UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
AUDREY D’ONOFRIO,
Plaintiff,
v. Civil Action No. 06-687 (JDB/JMF)
SFX SPORTS GROUP, INC., et al.
Defendants.
MEMORANDUM OPINION and REPORT & RECOMMENDATION
This case has been referred to me by Judge Bates for the resolution of discovery
disputes. Currently pending before the Court is Plaintiff’s Motion for Sanctions and
Spoliation Instruction/ Inference [#123]. A portion of this opinion addresses plaintiff’s
request for dispositive relief. Thus, a portion of this opinion is a report and
recommendation to Judge Bates.
I. Background
This lawsuit involves claims by plaintiff, Audrey (Shebby) D’Onofrio, that her
employer, SFX Sports Group, Inc. (“SFX”),1 discriminated against her because she is a
woman. Plaintiff also alleges that she was subjected to a hostile work environment and
then was terminated in retaliation for her protected activities. She brings this lawsuit
under the District of Columbia Human Rights Act (“DCHRA”), the Equal Pay Act, and
the District of Columbia Family Medical Leave Act.
1 Plaintiff also names as defendants SFX’s parent corporation, Clear Channel Communications, Inc. (“Clear Channel”) (currently operating as Live Nation, Inc.), Dan Rosier, former Chief Financial Officer for SFX, and Kimberly Wray, head of Human Resources for Clear Channel. Discovery in this case has been fractious. An extensive discussion of the
procedural history of the discovery disputes may be found in my prior opinions in this
case. See, e.g., D’Onofrio v. SFX Sports Group, Inc., 247 F.R.D. 43, 44-45 (D.D.C.
2008) (hereinafter “D’Onofrio I”); D’Onofrio v. SFX Sports Group, Inc., 254 F.R.D. 129,
129-34 (D.D.C. 2008) (hereinafter “D’Onofrio II”); and D’Onofrio v. SFX Sports Group,
Inc., 256 F.R.D. 277, 278-79 (D.D.C. 2009) (hereinafter “D’Onofrio III”). I will provide
a brief summary.
The parties encountered trouble in the discovery process as early as September
15, 2006, when plaintiff filed her Motion To Compel Discovery, for Sanctions and for
Enlargement of Time for Discovery [#16] (“First Motion”). D’Onofrio I, 247 F.R.D. at
44. Intervention by Judge Bates failed to resolve the disputes, and on October 26, 2006,
Judge Bates issued an order setting forth a schedule to address disputed discovery issues.
D’Onofrio I, 247 F.R.D. at 44 (citing Bates Order, 10/26/06). On November 8, 2006,
plaintiff filed her Memorandum Regarding Electronic Discovery Issues and Enlargement
of Time for Discovery [#25] (“Plaintiff’s E-Discovery Memo.”). Id. In this
memorandum, plaintiff informed the court that she wished to employ a forensic expert.2
Id. (citing Plaintiff’s E-Discovery Memo. 1-2).
Judge Bates continued to push the parties towards a resolution of their disputes,
ordering the parties to meet and confer and submit proposed discovery schedules to the
2 Plaintiff sought electronic documents from her former employer - items one might expect to find on a computer or server. D’Onofrio III, 256 F.R.D. at 278. Plaintiff had been told by defendants that no responsive documents existed, that her computer had been thrown away, and that her file on the server was empty. Id. Later, defendants notified plaintiff that there was a back-up e-mail server, and plaintiff wanted to enlist the help of forensics experts to determine whether a forensic search of the “Legato” and local servers might recover the lost data. Id. The Legato server is discussed in more detail later in this opinion.
2 Court. Id. (citing Bates Order, 11/9/06; Bates Order, 1/4/07). Nevertheless, plaintiff filed
her Memorandum Regarding Discovery Conference and Status of Discovery [#29]
(“Plaintiff’s Memo. on Discovery”), notifying the Court that the parties could not reach a
resolution and that plaintiff continued to seek Court action to compel discovery and to
employ a forensic expert. Id. (citing Plaintiff’s Memo. on Discovery 1). Judge Bates
again ordered cooperation among the parties, but to no avail; the plaintiff continued to
complain about defendants’ discovery failures, alleging that defendants may have
engaged in improper conduct concerning discovery. Id. (internal citations omitted). After
another status conferences with Judge Bates, plaintiff filed Plaintiff’s Second Motion to
Compel Discovery, and for Sanctions [#35]. Id. at 45. Judge Bates referred the matter to
me, and I attempted to resolve the motion. I ordered an evidentiary hearing on the issue
of spoliation of electronically stored information (“ESI”). D’Onofrio I 247 F.R.D. at 49.
