Marten Transport, Ltd. v. Plattform Advertising, Inc., No. 14-02464 (D. Kan., Feb. 8, 2016).
A court recently denied a motion for spoliation sanctions because Federal Rule of Civil Procedure 37(e) does not require perfection.
In this trademark infringement case, the plaintiff, Marten Transport, contracted with the defendant, Plattform Advertising, to advertise jobs on its site and authorized the use of its trademarks for that purpose. At some point, Marten stopped using Plattform, but its ads continued to be placed online. In September 2013, Marten sent Plattform a cease-and-desist letter, and Plattform advised that it had removed all of Marten’s job postings from its websites.
In December 2013, a Plattform manager noticed someone was logging in to its site with Marten’s user ID and creating job listings. Plattform could not confirm who was using the account but suspected it was someone at Marten. In September 2014, Marten filed a lawsuit alleging that Plattform improperly continued to use its trademarks after the contract ended.
Not until June 2015 did Plattform’s counsel send a letter advising Marten that someone at Marten had logged in and created job postings on five separate dates after the September 2013 cease-and-desist letter. In response, in September 2015, Marten produced an e-mail from employee Jolene Vinck that stated, “I didn’t know [the advertising contract had terminated] and had been posting on there all along!” Plattform asked Marten to produce the employee’s internet history. But by then, the employee had changed work stations, and her previous computer could not be located. Because Marten could not satisfy its request, Plattform filed a motion for spoliation sanctions.
Under rule 37(e), sanctions are available if a party failed to take “reasonable steps” to retain information it had a duty to preserve. The court observed that assessing the duty to preserve involves two inquiries: when the duty arose and what evidence the duty encompassed. Here, Marten agreed that it had a general duty to preserve ESI beginning in September 2013 but argued that “it did not know and could not have reasonably known that [the internet history] would be relevant to this case” until June 2015, by which time the information was lost.
First, the court found that relevant evidence had been lost. However, it ruled that Marten had made a good faith attempt to locate Vinck’s computer but that it had been recycled in good faith under standard company procedures. It further found that Vinck’s internet history could not be restored because the company retained that history only for 90 days, and it would have been erased no later than March 2014.
The court next concluded that Marten’s duty to preserve relevant evidence attached in the fall of 2013, when Marten itself “threatened” claims against Plattform. Marten did preserve all then-relevant information, including Vinck’s e-mail and electronic and physical files. However, the scope of its duty did not include Vinck’s internet history until June 2015, when Plattform advised Marten of its suspicions. Looking to Marten’s past experience, where “it had never been asked for internet search history . . . in any previous litigation,” and its computer forensics expert, who stated that businesses tend not to maintain internet history files, the court ruled that Marten had “no reason” to foresee the relevance of that information because to that point, the case “appeared to involve only Defendant’s alleged actions and alleged unauthorized use of Plaintiff’s trademarks, and there were no allegations that Plaintiff improperly accessed Defendant’s websites.”
Because the court refused to “use a ‘perfection’ standard or hindsight in determining the scope of Plaintiff’s duty to preserve ESI,” there was no breach of any duty, and it refused to sanction Marten.
The court acknowledged the advisory committee’s notes to rule 37(e), which “recognized the reality that often there is only limited information regarding prospective litigation and the scope of information that should be preserved may be uncertain.” However, when litigation is anticipated, parties should think broadly about what information may become relevant and take all reasonable steps to preserve that data. An early case assessment can help parties determine evidence relevant not only to the arguments they anticipate making but also to their opponents’ contentions.