Electronic Discovery Law
Spoliation Sanctions Not Warranted for Failure to Preserve Temporary Cache Files
Healthcare Advocates, Inc. v. Harding, Earley, Follmer & Frailey, 2007 WL 2085358 (E.D. Pa. July 20, 2007)
Healthcare Advocates was the plaintiff in an earlier lawsuit that asserted claims for trademark infringement and misappropriation of trade secrets against a competitor. The Harding firm represented the defendants in that lawsuit, which was dismissed on summary judgment. This civil action arose out of events that occurred in the pre-discovery phase of the underlying litigation.
After receiving the complaint, the Harding firm investigated the facts behind the allegations. Employees of the Harding firm accessed a website operated by the Internet Archive (www.archive.org), and viewed archived screenshots of Healthcare Advocates' website via a tool contained on Internet Archive's website called the Wayback Machine. The Wayback Machine allowed the Harding firm to see what Healthcare Advocates' public website looked like prior to the date the complaint was filed in the underlying litigation. Viewing the content that Healthcare Advocates had included on its public website in the past was very useful to the Harding firm in assessing the merits of the claims brought against their clients. The Harding firm printed copies of each archived screenshot of Healthcare Advocates' public website that they viewed via the Wayback Machine, and used the images used during the course of the underlying litigation. However, the Harding firm did not actively save any of the screenshots they viewed onto their computer hard drives.
Healthcare Advocates later sued the Harding firm, claiming among other things that the firm had infringed on its copyright rights by viewing and printing copies of the archived images of the Healthcare Advocates' web pages, by unknowingly saving copies of these web pages in temporary files known as caches, and by distributing the images to their co-counsel in the underlying litigation. It further alleged that the Harding firm was guilty of “hacking.”
In this opinion, the court granted defendant’s motion for summary judgment, finding that the Harding firm’s infringing use was excusable under the fair use doctrine. The court further rejected Healthcare Advocates’ request for spoliation sanctions based on defendant’s failure to preserve the temporary cache files.
Specifically, Healthcare Advocates had argued that the images were involuntarily saved in temporary files on the Harding firm's computers. Since the files were lost, plaintiff alleged that the Harding firm failed to fulfill their duty to preserve. Healthcare Advocates argued that if these temporary cache files had been preserved, they would have been able to determine if the Harding firm used the archived images for any purpose other than what has been alleged or admitted. Healthcare Advocates argued it was prejudiced without this evidence, and that the loss of these temporary files entitled it to a spoliation inference at trial.
The court noted that a spoliation inference is an “evidentiary rationale [that] is nothing more than the common sense observation that a party who has notice that [evidence] is relevant to litigation and who proceeds to destroy [evidence] is more likely to have been threatened by [that evidence] than is a party in the same position who does not destroy the [evidence].” (Citation omitted.) The court described the Third Circuit’s balancing test for evaluating whether sanctions are appropriate when evidence is lost – the considerations include: (1) the degree of fault of the party who altered or destroyed the evidence, (2) the degree of prejudice suffered by the opposing party, and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and where the offending party is seriously at fault, will serve to deter such conduct by others in the future.
Applying this test, the court found little if any fault to be attributed to the Harding firm for not preserving the temporary files:
A cache file is a temporary storage area where frequently accessed data can be stored for rapid access. When a computer accesses a web page, it will sometimes store a copy of the web page in its cache in case the page is needed again. Some cache files are discarded after only twenty-four hours. When the Harding firm viewed archived screenshots of Healthcare Advocates' website through the Wayback Machine, copies of the screenshots may have been automatically stored in the cache files of the Harding firm's computers. The facts show that the Harding firm made no effort to preserve these temporary files immediately after they used their web browsers.
(Citations to the record omitted.) The court found that the Harding firm had no reason to anticipate that using a public website to view images of another public website would subject them to a civil lawsuit containing allegations of hacking, or that temporary cache files would be sought. Further, the court noted that a letter sent by Healthcare Advocates’ counsel, which requested that nothing be deleted or altered on the Harding firm’s computers and that all copies of requested documents be preserved, said nothing about preserving the temporary cache files on those computers. The court found that the Harding firm read this request as asking them to preserve the copies of the screenshots they viewed through the Wayback Machine (which they did preserve). The Harding firm did not think that there was anything to preserve on their computers since they had not saved the screenshots to their hard drives.
In addition, the court noted that the cache files were automatically deleted from the Harding firm's computers. “The most important fact regarding the lost evidence is that the Harding firm did not affirmatively destroy the evidence. Quite the contrary, the Harding firm actually provided Healthcare Advocates with forensic images of their computer's hard drives.” The court found that “very little fault” could be attributed to the Harding firm for the loss of these temporary cache files.
The court also found that Healthcare Advocates had not suffered significant prejudice from not being able to look at these temporary files, and concluded that sanctions were not appropriate:
Healthcare Advocates was able to obtain the information that it needed through the forensic images of the Harding firm's computer hard drives. The Harding firm did not purposefully destroy evidence. To impose a sanction on the Harding firm for not preserving temporary files that were not requested, and might have been lost the second another website was visited, does not seem to be a proper situation for an adverse spoilation inference. Healthcare Advocates's request for an adverse inference in regard to the cache files is denied.
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