BACKGROUND

On July 22, 2013, Plaintiff Apex Colors, Inc. initiated litigation against Paul Bykowski, alleging misappropriation of Plaintiff’s trade secrets, breach of Bykowski’s fiduciary duties in actively competing with Plaintiff while employed by Plaintiff, tortious interference with Plaintiff’s business expectancy, and other related claims. See Case No. 2:13-CV-247. Some documents were produced during that litigation, documents that Plaintiff asserts confirm the breach of fiduciary duty and the misappropriation of trade secrets in the form of product certifications issued by Chemworld and Bykowski during the time that Bykowski served as Plaintiff’s president. In that litigation, Bykowski’s attorney produced an Excel spreadsheet of Finos' color/lot standards that was created by Bykowski in August 2003.

Plaintiff explains that the product certifications issued by Chemworld and Bykowski for Chemworld’s business are in the “exact same form and contained [Plaintiff’s] standard lot numbers.” (Pl. Br. 4). To Plaintiff, this means that Chemworld and Bykowski were representing to customers that the product being provided is the same as a product previously vetted with the customer using Plaintiff’s procedures and testing methods. Plaintiff further asserts that it recently learned in the present litigation that the product certifications produced by Bykowski in the previous litigation “surreptitiously omitted customer names without informing [Plaintiff] that any redactions were performed.” (Pl. Br. 4). A comparison of the exhibits submitted by Plaintiff shows that information was omitted from the documents produced in the earlier litigation. Plaintiff further contends that it appears that Bykowski deleted columns of data from the Excel spreadsheet because there are six columns with drop down arrows for sorting but five of the columns contain no data.

In the prior litigation, Plaintiff served discovery on the Chemworld Defendants. On the eve of the return date for the subpoena to the Chemworld Defendants, Bykowski filed for bankruptcy, effectively stopping Plaintiff’s discovery efforts in that first lawsuit. Plaintiff then pursued discovery in the bankruptcy proceeding by filing an adversary complaint.

In this litigation, in November 2014, before the bankruptcy stay was lifted and before the adversary complaint was removed from bankruptcy, Plaintiff served a nonparty subpoena on Bykowski. Plaintiff asserts that Bykowski has given inconsistent subpoena responses. First, on December 19, 2014, Bykowski responded to Plaintiff’s subpoena for documents and represented that he had no documents responsive to Plaintiff’s subparagraphs a, e, g, h, i, j, k, l, m, n, s, t, u, bb, and dd.

*2 On January 22, 2015, the Court issued an Order on Plaintiff’s Motion for Order to Show Cause Why Paul Bykowski Should Not Be Held in Contempt or Alternatively Enter an Order Compelling Production of Documents and Electronically Stored Information, requiring Bykowski to provide a full response to Plaintiff’s subpoena, including production of his computer, on or before January 30, 2015.

Then, on January 30, 2015, after being ordered to produce documents by the Court, Bykowski amended his subpoena responses and indicated that he may have responsive documents to the same enumerated subparagraphs of the subpoena (except for subparagraphs n, s, and u) but indicated that “[o]ther than those documents [contained on his laptop], which may no longer exist on [Bykowski’s] hard drive, none.” (Pl. Br., Ex. 7). However, Bykowski did not provide any responsive documents.

On February 12, 2015, at 1:15 p.m., Plaintiff filed a motion for an order to show cause, requesting that the Court hold Bykowski in contempt and order him to produce documents responsive to the subpoena. Five hours later, at 6:12 p.m. on February 12, 2015, counsel for Bykowski sent an email informing counsel for Plaintiff that Bykowski lost his computer the night before at a Holiday Inn in Akron, Ohio, while traveling and making sales calls. Counsel for Bykowski told Plaintiff’s counsel in the email that Bykowski had explained to him that, after working in the hotel lobby, he believed that he had replaced the laptop in his bag before leaving but later discovered that he did not have the laptop computer. Bykowski told his attorney that he called the hotel and was told that the charger cord was returned to lost and found but that the laptop had not been turned in to the hotel.

