BTD MANUFACTURING, INC., a Minnesota Corporation, Plaintiff, v. TEXTRON FASTENING SYSTEMS, INC., Defendant Civ. No. 04-4109 (RLE) United States District Court, D. Minnesota Signed April 24, 2006 Counsel Todd E. Zimmerman, Dorsey & Whitney, Fargo, ND, for Plaintiff. David J. Lohse, John J. Wackman, Polaris Industries, Inc., Medina, MN, Richard J. Nygaard, Schwebel Goetz & Sieben, James R. Crassweller, Kalina Wills Gisvold & Clark, PLLP, Minneapolis, MN, for Defendant Erickson, Raymond L., United States Magistrate Judge ORDER *1 This matter came before the undersigned United States Magistrate Judge, pursuant to the consent of the parties, as authorized by the provisions of Title 28 U.S.C. § 636(c), upon the Defendant’s Motion for Leave to Bring a Motion for Sanctions and Motion for Sanctions.[1] A Hearing on the Motions was conducted on March 9, 2006, at which time, the Plaintiff appeared by Todd E. Zimmerman, Esq., and the Defendant appeared by Richard J. Nygaard, Esq. For reasons which follow, the Defendant’s Motion for Sanctions is denied, and the Defendant’s Motion for leave to file a Motion for Sanctions is denied, as moot. II. Factual and Procedural Background BTD Manufacturing, Inc. (“BTD”), commenced this action in Minnesota State Court on August 25, 2004, alleging that Textron Fastening Systems, Inc. (“Textron”), had failed to satisfy the terms of a sales contract for the manufacture of a Skid Plate Assembly Line (the “Line”), at a contract price of $1.8 million. The Complaint alleges that BTD had paid Textron $912,265.00, on the contract price, and the present action seeks the recovery of those monies. Textron removed the case to Federal Court, and has since filed a Counterclaim against BTD for $908,556.00, which allegedly represents the unpaid portion of the contract price. In April of 2002, BTD entered into a purchase agreement with Textron for the Line, which was intended to be used in the production of aluminum shipping pallets. According to the contract, the Line was to be delivered to BTD within thirty (30) weeks from the receipt of certain materials, and forty (40) percent payment of the contract price. Affidavit of Todd E. Zimmermann (“Zimmermann Aff.”), Exh. 75, at p. 13. The contract also specified that “[a] run-off will be performed at BTD in which there will be a four-hour, at a 24.18 second cycle time, uninterrupted run,” and that “[o]nce the in-house run-off is completed that balance of the payment will be due Net 30.” Id. at p. 19. Textron subcontracted a portion of the project to Carotek, Inc. (“Carotek”), and it appears that Textron and Carotek experienced substantial difficulties in the completion of the Line to the specified standards. According to BTD, the Line was not completed to the specifications that were identified in the contract as of June of 2004, which was well after the contractually agreed upon thirty (30) week time frame. As such, on June 12, 2004, Earling Rasmussen (“E. Rasmussen”), who was the president and Chief Executive Officer (“CEO”) of BTD at that time, transmitted an email communication to his son Mark Rasmussen (“M. Rasmussen”), who is the Engineering Manager at BTD, and who served as the liaison between BTD and Textron, which read as follows: *2 Mark, I’ve been thinking about Textron and the Pallet Line. I know you have dealt with Textron and this Pallet Line in the pass [sic]. You still will be involved, but I want to talk to Tony[2] about this. * * * I’m going to tell him we have been forced to work around this Pallet Line and no longer need it. Everytime we try to use it, it doesn’t work and we lose money in the process. We have added cost to our pallet by putting nut certs in the pallet components and use screws with power locking thread. Right now we are buying these from Textron. We are going to let the customer assemble them to keep the cost in line. This also makes it easier to ship. WE NO LONGER CAN WAIT, Earl. See, Affidavit of James R. Crassweller (“Crassweller Aff.”), at Exh. F, Docket No. 48. Pursuant to E. Rasmussen’s instruction, the email communication was forwarded to an official with Textron on or around June 15, 2004. Apparently, at sometime in late August of 2004, officials with BTD and Textron conducted a meeting in Fargo, North Dakota, in an attempt to resolve the issues with the Line. See, Plaintiff’s Memorandum in Opposition to the Defendant’s Motion for Sanctions (“Plaintiff’s Mem.”), at p. 19; Crassweller Aff., Exh. B, at p. 21, ll. 23-25, p. 22, ll. 1-3. Subsequently, on August 25, 2004, this action was commenced. III. Discussion Textron’s Motion for Sanctions is predicated upon Rule 37, Federal Rules of Civil Procedure, and the