1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 R. R. DONNELLEY & SONS CO., No. 2:21-cv-00753 DJC AC 12 Plaintiff, 13 v. ORDER 14 JOHN PAPPAS, et al., 15 Defendants. 16 17 Presently before the Court is Plaintiff’s Motion for Contempt based on a 18 number of alleged violations of the Court’s Preliminary Injunction Order. Plaintiff 19 claims that Defendant Pappas deleted files from his computers and failed to provide 20 storage devices and accounts in violation of that order. 21 For the reasons stated below, the Court grants in part and denies in part 22 Plaintiff’s motion (ECF No. 47)1. 23 BACKGROUND 24 Plaintiff R. R. Donnelley & Sons Co. filed this action on April 26, 2021 (see ECF 25 No. 1) seeking to prevent Defendant John Pappas III, a former employee of Plaintiff, 26
27 1 Several documents filed related to this motion have been filed or lodged under seal. Where there is a redacted version available on the docket for this action, citations will be to that docket entry, though 28 referenced information may be redacted in those versions. 1 from using Plaintiff’s allegedly proprietary and confidential documents for his new 2 employer, Defendant Dome Printing2. Shortly after filing the complaint, Plaintiff filed a 3 motion seeking a Temporary Restraining Order. (ECF No. 4.) Two days later, Plaintiff 4 and Defendant Pappas stipulated to a Preliminary Injunction instead. (ECF No. 10.) 5 District Judge John A. Mendez subsequently signed that Preliminary Injunction on 6 April 30, 2021 and it was added to the docket on May 3, 2021 (Prelim. Inj. Order (ECF 7 No. 12).) 8 The Preliminary Injunction contained four main provisions. The first enjoined 9 Defendant Pappas from “using, disclosing, exploiting, transmitting, copying, or 10 accessing . . . any [of Plaintiff’s] confidential, proprietary, and/or trade secret 11 information” or “deleting or manipulating” any of that same information if Defendant 12 Pappas had copied or taken it from Plaintiff. (Prelim. Inj. Order at 2.) The second 13 compelled Defendant Pappas to make his “personal electronic data storage system(s) 14 and/or personal computer(s)” available to a third-party forensic analyst (later 15 determined to be Berkeley Research Group or “BRG”) and to turn over to Plaintiff any 16 “hard copy” records containing Plaintiff’s confidential information. (Id. at 2–3.) The 17 third compelled Defendant Pappas to “preserve all evidence, whether electronic or 18 otherwise, related in any way to this matter.” (Id. at 3–4.) Lastly, the order compelled 19 Defendant Pappas to respond to a set of discovery requests. (Id. at 4.) 20 On April 6, 2022, Plaintiff filed a Motion for Contempt, claiming that Defendant 21 Pappas violated the Preliminary Injunction by deleting “hundreds of responsive files” 22 on May 4, 2021, deleting an additional 19 items on May 12, 2021, failing to produce 23 six USB drives to BRG, and failing to produce his Dropbox account to BRG. (Pl.’s Mot. 24 (ECF No. 47) at 18–19.) Plaintiff alleges the May 4, 2021 and May 12, 2021 deletions 25
26 2 Due to some confusion about the names and relationships of multiple interconnect corporate entities, the original Complaint alleged that Defendant Pappas was hired by “Dome Printing”, though this entity 27 was not named as a defendant. (See ECF No. 1 at 2.) Subsequent amendments to the Complaint have clarified that Defendant Pappas was actually alleged to have been hired by “Mereliz Inc.” who was 28 doing business as “Dome Printing”. (See ECF No. 31 at 2.) 1 violated the first and third provisions of the Preliminary Injunction and that failure to 2 produce the USB drives and Dropbox account violated the third provision of the 3 Preliminary Injunction. (Id.) Defendants Meriliz and Pappas opposed the motion (Def. 4 Pappas’ Opp’n (ECF No. 59)) and Plaintiff filed a reply (Pl.’s Reply (ECF No. 63)). 5 Shortly after the motion for contempt was filed, this matter was transferred from 6 Judge Mendez to District Judge Kimberly J. Mueller as a result of Judge Mendez’s 7 senior status. (ECF No. 53.) The case was again reassigned a few months later to 8 District Judge Dale A. Drozd. (ECF No. 74.) It was reassigned for a third time to the 9 undersigned on April 6, 2023. (ECF No. 104.) Likely due to confusion caused by 10 these reassignments, the present motion has remained unresolved despite being fully 11 briefed on June 6, 2022. 