1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 SABRINA SHAFER, Case No. 19-cv-00787-CRB
9 Plaintiff, ORDER DENYING MOTION TO 10 v. SET ASIDE JUDGMENT
11 SKYLINE ADVANCED TECHNOLOGY SERVICES, et al., 12 Defendants. 13 14 This case involves an employment dispute between Plaintiff Sabrina Shafer 15 (“Shafer”) and Defendant Skyline Advanced Technology Services (“Skyline”).1 The 16 Court dismissed Shafer’s case against Skyline after Skyline’s Motion for Sanctions 17 brought to light Shafer’s destruction of evidence. See R. & R. re Mot. for Sanctions (Dkt. 18 98) (“R. & R.”); Order on R. & R. (Dkt. 103). Shafer now moves to set aside the judgment 19 in the case, arguing that Skyline was not forthcoming in its Motion for Sanctions with 20 regard to its ability to back up the data on Shafer’s Skyline-issued laptop. See generally 21 Mot. to Set Aside J. (Dkt. 120). As discussed below, while Shafer’s declaration is 22 arguably timely, it is not clear and convincing evidence of fraud or other misconduct by 23 Skyline, Shafer was not prevented from fully and fairly presenting her case, and, even 24 assuming that Skyline’s actions constituted fraud, such fraud would not have an effect on 25 the judgment. Thus, the Court DENIES Shafer’s Motion to Set Aside Judgment. 26 1 Although there are two related cases involved in this dispute—Skyline Advanced Technology 27 Services v. Shafer, No. 18-cv-6641-CRB, and Shafer v. Skyline Advanced Technology Services, 1 I. BACKGROUND 2 In February 2016, Skyline, a California corporation, hired Shafer, a resident and 3 citizen of Illinois and a licensed attorney, to serve as Director of Training and Service 4 Sales. Compl. (Dkt. 1) ¶¶ 4–5, 10–11. Shafer’s employment agreement stated that she 5 would receive a base salary plus additional tiered commission payments based upon sales 6 revenue. See Emp. Agreement (Dkt. 11-7) at 2. The agreement also stated that Skyline 7 would provide Shafer with a cellphone, laptop, and landline phone. Id. Skyline terminated 8 Shafer in September 2018. Compl. ¶ 21. Skyline then filed an action against Shafer in the 9 Northern District of California (“Skyline Case”), and Shafer filed a subsequent, separate 10 action against Skyline in the Northern District of Illinois (“Shafer Case”). See Skyline 11 Advanced Technology Services v. Shafer, No. 18-cv-6641-CRB; Shafer v. Skyline 12 Advanced Technology Services, No. 19-cv-787-CRB. The Shafer Case was transferred to 13 this district and assigned to this Court. See District Transfer (Dkt. 22); Order Reassigning 14 Case (Dkt. 38). 15 A. The Two Lawsuits 16 Central to the Skyline Case is a contract between Skyline and two other 17 corporations that Shafer negotiated on Skyline’s behalf during the summer of 2018. R. & 18 R. at 2, 4. In the Skyline Case, Skyline alleged that Shafer “committed various acts of 19 misconduct” including breach of contract, breach of fiduciary duty, breach of loyalty, 20 fraudulent concealment, fraudulent misrepresentation, and conversion “in the negotiation 21 and execution of a three-way contract between Skyline and two other corporations (Cisco 22 and Xentaurs).” Id. at 2. “Because Skyline enjoyed a preferred trading partner status with 23 Cisco, Cisco would often have non-partner vendors, such as Xentaurs, enter into a contract 24 with partners such as Skyline in order to do business with Cisco.” Id. Skyline alleged that 25 while Shafer was negotiating the contract on its behalf, she was engaged in an undisclosed 26 romantic relationship with Joe Onisick (“Onisick”), who represented Cisco in the contract. 27 Id. Skyline also alleged that Shafer and Onisick were secretly working for Xentaurs while 1 deal that was unfavorable to both Skyline and Cisco in order to provide themselves and 2 their new employer, Xentaurs, with a financial benefit. Id. Onisick had been working for 3 Xentaurs since May 1, 2018, and Shafer finalized her agreement with Xentaurs on August 4 23, 2018. Id. at 4. Skyline further alleged that Shafer took significant steps to “conceal 5 her activities, for example: using her personal email accounts to orchestrate the conspiracy 6 with Onisick; submitting fraudulent reimbursement requests to Skyline for Uber rides to 7 Onisick’s residence; and, by refusing to return two Skyline laptops in her possession 8 (which contained proprietary information that was valuable to Skyline)” even after Skyline 9 filed its complaint. Id. at 3. 