District Court’s broad authority to impose sanctions for the spoliation of evidence. See, Lord v. Nissan Motor Co., Ltd., 2004 WL 2905323 at *2 (D. Minn., December 13, 2004). Specifically, Textron contends that BTD destroyed and/or deleted numerous documents concerning the cancellation of the contract for the Line, and that the destroyed documents are necessary to their defense that BTD’s decision to cancel the contract was not because of a breach by Textron, but because BTD, along with its parent company -- Otter Tail Power (“Otter Tail”) -- discovered that there was an insufficient market for the aluminum pallets to render the Line profitable. As a sanction, Textron seeks the dismissal of BTD’s claim which, it asserts, is the “least drastic remedy.” Defendant’s Memorandum in Support of Motion for Sanctions (“Defendant’s Mem.”), at p. 8. Textron has represented that, on April 29, 2005, it served BTD with its First Set of Requests for the Production of Documents, which were substantially similar in subject matter to Requests for the Production of Documents that had been served on them by BTD. However, some time after receiving BTD’s Answers, Textron became concerned that BTD had failed to produce all of the responsive documents and, on November 4, 2005, Textron transmitted a letter to BTD, which identified its concern about the suspected deficiencies in BTD’s document production. See, Crassweller Aff. at Exh. A. Apparently, Textron’s concern was predicated on BTD’s production of approximately 334 pages of responsive documents, while Textron itself had produced approximately 12,380 documents. Id. at ¶7.[3] Given the nature of the requests, Textron represents that it had expected BTD to produce substantially the same documents that had been produced by Textron in its responses to BTD’s requests. *3 On December 5 and 6, 2005, Textron commenced the depositions of several BTD officials. During those depositions, Textron apparently learned, for the first time, that BTD did not have a practice of retaining email communications; that the email communication from E. Rasmussen to M. Rasmussen of June 12, 2004, concerning the cancellation of the contract, had been deleted; and that email communications, following the cancellation on June 12, 2004, had also been deleted. See, Crassweller Aff., Exh. B., at p. 24, ll. 6-20; Exh. C, at p. 66, ll. 8-22. Textron contends that, considering the absence of any retention policy, “it is clear that BTD destroyed numerous relevant documents that Textron has never had the opportunity to review.” Defendant’s Mem., at p. 5. Textron further contends that, following the communication of June 12, 2004, BTD should have been aware that future litigation was likely to commence concerning the Line, and that BTD should have preserved any documents or communications related thereto. BTD concedes that it does not have a practice of retaining email communications. Affidavit of Dave Welte (“Welte Aff.”), at ¶2. Rather, if an email is received by BTD personnel, and the recipient believes that it is important for some purpose, BTD’s policy is to print a hard copy of the email. Id. Moreover, email communications, that are transmitted to BTD personnel, are retained on a central server, as opposed to the user’s computer or hard drive, and the contents of the central server are saved onto a tape at the end of each month. Affidavit of Marty Kiebke, at ¶¶3-4. At the end of the next month, the contents of the central server are saved onto a second tape. However, the material on the back up tapes are only preserved for two (2) months, and the contents of the central server, for the third month, are recorded onto the first tape. As a consequence, the data from the first month is written over and, at least according to BTD, is unrecoverable. Id. at ¶¶4-5. BTD contends that any undisclosed email communications that were created, or received, concerning the Line, were discarded pursuant to that two-month retention policy. Welte Aff., at ¶4. BTD officials have also averred that BTD personnel do not commonly communicate internally by email. Id.; Affidavit of Mark Rasmussen (“M. Rasmussen Aff.”), at ¶4. As such, BTD contends that Textron is incorrect in its assertion that key documents, concerning the Line, have been lost or destroyed. It is the accepted rule, within our Circuit, and District, that Federal law governs the application of sanctions which arise from an asserted spoliation of evidence. See, Stevenson v. Union Pacific R.R., 354 F.3d 739, 746 (8th Cir. 2004)(refusing to address choice of law issue because the standard under Federal law, and Arkansas State law, was the same); Regents Ins. Co. v. Candle Corp. of America, 2004 WL 2713251 at *3, n. 5 (D. Minn., November 24, 2004)(Federal law governs), citing Fakhro v. Mayo Clinic of Rochester, 2004 WL 909740 at * 2 (D. Minn., March 31, 2004) (Federal law governs). Under Federal law, “[a] court’s inherent power includes the discretionary ‘ability to fashion an appropriate sanction for conduct which abuses the judicial process.’ ” Stevenson v. Union Pacific R.R., supra at 745. Accordingly, “[s]anctions for spoliation of evidence may be appropriate where a party destroys evidence that it ‘knew or should have known was relevant to imminent litigation.” Regent Ins. Co. v. Candle Corp. of America, supra at *3, quoting Dillon v. Nissan Motor Co., 986 F.2d 263, 267 (8th Cir. 1991); see Lord v. Nissan Motor Co., Ltd., supra at * 2; Fakhro v. Mayo Clinic of Rochester, supra at *3. “[T]o warrant dismissal as a sanction for spoliation of evidence ‘there must be a finding of intentional destruction indicating a desire to suppress the truth.’ ” Menz v. New Holland North America, Inc., 440 F.3d 1002, 1006 (8th Cir. 2006), quoting Stevenson v. Union Pacific R.R., supra at 746; see also, Morris v. Union Pac. R.R., 373 F.3d 896, 901 (8th Cir. 2004). *4 Here, the deposition testimony of BTD officials suggests that BTD did not retain email communications that may have been pertinent to its claim. However, that testimony is consistent with the averments of BTD officials that BTD personnel did not have a policy of saving electronic communications, and that, under BTD policy, all electronic data that is stored on the central server for the month of its creation, and on back up tapes for the two (2) following months, at which time it becomes unrecoverable. There has been no suggestion that BTD selectively deleted email communications and, considering the deletion of the email of June 12, 2004, which provides support for BTD’s assertion that it rejected the Line because of the Line’s failure to satisfy the contract specifications, it appears unlikely that any selective deletion of emails occurred to Textron’s detriment. See, M. Rasmussen Aff., at ¶¶1-3; Welte Aff., at ¶¶2-3. Accordingly, we are satisfied that any deletion by BTD of electronic communications was done pursuant to the company’s document retention policy. In order to impose a sanction for spoliation, “[w]here a routine document retention policy has been followed * * * there must be some indication of an intent to destroy the evidence for the purpose of obstructing or suppressing the truth.” Stevenson v. Union Pacific R.R., supra at 747. As such, our Court of Appeals recently held that it is an abuse of discretion to dismiss a case as a sanction for spoliation “without first determining whether [the plaintiff] acted in bad faith.” Menz v. New Holland North America, Inc., supra at 1006; see, E*Trade Securities, LLC v. Deutsche Bank AG, 230 F.R.D. 582, 588 (D. Minn. 2005)(“If destruction of relevant information occurs before any litigation has begun, in order to justify sanctions, the requesting party must show that the destruction was the result of bad faith.”). Here, we find that the Textron has failed to demonstrate that BTD’s adherence to its document retention policy, under the circumstances presented, somehow constituted bad faith. In making this determination, we are guided by the analysis of our Court of Appeals in Stevenson v. Union Pacific R.R., supra, where the Court upheld an adverse inference instruction upon a finding of bad faith. In Stevenson, the plaintiffs commenced a tort action against the defendant railroad after the plaintiffs’ vehicle was struck by a train at a railroad crossing. Prior to the commencement of the litigation, the railroad destroyed the voice tape recording from the date of the accident, pursuant to its retention policy. Id. at 747. Under those circumstances, the Court held that the District Court did not abuse its discretion in finding that the railroad’s adherence to its retention policy constituted bad faith. In so holding, the Court found that the following considerations supported a finding of bad faith: 1) the defendant’s knowledge that the voice tape, which was the only contemporaneous recording of the conversation, would be highly relevant to potential litigation; 2) the defendant’s knowledge that litigation is frequent where there has been an accident involving death or serious injury; and 3) the defendant’s preservation of voice tape recordings, in other cases, where the tape proved beneficial to the defendant. Id. at 748; see also, E*Trade Securities, LLC v. Deutsche Bank AG, supra at 588 (“[A] party’s decision to selectively preserve some evidence while failing to retain