Flashcards Studio

A consumer filed a federal products-liability action after a battery-powered scooter caught fire. Before suit, the consumer's lawyer sent the manufacturer a letter identifying the scooter model, the fire date, the warranty claim number, and the consumer's intent to sue. The manufacturer's legal department told the engineering team to preserve test results and customer complaints, but it did not suspend the company's automatic deletion of internal chat messages after 30 days.
After suit was filed, discovery showed that engineers had discussed the consumer's fire and similar battery failures in chat channels during the month after the demand letter. Those chats were deleted automatically. Some information can be reconstructed from emails, test logs, and the memories of two engineers, but the consumer argues that the deleted chats likely showed the engineers' immediate reaction and knowledge of other fires. There is no direct evidence that the manufacturer deleted the chats to hide them, but the company had received earlier warnings from outside counsel that chat preservation was often needed in product cases.
The consumer moves for default judgment or, alternatively, an instruction allowing the jury to presume the deleted chats were unfavorable to the manufacturer. What findings must the court make under Rule 37(e), and what remedy is most appropriate?