eDiscovery Assistant

City of Colton v. Am. Promotional Events, Inc.

2011 WL 13223947 (C.D. Cal. 2011)

September 30, 2011

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Summary

The Special Master found that the EPA had a duty to issue litigation hold letters concerning all evidence related to the Rialto-Colton Basin by July 12, 2006. The Special Master also found that the EPA had failed to do so, resulting in the potential destruction of relevant evidence. As a result, the Special Master ordered the EPA to produce the litigation hold letters and documents, including any ESI, to Goodrich by October 28, 2011.

Additional Decisions

CITY OF COLTON, Plaintiff,
v.
AMERICAN PROMOTIONAL EVENTS, INC., et al., Defendants.

CASE NO. ED CV 09-01864 PSG (SSx)Consolidated Case Nos.: CV 05-01479 JFW (Ex), CV 09-06630 PSG (SSx), CV 09-06632 PSG (SSx), CV 09-07501 PSG (SSx), CV 09-07508 PSG (SSx), CV 10-00824 PSG (SSx)

United States District Court, C.D. California, Western Division

Filed October 06, 2011

Signed September 30, 2011

Counsel

Jeffrey D. Dintzer, Elizabeth Burnside, Holly Biondo, Dana Craig, Kimberly A. Nortman, Brett H. Oberst, Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, CA 90071-3197, (213) 229-7000 * (213) 229-7520 Fax, jdintzer@gibsondunn.com, eburnside@gibsondunn.com, hbiondo@gibsondunn.com, dcraig@gibsondunn.com, boberst@gibsondunn.com, Attorneys for Goodrich Corporation.
Sallie Lux, Brouse McDowell, 388 South Main Street, Suite 500, Akron, OH 44311, (330) 535-5711 * (330) 253-8601 Fax slux@brouse.com, Attorney for Goodrich Corporation.
Scott A. Sommer, Andrew D. Lanphere, Martin R. Sul, Christine A. Scheuneman, Pillsbury Winthrop Shaw Pittman LLP, 50 Fremont Street, P.O. Box 7880, San Francisco, CA 94120-7880, (415) 983-1000 * (415) 983-1200 Fax, scott.sommer@pillsburylaw.com, andrew.lanphere@pillsburylaw.com, martin.sul @pillsburylaw.com, christine.scheuneman@pillsburylaw.com, Attorneys for City of Rialto and Rialto Utility Authority.
Mark E. Elliott, Pillsbury Winthrop Shaw Pittman LLP, 725 South Figueroa Street, Suite 2800, Los Angeles, CA 90017-5406, (213) 488-7100 * (213) 629-1033 Fax, mark.elliott@pillsburylaw.com, Attorneys for City of Rialto and Rialto Utility Authority.
Robert D. Wyatt, James L. Meeder, Henry Lerner, Allen Matkins Leck Gamble Mallory & Natsis LLP, Three Embarcadero Center, 12th Floor, San Francisco, CA 94111, (415) 837-1515 * (415) 837-1516 Fax, rwyatt @allenmatkins.com, jmeeder@allenmatkins.com, hlerner@allenmatkins.com, Attorneys for Black & Decker Inc.; Emhart Industries, Inc., Kwikset Corporation, Kwikset Locks, Inc.
Michael R. Farrell, Allen Matkins Leck Gamble Mallory & Natsis LLP, 515 S. Figueroa Street, 7th Floor, Los Angeles, CA 90071, (213) 622-5555 * (213) 620-8816 Fax, mfarrell@allenmatkins.com, Attorneys for Black & Decker Inc.; Emhart Industries, Inc., Kwikset Corporation, Kwikset Locks, Inc.
Joseph W. Hovermill, Joseph L. Beavers, Amanda A. Neidert, Miles & Stockbridge, P.C., 10 Light Street, Baltimore, MD 21202, (410) 385-3442 * (410) 385-3700 Fax, jhovermill@milesstockbridge.com, jbeavers@milesstockbridge.com, aneidert@milesstockbridge.com, Attorneys for Black & Decker Inc.; Emhart Industries, Inc., Kwikset Corporation, Kwikset Locks, Inc.