10 In the Shafer Case, Shafer brought Illinois state law claims against Skyline for 11 conspiracy, wage payment and collection, breach of contract, and defamation. See 12 generally Compl. Shafer alleged that Skyline and a number of its employees and 13 shareholders conspired not to pay her final commissions “in excess of $650,000” and 14 defamed her through accusations that she stole two Skyline laptops, engaged in sexual 15 relationships with Skyline customers, and lacked integrity or the ability to perform her job 16 duties. Id. ¶¶ 30, 37, 54, 62. This Court subsequently dismissed the defamation and 17 conspiracy claims. See Order on Mot. to Dismiss (Dkt. 50). 18 B. The Motion for Evidentiary and Monetary Sanctions 19 In May 2020, Skyline filed a Motion for Sanctions in both the Skyline Case and the 20 Shafer Case, alleging that Shafer had spoliated evidence. Mot. for Sanctions (Dkt. 91). In 21 its motion, Skyline alleged that Shafer destroyed numerous pieces of evidence important to 22 the litigation even after she was aware that litigation was imminent.2 Id. at 8–9. This 23 evidence included all data on Shafer’s Skyline-owned laptop (Shafer asserts that the 24 second laptop belonged to Cisco, R. & R. at 18), numerous emails forwarded from her 25 Skyline email account to her personal account, all communications between herself and 26 Xentaurs on her personal email account, all communications with the individuals at 27 1 Skyline whom she alleged had defamed her, and all communications with Onisick, 2 including over three thousand text messages they exchanged during the contract 3 negotiation. Mot. for Sanctions at 9–10. Skyline provided evidence suggesting that two 4 days prior to her termination, Shafer forwarded seventy-five emails from her Skyline email 5 to her personal email, but only produced fifteen of those emails in discovery. R. & R. at 5. 6 When Skyline received the laptop in Shafer’s possession on October 25, 2018, it had been 7 wiped of all data; in addition, Shafer never returned the two Skyline hard drives allegedly 8 also in her possession at that time. Id. at 6. When pressed in her deposition about the 9 missing evidence, Shafer stonewalled, answering that “she did not know, or did not recall, 10 in response to over 300 questions.” Id. at 7–8. 11 In her response to the Motion for Sanctions, Shafer claimed that she was given the 12 laptops to keep as her own property, was told that all the data on her Skyline-issued laptop 13 would be backed up to Skyline’s computer server, and was merely holding on to the laptop 14 while she awaited her final commission payment from Skyline after her termination. Id. at 15 9. She explained that she was no longer in possession of the emails and texts relevant to 16 the lawsuit because she had long had an “information management practice” of regularly 17 deleting emails and texts no longer of use to her. Id. at 10. She further stated that because 18 she believed that Skyline could remotely plant software on the Skyline-issued laptop after 19 her termination, she had the laptop’s hard drive replaced. Id. She did not state what she 20 did with the original hard drive. Id.
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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 SABRINA SHAFER, Case No. 19-cv-00787-CRB
9 Plaintiff, ORDER DENYING MOTION TO 10 v. SET ASIDE JUDGMENT
11 SKYLINE ADVANCED TECHNOLOGY SERVICES, et al., 12 Defendants. 13 14 This case involves an employment dispute between Plaintiff Sabrina Shafer 15 (“Shafer”) and Defendant Skyline Advanced Technology Services (“Skyline”).1 The 16 Court dismissed Shafer’s case against Skyline after Skyline’s Motion for Sanctions 17 brought to light Shafer’s destruction of evidence. See R. & R. re Mot. for Sanctions (Dkt. 18 98) (“R. & R.”); Order on R. & R. (Dkt. 103). Shafer now moves to set aside the judgment 19 in the case, arguing that Skyline was not forthcoming in its Motion for Sanctions with 20 regard to its ability to back up the data on Shafer’s Skyline-issued laptop. See generally 21 Mot. to Set Aside J. (Dkt. 120). As discussed below, while Shafer’s declaration is 22 arguably timely, it is not clear and convincing evidence of fraud or other misconduct by 23 Skyline, Shafer was not prevented from fully and fairly presenting her case, and, even 24 assuming that Skyline’s actions constituted fraud, such fraud would not have an effect on 25 the judgment. Thus, the Court DENIES Shafer’s Motion to Set Aside Judgment. 