ESI Discovery Best Practices, Part 6 – Now comes the bad news … potential consequences for inadequate preservation of ESI.

by Butler Snow LLP

Over the past year, I have blogged about ESI rules and best practices for identification, preservation and collection of ESI. In this blog I want to focus on the potential consequences for inadequate efforts in any of these areas.

There are numerous cases addressing failure to preserve ESI, and I highlight here but a few examples. One significant case is Peerless Industries v. Crimson AV.[1] I mention this case because in a prior blog I wrote that using a third-party vendor for collection efforts is the preferred approach. Well, the court in Peerless stated that a defendant’s “hands-off” approach to allowing a vendor to collect documents from a third party over which the defendant had control was insufficient, and ordered sanctions including payment of attorney’s fees. So, the take away here is that you can use a vendor, but you can’t just say “go get the relevant documents.” Counsel for the party must stay involved in the process.

In Day v. LSI Corp.,[2] the issue was whether the defendant had failed to preserve relevant documents, including those belonging to a particularly relevant custodian. In the course of discovery surrounding the issue of spoliation, it became clear that the defendant’s preservation and search efforts were neither timely nor comprehensive. In addition, testimony from the general counsel and another employee contradicted each other as to the data being sought. Because certain lost evidence was particularly relevant to one of plaintiff’s claims, the court found the risk of substantial prejudice was great, and awarded partial default judgment as to that claim. The court also found that an adverse instruction at trial would be appropriate and ordered the defendant to pay $10,000 in sanctions.

In Multi-Feeder Tech,[3] an interesting case where the magistrate judge ordered sanctions, the defendant appealed to the district court, and the district judge increased the sanctions. The case involved a computer forensic expert who was hired to examine the defendant’s computers. The forensic examination identified several occurrences of spoliation by the defendant, including commercial wiping software found on one custodian’s computer with 6 deletions occurring after the commencement of the lawsuit and the issuance of the ESI protocol order. The original order was a $500,000 sanction ($475,000 to the plaintiff and $25,000 to the court). The district judge increased the award to the plaintiff to $600,000, finding that there had been repeated violations of the court’s discovery orders.

The Apple‑Samsung battle a few years ago was well publicized, a battle that Samsung ultimately lost at trial.[4] The trial court sanctioned Samsung for failure to turn off its auto delete feature, which allowed responsive e‑mails to be destroyed. In addition to failing to disable the auto delete future, Samsung also failed to follow up with its employee custodians to ensure that they were preserving relevant data.

The Chin[5] case from the Second Circuit contains some good news in that it reverses the harsh decision in the Pension Committee[6] opinion from Judge Scheindlin–that the failure to issue a litigation hold constitutes gross negligence per se. Instead, the Second Circuit held that “the better approach is to consider the failure as one factor in the determination of whether discovery sanctions should issue.” However, parties should continue to issue written hold notices as soon as the obligation is triggered.

Finally, in the In re Delta/Airtran Baggage Fee case,[7] the plaintiff sought to reopen discovery order sanctions against the defendants under FRCP 26(g) for failure to produce responsive documents. The court found that Delta, one of the defendants, did not conduct a reasonable inquiry under FRCP 26(g) and ordered it to pay reasonable costs and attorney’s fees incurred as a result of the failure to preserve and produce relevant evidence.

These are but a few of the increasing number of cases addressing inadequate preservation of ESI. Of course, these cases all pre-date the change to FRCP 37 and the upcoming change to FRCP 26. In my next blog, I will address the rule changes and their potential impact on ESI discovery practices.

[1]           2013 U.S. Dist. LEXIS 2985, at *11–12 (N.D. Ill. Jan. 8, 2013)
[2]           2012 U.S. Dist. LEXIS 180319, at *43­–46 (D. Ariz. Dec. 19, 2012).
[3]           2012 U.S. Dist. LEXIS 132619, at *29 (D. Minn. Sept. 18, 2012).
[4]           881 F. Supp. 2d 1132, 1150 (N.D. Cal. 2012).
[5]           685 F.3d 135, 162 (2d Cir. 2012).
[6]           685 F. Supp. 2d 456, 471 (S.D.N.Y. 2010).
[7]           846 F. Supp. 2d 1335, 1353 (N.D. Ga. 2012).

Written by:

Butler Snow LLP

Butler Snow LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.