Vacation Club Servs., Inc. v. Rodriguez
Vacation Club Servs., Inc. v. Rodriguez
2011 WL 13298497 (M.D. Fla. 2011)
April 14, 2011
Kelly, Gregory J., United States Magistrate Judge
Summary
VCS requested ESI from Global, which Global failed to timely respond to. The Court denied the Motion for Sanctions and ordered Global to produce any and all non-privileged documents responsive to VCS's requests for production, and to file a written certification indicating whether or not it withheld any non-privileged documents. The Court also reserved jurisdiction to determine whether an award of attorneys' fees is appropriate for Global's failure to comply with the Court's Order.
VACATION CLUB SERVICES, INC., Plaintiff,
v.
GIOVANNI RODRIGUEZ, GLOBAL RESORT MANAGEMENT, LLC, and JEFFREY MORRIS, Defendants
v.
GIOVANNI RODRIGUEZ, GLOBAL RESORT MANAGEMENT, LLC, and JEFFREY MORRIS, Defendants
Case No. 6:10-cv-247-Orl-31GJK
United States District Court, M.D. Florida
Filed April 14, 2011
Kelly, Gregory J., United States Magistrate Judge
ORDER
*1 This cause came on for consideration without oral argument on the following motion filed herein:
MOTION: PLAINTIFF’S MOTION FOR SANCTIONS AGAINST DEFENDANT, GLOBAL RESORT MANAGEMENT, LLC AND FOR AN ORDER TO SHOW CAUSE WHY GLOBAL SHOULD NOT BE HELD IN CIVIL CONTEMPT (Doc. No. 64)
FILED: September 17, 2010
THEREON it is ORDERED that the motion is DENIED.
On September 17, 2010, Vacation Club Services, Inc. (“VCS”) filed a Motion for Sanctions Against Defendant, Global Resort Management, LLC [“Global”] and for an Order To Show Cause Why Global Should Not Be Held in Civil Contempt (the “Motion”). Doc. No. 64. On September 21, 2010, Judge Gregory A. Presnell entered an Order referring the portion of the Motion seeking sanctions under Rule 37, Federal Rules of Civil Procedure, to the undersigned. Doc. No. 65. On December 3, 2010, Global filed a response (“Response”) in opposition to the portion of the Motion referred to the undersigned. Doc. No. 79. On December 20, 2010, VCS filed a reply (“Reply”) to the Response. Doc. No. 82.
I. BACKGROUND
On February 24, 2010, VCS filed a Verified Amended Complaint for Damages and Injunctive Relief (the “Complaint”) against Global, Giovanni Rodriguez (“Rodriguez”) and Jeffrey Morris (“Morris”). Doc. No. 25. The Complaint alleges violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq., and asserts various state law claims, including breach of confidentiality agreement, breach of fiduciary duty, breach of duty of loyalty, misappropriation of trade secret information, conversion, civil theft, and violation of Fla. Stat. § 721.121, recordkeeping by resale service providers and lead dealers. Id.
VCS states that it is a developer of timeshare properties through wholly owned subsidiaries and affiliates. Id. at 2. It states that it has expended substantial resources in developing databases of members and prospective members, which contain confidential business information. Id. On May 11, 2009, Rodriguez became employed by VCS and executed a confidentiality agreement (the “Confidentiality Agreement”). Id. at 4. By executing the Confidentiality Agreement, Rodriguez agreed to use VCS’s confidential information solely for the benefit of VCS; to not disclose the confidential information to anyone outside of VCS; and following termination of employment with VCS, to not interfere with VCS’s contracts or relationships for a period of twelve months. Doc. No. 25 at 4-5. VCS alleges that Rodriguez obtained a list of data on all of the VCS members and prospective members by falsely representing to Angel Torres, VCS’s Special Project Manager, that he had been approved to use the computer software program “Map It” to create a map of the VCS members’ home locations. Id. at 5. VCS maintains that on October 7, 2009, Rodriguez emailed the confidential information from his work email to his personal email. Id. at 6. VCS states that Rodriguez’s direct supervisor had never heard of the Map It program and never authorized Rodriguez to use the program. Id. Accordingly, VCS alleges that Rodriguez fraudulently obtained the confidential information in order to provide it to Morris, who, in turn, provided it to Global. Doc. No. 25 at 7. VCS states that it began receiving complaints from VCS members that associates of Global were contacting them with offers to buy or rent their unused time share weeks with VCS. Id.[1]
*2 On February 24, 2010, Judge Presnell entered a preliminary injunction against Defendants Rodriguez and Global, enjoining them from using VCS’s trade secrets or confidential information. Doc. No. 24.