12 The Court also notes that in response to a minute order inquiring with the 13 parties about whether this motion remained pending, Plaintiff raised arguments about 14 other alleged violations of a protective order. (See ECF No. 153.) These arguments 15 are not before the Court in the complete briefing on the present Motion for Contempt 16 and will not be addressed. Similarly, Defendant argued that the Court “may wish to 17 rule on the contempt motion after considering Defendants’ Daubert motion” 18 regarding Dr. Shane Shook as “[Dr. Shook’s] declaration underlies assertions in the 19 Motion for Contempt.” (See ECF No. 150.) The present motion was filed and fully 20 briefed long before any Daubert motion was filed by Defendants and the Motion for 21 Contempt can properly be considered without first ruling on the Daubert Motion as to 22 Dr. Shook. Moreover, the validity of Dr. Shook’s analysis is not relevant for 23 determining whether Defendant Pappas violated the terms of the stipulated 24 Preliminary Injunction. 25 LEGAL STANDARD 26 A district court has an inherent power to enforce its own orders and hold 27 anyone who violates them in civil contempt. Davies v. Grossmont Union High School 28 Dist., 930 F.2d 1390, 1393 (9th Cir. 1991). A court can wield this power either to 1 coerce compliance with the order or “to compensate the complainant for losses 2 sustained.” Shell Offshore Inc. v. Greenpeace, Inc., 815 F.3d 623, 629 (9th Cir. 2016). 3 A party moving for contempt must show the non-moving party violated the Court’s 4 order by clear and convincing evidence. Irwin v. Mascott, 370 F.3d 924, 932 (9th Cir. 5 2004). There is no express “good faith” exception and the violation need not be willful 6 or intentional “[b]ut a person should not be held in contempt if his action ‘appears to 7 be based on a good faith and reasonable interpretation of the [court's order].’” In re 8 Dual-Deck Video Cassette Recorder Antitrust Litigation, 10 F.3d 693, 695 (9th Cir. 9 1993). “Substantial compliance” with a court order is also a defense against civil 10 contempt as “a few technical violations” are not a violation where “every reasonable 11 effort has been made to comply” with the court’s order. Id. A party must have fair and 12 well-defined notice of what conduct is required or prohibited by an injunction to be 13 held in contempt of it. Reno Air Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1132 14 (9th Cir. 2006). 15 The Ninth Circuit has distilled the above rules down to a three prong test. To 16 succeed on a motion to hold a party in civil contempt, the moving party must show by 17 clear and convincing evidence that (1) the non-moving party violated the terms of the 18 Court’s order, (2) that the non-moving party’s violations went beyond “technical 19 violations” that would consistent with “substantial compliance”, and (3) the non- 20 moving party’s violations were not based on good faith or reasonable interpretation of 21 the court’s order. See United States v. DAS Corp., 18 F.4th 1032, 1040 (9th Cir. 2021).
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 R. R. DONNELLEY & SONS CO., No. 2:21-cv-00753 DJC AC 12 Plaintiff, 13 v. ORDER 14 JOHN PAPPAS, et al., 15 Defendants. 16 17 Presently before the Court is Plaintiff’s Motion for Contempt based on a 18 number of alleged violations of the Court’s Preliminary Injunction Order. Plaintiff 19 claims that Defendant Pappas deleted files from his computers and failed to provide 20 storage devices and accounts in violation of that order. 21 For the reasons stated below, the Court grants in part and denies in part 22 Plaintiff’s motion (ECF No. 47)1. 23 BACKGROUND 24 Plaintiff R. R. Donnelley & Sons Co. filed this action on April 26, 2021 (see ECF 25 No. 1) seeking to prevent Defendant John Pappas III, a former employee of Plaintiff, 26
