Powertech Industrial Co., Ltd v. 360 Electrical, LLC

District Court, D. Utah·Decided July 17, 2026·No. 2:23-cv-00675·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT THE DISTRICT OF UTAH, CENTRAL DIVISION

POWERTECH INDUSTRIAL CO., LTD, a MEMORANDUM DECISION AND Taiwan company, ORDER DENYING DEFENDANT’S [63] MOTION FOR LEAVE TO DESTROY Plaintiff, OR ABANDON EXCESS AND DUPLICATIVE NON-CONFORMING v. PRODUCTS WITHOUT PREJUDICE

360 ELECTRICAL, LLC, a Utah limited Case No: 2:23-cv-00675-TC-CMR liability company, District Judge Tena Campbell

Defendant. Chief Magistrate Judge Cecilia M. Romero

This matter is referred to Chief Magistrate Judge Cecilia M. Romero pursuant to 28 U.S.C. § 636(b)(1)(A) (ECF 8). Before the court is Defendant and Counterclaimant 360 Electrical, LLC’s (Defendant or 360 Electrical) Motion for Leave to Destroy or Abandon Excess and Duplicative Non-Conforming Products (Motion) (ECF 63). The court also considers Plaintiff and Counter Defendant Powertech Industrial Co., LTD’s (Plaintiff or Powertech) Opposition to the Motion (Opposition) (ECF 67) and Defendant’s Reply in Support of the Motion (Reply) (ECF 70). The court has determined that oral argument would not materially assist it in deciding the issue. DUCivR 7-1(g). For the reasons set forth below, the Motion is DENIED. I. BACKGROUND The instant case concerns Plaintiff’s claims relating to allegedly unpaid invoices for wall outlet products (the Product) pursuant to a contract for wall outlet manufacturing and shipment (ECF 17 ¶¶ 55–89). Defendant asserts the Product manufactured by Plaintiff was defective, and Defendant claims damages of its own (ECF 34 ¶¶ 267–754). Sometime after the inception of the case, Defendant encountered issues which led to the dissolution of 360 Electrical; Defendant is without representation as of the date of this Order and allegedly without assets or employees (ECF 64 at 4; ECF 70 at 3; ECF 76 at 2–3; ECF 77). Pursuant to DUCivR 83-1.4, the court stayed the proceedings (ECF 80) until July 20, 2026, because Defendant’s counsel has withdrawn and

Defendant is without representation (ECF 77). Defendant’s Motion, filed March 3, 2026, stated it was “undergoing liquidation . . . and [was] in the process of dissolution” (ECF 63 at 4). Since early 2022 Defendant has allegedly been paying 1,500 dollars per month in order to store the Product in a warehouse (ECF 63 at 4). Defendant stated the Product “must be moved out of the warehouse” by the end of March but offered no specific reason why March was the deadline (Id.). By March 24, 2026, Defendant completed dissolution, “no longer exist[ed] and ha[d] shut down” (ECF 70 at 3). Due to the dissolution of Defendant as a company after the present Motion was filed, Defendant’s counsel Caleb Hatch (Mr. Hatch) filed a motion to withdraw as counsel (ECF 76), which the court granted (ECF 77). Mr. Hatch’s motion to withdraw, filed April 22, 2026, stated that “360 Electrical, LLC

was dissolved a while ago and is no longer in business; does not have any assets and employees; and cannot pay for ongoing legal services” (ECF 76 at 2). Prior to its dissolution Defendant claims it previously notified Plaintiff of “its reasoning behind the need to destroy [the Product],” and offered Plaintiff the opportunity to pick up the Product, inspect the Product, or pay for storage of the Product (ECF 63 at 3–4, 9–10). According to Defendant, Plaintiff accepted the offer to pay for storage of the Product until which time Plaintiff would pick up the Product, but Plaintiff allegedly never sent any payment and has never picked up the Product (ECF 3–4). Because of these circumstances Defendant requests leave to abandon or destroy all of the Product, except a twenty-five-unit sampling (ECF 63-1). Plaintiff’s Opposition denies Defendant gave any notice of intent to destroy, and Plaintiff denies the existence of any storage agreement between the parties (ECF 67 at 9–10). II. LEGAL STANDARD “[L]itigants have a duty to preserve documents or materials … that may be relevant to