On March 16, 2010, Global filed its Answer and Affirmative Defenses (the “Answer”) to the Complaint. Doc. No. 41.
On June 18, 2010, VCS filed a motion to compel against Global (“Motion to Compel”) seeking an order compelling Global to: 1) answer questions from the deposition of David Michael, Global’s corporate representative; 2) produce documents responsive to requests in VCS’s subpoena duces tecum for the Rule 30(b)(6) deposition of Global (the “Subpoena”); and 3) respond to VCS’s interrogatories and requests for production (collectively, the “Discovery Request”) . Doc. No. 59.[2] Global did not timely respond to the Motion to Compel, thereby waiving any objections to the Discovery Request, except for privilege or legal protections. Therefore, on July 8, 2010, the Court granted the Motion to Compel in its entirety and directed Global to produce responsive documents and/or answers to the Discovery Request within fourteen (14) days. Doc. No. 60. On July 22, 2010, Global filed a Notice of Compliance with the Court’s Order indicating that it had responded to Plaintiff’s Discovery Request. Doc. No. 61. Global stated that as to any objections raised in its response, Global would be filing a Renewed Motion for Protective Order. Id. However, Global has not filed any such motion.
The Motion
In the Motion, VCS seeks sanctions against Global pursuant to Rule 37, Federal Rules of Civil Procedure, for failure to comply with this Court’s Order granting the Motion to Compel and for spoliation of evidence. Doc. No. 64 at 3. Specifically, VCS seeks: “1) sanctions against Global pursuant to Rule 37, Fed. R. Civ. P., including but not limited to, striking Global’s [Answer], rendering a default judgment against Global, finding Global in contempt of court and awarding attorneys’ fees and costs to VCS; [and] 2) sanctions against Global for spoliation of evidence, including but not limited to, an adverse inference against Global that the information it destroyed was incriminating against Global, default judgment against Global and an award [of] attorneys’ fees and costs to VCS ...” Id. at 3.
VSC argues that Global effectively waived all objections to Plaintiff’s Discovery Request by not timely responding to the Motion to Compel, which the Court granted. Doc. No. 64 at 5. Nevertheless, VCS states that Global continues to object to portions of the Discovery Request. Id. (citing Doc. Nos. 64-2, at ¶¶ 6, 9, 11; 64-4). Specifically, Global objected to Request No. 19 as overbroad and not limited in scope, Request No. 22 as irrelevant, overbroad, burdensome, and seeking proprietary/confidential information, and Request Nos. 24 and 25 as privileged. Doc. No. 64-2. Furthermore, VCS states that Global failed to produce a privilege log to accompany its objections to the Discovery Request. Doc. No. 64 at 6. VCS maintains that it has been prejudiced by Global’s failure to comply with the Court’s Order. Id.at 12. VCS states that it has been unable to proceed with additional discovery from third parties due to Global’s failure to provide an adequate response to the Discovery Request. Id. Accordingly, VCS seeks sanctions against Global under Rule 37.
*3 As to the spoliation claim, VCS states that on February 2, 2010, VCS sent Global a cease and desist letter, which triggered Global’s duty to preserve all evidence potentially relevant to this litigation. Doc. Nos. 64 at 6; 64-6. On February 11, 2010, VCS sent a document preservation demand letter to Global reminding Global to “preserve all electronically stored information relevant to the upcoming litigation between [VCS, Rodriguez and Global].” Doc. No. 64-7. Global later informed VCS that on May 27, 2010, it created a full backup of Global’s computers. Doc. No. 64-8.[3] On July 22, 2010, Global produced forensic images in response to the Motion to Compel and the Court’s Order and, according to VCS, the images were created on July 17, 19, and 20, 2010. Doc. No. 64 at 7. Andrew Reisman (“Mr. Reisman”) performed a forensic investigation of the hard drive images and thumb drive produced by Global. Doc. No. 64-5. In his declaration, Mr. Reisman states:
During the course of my examination of the image contained “David Michael” user profile, which image was created on July 17, 2010, I was able to recover a deleted folder named “Delete” that was created on July 17, 2010 at 7:55 p.m. The “Delete” folder contained several deleted subfolders including those named “TVC”, “DGMF”, “Attendance Records” and various “Payroll” folders. I was able to find references to those deleted folders to many deleted Word documents, Excel spreadsheets, PDFs and zip container files, but the content of these files was not recoverable.