27 1 Several documents filed related to this motion have been filed or lodged under seal. Where there is a redacted version available on the docket for this action, citations will be to that docket entry, though 28 referenced information may be redacted in those versions. 1 from using Plaintiff’s allegedly proprietary and confidential documents for his new 2 employer, Defendant Dome Printing2. Shortly after filing the complaint, Plaintiff filed a 3 motion seeking a Temporary Restraining Order. (ECF No. 4.) Two days later, Plaintiff 4 and Defendant Pappas stipulated to a Preliminary Injunction instead. (ECF No. 10.) 5 District Judge John A. Mendez subsequently signed that Preliminary Injunction on 6 April 30, 2021 and it was added to the docket on May 3, 2021 (Prelim. Inj. Order (ECF 7 No. 12).) 8 The Preliminary Injunction contained four main provisions. The first enjoined 9 Defendant Pappas from “using, disclosing, exploiting, transmitting, copying, or 10 accessing . . . any [of Plaintiff’s] confidential, proprietary, and/or trade secret 11 information” or “deleting or manipulating” any of that same information if Defendant 12 Pappas had copied or taken it from Plaintiff. (Prelim. Inj. Order at 2.) The second 13 compelled Defendant Pappas to make his “personal electronic data storage system(s) 14 and/or personal computer(s)” available to a third-party forensic analyst (later 15 determined to be Berkeley Research Group or “BRG”) and to turn over to Plaintiff any 16 “hard copy” records containing Plaintiff’s confidential information. (Id. at 2–3.) The 17 third compelled Defendant Pappas to “preserve all evidence, whether electronic or 18 otherwise, related in any way to this matter.” (Id. at 3–4.) Lastly, the order compelled 19 Defendant Pappas to respond to a set of discovery requests. (Id. at 4.) 20 On April 6, 2022, Plaintiff filed a Motion for Contempt, claiming that Defendant 21 Pappas violated the Preliminary Injunction by deleting “hundreds of responsive files” 22 on May 4, 2021, deleting an additional 19 items on May 12, 2021, failing to produce 23 six USB drives to BRG, and failing to produce his Dropbox account to BRG. (Pl.’s Mot. 24 (ECF No. 47) at 18–19.) Plaintiff alleges the May 4, 2021 and May 12, 2021 deletions 25
26 2 Due to some confusion about the names and relationships of multiple interconnect corporate entities, the original Complaint alleged that Defendant Pappas was hired by “Dome Printing”, though this entity 27 was not named as a defendant. (See ECF No. 1 at 2.) Subsequent amendments to the Complaint have clarified that Defendant Pappas was actually alleged to have been hired by “Mereliz Inc.” who was 28 doing business as “Dome Printing”. (See ECF No. 31 at 2.) 1 violated the first and third provisions of the Preliminary Injunction and that failure to 2 produce the USB drives and Dropbox account violated the third provision of the 3 Preliminary Injunction. (Id.) Defendants Meriliz and Pappas opposed the motion (Def. 4 Pappas’ Opp’n (ECF No. 59)) and Plaintiff filed a reply (Pl.’s Reply (ECF No. 63)). 5 Shortly after the motion for contempt was filed, this matter was transferred from 6 Judge Mendez to District Judge Kimberly J. Mueller as a result of Judge Mendez’s 7 senior status. (ECF No. 53.) The case was again reassigned a few months later to 8 District Judge Dale A. Drozd. (ECF No. 74.) It was reassigned for a third time to the 9 undersigned on April 6, 2023. (ECF No. 104.) Likely due to confusion caused by 10 these reassignments, the present motion has remained unresolved despite being fully 11 briefed on June 6, 2022. 12 The Court also notes that in response to a minute order inquiring with the 13 parties about whether this motion remained pending, Plaintiff raised arguments about 14 other alleged violations of a protective order. (See ECF No. 153.) These arguments 15 are not before the Court in the complete briefing on the present Motion for Contempt 16 and will not be addressed. Similarly, Defendant argued that the Court “may wish to 17 rule on the contempt motion after considering Defendants’ Daubert motion” 18 regarding Dr. Shane Shook as “[Dr. Shook’s] declaration underlies assertions in the 19 Motion for Contempt.” (See ECF No. 150.) The present motion was filed and fully 20 briefed long before any Daubert motion was filed by Defendants and the Motion for 21 Contempt can properly be considered without first ruling on the Daubert Motion as to 22 Dr. Shook. Moreover, the validity of Dr. Shook’s analysis is not relevant for 23 determining whether Defendant Pappas violated the terms of the stipulated 24 Preliminary Injunction. 