A. Evidentiary Hearing
The evidentiary hearing was “held on April 4, 2008 for the purpose of
determining: ‘(a) the basis for the [ ] conclusion that email and other electronically stored
information have not been produced; (b) testimony from plaintiff as to what
electronically stored information she believes has not been produced; and (c) the
circumstances concerning the scrapping of plaintiff’s computer and the consequences
thereof in light of any demand made by plaintiff to preserve its contents.’” D’Onofrio II,
254 F.R.D. at 129-30 (citing D’Onofrio I, 247 F.R.D. at 49).
At the hearing, plaintiff presented Mr. Douglas Bond, a forensic computer
analyst, who plaintiff retained as an expert in this matter. D’Onofrio II, 254 F.R.D. at 130
(citing Transcript of Evidentiary Hearing-Morning Session 4:17-25 (Apr. 4, 2008) (“AM
3 Tr.”)). Mr. Bond testified that he might be able to locate electronically stored
information on the defendants’ servers using forensic techniques. Id. (citing AM Tr.
28:1-13). Bond further explained that his investigation is best done in person. AM Tr.
34:7-15. The defendants agreed to allow an in-person search of the defendants’ servers,
but the parties were unable to come to an agreement as to the appropriate protocol to
guide that search. D’Onofrio II, 254 F.R.D. at 130.
At the evidentiary hearing, I also heard evidence concerning plaintiff’s spoliation
allegations. D’Onofrio II, 254 F.R.D. at 130. Defendants called Mr. John Cavender, who
is a security officer with Clear Channel Communications. Mr. Cavender testified to what
searches for electronically stored information he performed in response to plaintiff’s
discovery requests and explained the defendants’ Legato system. Id. Defendants also
called Mr. Eugene Mason, who is Vice President of Finance at SFX Basketball. Mr.
Mason testified that he is the “de facto I.T. person” in the office where plaintiff was
employed. Id. (citing Transcript of Evidentiary Hearing-Morning Session 72:22-24 (Apr.
4, 2008) (“PM Tr.”)). Mr. Mason also testified that he “scrapped” plaintiff’s computer
after he decided that it could not be used and also searched for items requested by the
plaintiff. Id. (citing PM Tr. 77:1-12).
After the hearing, defendants filed motions for leave to file supplemental
briefings. D’Onofrio II, 254 F.R.D. at 130. I denied the motions; however, I recognized
that after the forensic search was completed and the extent of any lost ESI was
determined, supplemental briefing might be warranted. Id.
4 B. The Search
Prior to the search, I crafted a protocol for the search. D’Onofrio II, 254 F.R.D. at
130. In doing so, I determined that reproducing the prior searches conducted by
defendants, as proposed by defendants, was “not likely to produce all of the
electronically stored information that plaintiff legitimately demanded.” Id. at 131. I came
to this conclusion for several reasons. First, defendants’ first search was limited to e-
mails sent and received by plaintiff. See id. (citing PM Tr. 32:4-24). Second, plaintiff
has testified that she kept several back-ups of electronic files both on disks and in hard
copy in her office and that she had only used the discarded computer for a short time
because it was a replacement for an older model that crashed. Id. (citing AM Tr. 78:11-
14; PM Tr. 74:6-11). I was not, however, aware of any efforts taken to locate and
produce the back-ups, hard copies, or restore the crashed computer. Lastly, defendants’
witness testified that the first time that he was asked to make a copy of the plaintiff’s file
on the server was in March of 2008, a full two years after this case was filed, and one and
a half years after plaintiff filed her first motion to compel discovery. Id. (citing PM Tr.
90:3-21).
As will be established later, defendants, at a minimum, also failed to implement
appropriately a litigation hold after plaintiff notified Clear Channel in October 2005 that
she intended to file suit. I therefore crafted a protocol that permitted plaintiff’s “expert to
conduct a diligent search of all potential repositories of electronically stored information
that [were] likely to yield information that [was] responsive to plaintiff’s discovery
demands.” Id. at 132. I determined that plaintiff’s expert must be permitted to search any
depository of electronically stored information that may contain the following: “(1) e-
5 mails to or from plaintiff to include e-mails in which her name appears in the “cc” or
“bcc” lines; (2) e-mail in which her name is mentioned; (3) electronically stored
information created by her; (4) electronically stored information sent to her, again
whether sent to her directly or as one of other recipients; (5) electronically stored
information in which her name appears, whether her full name or her first or last name or
initials.” Id. I also required defendants to restore electronically stored information newly
discovered during the search, if such restoration was necessary to render it “reasonably
usable,” in accordance with Rule 34(b)(2)(E)(ii) of the Federal Rules of Civil Procedure.
Id. I defined reasonably usable as “capable of being read on a computer using either
commonly available word processing software, such as Word or Word Perfect, e-mail
software such as Outlook or Lotus Notes, or Adobe Acrobat Reader and without the
necessity of having to buy other software because only that software renders the restored
e-mail.” Id. Defendants agreed to pay $10,000 for the expert’s search; however, I
indicated I would determine how to allocate costs in excess of $10,000. Id.
