Civil No. 07–2502 MJD/AJB
January 27, 2011
Andrea R. Ostapowich, Beth E. Bertelson, Bertelson Law Offices, PA, Dorene R. Sarnoski, Dorene R. Sarnoski Law Office, Minneapolis, MN, Daniel B. Kohrman, Laurie A. McCann, Thomas W. Osborne, AARP Foundation Litigation, Washington, DC, for Plaintiffs.
Kathryn Mrkonich Wilson, Marko J. Mrkonich, Andrew J. Voss, Jeffrey A. Timmerman, Susan K. Fitzke, Littler Mendelson, PC, Minneapolis, MN, Allan G. King, Littler Mendelson, PC, Dallas, TX, for Defendants.
REPORT AND RECOMMENDATION ON MOTION FOR SANCTIONS RELATED TO NON–PRESERVATION OF EVIDENCE
*1 This matter is before the Court, Chief Magistrate Judge Arthur J. Boylan, on plaintiffs' motion for sanctions against the defendant for failing to preserve computer stored information [Docket No. 267]. Hearing was held on August 24, 2010, at the U.S. Courthouse, 316 North Robert Street, St. Paul, Minnesota 55101. Plaintiff was represented at the hearing by Dorene R. Sarnoski, Esq., and Beth E. Bertelson, Esq. Defendant was represented by Marko J. Mrkonich, Esq., and Andrew Voss, Esq. The motion has been referred to the magistrate judge for report and recommendation pursuant to 28 U.S.C. § 636.
Based upon the file and documents contained therein, including memorandums, affidavits, and exhibits, and in consideration of arguments presented at hearing, it is hereby Recommended that plaintiffs' Motion for Sanctions Related to the Non–Preservation of Evidence be denied [Docket No. 267].
Pursuant to Local Rule 72.2(b), any party may object to this Report and Recommendation by filing with the Clerk of Court, and by serving upon all parties, written objections which specifically identify the portions of the Report to which objections are made and the bases for each objection. This Report and Recommendation does not constitute an order or judgment from the District Court and it is therefore not directly appealable to the Circuit Court of Appeals. Written objections must be filed with the Court before February 10, 2011.
Unless the parties stipulate that the District Court is not required by 28 U.S.C. § 636 to review a transcript of the hearing in order to resolve all objections made to this Report and Recommendation, the party making the objections shall timely order and file a complete transcript of the hearing within ten days of receipt of the Report.
Defendant Seagate U.S. LLC, et al. (Seagate) manufactures computer hard drives and data storage solutions. The majority of plaintiffs are individuals who were terminated in 2004, in connection with a Reduction in Force (RIF) plan. Others retired from the company that same year pursuant to a Special Incentive Retirement Plan (SIRP). Plaintiffs commenced this action in May 2007, as a putative class action alleging violations of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq.
James Peterson and David Olson were employees at Seagate's Normandale facility in Bloomington, Minnesota, when they were terminated in July 2004. Thereafter, both of them promptly filed EEOC charges alleging age discrimination and disability claims. Each of the charges generally asserted that claims were brought on each claimant's own behalf and on behalf of “others similarly situated.” The EEOC issued a probable cause determination in November 2006, finding probable cause to believe that Seagate engaged in age discrimination with respect to an undefined class of employees. In addition to Peterson and Olson, the May 25, 2007, complaint named 19 other claimants as named representatives. All save one of the named plaintiffs were terminated at part of the RIF plan and all were employed at either the Normandale facility or Seagate's Shakopee, Minnesota, facility. The initial complaint expressly states that the plaintiffs were employed and terminated in Minnesota; EEOC charges were cross-filed with the Minnesota Department of Human Rights; and defendant Seagate is defined to cover entities that employed plaintiffs at the time of termination from Minnesota facilities. On May 30, 2008, plaintiffs moved for authorization to provide notice of this lawsuit to a nationwide class of employees.
*2 In the motion now before the court the plaintiffs seek sanctions against Seagate for the company's failure to preserve evidence relating to the 2004 RIF/SIRP. Specifically, plaintiffs argue that e-mails contained on computers used by nine particular individuals was improperly purged following each of those employee's separation from the company.