25 LEGAL STANDARD 26 A district court has an inherent power to enforce its own orders and hold 27 anyone who violates them in civil contempt. Davies v. Grossmont Union High School 28 Dist., 930 F.2d 1390, 1393 (9th Cir. 1991). A court can wield this power either to 1 coerce compliance with the order or “to compensate the complainant for losses 2 sustained.” Shell Offshore Inc. v. Greenpeace, Inc., 815 F.3d 623, 629 (9th Cir. 2016). 3 A party moving for contempt must show the non-moving party violated the Court’s 4 order by clear and convincing evidence. Irwin v. Mascott, 370 F.3d 924, 932 (9th Cir. 5 2004). There is no express “good faith” exception and the violation need not be willful 6 or intentional “[b]ut a person should not be held in contempt if his action ‘appears to 7 be based on a good faith and reasonable interpretation of the [court's order].’” In re 8 Dual-Deck Video Cassette Recorder Antitrust Litigation, 10 F.3d 693, 695 (9th Cir. 9 1993). “Substantial compliance” with a court order is also a defense against civil 10 contempt as “a few technical violations” are not a violation where “every reasonable 11 effort has been made to comply” with the court’s order. Id. A party must have fair and 12 well-defined notice of what conduct is required or prohibited by an injunction to be 13 held in contempt of it. Reno Air Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1132 14 (9th Cir. 2006). 15 The Ninth Circuit has distilled the above rules down to a three prong test. To 16 succeed on a motion to hold a party in civil contempt, the moving party must show by 17 clear and convincing evidence that (1) the non-moving party violated the terms of the 18 Court’s order, (2) that the non-moving party’s violations went beyond “technical 19 violations” that would consistent with “substantial compliance”, and (3) the non- 20 moving party’s violations were not based on good faith or reasonable interpretation of 21 the court’s order. See United States v. DAS Corp., 18 F.4th 1032, 1040 (9th Cir. 2021). 22 DISCUSSION 23 I. May 4, 2021 Deletions 24 Plaintiff has proved, by clear and convincing evidence, that Defendant Pappas 25 violated the Preliminary Injunction by deleting files from his computer on May 4, 2021. 26 According to the February 11, 2022 report and records of BRG, the independent 27 third-party forensic analyst agreed to by both parties, on May 4, 2021, a day after the 28 entry of the Preliminary Injunction Order, Defendant Pappas deleted 274 files that 1 contained one of the 4094 search query terms utilized by BRG. (Feb. 11, 2022 BRG 2 Report (Brown Decl. Ex. C) at 15; Feb. 11, 2022 Report Ex. 1 (Brown Decl. Ex. D (ECF 3 No. 51-2)); Feb. 11, 2022 BRG Report Ex. 2 (Deleted) (Brown Decl. Ex. D) rows 189– 4 462.) Plaintiff contends these deletions are a violation of Preliminary Injunction as they 5 constitute deletion of Plaintiff’s confidential, proprietary, and/or trade secret 6 information under the first provision and a failure to preserve evidence “in any way 7 related to this matter” under the third provision. (Pl.’s Mot. 18–19.) Defendant Pappas 8 admits that he did delete files on May 4, 2021 but argues that deletions were 9 accidental and the result of Defendant Pappas “reflexively” deleting a “Recovered on 10 Mac” folder that contained thousands of items previously moved to the trash by 11 Defendant and that he has regularly deleted that folder when it appeared. (Def. 12 Pappas’ Opp’n at 9–10.) Defendant Pappas maintains this was “not a selective 13 deletion process” and that there was no nefarious purpose behind the deletions. (Id. 14 at 10.) 15 Defendant Pappas’ deletions on May 4, 2021 clearly violated the first main 16 provision of the Preliminary Injunction. That provision expressly enjoined Defendant 17 Pappas from deleting files that included “[RRD confidential, proprietary, and/or trade 18 secret Information] or other data copied or taken from RRD that Pappas or his agents 19 have uploaded and/or stored using any computer, USB device(s), external hard drive, 20 and/or cloud-based storage account, or any other software or hardware application of 21 any kind.” (Prelim. Inj. Order at 2.) Plaintiff has provided evidence, in the form of the 22 BRG report and the accompanying records, that numerous potentially relevant files 23 were deleted on May 4, 2021. (See Feb. 11, 2022 BRG Report at 15; Feb. 11, 2022 24 BRG Report Ex. 2 (Deleted) rows 189–462.) Defendant Pappas does not dispute that 25 he deleted those files. (Def. Pappas’ Opp’n at 9–10.) 