ongoing and potential future litigation.” Vitamins Online, Inc. v. Heartwise, Inc., No. 2:13-cv- 00982, 2016 WL 1305144, at *2 (D. Utah Mar. 31, 2016) (quoting Philips Elecs. N. Am. Corp. v. BC Technical, 773 F. Supp. 2d. 1149, 1195 (D. Utah 2011)); Jordan F. Miller Corp. v. Mid- Continent Aircraft Serv., Inc., 139 F.3d 912 (10th Cir. 1998). “This is a general duty that arises from case law.” Fry v. Sch. Dist. No. 1, No. 24-cv-02284, 2024 WL 7006417, at *3 (D. Colo. Dec. 31, 2024). “Federal courts possess inherent powers necessary ‘to manage their own affairs so as to achieve the orderly and expeditious disposition of cases.’” Jordan F. Miller Corp. v. Mid-Continent Aircraft Serv., Inc., No. 97-5089, 1998 WL 68879, at *3 (10th Cir. Feb. 20, 1998) (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991)). Among these powers are the

“inherent authority to issue preservation orders.” Centurylink, Inc. v. Alpine Audio Now, LLC, No. 15-cv-01973, 2016 WL 192291, at *1 (D. Colo. Jan. 15, 2016) (quoting Bright Sols. for Dyslexia, Inv. v. Doe 1, No. 15-cv-01618, 2015 WL 5159125, at *2 (N.D. Cal. Sept. 2, 2015)). In determining whether a preservation order is necessary, courts have considered: (1) the level of concern the court has for the continuing existence and maintenance of the integrity of the evidence in question in the absence of an order directing preservation of the evidence; (2) any irreparable harm likely to result to the party seeking the preservation of the evidence absent an order directing preservation; and (3) the capability of an individual, entity, or party to maintain the evidence sought to be preserved. Id.; see also, e.g., Greer v. Moon, No. 2:24-cv-00421, 2026 WL 885884, at *1–2 (D. Utah Mar. 31, 2026) (applying the same set of factors). III. DISCUSSION A number of matters are not in dispute. All parties agree Defendant has some type of duty to preserve the Product (ECF 63 at 3, 5; ECF 2–5). The relevance of the Product to litigation is not in dispute either. Plaintiff states that the Product is “essential to both 360 Electrical’s and

Powertech’s claims and defenses—this entire case centers on the condition of those products” (ECF 67 at 4). Defendant, likewise, acknowledging the relevance of the evidence, still proposes to “retain a sampling of the [Product] for litigation as it continues” (ECF 63 at 3). The core undecided questions are whether the duty to preserve evidence has limitations based on the burdens to the custodial party and whether there is an established standard for granting motions to destroy or abandon evidence. Neither party has adequately briefed these issues, however. There is a plethora of case law on spoliation sanctions and when the duty to preserve evidence is triggered. Far fewer cases, however, address motions for permission to destroy evidence or whether the duty to preserve evidence is limited by burdens on the custodial party. As the court stated in Al Otro Lado, Inc. v. Nielson, “there is minimal case law support for defendant’s

request,” because “[t]ypically, [c]ourts are presented with requests seeking the preservation of relevant data, not requests like the one at issue where the party requesting the . . . order seeks judicial permission to destroy potentially relevant documents and information.” 328 F.R.D. 408, 415 (S.D. Cal. 2018). Defendant cites Federal Rule of Civil Procedure 26(b)(2)(C) (ECF 63 at 5), which states that “[o]n motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules.” Fed. R. Civ. P.

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Powertech Industrial Co., Ltd v. 360 Electrical, LLC, (D. Utah 2026).

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