In addition, some employees stored data on an network “I” drive. Plaintiffs contend that the nine individuals were employed by Seagate in key decision-making capacities with regard to the RIF/SIRP, and that e-mails on their computers, as well as “I” drive data, would be relevant and discoverable in this age discrimination action. Defendant Seagate acknowledges that the requested discovery either no longer exists or, in the case of Colorado, Oklahoma, and Minnesota employees, could possibly be retrieved by search of backup tapes which may contain e-mails and “I” drive data of former employees from those locations.
Seagate asserts that the subject data was lost or made inaccessible as a result of normal policies and procedures whereby the computers used by former employees are recycled for use by other employees and e-mails are deleted approximately 30 days after separation. “I” drive data is likewise deleted from the network servers after a designated time period or when server storage limits are reached, depending upon the particular location.
Plaintiffs argue that Seagate was on notice of the likelihood of litigation, and was obligated to preserve pertinent evidence, as a consequence of the EEOC age discrimination charges brought by individual plaintiffs Peterson and Olson in September 2004, through which Seagate was advised that the claims were being filed on behalf on all persons similarly situated to those individuals. Plaintiffs also note the district court's prior finding that the EEOC charges were sufficient to put Seagate on notice of class claims as grounds for denying a motion to dismiss.
In the current motion the plaintiffs contend that Seagate's failure to preserve evidence constitutes spoliation of evidence for which the defendant should be sanctioned. The requested relief is an order directing defendants to search all back-up servers, and other sources for RIF/SIRP materials contained of the computers of the nine referenced employees, at Seagate's expense. Plaintiff's further seek prompt production, identification, and indexing of such materials, and leave to request additional sanctions.
Seagate, on the other hand, contends that the Peterson and Olson EEOC actions did not give the defendant notice of nation-wide claims and did not give notice of potential claims by persons who had signed releases. Those two individuals were both employed at the Normandale facility in Minnesota, and neither their EEOC charges
nor the EEOC determinations
defined the similarly situated employees or otherwise described a class that clearly extended beyond the Normandale facility. Furthermore, the complaint in this district court action, filed May 25, 2007, made no mention of a nationwide class of former Seagate employees, but rather, suggested that the potential class did not include employees outside of Minnesota. There was essentially no notice of an intent to certify a nationwide class prior to plaintiffs' motion to authorized class notice in May 2008, well after any evidence subject to this motion had been permissibly deleted or archived pursuant to company data retention policy. Defendant contends that under these circumstances the inaccessibility of the material should not be construed as spoliation, defendants should be not subjected to punishment, and plaintiffs are improperly presenting a discovery motion under the guise of a motion for sanctions in order to shift the monetary burden for searching backup storage onto Seagate. In any event, defendant contends that plaintiffs have not identified any relevant documents or category of data that they do not already possess.
*3 “A spoliation-of-evidence sanction requires ‘a finding of intentional destruction indicating a desire to suppress the truth.’ “ Greyhound Lines, Inc., v. Wade, 485 F.3d 1032, 1035 (8Cir.2007) (quoting Stevenson v. Union Pac. R.R. Co., 354 F.3d 739, 746 (8th Cir.2004)). Moreover, imposition of sanctions for destruction of evidence requires a finding of prejudice to the opposing party. Id.
at 748). Justification for spoliation sanctions is typically provided by circumstantial evidence because the requisite intent is rarely shown by direct evidence, Greyhound
at 1035, and prejudice is established by the nature of the evidence. Stevenson
Plaintiffs in this instance have provided no persuasive evidence, circumstantial or otherwise, to establish that Seagate intentionally destroyed data or made materials inaccessible for the purpose of suppressing the truth and should be sanctioned for that reason. In addition, plaintiffs have not adequately defined the nature of the expected evidence to the extent necessary to establish prejudice. All of the employees whose e-mails and “I” drive data the plaintiffs now seek to recover were separated from Seagate before this lawsuit was commenced, and plaintiffs have not rebutted the defendant's showing that the computer information was deleted or archived for the purposes of complying with company policy and/or making computer assets available to other employees. As to plaintiffs' insistence that Seagate was on notice of pending litigation and had an obligation to retain relevant data as a result of EEOC proceedings, the record does not support the contention that the defendant should have been aware of a looming nationwide class action with respect to a matter that did not patently appear to reach outside of Minnesota, even as the complaint in this matter was prepared and filed in May 2007. The court concludes that there is no merit to plaintiffs' spoliation claim and therefore no basis for sanctions.