other or * * * a party’s use of the same type of evidence to their advantage in prior instances, may be used to demonstrate a party’s bad faith.”), citing Stevenson v. Union Pacific R.R., supra at 747-48. However, even taking into account all of those considerations, the Court noted that “this case tests the limits of what we are able to uphold as a bad faith determination.” Id. at 747-48. As we have noted, there has been no suggestion that BTD selectively deleted electronic communications, and nothing in our Record establishes that BTD has deviated from its retention policy in the past, when such communications were favorable to its litigation position. Moreover, in contrast to Stevenson, where the Court found that the defendant had knowledge that litigation would likely follow the train/car collision, and knew of the highly relevant nature of the voice tape recordings, we cannot impute such knowledge to the Plaintiff, here, where the existence of a contract, even one involving a large sum of money, does not carry any strong likelihood of litigation, and where the relevance of electronic communications, between the parties, would not be immediately apparent to any litigation that might commence. Accordingly, we find that Textron has failed to demonstrate that BTD acted in bad faith. *5 Textron has also asserted that BTD should have been aware that litigation was imminent, following the cancellation of the contract on June 12, 2004, and that its failure to preserve electronic communications, after that date, constitutes spoliation. “The obligation to preserve evidence begins when a party knows or should have known that the evidence is relevant to future or current litigation.” E*Trade Securities, LLC v. Deutsche Bank AG, supra at 588. Accordingly, “[w]hen litigation is imminent or has already commenced, ‘a corporation cannot blindly destroy documents and be shielded by a seemingly innocuous document retention policy.’ ” Id. at 589, quoting, Stevenson v. Union Pacific R.R., supra at 749, quoting, in turn, Lewy v. Remington Arms Co., 836 F.2d 1104, 1112 (8th Cir. 1988). “If * * * the destruction of evidence occurs after litigation is imminent or has begun, no bad faith need be shown by the moving party.” Id. Textron maintains that, as the Plaintiff in this action, BTD must have become aware that litigation was imminent following its decision to cancel the contract on June 12, 2004. However, we decline to impute such knowledge to the Plaintiffs. In doing so, we are cognizant of the analysis, in Menz v. New Holland North America, Inc., supra, where our Court of Appeals determined that the District Court had erred in dismissing a case, after the defendants had demonstrated that the plaintiff had sold, or destroyed, evidence that was pertinent to their defense. In Menz, the plaintiff was injured when a tractor that he was driving rolled over, and pinned his arm to the ground, which resulted in the eventual amputation of the arm. Several months after the accident, the plaintiff repaired the tractor, sold the front end loader that had been attached to the tractor at the time of the accident, and graded the area where the accident had occurred. Emphasizing the prejudice that would result from the defendants’ inability to conduct an independent examination of the accident scene, the front end loader, and the condition of the tractor, prior to, or immediately after the accident, the District Court dismissed the case as a sanction for spoliation. Menz v. New Holland North America, Inc., Case No. 4:03CV1762 (JCH), Memorandum and Order, at p. 5 (E.D. Mo., February 14, 2005). However, the Court of Appeals held that it was an abuse of discretion to dismiss the case without first determining whether the plaintiff had acted in bad faith. Given the circumstances that were present in Menz, and the rule that bad faith need not be shown once litigation is imminent or has commenced, as expressed in E*Trade Securities, LLC v. Deutsche Bank AG, supra at 588, the Court’s holding implies that the occurrence of an event, upon which litigation is ultimately predicated, does not automatically impute to a plaintiff knowledge that litigation is imminent. Here, much like in Menz, the party that is accused of spoliation is the Plaintiff. Moreover, at least some of the alleged spoliation is said to have occurred after BTD’s decision to stop work on the Line on June 12, 2004. However, Textron has not directed our attention to anything other than the email communication of June 12, 2004, which would suggest that litigation was imminent, as of that date. Rather, it appears that the parties conducted a meeting in late August of 2004, concerning