The Case of the Missing Lab Notebooks

Sherlock Holmes might have called this the case of the missing lab notebooks. Here, in a trade secrets lawsuit, relevant and responsive lab notebooks that were in one Plaintiff’s custody, went missing.

Defendants’ sanctions motion was unsuccessful because Defendants failed to provide clear and convincing evidence that the paper documents went missing after this Plaintiff’s duty to preserve was triggered.  The case demonstrates that the trigger and loss dates for each litigant is fundamental to spoliation analysis. Terran Biosciences, Inc. v. Compass Pathfinder Limited, 2026 WL 2349408 (D. Md. Aug. 13, 2026)(Crawford, J.).

THE FACTS,COMPLAINTS, and DISCOVERY REQUEST

While one plaintiff, Dr. Thompson, was working at the University of Maryland-Baltimore (“UMB”) lab, he developed a breakthrough medical treatment. The research details were recorded in physical lab notebooks and stored in the lab.

In March 2020, a major renovation began.  The materials were supposed to be moved to the floor below.  Post-renovation cleanup was completed in late 2022, however, Dr. Thompson had resigned on June 30, 2022.

The Court wrote: “When Dr. Thompson resigned, his lab ceased to exist, and there is no evidence that the removed lab materials, including the lab notebooks, ever returned to the fifth floor…. UMB has no knowledge of what happened to the lab notebooks after Dr. Thompson’s departure in June 2022.”

Plaintiffs sued, alleging improper disclosure and use of their trade secrets by Defendants.  Terran filed suit on August 5, 2022. Dr. Thompson joined as a plaintiff on June 5, 2023. UMB joined as a plaintiff on February 6, 2024.

Compass and two individuals were named defendants.

On July 10, 2025, [defendant] Compass served on Plaintiffs a request for production of documents that sought, among other things, documents relating to Dr. Thompson’s research, specifically identifying “lab notebooks” as encompassed by the request…. Defendants deposed [plaintiff] Dr. Thompson on September 16, 2025…. At this deposition, Dr. Thompson testified that when he left UMB, he knew where he left the lab notebooks but that “nobody seems able to find them.”

EFFORTS TO FIND THE NOTEBOOKS – DISCOVERY ON DISCOVERY

A discovery dispute was deferred while UMB continued to look for the notebooks. The parties then filed a status report and reported that they had agreed, in my words, to “discovery on discovery.”[1]

Specifically, the parties represented to the Court that UMB had “agreed to produce its internal litigation hold correspondence and the positions of individuals who received the litigation hold.”[2] …

UMB had also agreed to produce a witness to testify on five topics:

(1) When UMB first became aware that Terran intended to file this lawsuit, UMB’s involvement in that effort, and UMB’s knowledge of the fact that the suit involved alleged trade secrets detailed in Professor Thompson’s lab notebooks; (2) The details of UMB’s litigation hold; (3) What steps UMB took to identify relevant physical evidence, including the lab notebooks and when it implemented its litigation hold; (4) The timing and circumstances of the loss of the lab notebooks; and (5) When UMB first learned that the lab notebooks were missing, when it told Terran, and what steps it took next.

… The letter advised that after Defendants received this discovery, they would “confer with UMB on the scope of sanctions Defendants will seek based on the loss of the lab notebooks.” …

All of those steps were accomplished and the parties proposed a formal briefing schedule, which the Court granted.

COURT PROCEEDINGS

Initially, the Magistrate Judge rejected two preliminary challenges mounted by Plaintiffs.  Those were a challenge alleging untimeliness under Judge Grimm’s decision in Goodman v. Praxair, 632 F. Supp. 2d 494 (D. Md. 2009), and failure to follow the Judge’s protocol for resolving disputes.  The Court’s exhaustive analysis of timeliness is worth reading, id. at *3, but not the focus of this post.[3]

THE SPOLIATION STANDARD

Turning to the merits, the Court found sanctions were “unwarranted.”  Because the notebooks were not ESI, Fed.R.Civ.P. 37(e) did not apply and the Court held that the party moving for sanctions must show:

(1) [T]he party having control over the evidence had an obligation to preserve it when it was destroyed or altered; (2) the destruction or loss was accompanied by a ‘culpable state of mind;’ and (3) the evidence that was destroyed or altered was ‘relevant’ to the claims or defenses of the party that sought the discovery of the spoliated evidence, to the extent that a reasonable factfinder could conclude that the lost evidence would have supported the claims or defenses of the party that sought it.