Defendant contends that plaintiffs elected to approach this discovery issue in the context of a sanctions motion rather that by motion to compel discovery, and that the plaintiffs' objective in making this motion was simply to shift the financial burden for discovery of electronically stored information that is not readily accessible.
Rule 26(b)(2) of the Federal Rules of Civil Procedure states:
(B) Specific Limitations on Electronically Stored Information.
A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonable accessible because of undue burden or cost. If that showing is made the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)©). The court may specify condition for the discovery.
*4 Although accessibility and cost issues relating to production of computer-stored materials have been explicitly recognized and addressed in the motion for sanctions, plaintiffs have not argued this matter in the context of either a motion to compel discovery or a motion for protective order regarding the discovery of e-mails and “I” drive data. Consequently, the court declines to rule on the matter as a discovery motion. Nonetheless, the court expressly finds that the e-mails and “I” drive data that is under consideration here is electronically stored data that is not reasonably accessible because of undue burden or cost. To the extent that data has been deleted or is no longer retrievable by any means, such unavailability is the result of Seagate's usual and normal computer data retention policy; the unavailability was not a result of a concerted effort to suppress evidence or purge data pertinent to litigation; and Seagate was not under any duty to preserve the evidence in a readily accessible format at the time it was deleted or stored on backup tapes. See
Best Buy Stores, L.P. v. Developers Diversified, 247 F.R.D. 567, 569–71 (8th Cir.2007).
The nine former Seagate employees are identified as: (1) Peter Segar, a vice president located at the Shakopee, Minnesota, facility, whose employment ended in September 2004; (2) Joseph Clay, an HR business partner located in Longmont, Colorado, whose employment ended in December 2004; (3) Ken Davidson, a human resources vice president located in Oklahoma City, Oklahoma, whose employment ended in January 2005; (4) John Weyandt, a vice president located in Shakopee, Minnesota, whose employment ended in August 2005; (5) Jeremy Tennenbaum, a vice president located in Scotts Valley, California, whose employment ended in August 2005; (6) Dennis Brown, a vice president located in Milpitas, California, whose employment ended in September 2005; (7) Mark Stuchlik, a human relations director located in Oklahoma City, Oklahoma, whose employment ended in November 2005; (8) Kevin Eassa, a vice president located at Milpitas, California, whose employment ended in February 2007; and (9) Dallas Meyer, a vice president located in Shakopee, Minnesota, whose employment ended in February 2007.
See Decl. of Terry Kennedy [Docket No. 280]; Decl. of Greg Lafferty [Docket No. 281]; Decl. of Curt Rubald [Docket No. 283]; and Decl. of John Sosa–Trustham [Docket No. 284] for particulars regarding accessibility of particular materials.
Mem. Opinion and Ord. dated November 20, 2007, pp. 8–9 [Docket No. 46]. The motion to dismiss was based upon the arguments that, unlike Peterson and Olson, the 19 subject plaintiffs had not exhausted EEOC administrative remedies and had signed release agreements. [Docket Nos. 3 and 5]. Of course, the Order itself could not have put defendant of notice of need to preserve evidence that had already been made inaccessible. Furthermore, nothing in the decision indicates that the scope of the putative class was nationwide, and plaintiffs' memorandum in opposition to the motion to dismiss suggests only that the class consisted of former employees at the Normandale and Shakopee facilities.
[Docket No. 223, Ex. U and V].
[Docket No. 278] Aff. of Susan K. Fitzke, Ex. 1 and 2.
End of Document.