the Line, and that the decision was made to commence litigation following that meeting. See, Crassweller Aff., Exh. B, at p. 21, ll. 23-25, p. 22, ll. 1-14. In the absence of any evidence to suggest that litigation was imminent at an earlier date, we find that the Plaintiff’s obligation to preserve evidence began in late August of 2004, following the unsuccessful meeting between the parties to resolve issues concerning the Line. *6 Textron has presented evidence which establishes that BTD continued its policy of deleting email communications, even after the decision to commence this action. Specifically, the deposition testimony of Paul Ginter (“Ginter”), who is the present CEO of BTD, reflects that computer documents were not maintained following BTD’s decision to commence this action, id., Exh. B, at p. 25, ll. 11-19, and that nothing was done to try to preserve documents, even after BTD had become aware that there was going to be a dispute with Textron concerning the Line. Id., Exh. B, at p. 27-29. Similarly, the deposition testimony of David Welte (“Welte”), who is the Chief Financial Officer (“CFO”) for BTD, as well as that of M. Rasmussen, confirms that BTD officials never discussed the retention of documents concerning the Line. Id., Exh. C, at p. 71; Exh. D., at pp. 52-53. Moreover, BTD has conceded that the email of June 12, 2004, may have been permanently deleted in September of 2004, following the commencement of this action. As a result, to the extent that BTD deleted email communications following the meeting of August of 2004, and those email communications bear a relationship to the pending litigation, such conduct would certainly violate BTD’s obligation to preserve evidence, irrespective of its document retention policy. See, Lewy v. Remington Arms Co., supra at 1112, E*Trade Securities LLC v. Deutsche Bank AG, supra at 589; Broccoli v. Echostar Communications Corp., 229 F.R.D. 506, 510-11 (D. Md. 2005); Rambus, Inc. v. Infineon Technologies AG, 220 F.R.D. 264, 281 (E.D. Va. 2004)(“[O]nce a party reasonably anticipates litigation, it has a duty to suspend any routine document purging system that might be in effect and to put in place a litigation hold to ensure the preservation of relevant documents -- failure to do so constitutes spoliation.”). However, the extent to which BTD deleted emails following that date is unclear. Notably, while BTD concedes that the email of June 12, 2004, may have been permanently deleted following the commencement of this action, it has also represented that this email was the last that was transmitted concerning the termination of the Line. Plaintiff’s Mem., at p. 20. Furthermore, the averments of Welte, and M. Rasmussen, suggest that internal emails were rarely transmitted among BTD officials, who apparently had offices on the same floor of the same building, and communicated in person. Welte Aff., at ¶4; M. Rasmussen Aff., at ¶¶4 and 5. Welte has also attested that he does not recall receiving any substantive internal emails concerning the Line, and that he has no reason to believe that any substantive internal emails were created at BTD. Welte Aff., at ¶4. Aside from the emails, Textron has also asserted that spoliation was present by BTD’s failure to produce any “auto-cad” drawings of skid parts; BTD’s failure to produce any documents relating to market analysis; BTD’s destruction of non-email documents such as drawings, reports, and memoranda; the deletion of a file which was entitled “pallet line” from the computer of M. Rasmussen, and the non-production of back-up financial analysis documents. See, Defendant’s Reply to Plaintiff’s Supplemental Response, at pp. 2-3, Docket No. 66.[4]Unfortunately for Textron’s argument, Textron has failed to establish that many those documents were ever in existence, much less that they were destroyed, in bad faith, following BTD’s decision to commence this action. Specifically, the deposition testimony of E. Rasmussen reflects that BTD may not have documented any market research analysis, see, Crassweller Aff., Exh. E., at p. 63, ll. 1-7, and Textron has not presented any evidence to refute the averments of E. Rasmussen, and George Koeck (“Koeck”), who is the General Counsel and Corporate Secretary of Otter Tail, that, aside from the email of June 12, 2004, BTD did not create any documents concerning the decision to end work on the Line. Affidavit of Earling Rasmussen (“E. Rasmussen Aff.”), at ¶7; Affidavit of George Koeck (“Koeck Aff.”), at ¶¶6-7.