The lengthiest and most contentious debates surrounding the Dec. 1, 2015 amendments to the Federal Rules of Civil Procedure concerned new Rule 37(e), governing the sanctions available when parties fail to preserve electronically stored information (ESI).1 Given those debates, many parties and practitioners were eager to see how new Rule 37(e) would be interpreted by the courts. They did not have to wait long. In his new decision, CAT3 v. Black Lineage,2 Magistrate Judge James Francis—no stranger to the e-discovery world—has provided the first thorough judicial interpretation of new Rule 37(e) and offered his opinion on some controversial language from the corresponding Advisory Committee Note concerning potential limits on judges’ inherent power to sanction.3
‘CAT3 v. Black Lineage’
The plaintiffs brought several claims, including trademark infringement and cybersquatting under the Lanham Act along with claims under New York law.4 The plaintiffs alleged that the defendants’ “use of the trademark FLASHXHYPE and the domain name www.FLASHXHYPE.com”5 infringed on the plaintiffs’ “trademark ‘SLAMXHYPE’ and the domain name www.SLAMXHYPE.com”6 utilized for their clothing sales, website, and online magazine business operations.
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