In Barcroft Media, Ltd. et al. v. Coed Media Grp., LLC, No. 16-CV-7634 (JMF) (S.D.N.Y. Sept. 28, 2017), Plaintiffs – providers of entertainment-related photojournalism and owners of celebrity photographs – interposed various intellectual property claims against Defendant Coed Media Group, LLC (“CMG”). The claims related to the allegedly infringing use of certain celebrity photographs (the “Images”) on CMG’s pop culture and celebrity gossip websites. Because CMG purportedly failed to preserve the “webpages” on which it displayed the Images, Plaintiffs filed a motion for spoliation sanctions pursuant to Federal Rule of Civil Procedure 37.
In deciding the sanctions motion, Judge Furman discussed the relevant provisions of Rule 37 and its 2015 amendment. Specifically, the Court noted that a sanction may be imposed only if the ESI that should have been preserved is lost because a party failed to take reasonable steps to preserve it and the ESI cannot be restored or replaced through additional discovery. Once that standard is met, the next step in the inquiry is to determine whether; (1) the non-offending party has been prejudiced from the loss of ESI; and (2) the offending party acted with the intent to deprive another party of the information’s use in the litigation. Even a cursory reading of the (not so newly) amended Rule 37 makes plain that mere loss of data alone is not enough for sanctions. Rather, loss coupled with a prejudice is necessary and, even then, the resulting sanction must only be as great as needed to cure the prejudice. Thus, only after a Court identifies a prejudice to the aggrieved party, may the Court order measures necessary to remediate that prejudice.
Against this backdrop, the Court concluded Plaintiff’s motion for sanctions was without merit and bordered on frivolous. Specifically, the Court found there was no foundation for the imposition of any sanctions.
“Given the plain language of [Federal Rule 37(e)], Plaintiffs’ motion borders on frivolous, for the simple reason that they cannot even show that the evidence at issue was ‘lost.’ Several of the images are still hosted on CMG’s websites…And the record makes clear that Plaintiffs themselves possess copies of the other Webpages—in the form of screen captures taken when they displayed the Images (the ‘Screenshots’)…In fact, Plaintiffs themselves list the Screenshots as trial exhibits…Given that…, there is no foundation to impose sanctions under Rule 37(e).”
The Southern District went on to conclude that “Plaintiffs obviously cannot show prejudice ‘as [they] actually possess[ ] copies’ of the relevant evidence” and sanctions are not appropriate.
This decision serves as an important reminder that practitioners need to remain current in their understanding of the Federal Rules and the standards articulated under those Rules. Indeed, a sanction for lost ESI cannot be predicated merely upon loss alone. Rather there must be a loss of relevant ESI coupled with a prejudice before sanctions may be imposed.
 Bear in mind the decision is limited to spoliation issues, not authenticity and best evidence.