Finally, on February 25, 2015, Bykowski responded to the February 12, 2015 motion, asserting that the documents sought by Plaintiff were essentially the same as those he already produced in the first litigation prior to his bankruptcy. In his argument, Bykowski identified documents previously produced as now being responsive to subparagraphs v, w, x, y, z, and cc of Plaintiff’s November 2014 subpoena in this litigation, when Bykowski had previously represented that he had no documents responsive to those paragraphs.

On March 6, 2015, the Court ordered Bykowski to provide full and complete responses to the subpoena, including all documents previously produced in the first litigation, and stated that, if Bykowski again failed to comply with the Court’s order to produce documents by March 12, 2015, the Court would reconsider Plaintiff’s motion and hold Bykowski in contempt.

On March 13, 2015, Bykowski supplemented his previous subpoena response with documents he obtained from various email accounts under his name. But, Bykowski did not produce the documents he had previously produced in the first litigation, including production of the Excel spreadsheet he provided to his counsel in that first litigation. Also, on March 13, 2015, Bykowski produced documents in response to subparagraphs a, e, f, g, i, k, t, and u of the subpoena for which he previously indicated in his January 30, 2015 subpoena response were only available on his laptop computer that he claims to have lost (and for which he had indicated in his December 2014 response that no documents existed). Bykowski also identified that he is in possession of a responsive tangible item in his Portage, Indiana laboratory in response to subparagraph a, namely “powdered standards that [he] once used at PolySolve, brought to Apex, used at Finos, and now uses in [his] laboratory for certifications for Chemworld.” However, Bykowski has not produced (or made available for inspection) the powdered standards. Plaintiff notes that Bykowski has not affirmatively represented that the documents produced included all of the documents that were on his laptop computer.

*3 The instant motion was filed five days after the March 13, 2015 production, on March 18, 2015.

ANALYSIS

As an initial matter, the Court strikes, and does not consider, the Affidavit of Paul Bykowski in Opposition to Motion to[sic] for Sanctions [DE 229-3], submitted as Exhibit 3, because it does not conform to the requirements of an unsworn declaration under 28 U.S.C. § 1746, which must be subscribed “by him, as true under penalty of perjury, and dated, in substantially the following form: ... ‘I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date).’ ” 28 U.S.C. § 1746 (emphasis added). Although Bykowski’s Affidavit provides in the opening sentence “being first duly sworn and under penalty of perjury,” the Affidavit in fact is not sworn. Nor does the Affidavit state that it is “true,” and, significantly, the Affidavit is undated. Plaintiff noted the improper nature of the unsworn declaration in the reply brief on April 2, 2015; Bykowski has not attempted to cure the Affidavit. Because it does not comply with the requirements of § 1746, the Court does not consider Bykowski’s Affidavit at Exhibit 3 in support of his response brief. Bykowski also cites the Affidavit he submitted in support of his Motion for Summary Judgment at docket entry 13-2; because that Affidavit suffers from the same defects, the Court does not consider it either.

In the instant motion, Plaintiff contends that the Chemworld Defendants and Bykowski have attempted to thwart Plaintiff’s reasonable efforts in discovery, requiring Plaintiff to file numerous motions with the Court in order to obtain relevant information regarding Plaintiff’s claims. Plaintiff asserts that, based on Bykowski’s previous inconsistent statements before this Court and his actions in this and previous litigation with Plaintiff, it is questionable whether Bykowski in fact lost his laptop computer as he now claims. However, Plaintiff argues that, regardless of whether the laptop computer was lost, Bykowski has failed to preserve documents that are relevant to this dispute. Plaintiff seeks sanctions both for Bykowski’s failure to preserve the laptop computer and for his failure to comply with the Court’s January 22, 2015 Order.

A party has a duty to preserve evidence when it knows, or should have known, that litigation was imminent. Trask-Morton v. Motel 6 Operating L.P., 534 F.3d 672, 681 (7th Cir. 2008) (citing Burlington N. & Santa Fe Ry. Co. v. Grant, 505 F.3d 1013, 1032 (10th Cir. 2007); Silvestri v. Gen. Motors Corp., 271 F.3d 583, 591 (4th Cir. 2001)). “In order to draw an adverse inference that the missing documents contained information adverse to the defendants, [Plaintiff] must demonstrate that the defendant intentionally destroyed the documents in bad faith.” Norman-Nunnery v. Madison Area Tech. College, 625 F.3d 422, 428 (7th Cir. 2010) (citing Faas v. Sears, Roebuck & Co., 532 F.3d 633, 644 (7th Cir. 2008); Park v. City of Chicago, 297 F.3d 606, 615 (7th Cir. 2002)). “The crucial element in a spoliation claim is not the fact that the documents were destroyed but that they were destroyed for the purpose of hiding adverse information.” Id. (citing Faas, 532 F.3d at 644; Trask-Morton, 534 F.3d at 681).