The Court relied on its “inherent power” to control the judicial process, noting that inherent power is limited to curative sanctions and the movant bears the burden of providing “clear and convincing” evidence.

TRIGGER DATE

The first element involves deciding when the duty to preserve was triggered and when the loss or destruction occurred. Defendants contended that Plaintiffs’ duty arose in April 2022, months before litigation began, and long before there was any contention of loss. Plaintiffs replied that there was no duty in April 2022 and the lab notebooks most likely were lost in July 2022, before the duty was triggered.

The Facts Relating to the Trigger Date

The Court set the scene:  “There is no dispute that Terran filed this lawsuit on August 5, 2022, notified UMB of the filing on August 8, and that approximately one week later, on August 16, UMB issued its litigation hold.”  While UMB did not enter the case until February 6, 2024, it is a plaintiff and a plaintiff’s duty is triggered when it decides to pursue a claim.

In support of their asserted April 2022 trigger date, Defendants marshalled several facts.  The Complaints alleged: “Plaintiffs first suspected Defendants’ disclosure of, and misuse of, the Psilocybin Trade Secrets in approximately April 2022, in the course of reviewing Compass’s published patent application filings.”  Further, the Defendants relied on Plaintiffs’ privilege log which showed communications with outside counsel regarding “litigation, IP advice, and licensing advice.”[4]

Plaintiffs responded that UMB did not anticipate that it would later join the case.  They asserted that while Terran may have anticipated litigation in April 2022, that knowledge could not be imputed to UMB.  And, they asserted that the logged communications with counsel were on a licensing agreement with Terran, not on litigation against the Defendants.

The Court’s Holding Re: Trigger Date

The Court held that Defendants had failed to establish by clear and convincing evidence that Plaintiffs reasonably anticipated litigation as early as April 2022. It added:

Even assuming that Plaintiffs first suspected misuse of the trade secrets in April 2022, the mere suspicion of certain facts giving rise to a dispute demonstrates only that there was the “possibility of litigation,” not that Plaintiffs should have reasonably anticipated litigation at that time…. The Complaint does not allege that Plaintiffs understood in April that Compass had misappropriated their trade secrets, nor does it allege that Plaintiffs made known their suspicions of misappropriation to Compass. On the contrary, the allegation that Plaintiffs “first suspected misuse” in April suggests that this was their initial reaction to information contained in Compass’s patent filings—a far cry from an affirmative decision to sue, or even a direct threat of litigation from Terran to Compass that would have triggered a duty to preserve.  [emphasis in original].

The Court found the privilege log entries to be ambiguous. “At most, they establish that Plaintiffs communicated with private, outside attorneys regarding licensing and intellectual property issues and ‘litigation’ of an unspecified nature. That the subject emails covered multiple topics other than litigation tends to support the conclusion that litigation (of whatever nature) was not the parties’ sole, or even primary, concern at that time.”

The Court identified another gap in proof: “Nor have Defendants set forth any clear and convincing evidence establishing at what time after April 2022 but before August 5, 2022 [the date suit was filed], Plaintiffs, including then non-party UMB, may have reasonably anticipated litigation sufficient to trigger a duty to preserve.”

The Court concluded:

Accordingly, Defendants have failed to establish by clear and convincing evidence that Plaintiffs should have reasonably anticipated litigation in April 2022, thus triggering their duty to preserve evidence at that time. Rather, the evidence submitted supports the Court’s findings that Terran commenced litigation on August 5, 2022, triggering its own duty to preserve relevant evidence, and UMB’s duty to preserve arose at the latest on August 8, 2022, with UMB’s receipt of correspondence from Terran advising UMB of the lawsuit and seeking preservation of relevant evidence.[5]

The Court added: “Having determined when the duty to preserve arose, the Court now considers when UMB lost the notebooks, as the timing of when the evidence was lost in relation to when the duty to preserve arose, is essential to the spoliation analysis.”

