Wisk Aero LLC v. Archer Aviation Inc.

Background

Wisk sought sanctions under Federal Rule of Civil Procedure 37(e), which governs lost electronically stored information, based on the conduct of Archer employee Scott Furman. Furman had previously worked for Wisk as its Chief Avionics Architect and later joined Archer in the same role. After leaving Wisk, he was required to remove Wisk-related information from his electronic devices and repeatedly said that he had done so.

Furman used an Archer-issued computer to access personal email through Thunderbird and to access his personal Apple iCloud account. Some emails, messages, and photos on the computer contained information related to Furman’s work at Wisk, although Furman testified that he did not know that at the time. Furman received litigation-hold notices and later a subpoena requiring production of Wisk-related documents.

Archer’s forensic imaging of Furman’s laptop in May 2021 captured the files then on the computer, including the Thunderbird emails and iCloud messages and photos. In December 2021, Furman deleted the Thunderbird application and the iCloud files from the Archer computer. In January 2022, he used Fastmail.com to search his personal email for Wisk-related terms and deleted emails he found. He also deleted one Wisk-related file from his personal Dropbox account. Furman testified that fear of an FBI inquiry and concern for his family motivated the January deletions. Archer later obtained another forensic image, and emails in a zip file were produced to Wisk. Wisk said it had not received a copy of the Dropbox file.

Legal standard

Rule 37(e) allows a court to order measures to cure prejudice when electronically stored information should have been preserved, was lost, cannot be restored or replaced through additional discovery, and the loss resulted from a failure to take reasonable preservation steps. More severe sanctions, such as an instruction allowing the jury to presume the missing information was unfavorable, require proof that the party acted with the intent to deprive the opposing party of the information’s use in the litigation.

The court held that Rule 37(e) governed the requested sanctions for the lost electronic information and limited the court’s discretion under its inherent authority on these facts.

Court’s analysis

The court first concluded that the files from the Thunderbird application and iCloud account were not lost for purposes of Rule 37(e), because the May 2021 forensic image captured the materials that existed on the computer at that time. The court treated as potentially lost only metadata concerning the period between May and December 2021, possibly some emails deleted through Fastmail, and the Dropbox file.

For the metadata, the court found that Wisk did not show that Archer or Furman failed to take reasonable preservation steps. Archer had required new employees to remove information from former employers, had imaged Furman’s computer soon after Wisk filed suit, had taken another image after learning about the deletions, and had shared information and images with Wisk and the court. The court also found that Wisk had not shown that Furman used the files or that the files related to Archer’s work after May 2021. Wisk therefore did not establish either an unreasonable failure to preserve the metadata or prejudice from its possible loss.

The court likewise found that Wisk did not show prejudice from the Fastmail deletions. Wisk did not identify evidence that Furman or Archer used or accessed the information in the deleted emails, and it did not show that the emails recovered in the zip file were absent from the May 2021 forensic image. Although Furman intentionally deleted the emails, the court found that Wisk had not shown that he acted with the required intent to deprive Wisk of their use in the litigation. The court credited the evidence that Furman deleted them because he feared an FBI inquiry, and noted that the deletions occurred long after litigation began and after the laptop had been imaged.

The court treated the Dropbox file differently on whether it was lost: it found that the file was lost and likely could not be restored or replaced through additional discovery. However, the court found that Wisk did not show prejudice because it did not establish that the file was important or related to Archer’s work. The court also found insufficient evidence that Furman deleted the file intending to prevent Wisk from using it in the litigation. Although the Dropbox analysis presented a closer intent question, Furman’s sworn explanation, the timing of the deletion, and the lack of evidence connecting the file to Archer’s work did not satisfy Rule 37(e)(2).

Disposition

The court denied Wisk’s motion for sanctions. The court also stated that the motions to seal were granted.

Judge

The order was signed by H. Orrick, United States District Judge.