Case Law Summaries by ZapprovedEshelman v. Puma Biotech, Inc., No. 7:16-CV-18-D, 2017 WL 2483800 (E.D.N.C. June 7, 2017).

In this defamation case, the court denied a jury instruction for spoliation where the plaintiff failed to prove that the defendant could not replace information it lost. The plaintiff also did not prove that the loss was prejudicial or that the defendant had any intent to deprive him of information.

The case began when the defendant, Puma Biotechnology, Inc., created and distributed an investor presentation discrediting the plaintiff, Frederic Eshelman, in his election bid to join Puma’s leadership.

Two weeks after Eshelman filed his complaint, Puma issued a legal hold notice. That notice “did not explicitly reference internet browser histories” or search histories. Puma said it was unaware that its internet browser “automatically and by default drops internet browser history after 90 days.”

Approximately 120 days after the investor presentation was published, Eshelman specifically requested that Puma preserve its web browser histories. Puma advised Eshelman that it had already deleted this information.

Eshelman moved the court for “a jury instruction to help mitigate the harm” resulting from the loss of that information. In doing so, Eshelman argued that the search histories were “the most probative evidence of whether Puma acted with actual malice” in defaming him. Eshelman did not “define the particular instruction sought.”

The court evaluated its authority to sanction a party for spoliation under amended Federal Rule of Civil Procedure 37(e). As a threshold for applying Rule 37, a party must establish that the opposing party lost information because it failed “to take reasonable steps to preserve” it. Additionally, the movant must show that the party cannot restore or replace that information through additional discovery.

Here, the court concluded that “other avenues of discovery are likely to reveal information about the searches [Puma] performed.” Because Puma could probably replace the lost information through depositions, Eshelman failed to meet the threshold requirements for the application of Rule 37(e).

The court nonetheless continued its analysis, considering sanctions under Rule 37(e)(1). The court noted that it must find prejudice to impose such sanctions. To evaluate that prejudice, the court would need “some evidence regarding the particular nature of the missing [information].” However, Eshelman merely stated “in a cursory fashion” that the browser history would be the “most important information” for his case. He failed to specifically explain what information he expected to discover. As a result, the court could not gauge the harm to Eshelman and declined to find any prejudice.

Finally, the court considered whether sanctions would be warranted under Rule 37(e)(2), which requires a party’s intent to deprive another of discoverable information. Again, Eshelman failed to meet his burden, as he did not demonstrate that Puma engaged in any intentional conduct. Puma did not itself destroy the information. Moreover, the company “was unaware of the 90-day default retention measures” its browser used. The court concluded that “at most,” Puma negligently lost the information.

The court therefore declined to impose any sanctions for the lost web browser history.

Takeaways on proving harm from spoliation

When you ask the court to impose harsh sanctions for spoliation of information, spell out the harm that you have suffered. Explain to the court exactly why you sought that information, what you expected to find, and how the loss impedes your case. Additionally, tell the court exactly what instruction you are asking for, so that it can fully evaluate your request.

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