During the course of my examination of the drive image containing the “Alex” use profile, which image was created on July 17, 2010, I observed five deleted and overwritten files associated with the Microsoft Outlook email program. The last written date of these files was July 17, 2010, with times ranging between 1:14 p.m. and 1:22 p.m. Four of these file entries were named “~Outlook1.pst.tmp” and one was named “190721825.pst”. A PST file has the capability of storing emails and their attachments, calendar entries, contacts and tasks. Because the files I observed were deleted and overwritten, I was not able to recover any emails, attachments or other user generated content associated with those files. Additionally, the drive contained a deleted folder named “Delete” located in the “My Documents” folder of the Alex user profile, which folder was created on July 17, 2010 at 1:06 p.m.
During the course of my examination of the drive image containing the “Travis Thomas” user profile, which image was created on July 19, 2010, I was able to recover a deleted folder named “Delete” that was created on July 19, 2010 at 7:27 a.m. in the “My Documents” folder of the Travis Thomas user profile. Within the “Delete” folder I recovered Word, Excel and zip files in subfolders named “Bills and Taxes”, DGMF misc”, “Daily Totals 06, 07, 08”, “New Leads from Desktop” ... The content of these files was not recoverable.
During the course of my examination of the drive image containing the “Jeff” user profile, which was created on July 19, 2010, I was able to recover a deleted folder named “Delete” that was created on July 19, 2010 at 11:11 p.m. located in the My Documents folder of the Jeff user profile. Deleted files I recovered within the “Delete” folder include Word, Excel and zip files in subfolders named “Leads on the Floor”, “Emails ENGlish” ... The content of these files was not recoverable.
During the course of my examination of the drive image containing the “Kevin Wiegand” user profile, which was created on July 20, 2010, I was able to recover a deleted folder named “Delete” that was created on July 20, 2010 at 10:11 p.m. located in the “My Documents” folder of the Kevin Wiegand user profile. The content of these files was not recoverable.
Doc. No. 64-5. Accordingly, VCS maintains that either Global did not create forensic images on May 27, 2010, or Global is wrongfully withholding the images created on or prior to May 27, 2010. Doc. No. 64 at 7.
*4 On July 29, 2010, VCS sent a letter to Global indicating that a review of the forensic images produced revealed that Global “likely” systematically and intentionally destroyed evidence. Doc. No. 64-9. On August 4, 2010, Global responded by letter stating that its IT consultant created a full backup of Global’s computers on May 27, 2010, and Global did not destroy the original May 27, 2010 hard drive copy. Doc. No. 64-8.[4] Global stated that it was willing to have its IT consultant review the original hard drive copy with VCS’s IT consultant. Id. Global stated that it was acting in good faith and VCS “made a mountain out of a mole hill in this case.” Id. at 2. On August 25, 2010, VCS informed Global that it needed the information deleted from David Michael, Alex Simao, Travis Thomas, Jeffery Morris, and Kevin Wiegand’s hard drive prior to the imaging and production. Doc. No. 64-10. VCS states that as of the date of filing this Motion, Global had yet to produce any of the deleted information from the aforementioned hard drives. Doc. No. 64 at 9.
On November 19, 2010, the Court entered an Order To Show Cause against Global for failing to file a response to the Motion. Doc. No. 75. Global was ordered to show cause on or before December 3, 2010, why the Motion should not be granted. Doc. No. 75.