C. Privilege Review
The searches yielded hundreds of thousands of documents. D’Onofrio II, 254
F.R.D. at 133 (citing Joint Motion for Extension of Time to Enlarge Time to Comply
[#95] at 1). The protocol I crafted for the search allowed defense counsel several weeks
to conduct privilege review of the documents recovered by the search and to create a
privilege log. D’Onofrio II, 254 F.R.D. at 133. Defendants filed a 568-page privilege log
on March 5, 2009. D’Onofrio III, 256 F.R.D. at 278. The logs contained 9,413 entries
that variously asserted attorney-client or work-product privileges, or sought to withhold
documents on the grounds that they contained proprietary or private information. Id. In
6 an effort to proceed efficiently with this large privilege log, I convened a hearing on
March 10, 2009 to discuss whether the parties might be aided by the new Federal Rule of
Evidence 502(d)-(e). Id. (internal citations omitted). Defendants agreed to permit
plaintiff to test the validity of the privilege log using statistical sampling. Id. at 279. A
protective order was put in place for the process. See Protective Order [#106]. Some
disputes, not at issue in this pending motion, arose in regards to the privilege log; thus, I
undertook an in camera review of a sampling of the documents. See Memorandum
Order [#115].
D. Motion for Sanctions
After about a six-month break in proceedings, for the parties to pursue mediation,
plaintiff filed the pending Motion for Sanctions and Spoliation Instruction/Inference. See
Motion for Sanctions and Spoliation Instruction/Inference and Memorandum of Points of
Authorities in Support [#123] (“Pl. Mot.”). In the motion, plaintiff seeks “default
judgment as to Count IV and an adverse jury instruction/inference as a result of
[d]efendants’ intentional spoliation of evidence and misconduct in this case.” Id. at 1.
Plaintiff also seeks attorneys’ fees and costs. Id. Plaintiff argues that “[d]efendants’
intentional destruction of [p]laintiff’s computer and data stored within, the wiping of
documents related to the plaintiff from the [ ] server, and the loss of the contents of her
office,3 have prejudiced her throughout discovery, and [d]efendants should not be
permitted to benefit from that misconduct.” Pl. Mot. 1. It is for these reasons, and
defendants’ “pattern of stubborn defiance” that plaintiff believes sanctions to be
appropriate. Id. (quoting Bray v. Gillespie Mgmt. LLC v. Lexington Ins. Co., 259 F.R.D.
3 Plaintiff claims that upon her termination she was not permitted to retrieve from her office information that would have established her claims.
7 591, 594 (M.D. Fl. 2009)). Plaintiff argues that sanctions are justified because
defendants’ failure to preserve evidence has placed “unreasonable burdens” on plaintiff,
including forcing her to recreate the entire record of her work product. Id. at 17.
Defendants argue that plaintiff raises issues already addressed by the Court, such
as the format in which e-mails were produced. Defendants’ Opposition to Plaintiff’s
Motion for Sanctions and Spoliation Instruction/Inference [#135] (“Defs. Opp.”) at 5.
Moreover, defendants argue that plaintiff cannot meet the burden necessary to warrant an
adverse inference in the case, that plaintiff sent a preservation letter to her employer, or
that the evidence that was lost has not been recovered. Id. at 8-12.
II. Legal Standard
The parties in this case have flung case law from all over the country at each
other. I am reminded of the anecdote about an appellate court judge who, when counsel
relied on a single, lonely district court case from another Circuit for his entire argument,
interrupted the lawyer to say: “Counsel, you can find a district court in this country that
will say anything.” The point for counsel is that it should focus on what guidance the
court of appeals for this Circuit has provided. While the court of appeals has not yet
made its way into the specific complications that arise from the loss of electronically
stored information, it has given clear guidance as to what consequences should flow from
the loss of information due to a party’s fault.4
A party to litigation has “an obligation to preserve and also not to alter documents
it knew or reasonably should have known were relevant . . . if it knew the destruction or
4 “Fault” is merely used for the moment as a place marker, awaiting a discussion of how one is to define the “fault” that will engender certain consequences.
8 alteration of those documents would prejudice [its opponent].” Shepherd v. Am. Broad.
Cos., 62 F.3d 1469, 1481 (D.C. Cir. 1995) (internal quotations omitted).
A. Spoliation
A party’s obligation to preserve potentially relevant evidence arises “once [the
party] anticipates litigation.” Smith v. Cafe Asia, 246 F.R.D. 19, 21 n.2 (D.D.C. 2007)
(quoting United Med. Supply Co., Inc. v. U.S., 77 Fed. Cl. 257, 258 (2007) (internal
quotation marks omitted)). A party that fails to preserve such evidence “runs the risk of
being justly accused of spoliation5 and may find himself the subject of sanctions.” Id.