26 1 Although there are two related cases involved in this dispute—Skyline Advanced Technology 27 Services v. Shafer, No. 18-cv-6641-CRB, and Shafer v. Skyline Advanced Technology Services, 1 I. BACKGROUND 2 In February 2016, Skyline, a California corporation, hired Shafer, a resident and 3 citizen of Illinois and a licensed attorney, to serve as Director of Training and Service 4 Sales. Compl. (Dkt. 1) ¶¶ 4–5, 10–11. Shafer’s employment agreement stated that she 5 would receive a base salary plus additional tiered commission payments based upon sales 6 revenue. See Emp. Agreement (Dkt. 11-7) at 2. The agreement also stated that Skyline 7 would provide Shafer with a cellphone, laptop, and landline phone. Id. Skyline terminated 8 Shafer in September 2018. Compl. ¶ 21. Skyline then filed an action against Shafer in the 9 Northern District of California (“Skyline Case”), and Shafer filed a subsequent, separate 10 action against Skyline in the Northern District of Illinois (“Shafer Case”). See Skyline 11 Advanced Technology Services v. Shafer, No. 18-cv-6641-CRB; Shafer v. Skyline 12 Advanced Technology Services, No. 19-cv-787-CRB. The Shafer Case was transferred to 13 this district and assigned to this Court. See District Transfer (Dkt. 22); Order Reassigning 14 Case (Dkt. 38). 15 A. The Two Lawsuits 16 Central to the Skyline Case is a contract between Skyline and two other 17 corporations that Shafer negotiated on Skyline’s behalf during the summer of 2018. R. & 18 R. at 2, 4. In the Skyline Case, Skyline alleged that Shafer “committed various acts of 19 misconduct” including breach of contract, breach of fiduciary duty, breach of loyalty, 20 fraudulent concealment, fraudulent misrepresentation, and conversion “in the negotiation 21 and execution of a three-way contract between Skyline and two other corporations (Cisco 22 and Xentaurs).” Id. at 2. “Because Skyline enjoyed a preferred trading partner status with 23 Cisco, Cisco would often have non-partner vendors, such as Xentaurs, enter into a contract 24 with partners such as Skyline in order to do business with Cisco.” Id. Skyline alleged that 25 while Shafer was negotiating the contract on its behalf, she was engaged in an undisclosed 26 romantic relationship with Joe Onisick (“Onisick”), who represented Cisco in the contract. 27 Id. Skyline also alleged that Shafer and Onisick were secretly working for Xentaurs while 1 deal that was unfavorable to both Skyline and Cisco in order to provide themselves and 2 their new employer, Xentaurs, with a financial benefit. Id. Onisick had been working for 3 Xentaurs since May 1, 2018, and Shafer finalized her agreement with Xentaurs on August 4 23, 2018. Id. at 4. Skyline further alleged that Shafer took significant steps to “conceal 5 her activities, for example: using her personal email accounts to orchestrate the conspiracy 6 with Onisick; submitting fraudulent reimbursement requests to Skyline for Uber rides to 7 Onisick’s residence; and, by refusing to return two Skyline laptops in her possession 8 (which contained proprietary information that was valuable to Skyline)” even after Skyline 9 filed its complaint. Id. at 3. 10 In the Shafer Case, Shafer brought Illinois state law claims against Skyline for 11 conspiracy, wage payment and collection, breach of contract, and defamation. See 12 generally Compl. Shafer alleged that Skyline and a number of its employees and 13 shareholders conspired not to pay her final commissions “in excess of $650,000” and 14 defamed her through accusations that she stole two Skyline laptops, engaged in sexual 15 relationships with Skyline customers, and lacked integrity or the ability to perform her job 16 duties. Id. ¶¶ 30, 37, 54, 62. This Court subsequently dismissed the defamation and 17 conspiracy claims. See Order on Mot. to Dismiss (Dkt. 50). 