Warner Records Inc v. Charter Communications, Inc.

District Court, D. Colorado·Decided May 18, 2022·No. 1:19-cv-00874·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Senior Judge R. Brooke Jackson

Civil Action No. 19-cv-00874-RBJ-MEH

WARNER RECORDS INC., et al

Plaintiffs,

v.

CHARTER COMMUNICATIONS, INC.,

Defendant.

ORDER on PENDING MOTIONS (3)

This order addresses pending non-dispositive pretrial motions except Rule 702/Daubert motions. The background for this case has been summarized in several other orders and is not repeated here. A. Plaintiffs’ Motion for Spoliation Sanctions, ECF No. 594 (592), and

B. Charter’s Motion for Curative Measures and Sanctions for Plaintiffs’ Spoliation of Evidence, ECF No. 595 (593). A hearing would not materially assist the Court in resolving the issues, and therefore, plaintiffs’ request for a hearing is denied. 1. Plaintiff’s Motion. Plaintiffs assert that despite a March 23, 2016 notice of claims letter, Charter failed to implement a litigation hold. As a result, Charter permitted the deletion of “potentially relevant” emails of 33 custodians and attempted to conceal the failure. In addition, Charter deleted ticket data from the Charter Abuse Tracking System (“CATS”), resulting in plaintiffs’ being able to identify the infringing Charter subscriber for only 13% of plaintiffs’ 704,355 notices of infringement. Plaintiffs ask the Court to sanction the alleged misconduct by precluding Charter from arguing at trial that it lacked knowledge of the accuracy of plaintiffs’ infringement notices; precluding Charter from disputing the accuracy of plaintiffs’ identification of repeat infringers;

precluding Charter from disputing plaintiffs’ extrapolation of information about unidentified subscribers from the ticket data that was produced; and instructing the jury that Charter spoliated evidence, and that they should infer that the missing information would have been unfavorable to Charter. See ECF No. 592 at 1-3. Defendant responds that it took reasonable steps to preserve documents for anticipated copyright litigation such as plaintiffs’ claims by issuing its “Mingus Hold” in December 2015. Some emails that were inadvertently deleted in December 2018 were available from other sources. Further, Charter claims that plaintiffs have no evidence that Charter intended to deprive them of relevant information, and that they are speculating that there is relevant evidence that plaintiffs do not have. ECF No. 633 at 1. Charter states that deletion of data from CATS was

done pursuant to its regular retention schedule before the Mingus hold and Charter’s notice of this litigation. Id. at 1-2. In reply, plaintiffs claims that the Mingus Hold was only intended to apply to claims of Mingus Music Werkshop, not to plaintiff’s claims; and that, in any event, Charter closed the hold when it failed to migrate the hold to its new legal hold system in 2017. Even if that failure was inadvertent, it shows that Charter did not take reasonable steps to preserve evidence. Plaintiffs dispute that lost emails were available through other sources. ECF No. 680 at 1-6. They assert that Charter acted with intent to deprive them of relevant information, and they argue that they were prejudiced if there was even a reasonable possibility that the lost evidence would have been favorable to them. Id. at 6-7. Plaintiffs state that the CATS data was on hold as early as 2012, and that emails were preserved under that hold at least until 2017, i.e., they were on hold in 2016 when plaintiffs notified Charter of their claims. Id. at 8. They assert that they were prejudiced because they only received between 5.5 and 7.6 percent of the data, and statistical extrapolation

by plaintiffs’ expert is not as good as having the evidence in hand. Id. at 10. 2. Defendant’s Motion. Charter claims that in 2011 plaintiffs retained MarkMonitor, Inc. to scan peer-to-peer networks for suspected copyright infringement and to generate infringement notices to Internet Service Providers, ultimately for use in litigation. However, only “helpful fragments” of the MarkMonitor evidence were retained. Plaintiffs’ effort to recreate missing evidence in 2016 was “no remedy.” ECF No. 593 at 1-11. Charter claims to have been prejudiced, invoking the same “reasonable possibility” standard on which plaintiffs relied in their motion. Id. at 11-12. “At a minimum,” the Court should preclude plaintiffs from presenting the materials created in plaintiffs’ 2016 Download project; permit Charter to present evidence of plaintiffs’ spoliation to

the jury; and give an adverse inference instruction. Id. at 13-14. Plaintiffs respond that MarkMonitor retained everything required by “relevant contracts” that was necessary for sending infringement notices. Plaintiffs did not attempt to recreate missing evidence in 2016. They deleted some documents “in ordinary course” and gathered other files with the same “hash” value as the infringing files as to which plaintiffs gave notice from 2012 to 2015. ECF No. 632 at 1-2. They claim that rulings in the Sony v. Cox case show that their retention efforts were reasonable. Moreover, there is no prejudice from deletion of the source code MarkMonitor used because Charter has copies of the actual files downloaded (and in any event MarkMonitor “recently” located some missing source code). Id. at 3. Exclusion of everything from the 2016 download project would be excessively punitive because plaintiffs rely heavily on that information. Id. Defendant replies that plaintiffs’ “litany of excuses for why they are not accountable for spoliation” should not be condoned. ECF No. 682.

3. Magistrate Judge Recommendation. Given the extraordinary number of discovery disputes in this case, the Court sought the assistance of United States Magistrate Judge Michael E. Hegarty and Special Discovery Master (now District Judge) Regina Rodriguez in managing the discovery. Both of them were intimately involved in the discovery process. I sought Judge Hegarty’s assistance again in light of the volume of paper submitted with the parties’ respective spoliation motions.1 In his initial recommendation Judge Hegarty found it to be undisputed that both sides had failed to preserve some relevant information. However, he found a “practical equilibrium” between the parties as to whether the lost information was materially prejudicial to the complaining party and whether there was bad faith or other culpability. He also questioned

whether the requested relief would result in a distracting sideshow at trial and concluded that this Court, as trial judge, would need to address that question. ECF No. 718 at 2-3. Judge Hegarty found that in December 2018 deleted relevant emails of 18 or 19 custodians. He traced the history of the “Mingus Hold” and Charter’s change of vendors for litigation holds in the 2016-17 timeframe. Due to inadequate instructions to a company called Proofpoint, many of the Mingus Hold documents were deleted in 2018. However, plaintiffs did

1 Plaintiffs’ 15-page motion has 35 exhibits comprising 3364 pages. Defendant’s 16-page response has 103 exhibits (564 pages). The reply is 10 pages with 9 exhibits (305 pages). Defendant’s motion is 15 pages with 24 exhibits (863 pages); response 20 pages with 18 exhibits (207 pages); and reply 11 pages) with 4 exhibits (22 pages). The parties might have unlimited manpower and resources at their disposal, but they seem to be oblivious as to whether the magistrate judge or the Court has the time to read and patience to evaluate all of this material. not establish “calculated wrongdoing,” as opposed to negligence, warranting any remedy beyond what the magistrate judge or the special master had already imposed. Nor did plaintiffs establish material prejudice; in particular, they did not show that the emails that do remain do not paint a full picture. Id. at 3-4. “The discovery in this case has been colossal, probably beyond

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Warner Records Inc v. Charter Communications, Inc., (D. Colo. 2022).

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