*4 In contrast to the standard governing a claim of spoliation in the face of imminent litigation, Federal Rule of Civil Procedure 37(b) addresses the sanctions available when a party fails to obey a court order regarding discovery:

Fed. R. Civ. P. 37(b)(2)(A).

“The weight of authority ... holds that the culpability of a party who fails to comply with a court order determines only which sanctions the court should impose and not whether any sanctions are appropriate at all.” Halas v. Consumer Servs., Inc., 16 F.3d 161, 164 (7th Cir. 1994). “While a finding of willfulness, bad faith, or fault is required to impose the sanction of dismissal for a discovery abuse, there is no similar requirement for the imposition of a lesser sanction such as an adverse inference: An appellate court will ‘uphold any exercise of the district court’s discretion that could be considered reasonable.’ ” Intellect Wireless, Inc. v. Sharp Corp., No. 10 C 6763, 2015 WL 1539605, at *9 (N.D. Ill. Mar. 31, 2015) (quoting Maynard v. Nygren, 332 F.3d 462, 467 (7th Cir. 2003); citing Watkins v. Nielsen, 405 F. App'x 42, 44 (7th Cir. 2010)); see also Mathis v. John Morden Buick, Inc., 136 F.3d 1153, 1155 (7th Cir. 1998) (recognizing that a motion seeking sanctions for destruction of evidence under Rule 37 makes available the whole range of sanctions under that rule in contrast with a motion based solely on spoliation, which requires a showing of “bad faith”); Malibu Media, LLC v. Harrison, No. 1:12-CV-1117, 2014 WL 7366624, at *9 (S.D. Ind. Dec. 24, 2014) (contrasting the required showing of bad faith for sanctions based on spoliation in the face of imminent litigation in contrast with the standard of bad faith, willfulness, or fault required for the most severe sanctions for a failure to comply with an order for discovery under Rule 37).

A discovery sanction must be proportionate to a party’s discovery violation. Collins v. Illinois, 554 F.3d 693, 696 (7th Cir. 2009). “Fault does not refer to the noncomplying party’s subjective motivation, but rather describes the reasonableness of the conduct.” Krumwiede v. Brighton Assocs., L.L.C., No. 05 C 3003, 2006 WL 1308629, at *9 (N.D. Ill. May 8, 2006) (citing Langley v. Union Elec. Co., 107 F.3d 510, 514 (7th Cir. 1997)). “Fault may be evidenced by negligent actions or a flagrant disregard of the duty to preserve potentially relevant evidence.” Id.(citing Diersen v. Walker, No. 00 C 2437, 2003 WL 21317276, at *5 (N.D. Ill. June 6, 2003)).

*5 In this case, although Plaintiff is asserting that Bykowski failed to preserve evidence, the failure to preserve evidence is in the context of the Court’s January 22, 2015 discovery order requiring Bykowski to make his computer available for inspection. Thus, the Court considers the range of sanctions available under Rule 37(b)(2)(A) and whether Plaintiff has shown bad faith, willfulness, or fault on the part of Bykowski.

Plaintiff argues that it is prejudiced by Bykowski’s action because it cannot now obtain relevant documents, documents which the Court ordered Bykowski to produce. Plaintiff asks the Court to sanction Bykowski by either deeming facts related to Plaintiff’s discovery requests to Bykowski admitted or alternatively take an adverse inference that the documents requested by Plaintiff would have been negative to Bykowski and the Chemworld Defendants, barring Bykowski from presenting any evidence on his behalf or on behalf of his alleged co-conspirators (the Chemworld Defendants) at the upcoming preliminary injunction hearing and throughout the remainder of the litigation, imposing a monetary sanction against Bykowski, and awarding Plaintiff’s attorney’s fees and costs related to this motion.

