The Defendants' final contention with respect to the Plaintiffs' motion is that they are protected by the “safe harbor” provisions of Rule 37(e) of the Federal Rules of Civil Procedure. (See
Defs.' Mem. at 2). Even if one assumes that the data on the flash drive was lost in the innocent manner that Ms. Thomas described, Rule 37(e) is inapplicable. That rule provides that a court may not sanction a party “for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.” Fed.R.Civ.P. 37(e). As the Advisory Committee notes explain, the term “routine operation” relates to the “ways in which such systems are designed, programmed, and implemented to meet the party's technical and business needs.” Id.,
advisory committee's notes (2006). Here, however, the data on the flash drive was not overridden or erased as part of a standard protocol; rather, it was lost because the Defendants failed to make a copy. Moreover, even if the loss of the data could be described as “routine,” by the summer of 2008, the Defendants were fully aware that the Plaintiffs contemplated litigation to recover the funds that they were owed. Accordingly, the Defendants had a duty to preserve their data. Fujitsu Ltd., 247 F.3d at 436. At a minimum, that duty required that they make a copy of the files on the flash drive. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (S.D.N.Y.2003) (“While a litigant is under no duty to keep or retain every document in its possession ... it is under a duty to preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery and/or is the subject of a pending discovery request.”) (quoting Turner v. Hudson Transit Lins, Inc., 142 F.R.D. 68, 72 (S.D.N.Y.1991); William T. Thompson Co. v. General Nutrition Corp., 593 F.Supp. 1443, 1455 (C.D.Cal.1984)). The Defendants' failure to do so means that they failed to act in good faith. Rule 37(e) consequently does not preclude an award of sanctions.