On December 3, 2010, Global filed its Response. Doc. No. 79. Global denies that it failed to produce all electronically stored information and that it intentionally destroyed evidence. Id. at 2. Global points out that VCS’s Request No. 27 specifically requested a forensic image of any hard drives, “which copies date back to at least February 11, 2010 ...” Id. at 2-3 (emphasis in original). Attached to the Response is the Affidavit of Eric Wichhart (“Mr. Wichhart”), who was retained by Global to create a copy of the Global hard drives. Doc. No. 79-1. Mr. Wichhart states that on May 14, 2010, he had a phone conference with, Philip Bonus (“Mr. Bonus”), counsel for Global, and Adam Losey (“Mr. Losey”), counsel for VCS. Id. at 3. Mr. Wichhart states that he informed Mr. Losey that the image taken from Global’s hard drives would reflect the date the image was taken and that he would include all data created on or after February 11, 2010. Id. He states that Mr. Losey agreed and indicated that would be satisfactory. Id. Mr. Wichhart maintains that it was agreed that parties from both sides would perform a joint review of the data and perform a digital destruction of any data not relevant to the litigation. Doc. No. 79-1 at 3. Mr. Wichhart states that he arrived at Global’s corporate office on May 24, 2010, and over the course of two days, he created an exact mirror image of Global’s hard drives. Id. On May 27, 2010, Mr. Wichhart advised VCS’s counsel that the copies of Global’s hard drives were created but he could not provide copies until he completed an inventory and created back-up copies. Id. at 4. He states that he maintained the copies in his possession and control until he completed the imaging on July 21, 2010. Id. Mr. Wichhart states:
Over a period of several days (approximately July 14, 2010 through July 21, 2010) I did precisely as asked, first restoring each copied hard drive to a new drive. Then, once restored, I reviewed all of the data and systematically isolated all data created prior to February 11, 2010. Once said data was properly isolated, I copied each hard drive, creating an image that consisted of all data created on or after February 11, 2010.
I provided an external hard drive to Mr. Bonus containing a copy of the four hard drives, as referenced in paragraph 3 herein, and a thumb drive which contained specific documents requested by Plaintiff’s counsel.
In addition to the foregoing, I provided Mr. Bonus with a complete copy of the four (4) hard drives requested, including all data, pre-dating and post-dating February 11, 2010.
*5 Doc. No. 79-1 at 4 (emphasis in original).
Global states that upon receipt of its copies of the Global hard drives, VCS complained that Global failed to produce all electronically stored information in its possession and that it intentionally destroyed evidence based on the embedded text notes outlined by Mr. Reisman. Doc. No. 79 at 4. However, Global maintains that the embedded text notes of deleted data actually reflect the data excluded by Mr. Wichhart because it was created prior to February 11, 2010. Id. Counsel for Global maintains that on August 4, 2010, he offered to meet with VCS to jointly review the materials. Doc. No. 79-3. Instead, VCS proceed with the Motion. Doc. No. 79 at 5. Global maintains that the Motion should be denied. Doc. No. 79 at 7.
In the Response, Global does not specifically address VCS’s argument that Global withheld documents responsive to the Document Requests on the basis of Global’s objections to such requests, which objections were served after this Court’s July 8, 2010 Order compelling production was entered. Doc. No. 79. However, Global does make a general statement that it: “denies it failed to make all electronically stored information available ...” Doc. No. 79 at 2. Therefore, although Global represents that it has produced all electronically stored information responsive to the discovery requests at issue, it is unclear whether Global did withhold nonelectronically stored information on the basis of its objections.
On December 20, 2010, VCS filed its Reply. Doc. No. 82.[5] VCS states that during the May 14, 2010 telephone conference, counsel for Global agreed to produce all information in native format with accompanying metadata. Doc. No. 82 at 2. VCS maintains that Mr. Wichhart stated that Global had not undertaken any steps to preserve evidence or create forensic images prior to his involvement. Id. at 3. He stated that Global was not in possession of forensic images dated February 11, 2010. Id. He also explained that any forensic images he created would bear the date of their creation, not the February 11, 2010 creation date. Id.
VCS argues that Global’s Response “inaccurately states that Mr. Wichhart complied with VCS’s production request that Global produce forensically obtained copies of certain hard drives, ‘which copies date back to at least February 11, 2010, the date of the preservation letter sent to Global.’ ” Doc. No. 82 at 4. Rather, the images produced were created on July 17, 19 and 20, 2010. Id. Furthermore, VCS states that it never requested that Global exclude data from the forensic images. Id. at 6. VCS maintains that “[i]nformation created prior to February 11, 2010 is highly relevant to this litigation, and VCS needs the data that Global deleted to effectively pursue its claims against Global.” Id. at 7.
