In Clayton Int’l, Inc. v. Neb. Armes Aviation, LLC, No. 8:21CV309 (D. Neb. Fe. 21, 2025), Nebraska Magistrate Judge Ryan C. Carson granted in part plaintiff’s motion for sanctions for defendant Tracy Ogle’s disposal of the hard drive from his laptop after litigation commenced, granting the plaintiff “reasonable attorney fees and costs stemming from discovery efforts as it pertains to the loss of the hard drive”, but not the adverse inference sanctions sought, finding a lack of bad faith on defendant’s part.

Case Discussion and Judge’s Ruling

This case involved claims that Defendants misappropriated proprietary data to perform helicopter modifications for the Royal Jordanian Air Force and was filed in August 2021. In September 2021, Ogle reported that his laptop hard drive malfunctioned due to BitLocker encryption, making it inaccessible. He claimed to have taken it to Best Buy for service and later replaced the drive at the end of the month, disposing of the original.

Around this time, the parties discussed implementing reasonable data preservation measures, with Ogle’s counsel asserting that a litigation hold had been in place since April 2021. In November 2021, a forensic examination confirmed the installation and formatting of a new hard drive on Ogle’s laptop. By June 2022, Ogle’s company (Nebraska Gas Turbine, Inc. (NGTI)) was added as a defendant and served in the lawsuit. It was not until October 2022 that plaintiff learned about the hard drive failure and replacement when Ogle disclosed this information in a declaration.

The issue of Ogle’s hard drive was formally raised during a discovery dispute conference in December 2022, and the Court permitted limited additional discovery on the matter. A second conference in July 2023 allowed Ogle to be deposed again, during which he testified that he personally disposed of the hard drive. The matter continued into October 2023, when a third discovery dispute conference was held. The court approved reconvening Ogle’s deposition to examine his knowledge and intent regarding data preservation efforts. Plaintiff then filed this motion, seeking sanctions under FRCP Rule 37(e)(1) and 37(e)(2) for Ogle’s disposal of the hard drive.

In considering Rule 37(e)(1) sanctions for Ogle’s disposal of the hard drive, Judge Carson stated: “The court finds that Ogle knew or should have known that ESI evidence on his laptop may be relevant shortly after suit was filed and he was personally served. He thus had an affirmative duty to preserve that evidence. The evidence shows suit was filed August 16, 2021…Tracy Ogle and Nebraska Armes Aviation, LLC were personally served on August 23, 2021…NGTI was added as a party in June 2022 and served on June 16, 2022…The parties do not dispute that Ogle discarded the afflicted hard drive and installed a new one on his laptop sometime between September and November 2021.”

Continuing, he said: “The court also finds there was likely relevant information on the laptop and Ogle had an affirmative duty to preserve it. While Ogle testified that there was nothing on the laptop that would have been pertinent to the lawsuit, the evidence certainly suggests otherwise. Ogle acknowledged that he travelled to Jordan and Bahrain for work-related trips with the laptop and used it exclusively. He also used the laptop to access critical government programs related to helicopter modifications, which required new authorizations once the hard drive was replaced because the program was not available on any other computer… While Ogle discounts these changes to ‘failing of human memory,’ he is at the same time adamant about what was not on the laptop—any relevant information. The court again is not convinced that he can have it both ways… The court finds that Plaintiff should be awarded reasonable attorneys’ fees and costs that it would not otherwise have incurred but for Ogle’s failure to preserve the hard drive.”

However, in considering Rule 37(e)(2) sanctions for Ogle’s disposal of the hard drive, Judge Carson stated: “Other than Ogle’s poor recollection, there is no other evidence supporting the Plaintiff’s claim of bad faith. The evidence is insufficient to show that Ogle intentionally destroyed the hard drive for the sole purpose of interfering with the litigation…In Paisley Park, 330 F.R.D. at 237, the court granted an adverse jury instruction because it found the discovery misconduct went beyond mere negligence. In that case, bad faith was established because the other party ‘knew how to preserve information on their phones and knew that information on their phone might be discoverable’ and intentionally destroyed it by wiping their phones more than once after the litigation began. In this case, although the court finds that Plaintiff suffered some prejudice because of the spoliation of evidence and the uncertainty that now exists, it does not find that Ogle acted in bad faith and thus concludes that an adverse jury instruction is improper.”

So, what do you think? Do you agree with the Court that adverse inference sanctions aren’t warranted for Ogle’s disposal of the hard drive? Please share any comments you might have or if you’d like to know more about a particular topic.

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