[5]Lastly, while the deposition testimony of M. Rasmussen reflects that some documents were deleted from the “pallet line” file on his computer, Textron has not established that the deletion of those materials was made after BTD became obligated to preserve evidence. Rather, Welte has averred that, in late August of 2004, prior to the commencement of this action, he undertook to gather all of the documents concerning the Line, see, Welte Aff., at ¶5, and BTD has represented that the “pallet line” file, from the computer of M. Rasmussen, was a primary source of the materials that have been disclosed to Textron. *7 The fact that the Plaintiff has established some potential spoliation does not end our inquiry so as to justify sanctions. Rather, “[t]here must be a finding of prejudice to the opposing party before imposing a sanction for destruction of evidence.” Stevenson v. Union Pacific R.R. Co., supra at 748, citing Dillon v. Nissan Motor Co., supra at 267; see, New York State National Organization of Women v. Cuomo, 1998 WL 395320 at *2 (S.D. N.Y., July 14, 1998); see also, United States ex rel. Koch v. Koch Industries, Inc., 197 F.R.D. 488, 490 (N.D. Okla. 1999)(“While courts do consider many factors for determining the appropriate sanction for spoliation, the following two factors should ordinarily carry the most weight: the degree of culpability of the party who lost or destroyed the evidence, and the degree of actual prejudice to the other party.”). While the evidence destroyed need not be classified as a “smoking gun,” Stevenson v. Union Pacific R.R. Co., supra at 748, and “[s]poliation cases, by their nature, require at least a partial inference of prejudice based on unobtainable (spoiled) evidence,”Foust v. McFarland, 698 N.W.2d 24, 31 (Minn. App. 2005), rev. denied (Minn., August 16, 2005)[emphasis omitted], the party seeking the sanction “must demonstrate not only that [the offending party] destroyed relevant evidence as that term is ordinarily understood, but also that the destroyed evidence would have been favorable to her.” Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 221 (S.D. N.Y. 2003); see, Concord Boat Corp. v. Brunswick Corp., 1997 WL 3335279 at *7 (E.D. Ark., August 29, 1997); Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68, 76-77 (S.D. N.Y. 1991).[6] “This * * * requirement is even more necessary where the destruction was merely negligent, since in those cases it cannot be inferred from the conduct of the spoliator that the evidence would have been harmful to him.” Id., quoting Turner v. Hudson Transit Lines, Inc., supra at 77. Here, Textron asserts its belief that, at the time of BTD’s rejection of the Line, the Line had been accepted, and that it had performed in substantial accordance with the contract specifications. Textron has also urged that BTD decided to stop work on the Line, after BTD discovered that there was not a sufficient market for aluminum pallets; that design changes in the Line were required by changes in raw material; and that BTD undertook design responsibility for the Line after a settlement meeting in December of 2004. Textron contends that the deleted emails would be consistent with its version of the facts. Textron’s assertion, that the deleted materials would support its position, appears to be predicated on the BTD’s apparent deletion of seventy-nine (79) email communications that had been sent, or copied to BTD, concerning the Line; BTD’s failure to retain the email communication of June 12, 2004; BTD’s untimely disclosure of a Report that was completed by engineers at Virginia Polytechnic Institute and State University (“Virginia Tech”), concerning testing that had been performed on hand-constructed pallet prototypes; the apparent destruction of a videotape which was transmitted to M. Rasmussen via email, and which depicted the running assembly line, see, Crassweller Aff., Exh. C, at p. 61-63; the deposition testimony of E. Rasmussen, which suggests that BTD has been able to fill all of its orders for aluminum pallets without the Line, see, Crassweller Aff., Exh. E., at p. 63, l. 25, p. 64, ll. 1-9; and minutes from a meeting between Textron and BTD, on January 21, 2004, which reflect that Otter Tail had expressed its desire to have the Line functional by February 24, 2004, see, Affidavit of James R. Crassweller dated February 24, 2006 (“Second Crassweller Aff.”), at ¶7, Exh. F, Docket No. 59. *8 With respect to the Report, which contained the analysis of the Virginia Tech testing, Textron has drawn our attention to the deposition testimony of E. Rasmussen, that the original design of the aluminum pallets was tested at Virginia Tech, and that the testing revealed that the design “met all the criterias.” Id., Exh. B, p. 39, l. 25, p. 40, 1-6. Textron has also noted that, at the time that it took the depositions of BTD officials, it was not in possession of the Report, and that counsel for BTD had represented he had not seen the Report. Id., Exh. B., p.79, ll. 10-11.