Daniel J. Coyle, Steven H. Goldberg, Jennifer Hartman King, Leslie Fredrickson, DOWNEY BRAND LLP, 621 Capitol Mall, 18th Floor, Sacramento, CA 95814, (916)444-1000 (916) 444-2100 Fax, dcoyle@downeybrand.com, sgoldberg @downeybrand.com, jhking@downeybrand.com, lfredrickson@downeybrand.com, Attorneys for Defendant, Counter-Claimant, Cross-Claimant, and Third Party Claimant AMERICAN PROMOTIONAL EVENTS, INC.—WEST, for itself and as successor by name change or merger to Defendants AMERICAN PYRODYNE CORPORATION, PYRODYNE AMERICAN CORPORATION, AMERICAN WEST, INC., AMERICAN WEST MARKETING, INC., PYRODYNE AMERICAN CORPORATION, and FREEDOM FIREWORKS, INC.
Timothy V.P. Gallagher, Martin N. Refkin, Thomas A. Bloomfield, Emil Macasinag, Elizabeth Paranhos, Jill H. Van Noord, Megan Meadows, Gallagher & Gallagher, a Professional Corporation, 1925 Century Park East, Suite 950, Los Angeles, CA 90067, (310) 203-2600 * (310) 203-2610 Fax, timg@thegallaghergroup.com, refkin@thegallaghergroup.com, tbloomfield @thegallaghergroup.com, emil@thegallaghergroup.com, eparanhos @thegallaghergroup.com, jvannoord@thegallaghergroup.com, meadows @thegallaghergroup.com, Attorneys for County of San Bernardino; Robertson's Ready Mix, Inc.; Edward Stout; Edward Stout as the Trustee of the Stout-Rodriquez Trust, aka The Schulz Family Trust; Elizabeth Rodriquez; John Callagy as Trustee of the Fredricksen Children's Trust Under Trust Agreement Dated February 20, 1985; John Callagy as Trustee of the E.F. Schulz Trust; Linda Fredricksen; Linda Fredricksen as Trustee of the Walter M. Pointon Trust Dated 11/19/1991; Linda Fredricksen as Trustee of the Michelle Ann Pointon Trust Under Trust Agreement Dated February 15,1985; Linda Fredricksen as Trustee of the E.F. Schulz Trust; John Callagy; Mary Mitchell; Jeanine Elzie; Stephen Callagy; Michelle Ann Pointon; Anthony Rodriquez; Zambelli Fireworks Manufacturing Company, Inc.; Zambelli Fireworks Company, aka Zambelli Fireworks Internationale; and Zambelli Fireworks Manufacturing Company.
Penelope Alexander-Kelley, Jean-Rene Basle, Office of the County Counsel, County of San Bernardino, 385 North Arrowhead Avenue, San Bernardino, CA 92415-0140 (909) 387-5435 * (909) 387-5462 Fax palexander-kelley @cc.sbcounty.gov jbasle@cc.sbcounty.gov, Attorneys for County of San Bernardino and Robertson's Ready Mix, Inc.
Allan E. Ceran, Burke Williams & Sorensen, LLP, 444 S. Flower Street, Suite 2400, Los Angeles, CA 90071, (213) 236-0600 * (213) 236-2700 Fax, aceran @bwslaw.com, Amy Hoyt, Burke Williams & Sorensen, LLP, 2280 Market Street, Suite 300, Riverside, CA 92501-2121, (951) 788-0100 * (951) 788-5785 Fax, ahoyt @bwslaw.com, Attorneys for Broco, Inc. and J.S. Brower & Associates.
Thomas N. Jacobson, Attorney at Law, 3750 Santa Fe Avenue, Suite 105, Riverside, CA 92507, (951) 682-7882 * (951) 682-7884 Fax, tom @tomjacobsonlaw.com, Attorney for Robertson's Ready Mix, Inc.
John E. Van Vlear, Daniel S. Kippen Voss, Cook & Thel LLP, 895 Dove Street, Suite 450, Newport Beach, CA 92660-2998, (949) 435-0225 * (949) 435-0226, Fax vv@vctlaw.com dkippen@vctlaw.com, Attorneys for Thomas O. Peters, The 1996 Thomas O. Peters and Kathleen S. Peters Revocable Trust, Stonehurst Site LLC.
