In essence, during the case SanDisk chose to play dumb (or lazy) and did not produce all relevant evidence, despite admitting that they had some specific pieces, resulting in their negligence. As Pauley quotes, "A failure to conform to this standard is negligence even if it results from a pure heart and an empty head."
Yet, interestingly, the judge gives little leeway to SanDisk because it is a technology firm. "Its size and cutting-edge technology raises an expectation of competence in maintaining its own electronic records. The concatenation of omissions and missteps at SanDisk reveal a lack of attention to detail that has worked a hardship on the Plaintiffs and delayed this litigation."
Because SanDisk could not locate certain files or images from the hard drives of the custodians (in this case, the plaintiff's own hard drives), they were found to be "At minimum, [they] SanDisk was negligent...The undisputed facts reveal a cascade of errors, each relatively minor, which aggregated to a significant discovery failure."
I'm sure it is this kind of embarassing failure which legal teams must look to avoid (in addition to the sanctions, a mere $150,000 in this case).