26 In addition, Plaintiff provides a declaration from Craig Robertson, Plaintiff’s 27 President of Commercial and Digital Print, who identifies multiple documents 28 containing “pricing information, customer and project specifications, and contact 1 information” for Plaintiff’s customers that appear on the list of documents deleted on 2 this date.3 (See Robertson Decl. (ECF No. 47-4) ¶ 16.) These include specific an 3 invoice and a project quote for one customer (see Robertson Decl. ¶ 16.a; see also 4 Feb. 11, 2022 BRG Report Ex. 2 (Deleted) rows 278, 191, 256), and invoices for at least 5 four others (Robertson Decl. ¶¶ 16.b.iii, 16.c, 16.e, 16.f; Feb. 11, 2022 BRG Report Ex. 6 2 (Deleted) rows 217, 241, 379, 430). Robertson’s Declaration also provides copies of 7 several of these documents, a review of which shows that they appear to contain 8 pricing information, customer and project specifications, and customer contact 9 information, as indicated by Plaintiff. (See Robertson Decl. Ex. 1, Ex. 3, Ex. 6, & Ex. 10.) 10 Moreover, while the Court appreciates that some of the search terms used by BRG, 11 such as “( Dome OR ‘Dome Printing’ )” were overinclusive, a review of the deleted files 12 and their relevant “search hit” shows that many of these files were relevant to this 13 action. Plaintiff also does not dispute this point, though he does contend that there 14 were “thousands of other non-RRD documents” deleted as well. (Def. Pappas’ Opp’n 15 at 9–10.) It is uncontested that some of the files deleted would clearly fall under the 16 first provision of the Court’s Preliminary Injunction Order and Plaintiff has presented 17 evidence of this with the document previously noted. Plaintiff has thus established by 18 clear and convincing evidence that Defendant Pappas violated the first provision of 19 the Court’s order, thus satisfying the first prong of a civil contempt request. See DAS 20 Corp., 18 F.4th at 1040. 21 The above is also sufficient to show, by clear and convincing evidence, a 22 violation of the third provision of that order which compelled Defendant Pappas to 23 preserve “all evidence, whether electronic or otherwise, related in any way to this 24 matter.” (Prelim. Inj. Order at 3–4;) see DAS Corp., 18 F.4th at 1040. This does not 25 mean that every deletion on May 4, 2021 constituted a violation of the Court’s order; 26 3 In Defendant Pappas’ Opposition, Defendant asserts that Robertson’s Declaration is only speculative 27 lay interpretation of the report prepared by BRG. (See Def. Pappas’ Opp’n at 17–18.) The Court does not consider Robertson’s Declaration for any other purpose than the identification of Plaintiff’s 28 documents and the connected exhibits. 1 Plaintiff has not presented clear and convincing evidence to support such a finding. 2 But it is clear from the evidence presented that at least some of the files deleted would 3 fall within the scope of the first and third provisions of the order. 4 Plaintiff has also established that these violations go beyond “technical 5 violations.” See DAS Corp., 18 F.4th at 1040. While it is notable that many of these 6 files were available to Plaintiff via the production of other devices or through their own 7 servers, the Preliminary Injunction Order is clear that a portion of BRG’s analysis was 8 concerning the “copying, transport or use” of Plaintiff’s confidential, proprietary, or 9 trade secret information. (Prelim. Inj. Order at 2–3.) The intent of the Preliminary 10 Injunction was both to ensure Plaintiff’s files were deleted from Defendant Pappas’ 11 devices and to conduct a forensic analysis to determine whether those documents 12 have been accessed, copied, or moved. This latter purpose is frustrated by Plaintiff’s 13 deletion of these files, as their deletion meant BRG did not have access to the 14 metadata that would otherwise have been used to track “when a file or folder was 15 created, modified or opened. (See Feb. 11, 2022 BRG Report at 9.) As such, the 16 evidence is clear and convincing that these deletions are more than a technical 17 violation of the Preliminary Injunction Order. 