Graham v. Honeywell International Inc.

Background

Graham moved for sanctions under Federal Rule of Civil Procedure 37(e), which addresses the failure to preserve electronically stored information. He argued that Honeywell failed to preserve data from his company-issued laptop and cellphone. Graham had asked Honeywell not to destroy documents, emails, saved files, or pictures in his system, and Honeywell had directed him to return his devices for a litigation hold.

The opinion states that Graham returned the laptop and cellphone, but their contents were not produced in discovery. A Honeywell witness testified that the laptop was stored at a Honeywell office and later sent for forensic collection, but the vendor apparently received the wrong laptop. The vendor did not receive a cellphone under Graham’s name. Honeywell also conceded that text messages could not be recovered.

Legal standard

Rule 37(e) requires the court to consider whether the information should have been preserved because litigation was anticipated or ongoing, whether it was lost because the party failed to take reasonable preservation steps, and whether it can be restored or replaced through additional discovery. If the loss prejudiced another party, the court may order measures no greater than necessary to cure the prejudice. More severe sanctions, including an adverse jury instruction or terminating sanctions, require a finding that the party acted with the intent to deprive the other party of the information’s use in the litigation.

Rulings

The court denied the motion as to Graham’s hard-copy office files. It explained that paper files are not electronically stored information and that Graham’s argument for sanctions under the court’s inherent power was raised for the first time in his reply brief.

As to the laptop and cellphone data, the court found that the information should have been preserved and that Honeywell failed to take reasonable steps to preserve it. In particular, Honeywell failed to ensure that the correct laptop was retained and sent for forensic collection. The court found that Graham was prejudiced because potentially missing information included communications about his contract, calendar events, notes, a commission-related spreadsheet, and text messages concerning his planned retirement date and possible compensation.

The court found no evidence that Honeywell intentionally destroyed the information. It therefore concluded that an adverse jury instruction was not warranted. Instead, it recommended that the presiding judge give the jury a short factual statement explaining that Honeywell had a duty to preserve Graham’s laptop and cellphone data but that some information, including text messages between Graham and his supervisor, David Bach, was no longer available.

The court granted in part and denied in part Graham’s motion for sanctions. It also found that Graham was entitled to reasonable attorneys’ fees for specified work involving conferences about laptop and cellphone document requests, depositions concerning Honeywell’s preservation duty, related matters, and the sanctions motion. The parties were ordered to meet and confer about the fee amount. If they could not agree, Graham was permitted to file a fee motion within 30 days of the order.

Judge and disposition

The opinion identifies the decision-maker only as a United States Magistrate Judge; it does not provide the judge’s name in the supplied text. The court granted in part and denied in part the sanctions motion, recommended the short factual jury statement, and made the fee ruling described above.