Brian L. Zagon, Marc A. Shapp, Hunsucker Goodstein and Nelson PC, 3717 Mt. Diablo Blvd., Suite 200, Lafayette, CA 94549, (925) 284-0840 * (925) 284-0870 Fax, bzagon@hgnlaw.com, mshapp@hgnlaw.com, Attorneys for Pyro Spectaculars, Inc. and Astro Pyrotechnics, Inc.
David C. Solinger, Hunsucker Goodstein and Nelson PC, 333 S. Grand Avenue, 25th Floor, Los Angeles, CA 90071, (213) 943-1370 * (213) 402-3939 Fax, dsolinger@hgnlaw.com, Attorneys for Pyro Spectaculars, Inc. and Astro Pyrotechnics, Inc.
Steven J. Renshaw, Christine A. Renshaw, Renshaw & Associates, APLC, 5700 Ralston Street, Suite 301, Ventura, CA 93003, (805) 289-9447 * (805) 289-9402 Fax, srenshaw@renshawlegal.com, carenshaw@renshawlegal.com Attorneys for Trojan Fireworks.
Erik S. Mroz, Hunsucker Goodstein and Nelson PC, 1 North Pennsylvania St., Suite 1310, Indianapolis, IN 46204, (317) 633-6780 * (317) 633-6725 Fax, emroz @hgnlaw.com, Attorneys for Pyro Spectaculars, Inc. and Astro Pyrotechnics, Inc.
Brendan W. Brandt, Keith A. Kelly, Varner & Brandt, LLP, 3750 University Avenue, Suite 610, Riverside, CA 92501, (951) 274-7777 * (951) 274-7770 Fax, bwb@varnerbrandt.com, kak@varnerbrandt.com, Attorneys for Ken Thompson, Inc. and Rialto Concrete Products, Inc.
Bradley P. Boyer, Jad T. Davis, Ropers, Majeski, Kohn & Bentley, 515 South Flower Street, Suite 1100, Los Angeles, CA 90071, (213) 312-2000 * (213) 312-2001 Fax, bboyer@ropers.com, jdavis@ropers.com, Attorneys for Zambelli Fireworks Manufacturing Company, Inc.; Zambelli Fireworks Company, aka Zambelli Fireworks Internationale; and Zambelli Fireworks Manufacturing Company.
Richard A. Dongell, Matthew Clark Bures, Christopher T. Johnson, Dongell Lawrence Finney, 707 Wilshire Blvd, 45th Floor, Los Angeles, CA 90017-3609, (213) 943-6100 * (213) 943-6101 Fax, rdongell@dlflawyers.com, mbures@dlflawyers.com, cjohnson@dlflawyers.com, Attorneys for Whittaker Corporation.
David R. Isola, Stephen B. Ardis, Reginald R. Schubert, Isola Law Group LLP, 405 W. Pine Street, Lodi, CA 95240, (209) 367-7055 * (209) 367-7056, disola@isolalaw.com, rschubert@isolalaw.com, Attorneys for Harry Hescox.
C. Robert Boldt, Steven Soule, Beth Marie Weinstein, Sierra Elizabeth, Kirkland & Ellis, 333 S. Hope Street, Los Angeles, CA 90017, (213) 680-8400 * (213) 680-8500 Fax, robert.boldt@kirkland.com, steven.soule @kirkland.com, beth.weinstein@kirkland.com, sierra.elizabeth@kirkland.com, Attorneys for General Dynamics Corporation and Raytheon Company.
Harland L. Burge, Law Offices of Harland L. Burge, 23193 La Cadena Drive, Suite 101, Laguna Hills, CA 92653, (949) 699-4162 * (949) 699-4166, bsdlaw @aol.com, mariabsdlaw@cox.net, Attorneys for Environmental Enterprises, Inc.
William W. Funderburk, Jr., Anna L. Cole, Castellon & Funderburk LLP, 811 Wilshire Boulevard, Suite 1025, Los Angeles, CA 90017-2606, (213) 623-7515 * (213) 532-3984 Fax, wfunderburk@candffirm.com, acole@candffirm.com, Attorneys for Edward Stout; Edward Stout as the Trustee of the Stout-Rodriquez Trust, aka The Schulz Family Trust; Elizabeth Rodriquez; John Callagy as Trustee of the Fredricksen Children's Trust Under Trust Agreement Dated February 20,1985; John Callagy as Trustee of the E.F. Schulz Trust; Linda Fredricksen; Linda Fredricksen as Trustee of the Walter M. Pointon Trust Dated 11/19/1991; Linda Fredricksen as Trustee of the Michelle Ann Pointon Trust Under Trust Agreement Dated February 15,1985; Linda Fredricksen as Trustee of the E.F. Schulz Trust; John Callagy; Mary Mitchell; Jeanine Elzie; Stephen Callagy; Michelle Ann Pointon; and Anthony Rodriquez.