18 Defendant does argue that the deletion was inadvertent and the result of 19 Plaintiff’s regular deletion of a “recycling bin” folder on his computer. (Def. Pappas’ 20 Mot. at 9–10.) While the evidence from BRG arguably supports this claim as the file 21 paths for each of the files deleted on May 4 indicate they were in a “Deleted 22 Messages” or “Recovered Messages” folder, this only suggests that Defendant 23 Pappas’ deletion of these files was not willful. However, a party’s actions need not be 24 willful to constitute a substantive violation of the Court’s order. See In re Dual-Deck 25 Video Cassette Recorder Antitrust Litigation, 10 F.3d at 695. Defendant Pappas’ file 26 deletions on May 4, 2021 appear to go beyond technical violations, thus satisfying the 27 second prong, regardless of Defendant Pappas’ intent in deleting the files. See DAS 28 //// 1 Corp., 18 F.4th at 1040; see also In re Dual-Deck Video Cassette Recorder Antitrust 2 Litigation, 10 F.3d at 695. 3 Plaintiff has also met their burden to show by clear and convincing evidence 4 that Defendant Pappas’ violation of the Court’s order was not the result of a good faith 5 or reasonable interpretation of the order. See DAS Corp., 18 F.4th at 1040. Some 6 portion of the files deleted fell clearly within the scope of both the first and third 7 provisions of the court’s order. While Plaintiff might again argue that these deletions 8 were not willful, that does not establish that the violation was the result of a good faith 9 or reasonable interpretation of the Court’s order. Id. Accordingly, the Court grants 10 Plaintiff’s Motion for Contempt in part as to the May 4, 2021 deletions. 11 II. May 12, 2021 Deletions 12 Plaintiff has not shown by clear and convincing evidence that Plaintiff’s deletion 13 of files on May 12, 2021 was a violation of the first provision of the Court’s Preliminary 14 Injunction Order. It is uncontested that on May 12, 2021, Defendant Pappas deleted 15 another 19 documents that were responsive to the search query terms used by BRG. 16 (Feb. 11, 2022 Report Ex. 2 (Deleted) rows 463–481; see Def. Pappas’ Opp’n at 10.) 17 Unlike the May 4 deletions, Plaintiff has not presented any evidence that the files in 18 question contained Plaintiff’s confidential, proprietary, or trade secret information. As 19 such, Plaintiff has not met their burden to show that these deletions violated the first 20 provision of the Court’s order. See DAS Corp., 18 F.4th at 1040. 21 Plaintiff has still established by clear and convincing evidence that the deletion 22 of some of these files constituted a violation of the third provision, requiring that 23 Defendant Pappas “preserve all evidence . . . related in any way to this matter.” 24 (Prelim. Inj. Order at 3–4.) While at least half of the documents deleted on May 12 25 were included in BRG’s report as they returned a hit to the “( Dome or ‘Dome Printing’ 26 )” search query, a search that would undoubtedly return numerous false positives of 27 documents unrelated to this matter, nine of the documents deleted concern two 28 clients common between Plaintiff and Defendant Dome (Feb. 11, 2022 Report Ex. 2 1 (Deleted) rows 473–481), at least one of whom was expressly mentioned in Plaintiff’s 2 original Complaint (Feb. 11, 2022 Report Ex. 2 (Deleted) rows 473–75, 481). As such, 3 these files would fall squarely within the third provision of the Preliminary Injunction 4 Order as they were related to this matter via the shared clients and their deletion 5 constitutes a violation of that order. See DAS Corp., 18 F.4th at 1040. 6 Plaintiff has also established by clear and convincing evidence that the deletion 7 of these files is more than a technical violation of the order. Notably, at least one of 8 the files related to the common client mentioned above has not been made available 9 to Plaintiff via other produced devices. (Feb. 11, 2022 Report Ex. 2 (Deleted) rows 10 473; Def. Pappas’ Opp’n at 11.) Additionally, this deletion occurs in the context of the 11 prior May 4, 2021 deletion. While the permanent deletion of a single file, on its own, 12 may have constituted only a technical violation of the court’s order, it is not when 13 viewed in the broader context of the numerous other deletions that occurred. 14 Coupled with the May 4 deletion and the fact that Plaintiff has now been denied 15 access to potentially relevant information contained within at least one deleted 16 document, Plaintiff has presented clear and convincing evidence that the May 12 17 deletion is also more than a technical violation of the court’s order. See DAS Corp., 18 18 F.4th at 1040. 