[7] Textron contends that the Report is inconsistent with the deposition testimony of E. Rasmussen that the design met all of the criteria. As such, Textron urges that BTD’s untimely disclosure of the Report evidences a likelihood that BTD has destroyed other relevant documents which would have been favorable to Textron. BTD counters that Textron has made no showing that the deleted emails would support Textron’s position. Specifically, BTD notes that the seventy-nine (79) deleted emails that had been sent, or copied, to BTD, as well as the video which depicted the operation of the Line, were retained by Textron. See, Crassweller Aff., at Exh. A; Second Crassweller Aff., at ¶10. As to the Report, BTD maintains that the Report was thought to have been destroyed, but that BTD recently discovered that it had retained a copy for marketing purposes. Id., at Exh. G. BTD also asserts that Textron officials were present at the testing which was performed at Virginia Tech; that Textron had received a copy of the Report following the testing; and that the testing was performed prior to the contract that is currently in dispute. BTD also notes that, if Textron thought that the results of the Virginia Tech testing were relevant, it had eighteen months to issue a Subpoena duces tecum to Virginia Tech. BTD also characterizes as speculation, Textron’s assertion that BTD must have deleted documents which would have supported Textron’s position that BTD’s decision to stop work on the Line was motivated by discussions with Otter Tail, and the absence of sufficient demand for the pallets. Specifically, E. Rasmussen has averred that he made the decision to stop work on the Line after BTD had received an order for aluminum pallets from one of its customers, and because the Line was not functional, non-manufacturing personnel, including office staff, were required to assist in the assembly of the pallets so as to complete the order. E. Rasmussen Aff., at ¶4-5. According to E. Rasmussen, Textron had missed several promised completion dates for the Line and, after personally observing efforts to complete the order, he made the decision to stop work on the Line. Id. at ¶¶4-5. Similarly, Koeck has averred that no documents were provided to Otter Tail, concerning the decision to end work on the Line; that there were no discussions at board meetings of either BTD, or Otter Tail, to the effect that work should be stopped on the Line, as a result of market concerns; and that he is unaware of any documents, at either BTD, or Otter Tail, that would suggest that the project was terminated because there was an insufficient market for aluminum pallets. Koeck Aff., at ¶7. As an initial matter, neither the deletion of the seventy-nine (79) identified emails, the untimely disclosure of the Virginia Tech Report, nor the deletion of the video, provide a proper basis for a spoliation sanction, since each of those documents are available to Textron through other means. See, Allen Pen Co., Inc. v. Springfield Photo Mount Co., Inc., 653 F.2d 17, 24 (1st Cir. 1981).[8] However, Textron would have us infer, from the untimely disclosure of the Report, as well as the deletions of the seventy-nine (79) emails, and the video, that other documents were destroyed by BTD, which would have supported Textron’s position. *9 The evidence which has been presented does not reasonably allow for such an inference. While it appears that BTD did not, at any time prior to the depositions of December of 2005, modify its document retention practices as a result of this litigation, Textron has failed to establish that any evidence was destroyed which was likely to contain information that would be favorable to Textron’s litigation stance, and Textron’s reliance on the untimely disclosure of the Virginia Tech Report, and the apparent non-retention of the video, are unavailing. Specifically, we have no reason to doubt that BTD has been forthright in its assertion that it was unaware, until recently, of its retention of the Virginia Tech Report, and Textron has not presented any information that would establish that BTD’s non-retention of the video, which was transmitted to BTD via email, was somehow improper. Since “it would simply be inappropriate to [impose a spoliation sanction] based upon the speculation that deleted e-mails would be unfavorable to [the Plaintiff’s] case,” see, Concord Boat Corp. v. Brunswick Corp., supra at *7, and any sanction would be based entirely on the conjecture that BTD destroyed documents to the detriment of Textron, we deny Textron’s Motion for Sanctions.