In Safelite Grp., Inc. v. Lockridge, the U.S. District Court examined whether a cease-and-desist letter triggers a duty to preserve electronically stored information (ESI) and how routine deletion of text messages impacts spoliation sanctions under Rule 37. This case offers key lessons on preservation obligations, particularly when dealing with employees transitioning to competitors and the legal ramifications of failing to retain key communications. The decision provides a deep dive into the intersection of foreseeability, preservation duties, and the potential consequences of lost ESI.
Overview
This decision, issued on September 30, 2024, by U.S. District Judge Sarah Morrison, examines the consequences of failing to preserve text messages. At the heart of the dispute is whether a cease-and-desist letter suffices to put a layperson on notice of anticipated litigation, thereby triggering the obligation to preserve electronically stored information (ESI). This nuanced case highlights the importance of swift action to preserve evidence, a recurring theme in the Case of the Week series.
Case Background
The dispute began when Nathaniel Lockridge, the defendant, left his position as a store manager at Safelite, an auto glass repair company, and accepted a job with competitor Caliber Collision. Shortly after starting at Caliber in August 2021, Lockridge allegedly reached out to former Safelite employees, encouraging them to join him at Caliber—a move that Safelite claimed violated his non-compete and non-solicitation agreements.
On August 27, 2021, Safelite sent Lockridge a cease-and-desist letter, warning him that his actions breached his contractual obligations. While the letter hinted at potential litigation, it did not explicitly instruct Lockridge to preserve any ESI. Less than a month later, Safelite filed suit against Lockridge, alleging breach of contract and improper solicitation.
During discovery, Safelite requested Lockridge’s communications, including text messages with former colleagues. Lockridge, however, did not produce any relevant text messages, admitting that his phone had been set to auto-delete texts after 30 days—a setting he did not realize was in place until February 2022. Safelite moved for sanctions under Rule 37(e), arguing that Lockridge had failed to preserve crucial evidence.
Court’s Analysis
Judge Morrison began by outlining the three elements required under Rule 37(e) for imposing sanctions for failure to preserve ESI:
- ESI that should have been preserved was lost.
- Reasonable steps to preserve the ESI were not taken.
- The lost ESI cannot be restored or replaced through additional discovery.
The Court held that Lockridge’s failure to preserve his text messages met all three elements. Despite Lockridge’s argument that he was unaware of his obligation to preserve texts, the Court determined that the August 27 cease-and-desist letter put him on notice of reasonably foreseeable litigation. Relying on Goodman v. Praxair Servs., Inc., the Court emphasized that even without explicit instructions to preserve ESI, the letter made litigation foreseeable by detailing specific contractual violations and threatening legal action.
Additionally, the Court rejected Lockridge’s argument that his inexperience with litigation excused his failure to preserve evidence. It distinguished between two concepts: whether Lockridge had a duty to preserve and whether he took reasonable steps to do so. While Lockridge’s lack of litigation experience might affect the Court’s analysis of his preservation efforts, it did not absolve him of the duty to preserve relevant communications.
Sanctions and Prejudice
Safelite sought an adverse inference instruction, which would allow the jury to infer that the missing text messages were unfavorable to Lockridge’s defense. The Court found that Safelite had been prejudiced by the loss of these messages, as they were central to proving the extent of Lockridge’s solicitation efforts. However, the Court did not find evidence of intent to deprive Safelite of the messages, which would have justified harsher sanctions under Rule 37(e)(2).
Instead, the Court granted a permissive adverse inference, permitting both parties to present evidence at trial regarding the lost text messages and argue for their preferred inferences. In addition, Safelite was awarded fees and costs related to the spoliation dispute, including all discovery efforts tied to Lockridge’s text messages.
Key Takeaways
This decision underscores several critical lessons:
- Act Quickly to Trigger the Duty to Preserve: Safelite’s swift action—sending a cease-and-desist letter within days of learning about Lockridge’s new job—was pivotal. Had they delayed in doing so, the auto-deletion setting could have erased the texts before the duty to preserve attached. For attorneys, this case reinforces the importance of advising clients to act immediately when a potential dispute arises.
- Investigate Phone Settings Early: Lockridge’s claim that he only discovered the auto-delete setting months into litigation raises important questions. As Kelly Twigger noted, the default setting on most phones is to retain messages indefinitely. Engaging a forensic expert early could have revealed whether the phone’s settings were changed after the duty to preserve arose, potentially strengthening Safelite’s case for intent and more severe sanctions.
- Use Phone Records Strategically: Although the content of Lockridge’s text messages was lost, Safelite used phone records to demonstrate that relevant messages were sent during the key time frame. This creative use of ESI highlights the importance of leveraging all available data to build a narrative when primary evidence is unavailable.
- The Power of ESI in Telling Your Story: Safelite’s ability to present circumstantial evidence and phone records to suggest the likely contents of the missing texts illustrates how ESI can fill gaps in discovery. As Kelly advises, understanding where to look for electronic evidence—and knowing how to weave it into a compelling story—is essential for modern litigators.
- Importance of the FRCP Advisory Notes: Judge Morrison’s reliance on the advisory notes to Rule 37 highlights the value of understanding the intent behind rule amendments. Incorporating language from these notes into legal arguments can bolster credibility with courts and help shape persuasive arguments.
In summary, Safelite Grp., Inc. v. Lockridge offers a valuable roadmap for navigating preservation obligations and sanctions under Rule 37. It reminds us that quick action, strategic use of ESI, and attention to procedural details are crucial in litigation.
She is a co-author of Electronic Discovery and Records and Information Management, and host of Case of the Week at eDiscovery Assistant. As Principal at ESI Attorneys, Kelly manages the boutique eDiscovery and information law firm that acts as operational business partners with its clients to advise law firms, corporations, and municipalities on all areas of electronic information including eDiscovery, privacy, cybersecurity, and information governance.
Kelly is also the CEO of eDiscovery Assistant — a SaaS-based practical resource for litigators handling eDiscovery — that curates discovery decisions, rules, and additional content. She is developing an online academy to provide on-demand education for lawyers and legal support professionals to stay abreast of changes in the law and technology that affect litigation and clients’ obligations to respond.
You can reach Kelly at [email protected], join her Facebook community group at Let’s Talk eDiscovery, or connect with her on Twitter @kellytwigger.