Peter H. Weiner, Dennis S. Ellis, Tracy J. Egoscue, Nicholas J. Begakis, Paul Hastings LLP, 515 South Flower Street, Twenty-Fifth Floor, Los Angeles, CA 90071-2228, peterweiner@paulhastings.com, dennisellis @paulhastings.com, tracyegoscue@paulhastings.com, nickbegakis@paulhastings.com, Tel.: (213) 683-6000; Fax: (213)627-0705.
Christopher S. Riley, Barnes & Thornburg, 121 West Franklin Street, Suite 200, Elkhart, IN 46516, (574) 293-0681 * (574) 296-2535 Fax, Christopher.riley @btlaw.com, Attorneys for American West Explosives, Golden State Explosives, and ETI.
Daniel J. O'Hanlon, Danielle R. Teeters, Kronick Moskovitz Tiedemann & Girard, 400 Capitol Mall, 27th Floor, Sacramento, CA 95814, (916)321-4500 * (916)321-4555, dohanlon@kmtg.com, dteeters@kmtg.com, Attorneys for Fred Skovgard.
Rochelle L. Russell, Attorney, Environmental Defense Section, U.S. Department of Justice, 301 Howard Street, Suite 1050, San Francisco, CA 94105, (415) 744.6566 * (415) 744-6476 Fax, Rochelle.Russell@usdoj.gov, Attorneys for the United States of America and United States Department of Defense.
Stephen C. Lewis, Donald E. Sobelman, J. Thomas Boer, Estie M. Kus, Barg Coffin Lewis & Trapp, LLP, 350 California Street, 22nd Floor, San Francisco, CA 94104-1435, (415) 228-5400 * (415) 228-5450 Fax, scl@bcltlaw.com, des@bcltlaw.com, tjb@bcltlaw.com, emk@bcltlaw.com, Attorneys for The Ensifin-Bickford Company.
Michael C Augustim, Leslie Hill, Kim Smaczniak, Environment & Natural Resources Division, Environmental Defense Section, U.S. Department of Justice, P O Box 23986, Washington, DC 20026-3986, (202) 616-6519 * (202) 514-8865 Fax, michael.augustini@usdoj.gov, leslie.hill@usdoj.gov, kim.smaczniak @usdoj.gov, Attorneys for the United States of America and United States Department of Defense.
James R. MacAyeal, David Rosskam, Valerie K. Mann, Deborah A. Gitin, Bonnie A. Cosgrove, Environmental Enforcement Section, U.S. Department of Justice, P.O. Box 7611, Washington, DC 20044-7611, (202) 616-8777 * (202) 514-2583 Fax, jamie.macayeal@usdoj.gov, david.rosskam@usdoj.gov, valerie.mann@usdoj.gov, deborah.gitin@usdoj.gov, bonnie.cosgrove@usdoj.gov, Attorneys for the United States on behalf of the Environmental Protection Agency.
Michele Benson, Of Counsel, United States Environmental Protection, Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105, benson.michele @epa.gov, Attorneys for the United States on behalf of the Environmental Protection Agency.
Gene Tanaka, Best Best & Krieger LLP, 2001 N. Main Street, Suite 390, Walnut Creek, CA 94596, (925) 977-3300 * (925) 977-1870 Fax, gene.tanaka @bbklaw.com, Attorneys for Plaintiff City of Colton.
Danielle Sakai, Best Best & Krieger LLP, 3750 University Avenue, Suite 400, Riverside, CA 92502, (951) 686-1450 * (951) 686-3083, danielle.sakai @bbklaw.com, Attorneys for Plaintiff City of Colton.