18 B. The Motion for Evidentiary and Monetary Sanctions 19 In May 2020, Skyline filed a Motion for Sanctions in both the Skyline Case and the 20 Shafer Case, alleging that Shafer had spoliated evidence. Mot. for Sanctions (Dkt. 91). In 21 its motion, Skyline alleged that Shafer destroyed numerous pieces of evidence important to 22 the litigation even after she was aware that litigation was imminent.2 Id. at 8–9. This 23 evidence included all data on Shafer’s Skyline-owned laptop (Shafer asserts that the 24 second laptop belonged to Cisco, R. & R. at 18), numerous emails forwarded from her 25 Skyline email account to her personal account, all communications between herself and 26 Xentaurs on her personal email account, all communications with the individuals at 27 1 Skyline whom she alleged had defamed her, and all communications with Onisick, 2 including over three thousand text messages they exchanged during the contract 3 negotiation. Mot. for Sanctions at 9–10. Skyline provided evidence suggesting that two 4 days prior to her termination, Shafer forwarded seventy-five emails from her Skyline email 5 to her personal email, but only produced fifteen of those emails in discovery. R. & R. at 5. 6 When Skyline received the laptop in Shafer’s possession on October 25, 2018, it had been 7 wiped of all data; in addition, Shafer never returned the two Skyline hard drives allegedly 8 also in her possession at that time. Id. at 6. When pressed in her deposition about the 9 missing evidence, Shafer stonewalled, answering that “she did not know, or did not recall, 10 in response to over 300 questions.” Id. at 7–8. 11 In her response to the Motion for Sanctions, Shafer claimed that she was given the 12 laptops to keep as her own property, was told that all the data on her Skyline-issued laptop 13 would be backed up to Skyline’s computer server, and was merely holding on to the laptop 14 while she awaited her final commission payment from Skyline after her termination. Id. at 15 9. She explained that she was no longer in possession of the emails and texts relevant to 16 the lawsuit because she had long had an “information management practice” of regularly 17 deleting emails and texts no longer of use to her. Id. at 10. She further stated that because 18 she believed that Skyline could remotely plant software on the Skyline-issued laptop after 19 her termination, she had the laptop’s hard drive replaced. Id. She did not state what she 20 did with the original hard drive. Id. Shafer also conceded in her response that she had an 21 obligation to preserve evidence, and maintained that litigation was imminent starting on 22 October 2, 2018 when she received a letter from Skyline’s counsel telling her to “preserve 23 all evidence because Skyline was investigating her activities during the period she worked 24 for the company.” Id. at 11. However, she continued to destroy evidence even after this 25 point, including wiping all data off the laptop ten days later. Id. 26 In its reply, Skyline noted the inconsistencies between Shafer’s affidavit in the 27 response to the Motion for Sanctions and her deposition testimony. Id. at 12. For instance, 1 termination, whereas in her deposition, she indicated that she did not alter the laptop in any 2 way and returned it in the same condition, “with everything that was on it on her last day 3 of employment with Skyline.” Id. at 12–13. In connection with its reply brief, Skyline 4 submitted a declaration of Ed Misley (“Misley”), Director of Information Technology at 5 Skyline. See Misley Decl. (Dkt. 95-2). Misley declared that Shafer did not own the 6 laptop, nor did Skyline have the capability to back up the laptop remotely or save a copy of 7 the information on the laptop. Id. at ¶ 3, 7. 8 In his Report and Recommendation on the Motion for Sanctions, Magistrate Judge 9 Ilman found that August 23, 2018 was the date that Shafer’s duty to preserve evidence was 10 triggered. R. & R. at 16. August 23, 2018 was the date that Shafer signed her contract 11 with Xentaurs unbeknownst to Skyline and, thus, would have reasonably foreseen 12 litigation. Id. But because Skyline had previously requested that the date be fixed at 13 August 31, 2018, Magistrate Judge Ilman accepted that date. Id. at 16–17. 14 Magistrate Judge Ilman also found that Shafer deleted text and email 15 communications with Onisick “specifically to frustrate Skyline’s efforts to conduct 16 discovery and as part of a concerted effort to cover [her] evidentiary tracks.” Id. at 18. 