DATE OF LOSS OF THE NOTEBOOKS

The Court wrote: “After engaging in discovery to determine the lab notebooks’ whereabouts, neither Plaintiffs nor Defendants can state with any precision when the lab notebooks were lost or destroyed. The evidence shows that the last time the lab notebooks were observed was in June 2022…. There is no concrete evidence regarding what happened to the notebooks after that time.”

Plaintiffs asserted that the “most likely” time of loss was July 2022. They relied on an October 1, 2025, UMB email stating that the lab notebooks were inadvertently lost during the renovations and cleanup.  Renovations began in early 2021 and continued into 2022, well after Dr. Thompson resigned.

The Court disagreed with Plaintiffs:

This evidence does not support the firm conclusion that the date of loss or destruction of the lab notebooks was in July 2022, versus a later point, like August or thereafter. Plaintiffs’ chosen timing is convenient because it would mean that the lab notebooks were lost before the Plaintiffs’ duty to preserve arose. But another plausible and equally speculative interpretation of the same October 1 email is that the lab notebooks may have been lost sometime after August 5, 2022, when this lawsuit commenced. The record is unclear. At bottom, the only conclusions that the Court can draw from the evidence presented are: (1) the lab notebooks went missing sometime after June 2022, when Dr. Thompson last saw them; (2) the lab notebooks were declared lost on October 1, 2025, when UMB advised Defendants of the results of their investigation into the whereabouts of the lab notebooks; and (3) the lab notebooks were in UMB’s possession when they were lost or destroyed. [emphasis in original].

However, the Court saw no need to decide when the notebooks went missing:

As noted above, I cannot conclude that Plaintiffs’ duty to preserve the lab notebooks arose in April 2022. The evidence only establishes that the duty arose on August 5, 2022, at the earliest. Because the lab notebooks were lost at some point after June 2022, it is entirely possible that the lab notebooks were destroyed in the intervening month before there was a duty to preserve. Given that Defendants have not carried their evidentiary burden at the first step in the analysis, the Court need not proceed to step two to determine whether UMB had a culpable state of mind. Doing so would require the Court to stack all its findings upon a hypothetical—a “what if” scenario that presumes Plaintiffs lost or destroyed the lab notebooks after August 5, 2022. Such a conditional analysis could not serve as the basis for the award of any sanctions.

In short, the movant failed to demonstrate that the lab notebooks went missing after the duty to preserve was triggered. The Court added: “Defendants’ evidence would also fail to meet the less stringent preponderance of the evidence standard, if such standard applied here.” Here, the trigger date was dispositive.

This blog was initially posted on  Electronic Discovery Reference Model.

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[1] For more on “satellite” or “culpability” discovery, see generally Guidelines for “Discovery on Discovery” (Aug. 5, 2025); “Discovery on Discovery” Permitted (Sep. 4, 2025); “Discovery on Discovery” Denied in “It Ends With Us” Lawsuit  (Sep. 5, 2025).

[2] For more on disclosure of implementation communications, see “The Court is keenly interested in whether Defendants’ counsel issued a litigation hold.” (Feb. 19, 2026); 8 Lessons Learned – Part IV – Disclosure of Recipients of Litigation Hold Notices (May 9, 2024); Discovery of Steps Taken to Implement a Litigation Hold is Permitted (Mar. 26, 2022); When is a Litigation Hold Notice Discoverable? (Dec. 1, 2020)

[3] For more on timing, see, The “Best Time” to File a Spoliation Motion (Jul. 15, 2025); When Should a Motion for Sanctions be Filed?  (Mar. 30, 2026).

[4] A Privilege Log Can Be Admissible Evidence (Jan. 20, 2025); Privilege Log Entry Was Relevant to Inquiry Notice Where Time-Bar Was at Issue (Jul. 6, 2025);  Privilege Log Helps Defeat Summary Judgment on One Count (Jun. 24, 2025); Listing a Document on a Privilege Log Concedes That it is Relevant for Discovery (Sep. 6, 2025).

 

[5] Generally a Third Party Had No Duty to Preserve (Feb. 14, 2026).  UMB was not a party when Terra made its preservation request.