Tassopulos, Venetta S., Special Master

[DISCOVER MATTER BEFORE SPECIAL MASTER] REPORT OF SPECIAL MASTER; ORDER GRANTING GOODRICH CORPORATION'S MOTION TO COMPEL THE UNITED STATES' DISCOVERY RESPONSES RELATING TO LITIGATION HOLDS AFTER FURTHER BRIEFING ON MOTION

*1 The Motion to Compel the United States' Discovery Responses Relating to Litigation Holds in the instant case is directed to the Special Master in the case, City of Colton v. American Promotional Events, Inc., et al., and Consolidated Actions CV 09-01864 PSG (SSx) in accordance with The Order Re Re-Designation of Venetta S. Tassopulos, Magistrate Judge, (Ret.), as Special Master.

I. Introduction and Background

On August 10, 2011. Goodrich Corporation (“Goodrich”) filed a Joint Stipulation seeking an Order compelling the United States of America (“United States”) to produce all documents responsive to Goodrich's Request for Production of Documents to the United States of America, Set Five (“Fifth Set of RFPs”) served March 24, 2011, and to provide substantive responses to Goodrich's Second Set of Interrogatories to the United States of America (“Second Set of Interrogatories”), also served on March 24, 2011. (Jt. Stip. At 9) A hearing was held on August 24, 2011. In its discovery requests Goodrich was seeking information about the United States EPA's issuance of litigation hold letters and any documents which would relate or refer to any litigation hold letters drafted or sent out by the United States EPA relating to the Rialto-Colton Basin. (Jt. Stip. At 11) The United States objected to both the Fifth Set of RFP's and the Second Set of Interrogatories in their entirety, both on grounds of relevance and attorney-client and attorney work product privileges. Goodrich argued that the identities of those who drafted litigation hold letters, the identities of any recipients of such letters, and the date such letters were disseminated was not privileged. Further, Goodrich argued any privilege attached to the content of any litigation hold letters had been waived because there was evidence that the United States has spoliated evidence in this case.

On August 30, the Special Master filed a Report of Special Master; Order Granting In Part Goodrich Corporation's Motion to Compel the United States' Discovery Responses Relating to Litigation Holds. (“Report of Special Master”) The Special Master ordered the United States to serve responses to Goodrich's Second Set of Interrogatories identifying the names of all individuals who participated in the drafting of any litigation hold letter, the names of all individuals or entities who received any litigation hold letter, and the dissemination date of any litigation hold letter relating to the Rialto-Colton Basin by September 12, 2011.” (Report of Special Master filed August 30, 2011, 4:2-5) The Special Master also ordered the United States to submit to the Special Master for in camera review all documents relating to EPA litigation hold, including letters identified in the Joint Stipulation as had been agreed at the hearing, (Id. 4:608)

The Special Master stated that further consideration of the claims asserted in Goodrich's Motion would be addressed after reviewing the documents which had been submitted and that the Special Master would then “determine the issues raised by Goodrich regarding the United States' document retention policy, the adequacy of the United States' notification about the duty to preserve evidence regarding this case, and the possible spoliation of evidence.” (Id. 3:24-26)

*2 On September 8, 2011, the United States submitted a letter to the Special Master on which Counsel of Record was copied stating that a comprehensive list of individuals and entities who had received copies of litigation hold notices would be provided by the United States in response to Goodrich's Second Set of Interrogatories. An attachment to the letter included ten items, the date of issuance and the author of each item, and Bates Range Numbers for the documents. The United States also submitted the ten items for in camera review.

After reviewing the United States' submission of litigation hold letters, the Special Master issued an Order Re Further Briefing Re Goodrich Corporation's Motion to Compel United States' Discovery Responses Relating To Litigation Hold. (“September 12, 2011 Order”) The Special Master ordered further briefing from both parties on the issue of when the EPA was required to preserve evidence potentially relevant to this litigation. The Special Master requested argument solely on “the particular issue concerning the date on which the EPA was required to preserve evidence in anticipation of litigation related to the Rialto-Colton Basin, as distinct from any issue concerning whether any material evidence relevant to the litigation was in fact spoliated.” (September 12, 2011 Order)

The Special Master has considered the Joint Stipulation and all of the other filings and case law related to the original motion, the arguments of counsel at the hearing of August 24, 2011, as well as the supplemental memoranda and replies, exhibits and case law submitted in response to the Special Master's request for further briefing.