(citing United Med. Supply Co., 77 Fed. Cl. at 263; Lebron v. Powell, 217 F.R.D. 72, 78
(D.D.C. 2003)).
B. Categories of Sanctions the Court Has the Discretion to Award for Spoliation
The Federal Rules of Civil Procedure do not contain a provision specifying a
remedy for the failure to preserve evidence. The trial court, nevertheless, has a great deal
of discretion in exercising its inherent powers to fashion an appropriate sanction, but
because of their potency, such powers must be exercised with restraint. See Chambers v.
NASCO, Inc., 501 U .S. 32, 43-46 (1991) (finding that the inherent authority of the court
should be exercised when an applicable rule or statute is “not up to the task.”). Sanctions
available to a court, under its inherent power, include dispositive sanctions, awards of
attorneys’ fees and expenses, contempt citations, disqualifications or suspensions of
counsel, and drawing adverse evidentiary inferences or precluding the admission of
5 “Spoliation refers to the destruction or material alteration of evidence or to the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” Pension Comm. of Univ. of Montreal Pension Plan v. Banc of America Sec., 685 F. Supp. 2d 456, 465 (S.D.N.Y. 2010).
9 evidence. Shepherd, 62 F.3d 1469 at 1475 (citing Gregory P. Joseph, Sanctions: The
Federal Law of Litigation Abuse § 28(A) (2d ed. 1994)).
The court of appeals has subdivided these sanctions into two categories: (1)
punitive or penal sanctions; and (2) issue-related sanctions. See Shepherd, 62 F.3d at
1478. Issue-related sanctions include adverse evidentiary determinations and preclusion
of the admission of evidence. Id. (citing Marrocco v. Gen. Motors Corp., 966 F.2d 220,
225 (7th Cir. 1992); Jamie S. Gorelick, Stephen Marzen & Lawrence Solum, Destruction
of Evidence § 3.16, at 118 (1989 & Supp. 1995)). The court of appeals has found that,
“[b]ecause issue-related sanctions are fundamentally remedial rather than punitive,” a
court may impose such sanctions “whenever a preponderance of the evidence establishes
that a party’s misconduct has tainted the evidentiary resolution of the issue.” Id. Punitive
or penal sanctions require a higher burden of proof than issue-related sanctions.
Shepherd, 62 F.3d at 1478. These sanctions are dispositive sanctions (dismissal or
default judgment), contempt orders, awards of attorneys’ fees, and the imposition of
fines. Id. Because the court of appeals has found these to be fundamentally penal in
nature, a court “must find clear and convincing evidence of the predicate misconduct”
before imposing them. Id.
C. Sanctions Sought by Plaintiff
1. Dispositive Sanctions
Dispositive sanctions, such as dismissal of a lawsuit or default judgment, as a
sanction for spoliation, falls within a court’s inherent powers; however, they are
particularly severe sanctions. Chambers, 501 U.S. at 43-45; see also Shepherd, 62 F.3d at
1475 (internal citations omitted). The court of appeals for the District of Columbia
10 Circuit has indicated that a dispositive sanction (i.e. dismissal or default) is a drastic
sanction that should “be taken only after unfruitful resort to lesser sanctions.” Ripalda v.
Am. Operations Corp., 977 F.2d 1464, 1466 (D.C. Cir. 1992) (finding in a case of
attorney misconduct that the district court’s reliance on dismissal in the first instance was
an abuse of discretion) (internal citations omitted). Thus, such a draconian sanction
“should be imposed only in the most severe of circumstances, and in general only after a
resort to lesser sanctions have proved [sic] ineffective.” United States ex rel. Miller v.
Holzmann, No. 95-CV-1231, 2007 WL 781941, at *2 (D.D.C. Mar. 12, 2007). Further,
for a court to impose a dispositive sanction, it must be “satisfied by clear and convincing
evidence that the accused party acted in bad faith.” Shepherd, 62 F.3d at 1477.
2. Attorneys’ Fees
The court of appeals has categorized attorneys’ fees as a punitive or penal
sanction like dispositive sanctions. See Shepherd, 62 F.3d at 1478. As such, a court
“must find clear and convincing evidence of the predicate misconduct” before imposing
them. Id.
3. Adverse Inference
“There are three elements required to establish an adverse inference: (1) the 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 defense of the party that sought it.” Mazloum v. District of Columbia Metro.
11 Police Dep’t, 530 F. Supp. 2d 282, 291 (D.D.C. 2008) (Bates, J.) (citing Thompson v.
HUD, 219 F.R.D. 93, 101 (D.Md. 2003)) (internal citations omitted).
