Want Sanctions? Establish That Relevant Information Was Actually Lost

FiTeq, Inc. v. Venture Corp., No. 13-cv-01946-BLF, 2016 WL 1701794 (N.D. Cal. Apr. 28, 2016).

In an order disposing of eleven motions in limine, the court denied the plaintiff’s request for sanctions from alleged spoliation of information contained in e-mails because the plaintiff “failed to offer persuasive evidence” that any electronically stored information (ESI) was actually lost.

Shortly after the termination of the business agreement between plaintiff FiTeq, Inc. and its partner, defendant Venture Corporation, Venture’s executive vice president deleted all his e-mails related to the agreement. FiTeq later sued, claiming fraud and breach of contract, and Venture asserted numerous counterclaims.

During discovery, Venture “located [the executive vice president’s] old computer” and turned over what it claimed were all the restored e-mails. FiTeq argued that the produced e-mails were “so slight in number . . . that it is reasonable to infer that additional documents were destroyed.” FiTeq, therefore, asked the court for a permissive presumption that “Venture carried out or allowed the destruction of relevant evidence favorable to FiTeq.”

Venture countered that there was no evidence that it acted with the requisite intent for sanctions—depriving FiTeq of the benefit of using the documents in litigation—because its executive vice president deleted the e-mails “as part of routine housekeeping.” In addition, Venture contended that FiTeq could not establish prejudice because the “recovered files were duplicates of documents already produced by both parties.”

The court noted that under the amendments to Federal Rule of Civil Procedure 37(e), sanctions are appropriate where ESI “is lost . . . and it cannot be restored or replaced through additional discovery.” Here, Venture did turn over what it claimed were all of its recovered e-mails, and FiTeq did not request a deposition of the executive vice president to inquire about any other e-mails. Holding that FiTeq “failed to prove that other responsive documents ever existed,” the court denied the request for sanctions under the rule.

FiTeq also asked the court to consider sanctions pursuant to the court’s inherent authority. Noting that the advisory committee’s notes to the new rule “foreclose” reliance on inherent authority or state law,” the court also denied that request.

FiTeq, Inc. v. Venture Corp., No. 13-cv-01946-BLF, 2016 WL 1701794 (N.D. Cal. Apr. 28, 2016).


When attempting to prove spoliation, discovery about discovery can be the linchpin to establishing your argument. If you suspect information is missing, consider deposing witnesses who may be able to define the scope of that information. Here, FiTeq could only blindly accuse Venture of destroying e-mails, because it never questioned Venture’s employee about what e-mails he had sent or received.

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