II. Discussion

A. Legal Standard

The content of litigation hold letters is protected by the attorney-client and work product privileges. However, courts have allowed the disclosure of litigation hold instructions where the court makes a preliminary finding of potential document spoliation. Major Tours, Inc. v. Colorel, 2009 WL 241361 *2 (D. N.J. 2009), upheld at 720. Supp. 2d 587, 617-622 (D. N.J. 2010)

B. Evidence of Spoliation

In the Joint Stipulation, Goodrich argued that there was sufficient evidence of spoliation to compel the United States to disclose the content of its litigation hold letters. At the time, Goodrich's strongest case for spoliation involved certain “.sim” files related to a Vadoze Zone Model (“Model”) of the Rialto-Colton basin prepared by a contractor, CH2M Hill, for the EPA in 2006. (Declaration of Jeffrey Dintzer In Support of Goodrich Corporation's Motion to Compel the United States' Discovery Responses Relating to Litigation Holds, Exh. C) (“Dintzer Declaration”) The Model was ordered produced in a 2008 FOIA action brought by Goodrich. However, the Department of Justice informed Goodrich that although the “.sim” files related to the Model had been automatically generated during the running of a simulation of the Model, the files were not saved after the modeling work was completed. (April 30, 2009 letter from Beverly M. Russell to Jeffrey D. Dintzer and Michael K. Murphy; Dintzer Decl., Exh. M) Later, the Department of Justice informed Goodrich that CH2M Hill had conducted a search in its systems for back-up files. However, no back-up files had been saved. (June 5, 2011, letter from Beverly M. Russell to Jeffrey D. Dintzer and Michael K. Murphy; Dintzer Decl., Exh. N)

If this were true, it would clearly be sufficient to make a finding of spoliation, as the Model constitutes evidence which would be highly relevant to this case. However, in its portion of the joint stipulation in opposition to Goodrich's Motion, the EPA now claims that these files were not, in fact, destroyed. The EPA explained that the files were not generated automatically, as was originally thought, but had to be specifically run. (Declaration of Thomas Perina at Par. 15) At the time, the EPA claims that the “.sim” files were not run because of their size. Id. Therefore, the EPA claims that CH2M did not destroy any “.sim” files because they were never created in the first place. (Perina Decl., at Par. 16) The EPA further claims that using the Model itself, the files have been recreated exactly as they would have been if they had been created at the time, and that those files have been produced to Goodrich. (Perina Decl., at Pars 16-18)

*3 To bolster its claim of spoliation, Goodrich also points to the testimony of Keith Takata, a high level official in region 9 of the EPA, concerning his habit of occasionally disposing of documents relating to the Rialto-Colton basin if other identical documents existed in another file, on which he may have made some comments or notes which would have been thrown away with the document and not retrievable from other sources. (Deposition of Keith Takata, Volume I, 216:4-22; Dintzer Decl, Exh. T) Goodrich also points to the testimony of Kathleen Salyer, who testified that she used her own subjective criteria to delete emails from her files from 2003 to the present. (Deposition of Kathleen Salyer, Volume I, 134:2-19). Furthermore, Takata seemed unaware of any litigation hold letters related to the Rialto-Colton basin. (Deposition of Keith Takata, Volume I, 215:13-21)

At this time the Special Master cannot conclude that the EPA has spoliated documents in this case. Goodrich has not shown that the EPA has destroyed material evidence which it knew or should have known was relevant to the litigation.

C. Duty to Preserve Evidence in Anticipation of Litigation

However, the failure to impose an adequate document retention policy in relation to pending or reasonably foreseeable litigation can itself be adequate to support a preliminary finding that potential document spoliation has occurred. Major Tours., Id. Therefore, the Special Master must determine whether the EPA's actions, including the tine its litigation hold letters were issued, constitutes an adequate retention policy for litigation or potential litigation related to the Rilato-Colton Basin.

The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003). The duty to preserve material evidence arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation. In other words, the duty to preserve evidence begins when litigation is pending or reasonably forseeable. Micron Technology, Inc. v. Rambus Inc., 645 F.3d 1311, 1320 (Fed Cir. 2011). This is an objective standard, asking not whether the party in fact reasonably foresaw litigation, but whether a reasonable party in the same factual circumstances would have reasonably foreseen litigation. Micron Technology, 645 F.3d at 1320. There is also case law for the proposition that the duty of plaintiff such as the EPA in this case to preserve evidence is more often triggered before litigation commences because, unlike a defendant waiting to be sued, plaintiffs most often control the timing of litigation. Innis Arden Golf Club v. Pitney Bowes, Inc., 257 F.R.D. 334, 340 (D. Conn. 2009)

Once a party reasonably anticipates litigation, it is clear that the party must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents. Zubulake,220 F.R.D. at 218.

