Twins Special Co. v. Twins Special, LLC, No. 23-cv-223-JES-DDL (S.D. Cal. Sept. 28, 2026), full opinion (PDF)
Wiping a phone after a court orders it turned over for forensic examination can cost a party the case under Rule 37(e)(2). On September 28, a district judge in the Southern District of California granted terminating sanctions against the defendants in Twins Special Co. v. Twins Special, LLC, adopting in part a magistrate judge's recommendation. Crediting the forensic examiners, the court found that the defendants' phones had been wiped and then restored from a backup. The magistrate judge had found that the wipe came about a week after the examination order. The court found sufficient evidence that some ESI was lost. Rule 37(e)(2), the court explained, requires no showing of prejudice. In the court's view, lesser sanctions were inadequate chiefly because the scope of the missing information was unknown.
What happened
After several orders compelling the defendants to produce documents, the magistrate judge ordered an independent forensic examination of their devices. The examiners testified that the devices had been wiped in their entirety and then restored from a backup. In the defendants' account, they had updated the phones, restored them, and turned everything over.
According to the examiners' testimony, the evidence indicated that QuickBooks files had been used for financial data. iMessages on one phone, they testified, indicated that conversations had been taken offline to Signal on purpose. The examiners found no QuickBooks files or Signal messages on any device. The magistrate judge's report cited evidence that at least one device with relevant information had not been handed over. After an evidentiary hearing, the magistrate judge recommended terminating sanctions.
The court's analysis
Like the magistrate judge, the court credited the examiners over the defendants on the state of the devices. The defendants argued that the backup itself was a reasonable step to preserve the data. The court rejected that argument because the examiners could not verify that the backup was complete. In the court's view, the testimony as a whole showed that the defendants took actions to conceal information.
On intent, the magistrate judge had pointed to the timing of the wipe, a week after the examination order. The magistrate judge also found that the defendants had been selective about which responsive data they put back on the devices. On that record, the court found sufficient evidence to infer intent to deprive.
The defendants objected that the plaintiff had shown no prejudice. The court answered that Rule 37(e)(2), unlike Rule 37(e)(1), requires no showing of prejudice. Terminating sanctions under that subsection, the court explained, require ESI that should have been preserved but was lost because a party failed to take reasonable steps. The lost ESI must be beyond restoration or replacement through additional discovery. The court must then find intent to deprive and conclude that lesser sanctions are insufficient.
On lesser sanctions, the court drew on the magistrate judge's report. That report cited an examiner's conclusion that the defendants' obstruction of the inspection left serious evidentiary gaps. According to that examiner, the defendants were still withholding financial data, Signal messages, and entire devices. The court stated that it "cannot speak with any confidence to the type of ESI and documents it may be missing". A history of noncompliance with discovery orders, the court added, further supported terminating sanctions.
Why it matters
A device under an examination order should reach the examiner in its original state. After a wipe and restore, an examiner may be unable to confirm that the backup captured everything the phone held. A movant can pair that uncertainty about the backup with proof that specific data expected on the device is missing. For a responding party, calling a wipe an update is unlikely to prevail against forensic testimony that ESI was lost.
A movant seeking terminating sanctions under Rule 37(e)(2) will usually prove intent through circumstantial evidence. Useful examples include the timing of the loss and any selective restoration of data. A forensic examiner is the natural witness for those facts. Once intent is proved, the dispute will usually turn on whether lesser sanctions would suffice. The movant's argument on that point is strongest when no one can say what the lost data contained.
The full opinion is available as a PDF.