The decision to give an adverse inference instruction to the jury as to a particular
issue “is a question of law subject to de novo review; the choice of the language to be
used in a particular instruction, however, is reviewed only for abuse of discretion.”
Novak v. Capital Mgmt. & Dev. Corp., 570 F.3d 305, 315 (D.C. Cir. 2009) (quoting Joy
v. Bell Helicopter Textron, Inc., 999 F.2d 549, 556 (D.C. Cir. 1993)). More specifically,
the trial court’s refusal to permit the jury to infer from evidence that was not produced
that its production would have been harmful to the non-producing party is reviewed for
an abuse of discretion. Czekaksi v. Lahood, 589 F.3d 449, 454 (D.C. Cir. 2009). “Such
an instruction ‘is appropriate if it is peculiarly within the power of one party to produce
the evidence and the evidence would elucidate a disputed transaction.’” Id. The party
complaining of the missing evidence bears the burden of demonstrating that it is
peculiarly in the opposing party’s control. Id. at 455-56 (quoting United States v. West,
393 F.3d 1302, 1309 (D.C. Cir. 2005)).
But, as the court of appeals cautioned, care must be taken before an instruction
premised on a missing witness or evidence is given, because “there is the danger that the
instruction permitting an adverse inference may add a fictitious weight to one side or
another of the case. When thus an instruction is sought which in a sense creates evidence
from the absence of evidence, the court is entitled to reserve to itself the right to reach a
judgment as wisely as can be done in all the circumstances . . . .” Burgess v. United
States, 440 F.2d 226, 234 (D.C. Cir. 1970). While the facts will vary from case to case, it
12 is impossible to derive a definite guideline; instead “[t]he problem is one which must be
left in large part to the sound judgment of the trial judge.” Id. at 234 n.12.
4. Preclusion
The plaintiff has not requested preclusion as a sanction; however, preclusion is an
issue-related sanction within the inherent powers of the court that may be applied in the
case of spoliation. Preclusion can “ensure that a party will not be able to profit from its
own failure to comply” with discovery rules or rules set forth by the Court. Butera v.
District of Columbia, 235 F.3d 637, 661 (D.C. Cir. 2001) (citing Dellums v. Powell, 566
F.2d 231, 235 (D.C. Cir. 1977)). Preclusion can take two forms. It may be affirmative (a
party is precluded from proving a fact) or negative (a party is precluded from disproving
what the other party’s evidence establishes). For example, preclusion could prevent
defendant from arguing that plaintiff’s work was dissimilar from the work of her
comparator as a remedy for the alleged loss of evidence of her work product.
It must be recalled, however, that preclusion may have a dispositive effect on the
case, as was illustrated in the Bonds case. See Bonds v. District of Columbia, 93 F.3d
801, 808 (D.C. Cir. 1996). In Bonds, the trial court’s decision to preclude the defendant
from presenting certain evidence was understandably deemed by the court of appeals to
be, for all practical purposes, the entry of judgment against that party. Id. When
preclusion has the effect of default judgment, then, under the law of this Circuit, it can be
justified only by a clear and convincing showing of bad faith. See Shepherd, 62 F.3d at
1478. Even if preclusion does not have a dispositive effect, its consequences must be
carefully considered before it is ordered.
13 Nevertheless, to guard against abuses of the judicial process, preclusion may be a
necessary sanction. Id. Further, there is a deterrent value to preclusion, discouraging
sloppiness, a significant consideration in a world where too many businesses still may
not have efficient and useful record-keeping policies. Bonds, 93 F.3d at 808 (internal
citations omitted). See also Weisberg v. Webster, 749 F.2d 864, 870-71 (D.C. Cir. 1984)
(discussing the court’s use of sanctions for deterrence as legitimate).
III. Analysis
A. Evidence Was Lost
1. Defendants’ Obligation to Preserve
Plaintiff argues that defendants’ obligation to preserve arose upon receipt of
plaintiff’s letter, dated October 6, 2005, indicating that she intended to initiate litigation
and requesting that electronically stored information be preserved. Pl. Mot. 16.
Defendants argue that this letter, which it refers to as the preservation letter, did not
create a duty to preserve, because the letter was not sent to plaintiff’s employer. Defs.
Opp. 9. Instead, defendants contend that plaintiff’s service of the letter on her
employer’s parent company did not put anyone at SFX on notice of potential litigation.
Id. Further, according to defendants, the letter was insufficiently detailed to impose a
duty to preserve plaintiff’s computer. Id.