In its portion of the Joint Stipulation in opposition to Goodrich's motion and at the hearing, the United States stated that the Environmental Protection Agency (“EPA”) had sent out three litigation hold letters, the first in 2007, and the second and third in 2010. The subsequent submission of the letters for in camera review revealed that the EPA had sent out several other versions of litigation hold letters to certain individuals at EPA headquarters in September of 2009 and March of 2011, as well as a fourth round of litigation hold letters to EPA regional offices in August of 2011.

Goodrich argues that the EPA should have issued litigation hold letters from the time of its earliest involvement in the Rialto-Colton basin, but at the latest by July 14, 2003, the date on which the EPA issued a UAO pursuant to CERCLA Section 106(a) to Goodrich and Emhart. Goodrich argues that after issuance of the UAO, it was foreseeable that EPA would need to initiate litigation to enforce the UAO. The EPA admits that at the time of the issuance of the UAO, litigation relating to the Rialto-Colton basin was possible, but claims that litigation was not probable, and therefore the EPA had no obligation to issue litigation holds based merely on the possibility of future litigation.

*4 The EPA does not state a specific date by which it believes that it should have issued litigation hold letters. Instead, the EPA attempts to justify the dates on which it issued litigation holds in a variety of ways. The United States attempts to argue that hold letters must only be issued when litigation is probable, rather than merely possible. See Cache La Poudre Feeds, LLC v. Land O'Lakes, Inc., 244 F.R.D. 614, 621 (D. Colo. 2007); Point Blank Solutions, Inc. v. Tayoba America, Inc., 2011 WL 1456029, 24 (S.D. Fla. 2011). Goodrich counters that the majority of these cases involve defendants, and that “a plaintiffs duty is more often triggered before litigation commences, in large part because plaintiffs control the timing of litigations.” Pension Comm. Of Univ. of Montreal Pension Plan v. Banc of Am. Sec., 685 F.Supp.2d 456, 466 (S.D.N.Y. 2010). Goodrich also points out that the one case cited by the United States which stated that a duty to preserve will only attach where the litigation was “imminent, or probable without significant contingencies,” Hynix Semiconductor, Inc. v. Rambus, Inc., 591 F.Supp.2d 1038, 1061 (N.D. Cal. 2006), was reversed on appeal. The appellate court reversed the district court for improperly imposing the “significant contingencies” requirement, stating “Contingencies whose resolutions are reasonably foreseeable do not foreclose a conclusion that litigation is reasonably foreseeable.” Hynix Semiconductor Inc. v. Rambus Inc., 645 F.3d 1336, 1346 (Fed. Cir. 2011). See also Micron Tech, Inc. v. Rambus Inc., 645 F.3d 1311, 1320-21 (Fed. Cir. 2011)(A duty to preserve evidence applies if litigation is reasonably foreseeable, even if certain contingencies exist that could negate the need to bring litigation.)

The EPA also argues that it did not have a responsibility to issue litigation holds in the same way as a corporation would, or in the alternative, that its failure to issue litigation holds until after the complaint was filed is not prejudicial because it is required to preserve certain types of documents by the Federal Records Act. However, the EPA provides no factual evidence to demonstrate that the documents that must be preserved under the Federal Records Act, are similar in scope to the documents required to be preserved under a litigation hold. Nor does the EPA provide any case authority for the proposition that required preservation, under the Federal Records Act eliminates or diminishes the duty of a party to issue timely litigation holds.

The Special Master finds that at least by July 12, 2006, when CH2M Hill completed the Vadose Zone Model of the Rialto-Colton basin, the EPA foresaw or should have reasonably foreseen that there would be future litigation involving the Rialto-Colton Basin, and that the EPA had a clear duty to preserve all relevant documents in anticipation of such litigation. Therefore, at least by July 12, 2006, the EPA should have issued appropriate litigation hold letters instructing its personnel to save all documents relating to Rialto-Colton Basin. This conclusion is supported by the EPA's own conduct and testimony. When the EPA was attempting to prevent release of the Model in a FOIA action brought by Goodrich in 2008, Keith Takata, Director of the Superfund Administration in Region 9 of the EPA, stated in a declaration that the Model was prepared to be used by the EPA in future litigation regarding the Rialto-Colton basin. (Declaration of Keith Takata, Par. 17; Dintzer Decl., Exh I). At the same time David Towell, a lead project manager of CH2M, who worked on the Model, testified that no one from the EPA instructed him that anything related to the Model, including any input files, had to be preserved because it could be relevant to future litigation (Deposition of David Towell, Volume I, 236:4-22; Dintzer Decl, Ex. V.)

