Plaintiffs bring claims of breach of contract and breach of the duty of good faith and fair dealing against Defendant (their homeowners' insurer) based on damages caused by a water leak at Plaintiffs' home and alleged delays in the handling of their insurance claim by Defendant. Ms. Galbraith exchanged text messages with Plaintiffs' contractor, Jamie Sherman, both before and after litigation began.

Some, but not all, of the text messages post-lawsuit-initiation were preserved and have been produced. No pre-lawsuit text messages were preserved or have been produced. The text messages exchanged between Ms. Galbraith and Mr. Sherman that were not produced presumably were deleted, though Defendant offers no evidence of the same in connection with its motion. Mr. Sherman did not retain copies of the text messages. The relevance (and, thus, discoverability) of the text messages to the parties' claims or defenses was determined previously. See Order of Apr. 27, 2018, at 7-9, Doc. No. 50.

Defendant seeks an adverse inference “instructing the jury to infer from the absence of the text messages between Mrs. Galbraith and Jamie Sherman that it was not State Farm who was responsible for the unreasonable delay in completing repairs at Plaintiffs' house.” Mot. 8-9, Doc. No. 74.

Federal Rule of Civil Procedure 37(e) applies, and it provides:

Defendant seeks a sanction based in Rule 37(e)(2)(B), which applies “if the lost information should have been preserved in the anticipation or conduct of litigation”—generally starting at the point “when litigation is reasonably foreseeable”[1]—“and the party failed to take reasonable steps to preserve [the lost information].” Fed. R. Civ. P. 37(e) advisory committee's note (2015). A Rule 37(e)(2) sanction requires that the Court “find[ ] that the party that lost the information acted with the intent to deprive another party of the information's use in the litigation,” not merely that the non-preserving party acted with negligence or gross negligence. Id.

*2 As the party seeking sanctions, Defendant bears the burden of showing that Plaintiffs “acted with the intent to deprive [Defendant] of the [spoliated] information's use in the litigation” (Fed. R. Civ. P. 37(e)(2)). See Watkins v. N.Y.C. Transit Auth., No. 16 Civ. 4161 (LGS), 2018 WL 895624, at *10 (S.D.N.Y. Feb. 13, 2018); cf. Swanda Bros., Inc. v. Chasco Constructors, Ltd., L.L.P., No. 08-CV-119-D, 2012 WL 4382612, at *7 (W.D. Okla. Sept. 25, 2012) (indicating, pre-2015-revisions to Rule 37(e), that “[w]here a party seeks sanctions for destruction of documents, it bears the burden of showing the party to be sanctioned acted in bad faith”).[2] Defendant has not met its burden. Defendant provides insufficient evidence—direct or circumstantial—of Plaintiffs' intent except for the existence of some text messages and lack of others. Ms. Galbraith testified in her deposition to exchanging text messages with Mr. Sherman, but there apparently was no inquiry regarding her practice of retaining text messages or deleting them or when any deletion occurred. Defendant asks the Court to infer from Ms. Galbraith's deposition testimony that she “believe[d]” she had a “group of texts with Jamie Sherman” that Ms. Galbraith must have deleted the text messages between her deposition (in December 2017) and Plaintiffs' response to Defendant's motion to compel (filed on March 30, 2018 [Doc. No. 42] ). Mot. 7, Doc. No. 74 (quotation marks omitted). Defendant asks Ms. Galbraith's testimony to do too much in supporting Defendant's spoliation, and more is needed than this testimony—which can be read in various ways—for the Court to enter spoliation sanctions against Plaintiffs.

The only information regarding Ms. Galbraith's apparent deletion of text messages that she sent to or received from Mr. Sherman is her counsel's indication—in the hearing on Defendant's prior motion to compel—that Ms. Galbraith had a semi-regular practice of deleting those text messages she deemed to be unimportant and that this practice caused the deletion of text messages to or from Mr. Sherman. See Order of Apr. 27, 2018, at 8, Doc. No. 50. However, counsel's indication during a hearing on a separate motion is not evidence.

While Plaintiffs' conduct in not maintaining copies of Ms. Galbraith's text messages with Mr. Sherman likely can be viewed as at least negligent (especially as to those text messages exchanged with Mr. Sherman after Plaintiffs initiated this litigation), insufficient evidence has been submitted to support a conclusion of intent as is required for a Rule 37(e)(2) sanction. See Fed. R. Civ. P. 37(e) advisory committee's note (2015) (indicating that the revisions to Rule 37(e) “reject[ ] cases ... that authorize the giving of adverse-inference instructions on a finding of negligence or gross negligence”); cf. Living Color Enters., Inc. v. New Era Aquaculture, Ltd., No. 14-cv-62216-MARRA/MATTHEWMAN, 2016 WL 1105297, at *6 (S.D. Fla. Mar. 22, 2016) (finding no “intent to deceive or bad faith” in routine deletion of text messages by an individual (quotation marks omitted)).

Defendant implies that Plaintiffs have not met their production burden by pointing to questions Plaintiffs have not answered—e.g., (i) If Ms. Galbraith did not delete the text messages as suggested by Defendant, why did she not submit an affidavit indicating as much? (ii) Why did some text messages chains include messages from one person (Mr. Sherman) but not the other (Ms. Galbraith)? See Reply 4, Doc. No. 114. These are important questions, but they do not shift the burden of showing the appropriateness of a spoliation sanction from Defendant to Plaintiffs. Defendant appears to conflate the obligation to produce documents if they are discoverable and no valid objection exists (Plaintiffs' obligation) with the obligation to prove required elements for a spoliation sanction to issue (Defendant's burden).See Watkins, 2018 WL 895624, at *10; cf. Swanda Bros., 2012 WL 4382612, at *7.

Because the Court finds that Defendant has not shown by a preponderance of the evidence that Plaintiffs acted intentionally in deleting text messages exchanged with Mr. Sherman, the Court need not reach the other issues raised by Defendant's spoliation motion—e.g., when litigation was reasonably foreseeable to Plaintiffs, whether Defendant was required to attempt to obtain the records from Plaintiffs' cellular telephone provider before sanctions may be imposed, etc.

*3 While the Court declines to give an adverse-inference instruction to the jury as requested by Defendant, the Court will allow Defendant to cross-examine Plaintiffs and Mr. Sherman regarding the text messages they exchanged and their content based on the Court's previous determination regarding the text messages' relevancy to the claims and defenses presented in this litigation. See Order of Apr. 27, 2018, at 8, Doc. No. 50. Additional objections, if any, regarding cross-examination of Plaintiffs and Mr. Sherman will be addressed at trial based on the benefit of the Court's additional understanding as to Defendant's intended scope of questions regarding the same as such cross-examination unfolds.

IT IS THEREFORE ORDERED that Defendant's Motion for Sanctions is DENIED as set forth herein.

IT IS SO ORDERED this 20th day of July, 2018.