[9] NOW, THEREFORE, It is – ORDERED: 1. That the Defendant’s Motion for Sanctions [Docket No. 45] is DENIED. 2. That the Defendant’s Motion for Leave to File a Motion for Sanctions [Docket No. 40] is GRANTED. Footnotes [1] Under our Amended Pretrial Scheduling Order, the deadline for filing, and having heard dispositive Motions, was set for September 30, 2006. The Defendant’s Motion for Leave to File a Motion for Sanctions seeks an extension of that deadline solely for the purposes of filing the pending Motion for Sanctions. Since we have considered the Motion for Sanctions on its merits, we grant Textron’s Motion for Leave to File a Motion for Sanctions. [2] Joseph Anthony De Ruyte (“De Ruyte”) was Textron’s project manager for the line. Deposition of Joseph Anthony De Ruyte, p. 14, ll. 6-23, Zimmerman Aff., at Exh A. Presumably, E. Rasmussen’s reference to “Tony” was, in fact, a reference to De Ruyte. [3] Based on Textron’s representations, it appears that BTD’s responses to its Requests for the Production of Documents would have been due on May 29, 2005. However, Textron has not provided any explanation as to why it waited until November 4, 2005, which was well after the discovery deadline, to apprise BTD of the suspected deficiencies. [4] Textron asserts, for the first time its post-Hearing briefing, that spoliation sanctions are somehow warranted by BTD’s failure to produce “auto-cad” drawings of skid parts, and back up financial analysis documents. However, Textron has not directed our attention to any evidence that such materials were destroyed in derogation of any document retention policy, or that they were destroyed after August of 2004, and our review discloses that Textron has never moved to compel the production of those materials. Accordingly, we are not persuaded that BTD’s alleged non-production of “auto-cad” drawings of skid parts, or back up financial analysis documents, require a spoliation sanction. [5] While Textron asserts that BTD officials destroyed numerous non-email documents concerning the Line, the only evidence that it has presented, as to BTD’s failure to maintain information that was not transmitted electronically, was the deposition testimony of E. Rasmussen that BTD likely did not retain a Report that was created by officials at Virginia Polytechnic Institute and State University (“Virginia Tech”), following testing on prototypes of aluminum pallets, see, Crassweller Aff., Exh. E, at p. 78, ll. 6-25, p. 79, ll. 1-25, p. 80, ll. 1-9, and BTD has since produced that Report. The remainder of the materials, which the Textron has identified as having been destroyed, appear to be deleted electronic communications. See, Crassweller Aff., Exh A; Exh. B, at pp. 17-29; Exh. C., at pp. 61-63, 65-72; Exh. D., at pp. 51-52; and Exh. D, at pp. 69-73. [6] While Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D. N.Y. 2003), Concord Boat Corp. v. Brunswick Corp., 1997 WL 3335279 (E.D. Ark., August 29, 1997), and Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68 (S.D. N.Y. 1991), each involved requests for a sanction in the form of an adverse inference instruction, authority from our Court of Appeals suggests that it would be improper to impose the more severe sanction of dismissal based on a lesser showing. See, Menz v. New Holland North America, Inc., 440 F.3d 1002, 1006 (8th Cir. 2006) (“It would * * * be unreasonable to excuse a finding of bad faith when imposing a more severe sanction [than an adverse inference], the outright dismissal of the plaintiff’s case.”). [7] Apparently, BTD disclosed the Report after Textron had filed the pending Motion. [8] Textron itself retained the seventy-nine (79) deleted emails that it has identified, as well as the video of the Line. Moreover, as noted by BTD, Textron made no efforts to obtain the Virginia Tech Report from Virginia Tech through the use of a Subpoena duces tecum. [9] We recognize that proof of the contents of materials which, purportedly, have been destroyed, as well as the bad faith intent of that destruction, is difficult in the extreme. Nonetheless, that is the proof required by the governing precedent of this Circuit. Our analysis has searched for direct, and circumstantial evidence, inclusive of the reasonable inferences to be drawn from that evidence, to support the requested finding of spoliation, and have concluded that the proof is decidedly wanting. While, on occasion, the difficulties of such proof may foster a climate for spoliation that is too elusive to prove, in order to be sanctionable, the evidence of spoliation must be more than mere surmise.