In Jones v. Riot Hosp. Grp. LLC, No. 22-16465 (9th Cir. March 5, 2024), the Ninth Circuit Court of Appeals affirmed terminating sanctions for deletion of text messages by the plaintiff, finding no abuse of discretion for dismissal under Rule 37(e)(2) or finding that expert testimony was admissible. The Circuit Court also found no abuse of discretion in the district court’s award of attorneys’ fees and costs.

Case Background

In this case involving claims of Title VII violations and common law tort claims by a former waitress at a bar owned by the defendants, defendant Riot obtained text messages exchanged between plaintiff Jones, her friends, and co-workers between December 2015 and October 2018. Riot identified instances where Jones appeared to have abruptly stopped communicating with people she had been messaging almost daily.

In response to a subpoena, Jones’ third-party imaging vendor produced a spreadsheet showing that messages between Jones and her co-workers had been deleted from Jones’ mobile phone. In subsequent depositions, two of the co-workers, both of whom Jones had identified as prospective trial witnesses, testified that they had exchanged text messages with Jones about the case since October 2018. After Jones failed to comply with the district court’s order to produce those messages, the court ordered the parties to jointly retain a third-party forensic search specialist to review the phones of Jones and three prospective witnesses.

The district court allowed Riot to subpoena the three witnesses “to produce their recent communications regarding Plaintiff’s claims,” and ordered Jones to deliver her phone to K.J. Kuchta, the agreed-upon forensic specialist. Kuchta was to extract messages containing stipulated search terms and send them to Jones’ counsel, Philip Nathanson, who would then send all discoverable messages to Riot and produce a privilege log of those not produced. Jones and two of the witnesses ultimately delivered phones to Kuchta, but Jones and one of the witnesses obtained new phones shortly after they were ordered to hand over their devices for imaging. Neither Jones nor the witnesses produced the earlier phones for imaging, effectively preventing discovery of messages deleted from those phones.

Kuchta extracted messages and sent them to Nathanson, but the lawyer failed to forward any to Riot, despite multiple district court orders that he do so and several deadline extensions. The district court then ordered Kuchta to send all non-privileged messages directly to Riot and later assessed $69,576 in fees and costs against Jones and Nathanson.

After finally receiving the text messages, Riot moved for terminating sanctions for deletion of text messages under FRCP 37(e)(2). Riot submitted an expert report from Kuchta, who concluded that “an orchestrated effort to delete and/or hide evidence subject to the Court’s order has occurred.” In 2022, the district court dismissed the case with prejudice, finding that Jones deleted text messages and cooperated in the deletion of messages by her witnesses, intending to deprive Riot of their use in litigation. Jones and Nathanson appealed the terminating sanctions for deletion of text messages.

Circuit Court’s Ruling

Noting that “[t]he district court found that Jones intentionally deleted relevant text messages with co-workers from 2017 and 2018 and coordinated with her witnesses to delete messages from 2019 and 2020”, the Circuit Court stated: “Jones… argues that the district court abused its discretion by dismissing the case because her conduct was neither willful nor prejudicial to Riot… We disagree. The Anheuser-Busch test generally controls the imposition of terminating sanctions, but we deal here with Rule 37(e)(2). To dismiss a case under Rule 37(e)(2), a district court need only find that the Rule 37(e) prerequisites are met, the spoliating party acted with the intent required under Rule 37(e)(2), and lesser sanctions are insufficient to address the loss of the ESI.” The Court also noted that “there was ample circumstantial evidence that Jones intentionally destroyed a significant number of text messages and collaborated with others to do so” and that “a screenshot of a message sent by a witness to Jones but missing from Jones’ phone in its original form, ‘shows that Plaintiff deleted at least one message that had a direct bearing on her case.’”

The Circuit Court also rejected Jones’ argument that the district court abused its discretion in finding that Riot was prejudiced by the destruction of the text messages, noting: “Rule 37(e)(2) does not mention prejudice as a prerequisite to sanctions, including dismissal. The Advisory Committee Notes explain that a finding of prejudice was not included as a requirement because ‘the finding of intent required by [Rule 37(e)(2)] can support not only an inference that the lost information was unfavorable to the party that intentionally destroyed it, but also an inference that the opposing party was prejudiced by the loss of information that would have favored its position.’”

The Circuit Court also rejected Jones’ objections regarding the admissibility of expert testimony, noting that Jones argument that the report was submitted after the deadline for expert disclosures “ignores the district court’s order reopening discovery for the limited purpose of presenting expert reports on spoliation.” The Court also rejected her objections that Kuchta had a conflict of interest because he had earlier served as a special master, that the district court abused its discretion in not holding a Daubert hearing and rejected her objections to the district court’s original order instructing her and others to hand over their phones to Kuchta on procedural and privacy grounds. Finally, the Court found no abuse of discretion for the district court’s award of attorneys’ fees and costs.

So, what do you think? Were the terminating sanctions for deletion of text messages warranted? Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant, an Affinity partner of eDiscovery Today.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by my employer, my partners or my clients. eDiscovery Today is made available solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Today should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.