Affidavits of Mr. Losey and Julie A. Angelini, Esq., the attorneys present at the May 14, 2010 telephone conference, are attached to the Reply. Doc. Nos. 82-1; 82-2. In his affidavit, Mr. Losey states that counsel for Global agreed to produce all information in native format. Doc. No. 82-1 at 2. He also states:
*6 Mr. Wichhart stated that some of the information on the hard drives would not be relevant to this litigation, and I agreed that if Global believed certain information was irrelevant or privileged, then VCS and Global could jointly review the information.
Counsel for Global then unexpectedly shouted the word ‘no’ at loud volume and disconnected from the Teleconference, leaving myself, Ms. Angelini and Mr. Wichhart in the Teleconference.
Mr. Angelini, Mr. Wichhart and I remained in the Teleconference for several minutes waiting for Mr. Bonus to return to the Teleconference, and I then stated that I believed that the parties could not continue the Teleconference without counsel for Global present. I then terminated the Teleconference.
* * * *
Global’s Response inaccurately implied that, at the Teleconference, I gave Global permission to unilaterally delete information from the discussed images prior to production of these images. This claim is false. A forensic image contains all the electronically stored information that is contained within the original storage device. By requesting forensic images, I requested all the data contained within the underlying storage devices. I made no statement that could be interpreted as granting Global permission to unilaterally delete any information from any forensic images, or underlying drives. I never requested that Global carve out data from the forensic images.
Doc. No. 82-1 at 3-4.[6]
II. LAW
A. Rule 37, Federal Rules of Civil Procedure
“Rule 37, Federal Rules of Civil Procedure, outlines numerous sanctions the court may impose against uncooperative parties for the failure to comply with a court order or the failure to disclose information as required by Rule 26(a).” Hache v. Damon Corp., No: 8:07-CV-1248-T-30EAJ, 2007 WL 4365658, at *1 (M.D. Fla. Dec. 13, 2007). “Rule 37 sanctions are intended to prevent unfair prejudice to the litigants and insure the integrity of the discovery process.” Gratton v. Great Am. Commc’ns, 178 F.3d 1373, 1374 (11th Cir. 1999). Rule 37(b)(2) states:
(A) For Not Obeying a Discovery Order. If a party or a party’s officer, director, or managing agent--or a witness designated under Rule 30(b)(6) or 31(a)(4)--fails to obey an order to provide or permit discovery, including an order under Rule 26(f), 35, or 37(a), the court where the action is pending may issue further just orders. They may include the following:
(i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vii) treating as contempt of court the failure to obey any order except an order to submit to a physical or mental examination.
* * * *
(C) Payment of Expenses. Instead of or in addition to the orders above, the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.
*7 Fed. R. Civ. P. 37(b)(2) (emphasis added). Thus, when a party fails to comply with a Court order, the Court must direct that party to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust. Id. The Court may issue any further orders set forth above. Id.
Rule 37(c) provides:
(1) If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless. In addition to or instead of this sanction, the court, on motion and after giving an opportunity to be heard:
(A) may order payment of the reasonable expenses, including attorney’s fees, caused by the failure;
(B) may inform the jury of the party’s failure; and
(C) may impose other appropriate sanctions, including any of the orders listed in Rule 37(b)(2)(A)(i)-(vi).
Fed. R. Civ. P. 37(c).[7] Thus, Rule 37(c) sanctions are appropriate where a party has failed to comply with an order of the Court or failed to comply with the initial disclosure requirements of Rule 26. Hache, 2007 WL 4365658, at *1.
