First Fin. Sec., Inc. v. Freedom Equity Grp., LLC, No. 15-cv-1893-HRL, 2016 WL 5870218 (N.D. Cal. Oct. 7, 2016)
In this case, the court imposed two permissive adverse inference instructions against Defendant at trial. The first adverse inference was ordered pursuant to FRCP 37(e)(2) for Defendant’s failure to preserve text messages. The second was imposed pursuant to FRCP 37(b)(2) (authorizing the court to “remedy the violation of a discovery order with a ‘just’ sanction”), upon the court’s conclusion that Defendant’s failure to produce certain native-format data, despite being repeatedly ordered to do so, resulted in substantial prejudice to the Plaintiff. In so concluding, the court rejected the argument that it was required to find bad faith, reasoning instead that it could impose such a sanction upon a determination of gross negligence.