I disagree with defendants. The letter sent by plaintiff’s counsel on October 6,
2005, less than two weeks after plaintiff was terminated, clearly indicated that plaintiff:
(1) regarded her termination to be wrongful; (2) had retained counsel; (3) believed her
termination to be a violation of the District of Columbia Human Rights Act, Title VII of
the Civil Rights Act, the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
14 Worker Adjustment and Retraining Notification Act, the Americans with Disability Act,
and the Family Medical Leave Act; and (4) believed the company’s restructuring was a
pretext to terminate plaintiff based on her medical status and a manifestation of disparate
treatment based on her gender. Pl. Mot. 16 (citing Pl. Mot, Ex. A). Further, plaintiff’s
counsel informed defendants that plaintiff might formally request, through discovery, e-
mail and other electronic communications, word processing documents, spreadsheets,
databases, calendars, telephone logs, contact manager information, internet usage files,
and network access information. Id. The letter concludes by asserting that “the company
and its subsidiaries and related entities . . . must take every reasonable step to preserve
this information until the final resolution of this matter.” Id. (emphasis added). The letter
warns against routine data destruction and backup tape recycling policies. Id.
There is no ambiguity in this letter in regards to the plaintiff’s intent to pursue her
claims in court, if necessary, or to the type of data she requests defendants to preserve.
Defendants’ argument that by sending the letter to the parent company, rather than to
plaintiff’s employer SFX, is disingenuous. The letter was sent to Clear Channel, SFX’s
parent company. The reference line of the letter indicates that it is in regards to Clear
Channel and SFX. Moreover, Clear Channel is a named defendant in this case. The
defendants, i.e., all defendants, were on notice and should have undertaken steps to
preserve potentially relevant information.
2. Defendants Failed to Preserve Evidence
The fact that defendants failed to preserve evidence has been established.
Initially, in response to discovery requests, plaintiff was told that no responsive
documents existed, that her computer had been thrown away, and that her file on the
15 server was empty. D’Onofrio III, 256 F.R.D. at 278. It was at this point that plaintiff
sought the assistance of a forensic expert.
3. Defendants’ Remedial Efforts Restored Some Evidence That Was Lost
Pursuant to the Court’s order, defendants made their servers available to
plaintiff’s expert for a forensic exam that yielded hundreds of thousands of documents.
D’Onofrio II, 254 F.R.D. at 133. Up to $10,000 of the cost of this search was paid for by
defendants, who then executed a privilege review of these thousands of documents.
D’Onofrio III, 256 F.R.D. at 278. As a result of defendants’ efforts, some of the lost
documents were recovered, and the loss of evidence was not total.
B. Punitive or Penal Sanctions
1. Default Is Not An Appropriate Sanction In This Case
As explained earlier, in the D.C. Circuit, a party seeking a dispositive sanction
because of her opponent’s loss or destruction of evidence must establish, by clear and
convincing evidence, that the accused party acted in bad faith. See Shepherd, 62 F.3d at
1477.
It is clear to me that plaintiff’s demand that she be awarded default judgment on
her Equal Pay Act claim fails to meet this standard. While it is evident that defendants
failed to act to preserve evidence, plaintiff has not shown, by clear and convincing
evidence, that defendants acted in bad faith, i.e., with a purposeful intent to destroy
evidence. See, e.g., Shepherd, 62 F.3d at 1477. Furthermore, if the Court can find a less
drastic sanction than dismissal or default that is fully effective, it should impose that
lesser sanction. Bonds, 93 F.3d at 808; Ripalda, 977 F.2d at 1466. It is yet to be
determined whether plaintiff is entitled to any other issue-related sanction, such as an
16 adverse inference or defendants’ being precluded from presenting certain evidence. Until
the plaintiff’s entitlement to such sanctions is first addressed and resolved, dismissal
cannot, under this Circuit’s law, even be considered. To award plaintiff a default
judgment without considering the efficacy of less drastic remedies violates this Circuit’s
law in the most obvious way.
The court of appeals has categorized attorneys’ fees as a punitive or penal
sanction like dispositive sanctions. See Shepherd, 62 F.3d at 1478. As such, a court
“must find clear and convincing evidence of the predicate misconduct” before imposing
them. Id. The evidence in this case of the predicate misconduct is simply not clear and
convincing.
In other prominent spoliation cases, the lost evidence is gone forever and the
consequences of its loss are a function of that reality. To say of this case, however, that it
involves the loss of evidence is to have Hamlet without the Dane. To take that metaphor
a step further, it stops the play after the First Act. This case involves the apparent loss of
evidence, a diligent and expensive attempt to retrieve what was lost from other sources,
and a bitter, irreconcilable dispute as to what may still be missing and its relevance to
plaintiff’s claims.
I can first say that it appears to me that the award of attorneys’ fees now, under
my inherent power, would be an abuse of discretion. While it is certainly true that
plaintiff has expended significant resources to litigate the consequences of the loss of the
information at issue, it is equally true that defendants have expended a veritable king’s
ransom on the forensic search of the Legato server and an examination of its contents for
17 relevance and privilege, all in an effort to restore what was lost. I have presided over this
case for three years and am personally familiar with the high yield of documents from the
forensic search, because I reviewed thousands of e-mails claimed to be privileged.