The Court finds that Plaintiff has demonstrated fault on the part of Bykowski based on his negligence and flagrant disregard of his duty to preserve the laptop that he had been ordered to produce. Based on Bykowski’s attorney’s explanation in the February 12, 2015 email to Plaintiff’s counsel, it appears that Bykowski lost the laptop while in a hotel lobby in Ohio by not putting it in his bag before he left. This alone demonstrates negligence under the circumstances. In addition, Bykowski himself has not provided any explanation as to the steps he took to safeguard the computer or the circumstances under which he lost the laptop computer; nor has Bykowski provided any sworn statement as to the loss of the laptop.[1] Bykowski knew that he was required to produce the laptop in discovery and yet he did not take steps to safeguard it. Moreover, the suspicious timing of Bykowski’s counsel informing Plaintiff’s counsel of the loss of the laptop just five hours after Plaintiff filed a motion for order to show cause for Bykowski’s failure to comply with the Court’s January 22, 2015 Order raises questions about Bykowski’s efforts to protect the laptop computer.

The Court finds that Plaintiff has suffered prejudice as a result of Bykowski losing the laptop computer because Plaintiff has no other way of obtaining the information on the computer or even knowing what other information was on the computer. The Chemworld Defendants have indicated in response to some discovery requests that Bykowski is the only source of the requested information. Plaintiff has also been deprived of the opportunity to undertake a forensic examination of the laptop computer to determine if information had been deleted. The laptop is a main piece of evidence in this litigation; and now it is gone. However, it is not the only evidence produced by the Chemworld Defendants, Bykowski, and nonparties through Plaintiff’s extensive discovery efforts. Thus, Plaintiff is not left with a complete deficit of information.

*6 Accordingly, the Court grants Plaintiff’s request for sanctions under Rule 37(b)(2) and imposes the sanction of allowing the trier of fact to consider a negative inference that documents contained on Bykowski’s laptop computer would have been favorable to Plaintiff. The Court finds this to be a just order that imposes a sanction proportionate to Bykowski’s conduct and that balances Bykowski’s fault with the prejudice to Plaintiff in light of the other discovery that Plaintiff has already obtained in this litigation. See Fed. R. Civ. P. 37(b)(2)(A) (“[T]he court where the action is pending may issue further just orders.”). In addition, pursuant to Federal Rule of Civil Procedure 37(b)(2)(C) and finding that Bykowski losing his laptop computer was not substantially justified or that other circumstances make an award of expenses unjust, the Court orders Bykowski to pay Plaintiff’s reasonable expenses, including attorney’s fees, caused by Bykowski losing his laptop computer.

The Court denies, as disproportionate to Bykowski’s sanctioned conduct, Plaintiff’s request for sanctions in the form of barring Bykowski from presenting evidence to defend against Plaintiff’s claims, designating facts as alleged by Plaintiff be taken as established, holding Bykowski in contempt of Court, and imposing a monetary sanction.

CONCLUSION

Based on the foregoing, the Court hereby GRANTS in part and DENIES in part Plaintiff’s Motion for Sanctions Regarding Paul Bykowski’s Laptop Pursuant to Federal Rule of Civil Procedure 37 and Court’s Inherent Powers [DE 215]. The Court ORDERS that the trier of fact, whether the Court at the preliminary injunction hearing or the trier of fact in subsequent proceedings, will consider a negative inference that documents contained on Bykowski’s laptop computer would have been favorable to Plaintiff. The Court further ORDERS Bykowski to PAY Plaintiff’s reasonable expenses, including attorney’s fees, caused by Bykowski losing his laptop computer. The Court ORDERS Plaintiff to file a verified statement of reasonable expenses, including attorney’s fees, caused by Bykowski losing his laptop computer on or before April 30, 2015.

SO ORDERED this 13th day of April, 2015.

Bykowski’s Affidavit submitted as Exhibit 3 to his response brief, which the Court has stricken, does not offer any other explanation regarding the loss of the laptop, other than to reference losing the laptop in Ohio on February 11, 2015.