B. Spoliation
In a case premised on federal question jurisdiction, federal law controls the imposition of sanctions for failure to preserve evidence. Martinez v. Brink’s, Inc., 171 Fe.Appx. 263, 268 n.7 (11th Cir. 2006). “Although federal law controls spoliation sanctions, the Court’s opinion may be ‘informed’ by state law, as long as it is consistent with federal law, because federal law in the Eleventh Circuit does not set forth specific guidelines on spoliation.” Optowave Co., Ltd. v. Nikitin, 2006 WL 3231422, *8 (M.D. Fla. November 7, 2006) (citing Flury v. Daimler Chrysler Corp., 427 F.3d 939, 944 (11th Cir. 2005)). Under Florida law, the remedy for a party failing to produce crucial but unfavorable evidence that is destroyed or inexplicably disappears is an adverse inference or discovery sanctions. Martino v. Wal-Mart Stores, Inc., 908 So.2d 342 (Fla. 2005). Prior to the court exercising any leveling mechanism due to spoliation of evidence, the court must decide: 1) whether the evidence existed at one time, 2) whether the spoliator had a duty to preserve the evidence, and 3) whether the evidence was critical to an opposing party being able to prove its prima facie case or a defense. Golden Yachts, Inc. v. Hall, 920 So.2d 777, 781 (Fla. 4th DCA 2006); see Flury, 427 F.3d at 944 (applying Georgia spoliation and sanctions law).
The Court has broad discretion to impose sanctions derived from its inherent power to manage its own affairs and to achieve the orderly and expeditious disposition of cases. Id. at 944. Sanctions for discovery abuses are intended to prevent unfair prejudice to litigants and to insure the integrity of the discovery process. Id. The courts have the inherent power to enter a default judgment as punishment for a defendant’s destruction of documents:
Sanctions may be imposed against a litigant who is on notice that documents and information in its possession are relevant to litigation, or potential litigation, or are reasonably calculated to lead to the discovery of admissible evidence, and destroys such documents and information. While a litigant is under no duty to keep or retain every document in its possession once a complaint is filed, it is under a duty to preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery, and/or is the subject of a pending discovery request.
*8 Telectron, Inc. v. Overhead Door Corp., 116 F.R.D. 107, 126 (S.D. Fla. 1987) (quoting Wm. T. Thompson v. General Nutrition, 593 F.Supp. 1443, 1455 (C.D. Cal. 1984)). In the Eleventh Circuit, it is clear the most severe sanction of default should be exercised only when there is a showing of bad faith and lesser sanctions will not suffice. See Flury, 427 F.3d at 944-45; see also Aldrich v. Roche Biomedical Laboratories, 737 So.2d 1124, 1125 (Fla. 5th DCA 1999) (the appropriate sanction when a party fails to preserve evidence in its custody depends on the willfulness or bad faith of the party responsible), rev. denied, 751 So.2d 1250 (Fla. 2000). An adverse inference is drawn from a party’s failure to preserve evidence only when the absence of that evidence is predicated on bad faith; thus, negligence in losing or destroying records is not enough for an adverse inference, as “ ‘it does not sustain an inference of consciousness of a weak case.’ ” Bashir v. Amtrak, 119 F.3d 929, 931 (11th Cir. 1997) (quoting Vick v. Texas Employment Comm’n, 514 F.2d 734, 737 (5th Cir. 1975)). Thus, the Court should not infer that the missing evidence was unfavorable unless the circumstances surrounding the evidence’s absence indicate bad faith. Id.
III. ANALYSIS
As set forth above, the Court granted as unopposed VCS’s Motion to Compel in its entirety because Global failed to timely respond. Doc. No. 60. In the requests for production, VCS indicated that electronically stored information shall be produced in native format with metadata and that the requests should be answered for the time period of 2008 through the present. Doc. No. 59-10 at 3, 5. However, Request No. 27 sought: “A forensically obtained copy of any hard drives contained within the primary business computers of David Michael, Travis Thomas, Alex Simao, Kevin Wiegard, Jeffrey Graham, and Jarrod King, which copies date back to at least February 11, 2010, the date of the preservation letter sent to Global.” Id. at 8 (emphasis added).
