United States: Discovery: S.D.N.Y. Finds "No Foundation" To Impose Spoliation Sanctions Under Federal Rule 37 Where No Evidence Was "Lost"

The US District Court for the Southern District of New York recently denied a motion for spoliation sanctions in Barcroft Media Ltd. v. Coed Media Group, LLC, No. 16-cv-7634 (S.D.N.Y. Sept. 28, 2017). The case involved an allegedly infringing use of certain celebrity photographs on the defendant's website. The plaintiffs sought spoliation sanctions pursuant to FRCP 37, on the ground that the defendant failed to preserve the webpages on which it had displayed the photographs at issue.

However, several of the images at issue were still hosted on the defendant's websites at the time the motion was filed, and the plaintiffs had taken screenshots of the other websites when they had displayed the images at issue in the past. Notably, the defendant did not dispute the authenticity of the plaintiffs' screenshots.

Emphasizing the 2015 amendments to the Federal Rules of Civil Procedure, the Court found the plaintiffs' motion to be without merit because "there was no foundation to impose sanctions under Rule 37(e)" where the plaintiffs could not show that the images at issue were "lost." Rule 37 was amended in 2015 to state that a court may impose sanctions only "if electronically stored information that should have been preserved in anticipation 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." More severe sanctions can be imposed "only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation." Fed. R. Civ. P. 37(e)(2).

Denying sanctions, the Court observed that the plaintiffs could not show prejudice because they themselves actually possessed copies of the relevant evidence.   Moreover, even if an appropriate foundation for sanctions otherwise existed, the Court explained that sanctions would not be appropriate due to the lack of evidence that the defendant "acted with the intent to deprive another party of the information's use in the litigation," Fed. R. Civ. P. 37(e)(2). The Court ultimately found that the plaintiffs' sanctions motion was "without merit," and "borderline[d] on frivolous."

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