Having done that, and having a general familiarity with the extraordinary amount of
information that a forensic search yields and the consequential costs of privilege review,
I can say without hesitation that I fully credit defense counsel’s assertion that the search,
review, and discovery disputes in this single-plaintiff case has cost over $1 million. The
heart and soul of any sanction is its proportion to the harm done and the prejudice
sustained. Bonds, 93 F.3d at 808 (finding that “[t]he choice of sanction should be guided
by the ‘concept of proportionality’ between offense and sanction.”). Given what
defendant has already expended, adding attorneys’ fees under the Court’s inherent power
to sanction crosses the line from fairness to disproportional punishment. That, put
simply, is to place Pelion upon Ossa, and I will not do it.6
Rule 37 of the Federal Rules of Civil Procedure awards, except in certain
circumstances, attorneys’ fees to a moving party whose motion to compel discovery is
granted, unless the opposing party establishes substantial justification for its position.
See Fed. R. Civ. P. 37(a)(5)(A). The motion before me is one for sanctions and not to
compel. The Rule just cited is therefore inapplicable. I appreciate that I must resolve the
parties’ cross-motions for sanctions related to plaintiff’s Second Motion to Compel
Discovery and for Sanctions [#37], which seeks attorney fees. See D’Onofrio I, 247
F.R.D. at 55 (postponing the parties’ cross-motion for sanctions until the conclusion of
6 This is a statutory fee-shifting case; however, this opinion speaks only to the award of attorneys’ fees in the exercise of the Court’s inherent powers.
18 the evidentiary hearing). The parties will be permitted an opportunity to be heard on the
issue of attorneys’ fees available under Rule 37 as to the earlier motion, once all other
motions are resolved. I hope that resolution of all the other issues will finally move this
case to trial, and I would prefer not to interfere with that process until I have first
resolved the issues pertaining to Plaintiff’s Motion for Sanctions and Spoliation
Instruction/ Inference [#123].
C. Issue-related Sanctions
Having found punitive sanctions to be unwarranted in this case, I turn now to
issue-related sanctions.
1. Adverse Inference
The plaintiff has moved for an adverse inference instruction. Pl. Mot. 1.
Generally, an adverse inference instruction would tell the jury that it may infer from the
loss of the evidence that, had the evidence been produced, it would have been detrimental
to the party that lost it. Before ordering such a sanction, however, this Court must first
establish what was lost and what was recovered. From that, the Court can craft a
balanced instruction.
The plaintiff would have the Court instruct the jury to apply an adverse inference
to the lost evidence, without qualification; but, that instruction is half true. In this case,
there were remedial efforts taken to restore the lost evidence. The proper instruction,
therefore, would have to take into account that, while certain information was lost,
defendant made an effort to find it from another source, and that the alternative source
yielded some evidence. The problem, of course, is that the parties do not agree about
what remains lost. They agree even less about the significance of what was lost.
19 Plaintiff says that there is still much evidence that was lost, and it is significant.
Defendants say that, given what was recovered, nothing was lost, but if any thing was, it
is insignificant.
Moreover, in the instant case, plaintiff cannot establish by clear and convincing
evidence that defendants acted in bad faith; therefore, any adverse instruction would be
based on conduct that is not in bad faith. When a party, for example, has acted
negligently and lost evidence, the inference does not flow naturally from the facts. When
a person purposefully destroys evidence, it is reasonable to infer that he did so to keep it
from being used against him. That is the historical basis of the doctrine and the maxim
that everything is construed against the spoliator.7 When, as in this case, it is not a
party’s bad faith that leads to the destruction of evidence, its actions hardly bespeak an
intention worthy of such a harsh punishment because the logical premise of the
instruction– that the spoiliator must have destroyed the evidence to keep any one from
seeing it– is not there. Without clear and convincing evidence of bad faith, all that is
known or can be said is that a party was negligent, sloppy, or even reckless; a court
cannot logically infer the intent of what a party did from its behavior because its behavior
was unthinking– it was negligent and sloppy. If the jury is, nevertheless, instructed to
draw an inference that the lost evidence would have been detrimental, it can only be
because the interests in righting the evidentiary balance and in the deterring of others
trumps the lacuna that a logician would detect in the logic of giving such an instruction.
7 Armory v. Delamirie, (1721) 93 Eng. Rep. 664 (K.B.) (directing the jury to “presume the strongest against [defendant],” who had lost the evidence).
20 The problem, however, in this case is that imbalance in the evidence due to the loss is an
unknown quantity and of an unknown value as to which the parties do not agree.