Central to the parties’ dispute is whether VCS was obligated to produce a complete image of the hard drives at issue. As set forth above, Request No. 27 specifically limited the relevant time period for that request to on or after February 11, 2010. Therefore, by its own terms, Request No. 27 only requested an image of the hard drives dating back to February 11, 2010. VCS also relies on the parties’ May 14, 2010 telephone conference, arguing that Global orally agreed to produce a complete image of the hard drives. Doc. Nos. 82 at 2; 82-1 at 2. In his affidavit, Mr. Losey maintains that he requested all of the data contained on the subject hard drives and did not grant Global permission to carve out any data prior to February 11, 2010. Doc. No. 82-1 at 4. Global, on the other hand, denies that it failed to make all electronically stored information available to VCS. Doc. No. 79 at 2. Global points out that VCS’s Request No. 27 specifically requested a forensic image of any hard drives, “which copies date back to at least February 11, 2010 ...” Id. at 2-3 (emphasis in original). Furthermore, Mr. Wichhart states in his affidavit that he specifically complied with that request. Doc. No. 79-1 at 3- 4. According to Mr. Wichhart, he worked over a two-day period and completed the imaging on May 27, 2010. Id. On that day, he informed counsel for VCS and counsel for Global that he completed the copies of the hard drives but he would not provide copies until he completed an inventory and created back-up copies. Id. at 4. He states that on July 14, 2010, Mr. Bonus directed him to complete the image as discussed at the May 14, 2010 telephone conference. Id. He states he was to provide Mr. Bonus with a copy of each and every hard drive, excluding all data contained therein with a creation date prior to February 11, 2010, and including all data contained therein with a creation date on or after February 11, 2010. Id. From July 14, 2010 through July 21, 2010, Mr. Wichhart states he restored each copied hard drive to a new drive and isolated all data created prior to February 11, 2010. Id. Thereafter, he provided an external hard drive to Mr. Bonus containing a copy of the four hard drives and a thumb drive which contained documents requested by VCS’s counsel. Doc. No. 79-1 at 4. In addition, he provided a complete copy of the four hard drives, including all data pre and post February 11, 2010, to Mr. Bonus. Id.
*9 The affidavits characterizing the telephone conference at issue are conflicting (see supra, affidavits of Mr. Wichhart, Mr. Losey and Ms. Angelini) and the purported agreement to produce a complete image of the hard drives, including any data created prior to February 11, 2010, was not memorialized in writing. Local Rule 4.15 specifically addresses oral stipulations and it states:
No stipulation or agreement between any parties or their attorneys, the existence of which is not conceded, in relation to any aspect of any pending case, will be considered by the Court unless the same is made before the Court and noted in the record or is reduced to writing and subscribed by the party or attorney against whom it is asserted.
Local Rule 4.15. Thus, the alleged oral agreement to produce a complete image of the hard drives, including information prior to February 11, 2010, is not enforceable because it is not conceded and was not reduced to writing.
Another issue raised in the Motion is whether Global violated this Court’s July 8, 2010 Order granting VCS’s Motion to Compel by thereafter objecting to certain requests for production. Following the Court’s July 8, 2010 Order granting the Motion to Compel, Global asserted the following objections to VCS’s requests for production: Request No. 19 as overbroad and not limited in scope, Request No. 22 as irrelevant, overbroad, burdensome, and seeking proprietary/confidential information, and Request Nos. 24 and 25 as privileged. Doc. No. 64-2. Because Global failed to timely respond to the Discovery Request, Global waived all objections except for privilege or legal protections. See Perry v. Modern Hometech, Inc., 2009 WL 1140121, at *2 (M.D. Fla. Apr. 28, 2009). Therefore, it is improper for Global to assert objections to the form of the Discovery Request. In its Response, Global does not specifically indicate whether it withheld documents on the basis of the above-referenced objections. However, as the Court previously noted, Global maintains that it made all electronically stored information available to VCS. Doc. No. 79 at 2. Thus, in an abundance of caution, the Court again directs Global to produce any and all non-privileged documents responsive to VCS’s requests for production.
Global has failed to produce a privilege log. Doc. No. 64 at 6. A party objecting to production on the grounds of privilege must produce of privilege log. See Fed. R. Civ. P. 26(b)(5). Therefore, on or before April 22, 2011, Global shall either: 1) provide VCS written confirmation that it is not withholding any documents on the basis of a claim of privilege; or 2) serve VCS with a privilege log that complies with Fed. R. Civ. P. 26(b)(5).
A. Sanctions pursuant Rule 37
Pursuant to Rule 37(b)(2)(C), the Court must award VCS its reasonable expenses incurred in filing this Motion, including attorneys’ fees, unless the Court finds Global’s failure was substantially justified or other circumstances make an award of expenses unjust. Fed. R. Civ. P. 37(b)(2)(C). Global has not indicated whether any documents were withheld in response to the Discovery Request on the basis of a form objection.[8] Accordingly, on or before April 22, 2011, Global shall notify the Court by filing a written certification indicating whether or not it withheld any non-privileged documents responsive to VCS’s request to produce after this Court’s July 8, 2010 Order compelling discovery was entered. The Court reserves jurisdiction for a ruling on the issue of whether sanctions are warranted based on Global’s failure to comply with this Court’s July 8, 2010 Order.