17 Further, primarily due to Shafer’s inconsistent story on the ownership and fate of the 18 laptops and hard drive, Magistrate Judge Ilman found that Shafer willfully spoliated 19 evidence—evidence that Magistrate Judge Ilman determined would have been at the heart 20 of Skyline’s defense in the Shafer Case. Id. at 19–20. Because of Shafer’s willful 21 behavior, Magistrate Judge Ilman recommended imposing sanctions on Shafer, dismissing 22 the Shafer Case and including an adverse inference jury instruction against Shafer in the 23 Skyline Case. Id. at 22–24. This Court adopted the Report and Recommendations on the 24 Motion for Sanctions on July 30, 2020, and dismissed the Shafer Case. See Order on R. & 25 R. 26 C. The Motion to Set Aside Judgment 27 On May 19, 2021, Shafer filed a Motion to Set Aside Judgment in the Shafer Case. 1 did not have the ability to “remotely backup the laptops and hard drives of its employees, 2 including the hard drive of the laptop used by Shafer” were false. Id. at 1. Shafer seeks to 3 discredit the Misley Declaration that Skyline filed in connection with its reply brief in the 4 Motion for Sanctions. See id. She alleges that Misley’s statements that Skyline had no 5 copies of the data on her Skyline laptop or hard drive were false. See id. at 1–2. 6 As evidence of this misrepresentation, Shafer points to the declaration of Rick 7 Kollins (“Kollins”), a former employee of Skyline, submitted with her motion. Id. at 2. 8 Kollins declares that he has worked as an information technology engineer for forty years, 9 including working for Skyline from 1982 to 2015, and again from Spring 2016 to October 10 2018. Kollins Decl. (Dkt. 120-3) ¶ 1. He further states that during his time at Skyline, 11 data generated in connection with Skyline’s business, including emails, were routed 12 through Skyline’s central network and stored locally on its servers, and the only way that 13 this stored data no longer exists is “if Skyline trashed the back-ups.” Id. ¶ 8. In addition, 14 he states that, starting in 2015, Skyline implemented procedures for regularly backing up 15 its employees’ laptops. Id. ¶ 9. Kollins does not mention Shafer’s Skyline laptop or hard 16 drive at any point in the declaration. See generally id. In the Motion to Set Aside 17 Judgment, Shafer requests leave to conduct limited discovery and permission to amend the 18 Motion with additional evidence obtained through that discovery. See Mot. to Set Aside J. 19 at 12. 20 Skyline responds that Shafer’s motion ignores that she destroyed thousands of 21 emails and text messages, destroyed evidence from the laptop, and provided conflicting 22 testimony on the fate of the laptop and hard drive. Opp’n to Mot. to Set Aside J. (Dkt. 23 123) at 1. Skyline further argues that the Motion to Set Aside the Judgment does not 24 discredit the statements made in the Misley Declaration, as Kollins never asserts in his 25 declaration that Skyline had a backup of the data on Shafer’s laptop and hard drive. Id. at 26 2. Skyline also notes that the Kollins Declaration contains numerous inaccuracies, 27 including its statement that Kollins started working at Skyline in 1982, even though 1 even though Kollins was not employed by Skyline in 2015. Id. at 8. 2 In her reply, Shafer counters that she is not challenging the finding of spoliation, but 3 rather argues that the remedy is disproportionately harsh in light of Skyline’s alleged 4 misrepresentations. See Reply to Opp’n to Mot. to Set Aside J. at 2. She presents no 5 further evidence in her reply to support her contention that Skyline misrepresented the 6 facts in its Motion for Sanctions. See generally id. 7 II. LEGAL STANDARD 8 Under Rule 60(b)(3) of the Federal Rules of Civil Procedure, a losing party may be 9 relieved from a final judgment or order on the basis of “fraud, . . . misrepresentation, or 10 other misconduct of an adverse party.” Fed. R. Civ. P. 60(b)(3). “A motion under Rule 11 60(b) must be made within a reasonable time—and . . . no more than a year after the entry 12 of the judgment or order or the date of the proceeding.” Fed. R. Civ. P. 60(c)(1). “To 13 prevail, the moving party must prove by clear and convincing evidence that the verdict was 14 obtained through fraud, misrepresentation, or other misconduct and the conduct 15 complained of prevented the losing party from fully and fairly presenting [its position].” 