UMG Recordings, Inc. v. Grande Communications Networks, LLC

          ORDER

          ANDREW W. AUSTIN UNITED STATES MAGISTRATE JUDGE.

         Before the Court are Defendant Grande Communications Networks LLC’s Motion for Evidentiary Sanctions Based on Spoliation of Rightscorp Evidence (Dkt. No. 247); Plaintiffs’ Opposition (Dkt. No. 253); Grande’s Reply (Dkt. No. 260); Grande’s Supplemental Brief (Dkt. No. 284); Plaintiffs’ Response (Dkt. No. 283); and various exhibits filed under seal. The District Court referred these motions to the undersigned for disposition.

         I. Background

         In this motion, Grande requests that the Court prevent UMG from offering at trial any of the notices of infringement that were generated by Rightscorp, Inc.-a third party vendor that gathered data on alleged infringement committed by Grande customers-and any music files downloaded by Rightscorp. Grande contends that Rightscorp destroyed “virtually all evidence underlying” the notices and music files, and due to this spoliation, an exclusion sanction is warranted. UMG responds that it did not destroy any evidence, and to the extent anything has been deleted, it was done by Rightscorp, which is not a party to this case, and which therefore had no duty to retain the information Grande contends was destroyed or deleted. UMG notes further that Judge Ezra has already addressed this issue and rejected Grande’s arguments, and even if the issues are still ripe for decision, Grande mischaracterizes the nature and relevance of the allegedly unavailable data.

         II. Analysis

         A. Standard

         Spoliation is “the destruction of evidence . . . or the significant and meaningful alteration of a document or instrument.” Andrade Garcia v. Columbia Med. Ctr., 996 F.Supp. 605, 615 (E.D. Tex. 1998) (internal quotation marks omitted). The governing standard for excluding evidence or otherwise imposing sanctions for the destruction of evidence is contained in Federal Rule of Civil Procedure 37(e). That rule was substantially amended in 2015 to resolve conflicting circuit standards regarding sanctions when electronically stored information is not preserved. See CAT3, LLC v. Black Lineage, Inc., 164 F.Supp.3d 488, 495 (S.D. N.Y. 2016). Under Rule 37(e), a court must first determine that four predicate elements exist before the rule is applicable:

• there is ESI that should have preserved;

• that ESI has been lost;

• the ESI was lost because of a party’s failure to take reasonable steps to preserve it; and

• the ESI cannot be restored or replaced.

         Fed. R. Civ. P. 37(e). If the court finds that all four of these elements are established, then the court considers the appropriate responsive measures. If the court finds that a party has been prejudiced by the loss of the ESI, “it may order measures no greater than necessary to cure the prejudice.” Id. at 37(e)(1). If, on the other hand, it finds that the party who caused the loss of the ESI “acted with intent to deprive another party” of the use of the information, the court may take one of three more severe steps: (1) presume the information was unfavorable to the destroying party; (2) instruct the jury it either may, or must, presume the information was unfavorable to the destroying party; or (3) dismiss the case or enter a default judgment. Id.

         B. Judge Ezra’s order on summary judgment

         In ruling on one of the summary judgment motions in this case, Judge Ezra ...