s substantial prior notice that it had an obligation to preserve the Mt. Vernon baler; and Defendant’s subsequent conscious disregard of that obligation when it sold the Mt. Vernon baler for scrap. (See Dkt. No. 39 at 2-3, 6.) Defendant’s remaining arguments opposing the Court’s evaluation of Defendant’s degree of fault simply restate those it raised in its response to Plaintiff’s original motion. (Compare Dkt. No. 42 at 11-12, with Dkt. No. 30 at 8-9.) Thus, Defendant has not identified a manifest error in the Court’s evaluation of Defendant’s degree of fault in spoliating the Mt. Vernon baler. See Premier Harvest, Case No. C17-0784-JCC, Dkt. No. 61 at 1; W.D. Wash. Local Civ. R. 7(h)(1).

The case is TVI, Inc. v. Harmony Enterprises, Inc. Case No. C18-1461-JCC. (D. W.D. Washington).

This case is instructive for any lawyer handling litigation involving an allegedly defective product. Preserve the product until both sides have had an opportunity to examine it. Failing to preserve the product risks a spoliation of evidence instruction to the jury and an award of fees and costs.