16 De Saracho v. Custom Food Mach., Inc., 206 F.3d 874, 880 (9th Cir. 2000). If a party had 17 the opportunity to dispute the alleged misrepresentation engaged in by the opposing party 18 or to conduct further discovery to determine if the opposing party was indeed engaged in 19 misrepresentation or fraud, the judgment will not be set aside. See Casey v. Albertson’s 20 Inc., 362 F.3d 1254, 1260 (9th Cir. 2004); Pac. & Arctic Ry. & Navigation Co. v. United 21 Transp. Union, 952 F.2d 1144, 1148 (9th Cir. 1991); In re M/V Peacock, 809 F.2d 1403, 22 1405 (9th Cir. 1987). Where there is evidence of fraud, the judgment will only be set aside 23 if the alleged misconduct affects the judgment. See Alexander v. Robertson, 882 F.2d 421, 24 425 (9th Cir. 1989) (holding that although fraud on the court was proven, it would be 25 “fruitless” to set aside judgment when the moving party would still lose). 26 III. DISCUSSION 27 Although Shafer’s Motion to Set Aside Judgment is (A) timely, the Court 1 evidence of fraud or misrepresentation by Skyline; (C) Shafer was not prevented from 2 fully and fairly presenting her case; and (D) the alleged fraud would have no effect on the 3 judgment. 4 A. Timeliness of Motion 5 Shafer’s Motion to Set Aside Judgment was timely. “A motion under Rule 60(b) 6 must be made within a reasonable time—and . . . no more than a year after the entry of the 7 judgment or order or the date of the proceeding.” Fed. R. Civ. P. 60(c)(1). “What 8 constitutes ‘reasonable time’ depends upon the facts of each case, taking into consideration 9 the interest in finality, the reason for delay, the practical ability of the litigant to learn 10 earlier of the grounds relied upon, and prejudice to other parties.” Ashford v. Steuart, 657 11 F.2d 1053, 1055 (9th Cir. 1981). Shafer arguably did not make her Motion to Set Aside 12 Judgment “within a reasonable time,” as she could have obtained a declaration from 13 Kollins prior to the judgment on the Motion for Sanctions and makes no mention of why 14 she waited until ten months after the judgment to present this declaration to the Court, 15 except to say that she did not become aware of the alleged misrepresentation until 16 February 2021. See Mot. to Set Aside J. at 7. But accepting Shafer’s motion as timely is 17 not prejudicial to Skyline, because, as discussed below, this Court denies Shafer’s Motion 18 to Set Aside Judgment on other grounds. Because courts in the Ninth Circuit have 19 generally accepted Rule 60(b)(3) motions as timely so long as they were made within a 20 year of entry of judgment, the Court finds that Shafer’s Motion to Set Aside Judgment was 21 timely. See Am. Tel. & Tel. Co. v. United Comput. Sys., Inc., 5 F.3d 534, 1993 WL 22 360778, at *2 (9th Cir. Sept. 15, 1993) (“A Rule 60(b) motion must be made within one 23 year after entry of judgment. AT&T’s motion to vacate the confirmation order was 24 timely.”) (citations omitted); see also De Saracho v. Custom Food Mach., 182 F.R.D. 601, 25 608 (N.D. Cal. 1998) (holding that the Rule 60(b)(3) motion was timely filed where it was 26 made over nine months after entry of judgment). 27 B. Clear and Convincing Evidence 1 Judgment, is not clear and convincing evidence of fraud, misrepresentation, or other 2 misconduct by Skyline. Shafer argues that the Kollins Declaration is definitive proof that 3 Skyline misrepresented its ability to back up the data on her laptop and, thus, lied about its 4 inability to access that data in discovery. See Mot. to Set Aside J. at 4. 