19 Finally, Plaintiff has met their burden to show by clear and convincing evidence 20 that the May 12 deletion was not the result of a good faith or reasonable interpretation 21 of the Court’s order. See DAS Corp., 18 F.4th at 1040. While the deletion of the files 22 responsive to the “(Dome or ‘Dome Printing’ )” search term might have been the result 23 of a good faith interpretation of the Preliminary Injunction Order, documents 24 concerning common clients between Plaintiff and Dome, one of whom was expressly 25 mentioned in the Complaint, are clearly within the scope of the third provision of the 26 Court’s order. As stated above, whether Defendant Pappas’ violation was willful is not 27 relevant as this does not show that the deletion was the result of a good faith or 28 reasonable interpretation of the Court’s order. Id. 1 The Court also grants in part Plaintiff’s Motion for Contempt as to Defendant 2 Pappas’ May 12, 2021 deletions. 3 III. USB Drives 4 Plaintiff has not shown by clear and convincing evidence that Defendant 5 Pappas’ violated the Court’s order in failing to turn over six USB drives that were 6 connected at some point to Defendant Pappas’ computer. The Preliminary Injunction 7 compels Defendant Pappas to “make all of [his] personal electronic data storage 8 system(s) and or/personal computers(s), including . . . USB storage devices, . . . 9 available to an independent third party forensic analysis . . . .” (Prelim. Inj. Order at 2.) 10 While USB drives are expressly included in this portion of the order, Plaintiff has not 11 established that these drives were Pappas’ personal electronic data storage systems 12 or that he in fact still had them in his possession or control. Plaintiff only states that the 13 six USB drives in question were, at some point, connected to Defendant Pappas’ 14 computer and that “[a]t least three of the USB devices were used as recently as 2018 15 and were connected to Pappas’ [computer] . . . .” (Pl.’s Mot. at 19.) That these USB 16 drives were simply connected to Defendant Pappas’ computer is insufficient to serve 17 as clear and convincing evidence that Defendant Pappas violated the Court’s order by 18 failing to turn these devices over. Accordingly, Plaintiff’s Motion for Contempt is 19 denied in part as related to the USB Drives. 20 IV. Dropbox Account 21 Plaintiff has shown by clear and convincing evidence that Defendant Pappas’ 22 violated the Court’s order by failing to disclose and provide his Dropbox account to 23 BRG. The second provision of the order compels Defendant Pappas to turn over 24 “cloud-based storage systems” to BRG. (Prelim. Inj. Order at 2.) It is uncontested that 25 a Dropbox account would be considered a cloud-based storage system. (Def. 26 Pappas’ Opp’n at 11–12.) The failure to provide Defendant Pappas’ Dropbox account 27 to BRG thus constitutes a violation of the Court’s order. See DAS Corp., 18 F.4th at 28 1040. 1 Plaintiff has also established by clear and convincing evidence that this failure 2 was more than a technical violation of the Court’s order. The order requires that 3 numerous physical and digital forms of storage be turned over to BRG for analysis. 4 (Prelim. Inj. Order at 2.) While it might be reasonable that Defendant Pappas could 5 fail to remember every account or device he had used, in conducting their 6 investigation BRG found an email sent from Defendant Pappas’ Dropbox account less 7 than a month prior to the issuance of the Preliminary Injunction Order. (Feb. 11, 2022 8 BRG Report at 14.) That email was a request from Defendant Pappas for material to 9 be sent to that account, indicating Defendant Pappas’ usage of the account was not as 10 passive as Defendant suggests. (Id.) Moreover, at the time of the motion, it appears 11 Defendant Pappas had still not provided this account. (Pl.’s Mot. at 19; see Def. 12 Pappas’ Opp’n at 20.) While Defendant Pappas stated in his opposition that he “has 13 agreed to further deposition, and will turn over his Dropbox account . . .” (Def. Pappas’ 14 Opp’n at 20), the failure to promptly remedy the failure to provide the Dropbox 15 account undercuts any argument that this was simply a technical violation of the 16 Court’s order. 