2. Preclusion
Preclusion may provide an approach that flows more logically when the
destruction of evidence is not in bad faith. If I issued the sanction of preclusion in this
case, the jury would not be instructed to draw an inference. Instead, defendants would be
prohibited from presenting certain evidence because their behavior caused the loss of that
evidence. Regardless of any intent, if the defendants destroyed evidence, plaintiff would
be prevented from using it. Thus, the sanction of preclusion disables defendants from
relying on the loss they caused.
While in this case the loss of evidence was followed by a genuine effort to find it,
preclusion may be the most appropriate way to right evidentiary balance that was upset
by the loss. On the other hand, defendants may be able to show, that, because of their
efforts to find the lost information or otherwise, plaintiff has made no legitimate showing
that the lost evidence would have helped her. Thus, while preclusion may still be
justified on the basis of deterrence, the absence of any showing of prejudice may offend
this Circuit’s insistence that any litigation sanction be calibrated as carefully as possible
to the prejudice suffered and the harm done. The problem, again, is that the Court does
not know what remains lost and whether the lost evidence had significance for the case;
thus, I cannot determine whether preclusion would be carefully calibrated enough of a
sanction to satisfy the standard set by the court of appeals.
21 3. Need for an Evidentiary Record
In light of the complexity and nuance required to craft a balanced sanction, I am
convinced that I must predicate any ruling or recommendation to Judge Bates on the
strongest possible evidentiary record. It is only after establishing the prejudice the
plaintiff suffered that any resulting sanction will fairly address that prejudice, consistent
with this Circuit’s insistence that any sanction imposed be a function of the prejudice
done to a party by its offending opponent. Bonds, 93 F.3d at 808. Accordingly, I will
order an evidentiary hearing to address the factual issues that I will now identify. The
parties differ about several factual issues that bear directly on what, if any, sanction
should be awarded. They fall roughly into two categories, those that pertain to the
physical contents of plaintiff’s office when she left her employ and the other with the loss
of electronically stored information on the computer she used. I believe the following
issues are still in dispute:
(1) What were the contents of plaintiff’s office, and what was in the file drawers
or cabinets immediately outside her office, on the day of her departure?
(2) When plaintiff returned to retrieve items from her office, was she precluded
from taking whatever she wanted?
(3) Did any one supervise plaintiff as she removed items from her office?
(4) What was stored on plaintiff’s computer that was not also on a network
server? This would pertain to what is usually called her “local drive,” i.e., the part of her
computer where information was stored that was not also stored on a network server.
22 (5) Of the contents of plaintiff’s computer when she left, what should have been
captured on some other media, whether the local server or the Legato server?
(6) When plaintiff’s computer was disposed of, did the person disposing it know
of her lawsuit?
(7) What was recovered from the DC server that duplicates information relevant
to this lawsuit that was in plaintiff’s office or on her computer?
(8) What was never recovered from the DC server that was relevant to this
lawsuit?
(9) What was recovered from the Legato server that duplicates information
relevant to this lawsuit that was in plaintiff’s office or on her computer?
(10) What was never recovered from the Legato server that was relevant to this
Counsel will meet and confer first to establish whether, in their view, there are
additional factual issues that must be resolved. If they agree that there are, they may
jointly propose them as additions in a jointly filed document. If, on the other hand, they
cannot agree, either party may propose additional issues, and I will consider including
them.
As to all factual issues, I expect counsel to make a genuine effort to eliminate any
need to hear evidence as to facts that are not in dispute. Thus, counsel will also meet and
confer and attempt to reach agreement as to facts not in dispute and, if they can agree,
jointly file a statement of their agreement. A separate Order specifies the deadlines by
which all of this must be accomplished.
23 I appreciate that plaintiff seeks additional discovery as to the merits of the case
itself. See Plaintiff’s Show Cause Response to Support the Enlargement of Time for
Discovery [#127]. Action on that request will be stayed until the hearing is held.
IV. Conclusion
For the reasons stated herein, I recommend that plaintiff’s motion for the sanction
of default judgment in regards to her Equal Pay Act claim be denied. Further, an
evidentiary hearing to address other sanctions sought by plaintiff in her motion will be
held. A separate order accompanies this Memorandum Opinion.
In this Memorandum Opinion, I have spoken to plaintiff’s demand that she be
awarded default judgment. That portion of the Memorandum Opinion must therefore be
deemed a Report and Recommendation. As to that portion, plaintiff is reminded that
failure to file timely objections to the findings and recommendations set forth in this
report may waive her right of appeal from an order of the District Court adopting
such findings and recommendations. See Thomas v. Arn, 474 U.S.140 (1985). Digitally signed by John M. Facciola Date: 2010.08.24 10:12:44 -04'00' JOHN M. FACCIOLA UNITED STATES MAGISTRATE JUDGE