Kristen N. Cooley v. Target Corporation

Background

Kristen N. Cooley, guardian of the estate of N.O.C., a minor, objected to a magistrate judge’s June 10, 2022 order denying her motion for sanctions against Target Corporation, Target Enterprise, Inc., and John Does 1-10. The requested sanctions concerned alleged spoliation—the failure to preserve potentially relevant evidence—and a pattern of discovery abuse.

The magistrate judge found that Target had a duty to preserve electronically stored information (ESI) beginning September 25, 2018, when it received Cooley’s cease-and-desist letter, and that Target failed to preserve some ESI. The magistrate judge nevertheless found that Cooley was not prejudiced by the loss and that Target did not intentionally destroy ESI to deprive Cooley of its use in the litigation. The magistrate judge therefore declined to impose sanctions.

Rule 26(g) and the requested sanctions

Cooley argued that the magistrate judge should also have considered sanctions under Federal Rule of Civil Procedure 26(g), which permits sanctions for improperly certifying disclosures or discovery requests. The court rejected that objection. It explained that Cooley had mentioned Rule 26(g) but had not requested specific sanctions under that rule or explained how it would change the analysis.

The court held that each of Cooley’s five requested sanctions dealt exclusively with Target’s alleged destruction of ESI and therefore fell under Federal Rule of Civil Procedure 37(e). The requested sanctions were: striking Target’s independent-creation defense; giving an adverse-inference instruction concerning the destroyed evidence; allowing evidence and a jury question about Target’s intent; precluding certain evidence supporting Target’s independent-creation position; and allowing evidence about the loss and likely relevance of Target’s records.

The court also agreed that the cited examples of discovery misconduct did not establish grounds for sanctions. It viewed Target’s revision concerning the design of 16 of the 17 accused products as a typical clarification during discovery. It also found that a witness’s later statement about not seeing a promotional video did not warrant sanctions. Finally, it found that Target’s failure to produce license agreements was not sufficiently related to the loss of ESI and did not support a finding of bad faith.

Rule 37(e) and preservation of ESI

The court affirmed the conclusion that Target’s duty to preserve ESI began when it received Cooley’s September 25, 2018 cease-and-desist letter. Although Target believed Cooley’s claim lacked merit and Cooley did not file the complaint until May 2020, the letter stated that Cooley would sue unless the dispute could be resolved. The court therefore concluded that litigation was reasonably foreseeable in September 2018 and that Target had a duty to place a litigation hold at that time.

Rule 37(e)(1) allows measures no greater than necessary to cure prejudice when a party fails to preserve ESI and another party is prejudiced. Rule 37(e)(2) permits more serious measures—such as an adverse inference or dismissal—when the party intentionally destroyed ESI to deprive another party of its use in the litigation.

The court found no clear error in the magistrate judge’s conclusion that Target did not act with the required intent. Some emails had been deleted under Target’s retention policy before the cease-and-desist letter. Other emails had been preserved under a separate litigation hold and provided to Cooley. Target also stopped using and archived GroveSite and FlexPLM, but there was no reason to believe it intentionally altered the archives to make information related to Cooley’s case inaccessible.

The court likewise found no clear error in the conclusion that Cooley was not prejudiced. Regarding Davis’s laptop, Target initially stated that the laptop used in 2017 was replaced in 2019, then later stated that it had been replaced in January 2018 and again in April 2019. The court agreed that any prejudice from the lost hard drive was limited because most emails had already been deleted and relevant files had been saved on a shared drive. It therefore declined to order an evidentiary hearing. The court reserved the possibility of sanctions later if Target’s supplemental response about the laptop proved false, unsupported, or submitted in bad faith.

Other issue and disposition

The court found that Cooley’s memorandum exceeded the local word limit because it omitted more than 400 words of inserted excerpts from the word count. It warned that she must request permission in advance to submit an overlength memorandum but did not impose sanctions under the local rule.

The court ordered that Cooley’s appeal of the magistrate judge’s June 10, 2022 order was DENIED and that the June 10 order was AFFIRMED.