B. Sanctions for the Spoliation of Evidence
*10 In this case, VCS has not carried its burden in conclusively establishing that Global has destroyed evidence that previously existed, which Global had a duty to preserve, and was crucial to VCS’s ability to prove its prima facie case. Golden Yachts, 920 So.2d at 781. VCS maintains that Global intentionally destroyed evidence based on Mr. Reisman’s forensic examination of the hard drive images which revealed that documents were deleted on July 17, 19, and 20, 2010. Doc. No. 64 at 7. However, based on the affidavit of Mr. Wichhart (see supra), it does not appear that Global destroyed evidence and there has been no showing that Global destroyed evidence. In fact, it appears Global has a complete image of the hard drives at issue. Global offered to meet with VCS to jointly review the discovery materials in dispute, but VCS declined and proceeded with its Motion. Doc. No. 79-3. Therefore, the Court does not find that VCS met its burden in establishing the deliberate spoliation of evidence by Global.[9]
IV. CONCLUSION
As set forth herein,
1. The Motion is DENIED to the extent VCS requests that the Court strike Global’s answer and affirmative defenses, enter a default judgment against Global and find Global in contempt of Court;
2. The Motion is DENIED to the extent the Motion seeks sanctions against Global for the spoliation of evidence;
3. On or before April 22, 2011, Global is directed to produce any and all non-privileged documents responsive to VCS’s requests for production;
4. On or before April 22, 2011, Global shall file a written certification stating whether or not it withheld any non-privileged documents responsive to VCS’s request to produce after this Court’s July 8, 2010 Order compelling discovery was entered;
5. On or before April 22, 2011, Global shall either: 1) provide VCS written confirmation that it is not withholding any documents responsive to VCS’s request to produce on the basis of a claim of privilege; or 2) serve VCS with a privilege log that complies with Fed. R. Civ. P. 26(b)(5); and
6. The Court reserves jurisdiction to determine whether an award of attorneys’ fees in bringing the Motion is appropriate for Global’s purported failure to comply with the Court’s July 8, 2010 Order compelling discovery.
DONE and ORDERED in Orlando, Florida on April 14, 2011.
Footnotes
Counsel for Global represented that it purchased a portion of VCS’s database from Morris, not Rodriguez, and used the database for one week prior to receiving VCS’s demand letter and then ceased using the database. Doc. No. 24 at 4.
In its request for production, VCS stated that documents should be provided for the period from 2008 through the present. Doc. No. 59-10 at 5. However, Request No. 27 seeks: “A forensically obtained copy of any hard drives contained within the primary business computers of David Michael, Travis Thomas, Alex Simao, Kevin Wiegard, Jeffrey Graham, and Jarrod King, which copies date back to at least February 11, 2010, the date of the preservation letter sent to Global.” Id. at 8.
Although the Motion states that the backup of Global’s computers occurred on March 27, 2010, this appears to be a typographical error as the backup was finalized on May 27, 2010. See below; Doc. No. 79-1.
In the letter, Global states that the back-up was created on March 27, 2010. However, as previously mentioned, the Court believes the back-up was actually finalized on May 27, 2010. See affidavit of Mr. Wichhart.
The Court granted VCS leave to file the Reply. Doc. No. 81.
Ms. Angelini’s affidavit is consistent with Mr. Losey’s affidavit. Doc. No. 82-2.
Rule 37(c) also allows for the imposition of other appropriate sanctions. Fed. R. Civ. P. 37.
The Court notes that this does not include any objection based on a claim of privilege.
To the extent VCS contends it has been prejudiced by Global’s failure to make a full production of the hard drives at issue and such conduct has hampered VCS’s ability to prosecute its claims, the Court rejects that argument. Global represents that it has offered to make the entire hard drives available to VCS and VCS has failed to take advantage of that offer. Accordingly, any delay in obtaining the balance of data from the hard drives appears to be self-imposed.