*1 Defendants’ Renewed Motion for Fed. R. Civ. P. 37 Sanctions against Plaintiff for failure to preserve relevant evidence (“Sanctions Motion”) was argued by counsel on September 26, 2024. For the reasons that follow, the Special Master DENIES the Sanctions Motion.

This is a Renewed Motion by Defendants, Joybees, Inc. and Kellen McCarvel (collectively referred to as “Defendants”) alleging that Plaintiff, Crocs, Inc. (“Crocs”) (Defendants and Crocs are collectively the “Parties”) has not adequately preserved evidence. This Motion, as the name suggests, is a “renewed” motion, and it relates back to ECF No. 201, Defendants’ Motion for Fed. R. Civ. P. 37 Sanctions for Plaintiff's Failure to Preserve Documents.

The thrust of Defendants’ argument is that since the original litigation hold was put in place, the scope of the litigation has expanded and, therefore, Crocs had a related duty to expand the litigation hold to identify additional individuals whose information should be withheld to ensure compliance with the duty under Fed. R. Civ. P. 37(e) to “take reasonable steps to preserve [electronically stored information].”

The Parties spent the vast majority of their time, both in their written submissions and in oral argument, debating whether Crocs had adequately supplemented its list of individuals who received a litigation hold. In my view, the Parties are focused on the tail and not the dog. Specifically, Fed. R. Civ. P. 37(e) addresses electronically stored information and sets forth the penalties if a party has not adequately preserved electronically stored information.[1]

In relevant part, Fed. R. Civ. P. 37(e) recognizes that all parties in litigation have an obligation “to take reasonable steps to preserve [electronically stored information]. The Rule then describes the penalties if the court determines that there was “prejudice to another party from loss of the information.” Nowhere in the rule does it require that a particular methodology be used in order to satisfy the “reasonable steps” requirement. Admittedly, a common practice is to disseminate a litigation hold which, in order to be “reasonable,” should be directed to the individuals who are most likely to have relevant electronically stored information and should identify, with reasonable particularity, the information that should be preserved. Europe v. Equinox Holdings, Inc., 592 F.Supp. 3d 167 (S.D.N.Y. 2022) (once the duty to preserve is triggered, the preservation obligation requires a litigant to do more than refrain from intentionally destroying relevant evidence. Instead, if a party fails to timely institute a formal litigation hold, spoliation can be found.). However, perfection in preserving all relevant electronically stored information is often impossible, and the rule does not require perfection. Committee Note 2015 Amendment, ¶9. The duty to preserve extends to those employees and sources likely to possess relevant information. Key players in the case are the right focus, as is an effort to preserve unique relevant evidence that might be sought by the adversary. Alabama Aircraft Industries, Inc v. Boeing Company, 319. F.R.D. 730 (N.D. Ala. 2017). Thus, the ultimate question is whether reasonable steps have been undertaken to preserve electronically stored information. Creation of a litigation hold is a means to an end, not an end in itself.

*2 In its moving papers, Defendants attached various exhibits including five sets of written discovery and one page from the deposition of Sara Yoder. However, Defendants have failed to identify any information that was relevant to the case and which was not preserved. I understand and acknowledge the previous observation that “Crocs seeks to place Joybees in an impossible Catch-22 position by asserting Defendants have not established prejudice when their inability to do so is in part due to the fact that Crocs did not retain the documents and, therefore, the Defendants do not know the contents of the documents that were destroyed by Crocs. Since there are difficulties of proof, the burden should not be imposed on the innocent party. [ECF 318 at 5-6]. However, although Joybees may be excused from identifying specific documents, it cannot base its Motion on pure speculation and/or belief. “The rule does not place a burden of proving or disproving prejudice on one party or the other.” Committee Note to 2015 Amendment, ¶14. Given the extensive written discovery, Defendants should be able to point to the types of documents or information that they requested but that Crocs failed to produce. Although Defendants have identified individuals whom they believe should have been placed on a litigation hold list, they have failed to identify relevant information that has been withheld because it was destroyed.

Additionally, in order for the Special Master to issue a Sanctions Order, Defendants must establish prejudice. During oral argument, counsel for Defendants focused, in part, on trade secret information contained in the 2023 Action relating to manufacturing, fabrication and testing of Crocs’ products. Counsel went on to discuss that part of a claim for misappropriation of trade secrets involves evidence that the trade secrets were adequately protected. (Transcript of Proceedings dated September 26, 2024, at 20:5-20). However, Defendants fail to explain how the absence of that information would prejudice it. Similarly, Defendants have failed to explain what specific information has been destroyed and how the lack of that information has or will prejudice them.

Based on the foregoing analysis, the Special Master hereby DENIES Defendants’ Renewed Motion for Fed. R. Civ. P. 37 Sanctions for Plaintiff's Failure to Preserve Documents.

IT IS SO ORDERED.