Hefter Impact Technologies, LLC v. Sport Maska, Inc.
1:15-cv-13290
D. Mass.Aug 3, 2017Background
- HIT (Hefter Impact Technologies) assigned its "Hefter Shell Design" to CCM (Sport Maska, d/b/a Reebok–CCM) in a 2005 Purchase and Assignment Agreement that paid a lump sum plus 4.5% royalties on sales of any helmet that "incorporates the Shell Design."
- Parties agree royalties were paid for the Vector line; dispute centers on later models: the Resistance line, HT11K, and FitLite line, which HIT alleges are "derived from" the Hefter design.
- HIT sent a demand letter on Sept. 22, 2014 (referencing the Resistance line); CCM issued litigation-hold memoranda but admits employees’ email backups older than three months were routinely destroyed and that employee Laura Gibson discarded handwritten notebooks and had her laptop wiped upon maternity leave.
- CCM contends snapshots of custodians’ email mailboxes were taken after the 2014 letter and that responsive materials were produced; supplemental productions occurred in Oct. and Dec. 2016 after depositions revealed gaps.
- HIT moved for sanctions for spoliation (emails lost due to retention policy, wiped laptop data, and Gibson’s destroyed notebooks). Court examined Rule 37(e) (2015 amendment) for ESI and common-law spoliation standards for physical notebooks.
- Court found insufficient evidence of intent to deprive or substantial prejudice from lost ESI or laptop wiping; Gibson’s notebook destruction was negligent but unlikely to have produced highly probative materials. Court granted motion in part and denied in part, awarding HIT reasonable fees and costs for bringing the sanctions motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CCM should be sanctioned under Fed. R. Civ. P. 37(e) for lost ESI (deleted backups and laptop wipes) | CCM failed to suspend a three-month email backup deletion policy and wiped Gibson’s laptop after a litigation hold, causing loss of relevant ESI | Snapshots of custodians’ mailboxes were taken; responsive ESI was produced or recoverable; wiping followed regular policies and lacked intent to deprive | No 37(e) sanctions: no proof relevant ESI was destroyed, no intent to deprive, and no demonstrated prejudice from lost ESI |
| Whether destruction of Gibson’s handwritten notebooks warrants spoliation sanctions (adverse inference) | Notebooks were destroyed after litigation hold and likely contained relevant development notes | Gibson discarded notebooks as routine practice, with no intent to thwart litigation; notebooks likely contained little probative info on Resistance (completed prior) | No severe sanctions; destruction was negligent at worst and unlikely to have caused substantial prejudice |
| Whether CCM’s overall preservation/document-production processes justify sanctions | CCM’s retention and destruction policies, cursory custodian reviews, and late supplemental productions hampered discovery and merit sanctions | CCM points to efforts (hold memoranda, snapshots, supplemental productions) and lack of bad faith | Court acknowledged discovery complications and imposed a limited sanction (attorneys’ fees for motion) rather than evidentiary or dispositive sanctions |
| Appropriate remedy for any spoliation or discovery misconduct | Request for adverse inference or harsher sanctions and fees | Argues such remedies are unwarranted absent intent or prejudice; limited monetary sanction only if any | Court awarded HIT reasonable attorneys’ fees and costs for bringing the sanctions motion; otherwise denied relief requested by HIT |
Key Cases Cited
- Chambers v. NASCO, Inc., 501 U.S. 32 (U.S. 1991) (courts have inherent power to impose sanctions for spoliation and litigation misconduct)
- Gordon v. DreamWorks Animation SKG, Inc., 935 F. Supp. 2d 306 (D. Mass. 2013) (spoliation elements and timing requirements)
- United States v. Laurent, 607 F.3d 895 (1st Cir. 2010) (adverse-inference instruction normally requires bad-faith destruction)
- Collazo-Santiago v. Toyota Motor Corp., 149 F.3d 23 (1st Cir. 1998) (prejudice and degree of fault inform spoliation sanctions)
- Alexce v. Shinseki, [citation="447 F. App'x 175"] (Fed. Cir. 2011) (destruction of duplicative documents does not by itself justify sanctions)
- In re Ethicon, Inc. Pelvic Repair Sys. Prod. Liab. Litig., 299 F.R.D. 502 (S.D.W. Va. 2014) (awarding costs for bringing a sanctions motion where party negligently lost relevant evidence)