5 Specifically, Shafer argues that the Misley Declaration submitted with Skyline’s 6 reply brief in the Motion for Sanctions “is directly contradicted by Rick Kollins.” Mot. to 7 Set Aside J. at 2. Shafer cites a case from the Third Circuit—Est. of Murdoch v. 8 Pennsylvania, 432 F.2d 867 (3rd Cir. 1970)—to argue that this Court should “take[] as true 9 evidence attached to a Rule 60(b)(3) motion which tends to refute the prior affidavits 10 submitted.” Mot. to Set Aside J. at 8. Kollins declares that he worked for Skyline between 11 1982 and 2015 and 2016 and 2018. Kollins Decl. ¶ 1. Taking the Kollins Declaration at 12 face value, it appears to contradict Skyline and Misley’s statements that Skyline was 13 unable to remotely back up Shafer’s laptop. See id. ¶ 8 (“All the data generated in 14 connection with Skyline’s business passed through . . . the Skyline centralized computer 15 network . . . including the emails and electronic documents generated by Skyline’s 16 employees. These back-ups were stored by Skyline locally on Skyline’s servers.”). As 17 Shafer was a Skyline employee between 2016 and 2018, R. & R. at 1–2, if Skyline was 18 remotely backing up “all the data . . . generated by Skyline’s employees” during that time, 19 it follows that Skyline was remotely backing up all the data generated by Shafer on her 20 Skyline-issued laptop. Kollins Decl. ¶ 8. 21 But factual discrepancies undermine the credibility of the Kollins Declaration. 22 Kollins declares that he started working for Skyline in 1982. Id. ¶ 1. But Skyline did not 23 exist until 1998. See Skyline Articles of Incorporation (Dkt. 125-1) at 2. Kollins further 24 notes that “while [he] worked there, Skyline implemented procedures for routinely and 25 regularly backing up its computer systems, which from about 2015 forward included 26 procedures for implementing remote back-ups of laptops used by employees.” Kollins 27 Decl. ¶ 9. But as Kollins’ own resume indicates, Kollins Resume at 2, Kollins was not 1 became aware of company practices in 2015. See Kollins Notice of Claim to Benefit 2 Chargeable Employer (Dkt. 125-1) at 2. Shafer makes no mention of these discrepancies 3 in her reply to Skyline’s Opposition to the Motion to Set Aside Judgment. See generally 4 Reply to Opp’n to Mot. to Set Aside J. Because of the Kollins Declaration’s factual 5 discrepancies, it does not rise to the level of clear and convincing evidence of fraud or 6 misrepresentation by Skyline regarding its ability to remotely back up Shafer’s Skyline 7 laptop and hard drive. And even if this Court were to find that the Kollins Declaration is 8 clear and convincing evidence of fraud by Skyline, Shafer’s Motion to Set Aside Judgment 9 fails for other reasons, as discussed below.3 10 C. Shafer’s Ability to Fully and Fairly Present Her Case 11 Shafer has not demonstrated that she was prevented from fully and fairly presenting 12 her opposition to Skyline’s Motion for Sanctions. To prevail on a motion to set aside 13 judgment, the moving party must show that “the conduct complained of prevented the 14 losing party from fully and fairly presenting [its position].” De Saracho, 206 F.3d at 880. 15 If the moving party had the opportunity to dispute the opposing party’s alleged 16 misrepresentation or to conduct further discovery to determine if the opposing party was 17 indeed engaged in misrepresentation or fraud, courts have declined to set aside judgment. 18 See, e.g., In re M/V Peacock, 809 F.2d at 1405 (holding that the moving party was not 19 prevented from fully and fairly presenting her case where she had an incentive to discover 20 the alleged misrepresentation and was able to discover the alleged misrepresentation); 21 Casey, 362 F.3d at 1260 (denying the moving party’s request for relief from judgment 22 where the fraud was “discoverable by due diligence before or during the proceedings”); 23 Sathianathan v. Smith Barney, Inc., No. C04-02130 SBA, 2009 WL 537158, at *5 (N.D. 24 Cal. March 3, 2009) (holding that the moving party was not entitled to Rule 60(b)(3) relief 25 where he had the opportunity to dispute allegedly false testimony contained in the 26 opposing party’s motion and reply brief but failed to do so and the allegedly false 27 1 testimony had no impact on the court’s analysis of the opposing party’s motion). 2 Here, Shafer did have an incentive to discover the alleged misrepresentation and 3 was able to discover the alleged misrepresentation. In her response to the Motion for 4 Sanctions, she asserted that she believed that all the information on her laptop was backed 5 up onto Skyline’s servers. R. & R. at 9; see also Mot. to Set Aside J. at 5. Shafer had an 6 incentive and was able to discover the alleged misrepresentation in order to fully present 7 her case, but failed to do so. See In re M/V Peacock, 809 F.2d at 1405. 