Dispute Over Scope of Preservation Obligation Leads to Partial Sanctions For Now: eDiscovery Case Law
In E.E.O.C. v. GMRI, Inc., No. 15-20561-CIV-LENARD/GOODMAN (S.D. Fla. Nov. 1, 2017), Florida Magistrate Judge Jonathan Goodman, in a very lengthy and detailed order, denied in part and granted in part the plaintiff’s motion for sanctions for spoliation of paper applications, interview booklets, and emails. Judge Goodman did not grant the request for most-severe type of relief sought – permissible inferences at the summary judgment and trial stages – but did rule that the plaintiff could “present evidence of the purportedly destroyed and/or missing paper applications, interview booklets and guides, and emails to the jury” and “argue to the jury that Seasons 52 acted in bad faith (as defined by Rule 37(e)(2))”, which could lead to the jury inferring that the lost ESI was unfavorable to the defendant.
In this age discrimination case filed by the Equal Employment Opportunity Commission (EEOC) against the defendant owner of a chain of restaurants, the investigation by the EEOC began as an investigation of two employee complaints against the defendant’s Coral Gables restaurant location in late 2010. At that time, the EEOC notified Seasons 52 (the restaurant chain owned by the defendant) of the charges and explained the EEOC’s recordkeeping regulations. Then, on August 31, 2011, the EEOC issued an “expansion letter” and notified Seasons 52 that it was expanding the investigation to include Seasons 52’s hiring practices throughout the nation as they affect a class of individuals, applicants for employment, because of their ages. The EEOC also sent a follow-up letter, dated the next day, which requested additional information and which referenced “expansion” of the case. In July 2013, the EEOC issued Letters of Determination finding that Seasons 52 had engaged in age discrimination and filed its complaint in February 2015.
However, there was dispute over the August 31 2011 letter, which the defendant, (during an October 11, 2017 evidentiary hearing) claimed it never received. The defendant acknowledged it did receive the September 1 2011 letter. Nonetheless, the defendant contended that it was under a duty to preserve for only one restaurant in Coral Gables because the two complaints that triggered the EEOC investigation concerned that sole location. However, the plaintiff contended that Seasons 52 had a duty to preserve for all restaurants in the country because the scope of the investigation expanded into a national investigation encompassing all Seasons 52 restaurants. So, while the defendant issued a litigation hold in Coral Gables in December 2010, it did not issue litigation holds for other locations until at least May 2015. As a result, the defendant failed to preserve paper applications, interview booklets and emails in most of its locations (the order has WAY more detail on the extent of the failure to preserve).
Stating that the plaintiff “has come up empty handed”, the defendant filed a summary judgment motion and the plaintiff filed its motion for sanctions shortly thereafter, which the defendant contended was a last minute attempt to save the case.
Judge Goodman began by referencing a song from John Hiatt, who wrote a song released in 1995 called Shredding the Document, as being “at the heart of the sanctions motion being considered here”. He rejected the defendant’s argument that the plaintiff’s motion was in direct response to the defendant’s summary judgment motion, noting that it was filed only two days after and it was “highly likely” that the plaintiff began preparing the sanctions motion long before it received the defendant’s summary judgment motion.
With regard to the dispute over the August 31 2011 letter, Judge Goodman, observing that “Seasons 52’s witnesses unequivocally testified that they never received it and that their records and databases do not contain it”, that “they concede receipt of other letters” and that the zip code on the letter was incorrect, ruled: “The EEOC has not established by a preponderance of the evidence that Seasons 52 received the so-called August 31, 2011 expansion letter.”
However, noting that “The September 1, 2011 letter made explicit reference to an ‘expansion’ of the case, and Seasons 52 was regularly forwarding information about 10 restaurants and then added another restaurant…to the ongoing production”, Judge Goodman found that “Seasons 52 was therefore under a duty to preserve relevant materials for those 11 restaurants” and found their “lack of logical follow-through to be unacceptable.”
Noting that “the EEOC’s expert witness was still able to reach conclusions even without certain paper applications and interview booklets”, Judge Goodman determined that “some prejudice” had occurred, but that “Seasons 52 certainly has a logical argument that the missing materials were not critical or crucial to the EEOC’s case, which is why the Undersigned is not now granting the EEOC harsh-type sanctions like a permissible adverse inference.” As a result, Judge Goodman did not grant the request for most-severe type of relief sought – permissible inferences at the summary judgment and trial stages – but did rule that the plaintiff could “present evidence of the purportedly destroyed and/or missing paper applications, interview booklets and guides, and emails to the jury” and “argue to the jury that Seasons 52 acted in bad faith (as defined by Rule 37(e)(2))”, which could lead to the jury inferring that the lost ESI was unfavorable to the defendant.
So, what do you think? Should juries decide spoliation is unfavorable to a party without judicial instructions to that effect? Please share any comments you might have or if you’d like to know more about a particular topic.
Case opinion link courtesy of eDiscovery Assistant.
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