17 Plaintiff has also shown by clear and convincing evidence that the failure to 18 provide the Dropbox account was not the result of a good faith or reasonable 19 interpretation of the Court’s order. Defendant does not contest this point. 20 Accordingly, the Court grants in part Plaintiff’s Motion for Contempt for Defendant 21 Pappas’ failure to identify and provide the Dropbox account. 22 V. Remedies 23 Having found that Plaintiff has established by clear and convincing evidence 24 that Defendant Pappas violated the Court’s order with the deletion of files on two 25 occasions and the failure to provide BRG with access to Plaintiff’s Dropbox account, 26 the Court must now consider the appropriate sanction to impose. The Court is 27 empowered to coerce compliance with a court order, compensate an injured party for 28 actual losses caused, or punish a completed act of disobedience. Ahearn ex rel. 1 N.L.R.B. v. Int’l Longshore & Warehouse Union, Locals 21 & 4, 721 F.3d 1122, 1129 2 (9th Cir. 2013) (citing Int'l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 3 828 (1994)). The first two sanctions are civil sanctions whereas the third is a criminal 4 sanction. Id. While it is true that “[t]he Supreme Court recognized that the line 5 between civil and criminal contempt is blurred where contempts involving out-of- 6 court disobedience to complex injunctions are at issue[,]” Ahearn ex rel. N.L.R.B., 721 7 F.3d at 1029 (citations and quotation marks removed), the injunction in question here 8 is not particularly complex, only including four main provisions. As such, the line 9 between civil contempt, where the Court is seeking to coerce compliance and 10 compensate actual losses, and criminal contempt, where the Court is seeking to 11 punish acts of disobedience, is quite clear. 12 Here, Defendant Pappas substantially violated the Court’s order and the 13 violations were not the result of good faith or reasonable interpretation of the Court’s 14 order. As such, civil sanctions are warranted to ensure continued compliance with the 15 Court’s orders and compensate Plaintiff for the violations of this order. However, 16 while BRG’s analysis shows that Defendant Pappas deleted a significant number of 17 files, at least as to the May 4 deletion, Defendant Pappas’ explanation that these 18 deletions were not a willful violation of the order is also supported by the evidence. 19 (See Feb. 11, 2022 BRG Report Ex. 2 (Deleted) rows 189–462.) Defendant Pappas’ 20 intent may not be relevant to the determination of whether he violated the Court’s 21 order but it does show that only civil sanctions compensating Plaintiff for actual loss 22 and possible evidentiary sanctions are warranted. 23 Accordingly, the Court orders that Defendant Pappas pay Plaintiff the attorneys’ 24 fees and costs that Plaintiff incurred in bringing the present Motion for Contempt. The 25 Court directs Plaintiff to submit a declaration of counsel which sets out the necessary 26 and reasonable attorneys’ fees and costs incurred in filing this Motion. Additionally, 27 should this case reach trial the Court will impose evidentiary sanctions under Federal 28 Rule of Civil Procedure 37 including the usage of an adverse inference instruction. If 1 | there are other specific evidentiary sanctions that Plaintiff believes are warranted, 2 | Plaintiff shall file such a request in advance of the final pretrial conference. Given the 3 | current stage of the litigation, the Court concludes these remedies are sufficient to 4 | coerce compliance with court orders and to compensate Plaintiff for actual losses due 5 || to the violation of the Preliminary Injunction Order. 6 CONCLUSION 7 In accordance with the above, IT |S HEREBY ORDERED that: 8 1. Plaintiff's Motion for Contempt (ECF No. 47) is GRANTED IN PART and DENIED 9 IN PART; 10 2. Within 14 days of this order, Plaintiff shall submit a declaration of counsel 11 setting out the reasonable attorneys’ fees and costs incurred in filing this 12 Motion for Contempt; and 13 3. Within 7 days of the Plaintiff's counsel’s declaration being filed, Defendant 14 Pappas may file a response, if any, to that declaration, limited to 5 pages. 15 16 IT IS SO ORDERED. 17 | Dated: _April 12, 2024 “Dinel . CoO □□□□ Hon. Daniel □□ |. Cod 18 UNITED STATES DISTRICT JUDGE 19 20 21 22 23 | DJC1 - rrd21¢ev00753.contempt 24 25 26 27 28 13