8 In her Motion to Set Aside Judgment, Shafer makes the conclusory allegation that 9 “[b]ecause of Skyline’s misrepresentations,” she was unable to present conclusions 10 regarding Skyline’s alleged ability to back up her laptop and hard drive. Mot. to Set Aside 11 J. at 11. But Shafer does not explain how these misrepresentations prevented her from 12 presenting her conclusions, given that she did present the conclusion in her Opposition to 13 the Motion for Sanctions that she believed Skyline had a backup of the information on her 14 Skyline laptop and hard drive. See R. & R. at 9. 15 Furthermore, as discussed below, Skyline’s representations about its inability to 16 remotely back up Shafer’s laptop were not determinative as to the sanctions. See generally 17 R. & R. (making no mention of the Misley Declaration). Thus, Shafer was not prevented 18 from fully and fairly presenting her opposition to sanctions. See Sathianathan, 2009 WL 19 537158, at *5. 20 D. Kollins Declaration’s Effect on the Judgment 21 Even if the Kollins Declaration were proof of fraud or misrepresentation by 22 Skyline, it would not have any effect on the judgment. Where there is evidence of fraud, 23 the judgment will only be set aside if the alleged misconduct affects the judgment. See 24 Alexander, 882 F.2d at 425; see also Perez v. Rash Curtis & Assocs., No. 4:16-cv-03396- 25 YGR, 2020 WL 1904533, at *12 (N.D. Cal. Apr. 17, 2020). Under Rule 37(e), if a party 26 fails to take reasonable steps to preserve electronically stored information in anticipation or 27 in the midst of litigation and the information cannot be restored or replaced, a court may 1 the information’s use in the litigation.” Fed. R. Civ. P. 37(e). But a court may also 2 dismiss a case where a party “willfully deceived the court and engaged in conduct utterly 3 inconsistent with the orderly administration of justice.” Wyle v. R.J. Reynolds Indus., 4 Inc., 709 F.2d 585, 589 (9th Cir. 1983). “Destruction of evidence is considered willful 5 spoliation when a party has some notice that documents were potentially relevant to 6 litigation before they were destroyed.” R. & R. at 19 (citing Leon v. IDX Sys. Corp., 464 7 F.3d 951, 959 (9th Cir. 2006)). 8 Even if the Court were to assume that Skyline could have restored or replaced the 9 information on Shafer’s Skyline laptop—which is wholly inconsistent with Skyline’s 10 actions, such as providing a hard drive for Shafer to back up the information on her 11 computer and requesting that she preserve all evidence on her computer in anticipation of 12 litigation—Shafer still willfully deceived the Court and willfully spoliated evidence—from 13 her laptop and other sources. Id. at 22 (noting that Shafer engaged in “willful evidentiary 14 spoliation” and deliberately engaged in “deceptive practices that undermine[d] the integrity 15 of judicial proceedings”). Shafer, a lawyer, not only wiped the laptop of data after Skyline 16 asked her to preserve all evidence, but also deleted all of her text message and email 17 communications with Onisick and Xentaurs, offered conflicting testimony regarding the 18 fate of the Skyline laptop and hard drive, and stonewalled Skyline in her deposition. Id. at 19 13, 17–19. These actions are sufficient under the circumstances to support a dismissal of 20 the case. See id. at 22 (“[T]he combination of willful evidentiary spoliation . . . attended 21 with such wildly inconsistent, and patently false, testimony by a private party who is a 22 licensed attorney and an officer of the courts, warrants no lesser sanction”); see also Wyle, 23 709 F.2d at 589; Anheuser-Busch, Inc. v. Nat. Beverage Distribs., 69 F.3d 337, 355 24 (holding that dismissal of the case was an appropriate sanction where the opposing party 25 provided conflicting testimony regarding the fate of documents relevant to the case and 26 withheld the documents from the moving party in discovery). 27 Because the Kollins Declaration would have no effect on the judgment and the 1 || Court sees no reason to set aside judgment. See Alexander, 882 F.2d at 425. 2 || IV. CONCLUSION 3 For the foregoing reasons, the Court DENIES the Motion to Set Aside Judgment. 4 IT IS SO ORDERED. a 5 Dated: June 29 , 2021 CHARLES R. BREYER 6 United States District Judge 7 8 9 10 11 3 12
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