Policy of no modification saves website operator from spoliation sanctions

February 6th, 2009 | By Evan Brown

GW Equity LLC v. XCentric Ventures LLC, 2009 WL 62168 (N.D. Tex. January 9, 2009)

Information on a company’s website is relevant in numerous types of cases. But website content is sometimes dynamic, and the mechanics of preservation can be tricky. A recent case from the U.S. District Court for the Northern District of Texas provide some guidance.

XCentric Ventures opearates the Ripoff Report, a website that collects consumer-submitted “reports” on companies’ goods and services. GW Equity sued XCentric for defamation after it discovered some unflattering statements on the site. Central to XCentric’s defense was that it is immune from defamation liability under the Communications Decency Act (at 47 U.S.C. 230) because it did not create the offending content. So to overcome that immunity defense, GW Equity sought to prove that XCentric’s staff — and not its visitors — had edited the content.

Early in the dispute, GW Equity sent two letters to XCentric demanding that XCentric preserve the original content purportedly uploaded by the site’s visitors. XCentric did nothing in response to these letters, but maintained the internal policy that its staff (called content monitors) could not change the content of visitor-submitted reports except to redact personal information and profanity. These changes were noted on the face of the reports with the label “redaction” or symbols replacing profane words. The database underlying the site did not retain copies of reports’ past revisions. Instead, the changed versions simply overwrote the original content.

GW Equity sought spoliation sanctions against XCentric, claiming that XCentric’s failure to abide by the preservation demands showed intentional destruction of evidence and bad faith. The magistrate judge denied the motion, and the district court affirmed the order.

The district court found the magistrate judge properly credited evidence showing that evidence had not been intentionally destroyed. It was company policy not to modify the content except for minor redactions, and none of the staff testified they had deviated from that policy. There was no evidence of modification on the face of the posts. The court rejected GW Equity’s argument that the staff had an incentive to lie because they worked for XCentric, absent any outside indication they were lying. Without a showing that XCentric had intentionally destroyed evidence, there was nothing to support the bad faith required for a finding of spoliation.

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