The Special Master wishes to make clear that at this time there is not enough information to make a determination concerning whether any material evidence in this case, whether related to the Vadoze Zone Model, or other documents, has been destroyed. The Special Master is simply finding that by the time the EPA had the Model prepared it either knew or should have known that litigation regarding the Rialto-Colton basin was reasonably foreseeable, and that the Model would be evidence highly relevant to the litigation. See Innis Arden Golf Club, 257 F.R.D. 334, 340. (Plaintiff who was working to identify the parties responsible for PCB contamination and collecting land samples for the purposes of pursuing recovery costs establishes that litigation was reasonably foreseeable.) Therefore, it is clear that the EPA had a duty to issue litigation hold letters concerning all evidence related to the Rialto-Colton Basin at least by July 12, 2006, when the Vadoze Zone model was completed.

*5 The Special Master makes this finding only for the purpose of determining the current issues involving whether the EPA's litigation hold letters should be produced to Goodrich. The Special Master leaves open whether the EPA had a duty to issue litigation hold letters and preserve relevant evidence, as Goodrich argues, at the time UAO was sent to Goodrich and Emhart Industries in July of 2003. The Special Master reserves this decision for a time when it may become necessary, specifically if Goodrich gathers further evidence either about the EPA's actual spoliation of documents in the time period during which the Special Master has found a duty to preserve evidence, or the EPA's failure to preserve documents potentially relevant to this litigation in the time period between 2003 and 2006.

D. Timeliness of Litigation Hold Letters

The litigation hold letter issued by the EPA in October of 2007 was in response to Goodrich's claim against the EPA that certain provisions of CERCLA were unconstitutional. The EPA did not institute its first litigation hold relating to this litigation until May of 2010, for Region 9 of the EPA; until September of 2010, for certain individuals at EPA Headquarters in Washington, D.C.; and until August of 2011, for the remaining regional offices of the EPA. These dates are three, six, and sixteen months, respectively, after the EPA filed its complaint in the action.

The Special Master finds that the litigation hold letters issued by the EPA were not timely, causing the EPA to be without a proper document retention policy for evidence potentially relevant to litigation involving the Rialto-Colton Basin for a significant period of time. During this entire period of time, the EPA should have reasonably anticipated that there would be litigation with Goodrich and other parties related to the Rialto-Colton basin. This failure to issue timely litigation holds creates at least the possibility that during this time the EPA had in its possession evidence potentially relevant to the present litigation, which, under the normal retention policies of the EPA, may have been destroyed.

III. Conclusion

Even though the Special Master is not finding at this time that any potentially relevant evidence relating to the Rialto-Colton Basin has, in fact, been spoliated, the fact that there is a four year time period between the latest date that the litigation hold letters should have been issued, and a document retention policy for documents related to potential litigation concerning the Rialto-Colton Basin should have been instituted, indicates that evidence related to this litigation may have been discarded, deleted or destroyed during the time that no litigation hold was in place. This is sufficient to find a waiver of the attorney-client privilege in relation to the hold letters issued by the EPA. See Major Tours, Inc. v. Colorel. Supra.Therefore, the EPA must produce its litigation hold letters in response to Goodrich's Fifth Set of RFPs. As reflected in the order below, the Special Master is providing additional time to the United States to produce these letters so that the United States has a sufficient opportunity to seek a stay of this order, if it chooses to file a motion for de nova review, and so that the Court has sufficient opportunity to consider the stay request.

IT IS ORDERED:

1. The EPA shall produce to Goodrich the litigation hold letters and documents which were submitted to the Special Master for in camera review, by October 28, 2011.

2. In accordance with Rule 53(e) the “REPORT AND ORDER” shall be filed with the clerk and a copy provided for the Honorable Suzanne Segal and served on each party by First Resolution Service Inc.