*1 On July 9, 2021, Falck Northern California Corp., Falck Mobile Health Corp. d/b/a Care Ambulance Services, Inc., Falck USA, Inc., and Falck Rocky Mountain, Inc. (collectively, “Falck”) filed a Motion for Sanctions (the “Motion”) against Scott Griffith Collaborative Solutions, Inc. (“SGCS”) for alleged discovery misconduct, including spoliation of evidence. Dkt. No. 102.[1] Falck moved pursuant to Federal Rule of Civil Procedure 37(b)(2) and (e) and Local Rules 7-8 and 37-4 for terminating sanctions or, in the alternative, lesser sanctions. Mot. at 1-2. Chief Magistrate Judge Joseph C. Spero, who is handling discovery matters in these related actions, held a hearing on the Motion on September 10, 2021. See Dkt. No. 119. Because terminating sanctions are case-dispositive, the motion requires a report and recommendation. See United States v. Reyna-Tapia, 328 F.3d 1114, 1118 (9th Cir. 2003) (certain matters, such as “case-dispositive motions,” may be referred to a magistrate judge “only for evidentiary hearing, proposed findings, and recommendations”) (citing 28 U.S.C. § 636(b)(1)(B)). Judge Spero prepared a Report and Recommendation Regarding Motion for Sanctions (the “Recommendation” or “R&R”), which was served on the parties on September 10, 2021. Dkt. No. 122. The Recommendation provides a detailed recounting of the pertinent facts, the appropriate standards for decision, and a thorough analysis; this Order merely summarizes the Recommendation.

Judge Spero finds that SGCS has spoliated certain evidence. R&R at 12-14. Specifically, he finds that Paul LeSage (“LeSage”), an SGCS partner, had deleted his September 2019 emails with SGCS's client American Medical Response (“AMR”), his email forwarding the KRDO story to SGCS contractor Anna Kovacs (“Kovacs”), and his text messages with AMR employee Rob Garrett (“Garrett”) regarding Falck's purported infringement and SGCS and AMR's response thereto. Id. at 13-14. Judge Spero further finds that terminating sanctions are not warranted. Id. at 14-16. While the prejudice to Falck is “potentially significant,” particularly with respect to the missing text messages, Judge Spero notes that the material could conceivably be recovered through a forensic examination. Id. at 14. He also finds that lesser sanctions, which have not yet been imposed in this matter, are likely more appropriate. Id. at 14-15 (citing Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091, 1096 (9th Cir. 2007) (instructing courts to consider, among other factors, the availability of less drastic sanctions)).

Accordingly, Judge Spero recommends that the Court deny Falck's request for terminating sanctions, as well as its request for monetary sanctions and its request that the Court deem SGCS's work product protection waived as to certain emails. Id. at 15-16, 18-21. He recommends that the Court instead: order SGCS to submit to a forensic examination of devices in its or LeSage's possession that LeSage used for his work with SGCS, as well as a third-party search of LeSage's email account and any other relevant cloud services, at SGCS's expense. Id. at 17. He recommends that “the parties be required to meet and confer to determine a search protocol and to select a contractor to conduct the examination, with those issues to be resolved no later than October 8, 2021.” Id. He further recommends that SGCS be required to reimburse Falck's reasonable attorneys’ fees for the meet-and-confer process. Id. at 17-18.

*2 Additionally, Judge Spero recommends that the Court “require SGCS to lodge for in camera review ... the emails dated from September 5, 2019 through September 26, 2019 that SGCS withheld based solely on work product protection.” Id. at 20. These emails are to be lodged by October 8, 2021. Judge Spero will then review the emails and “order production of any that provide otherwise-unavailable relevant factual information regarding LeSage's text messages with Garrett, unproduced emails exchanged with AMR, or other purportedly missing non-work-product documents at issue in the present motion.” Id.

Finally, Judge Spero recommends that the Court deny Falck's request for further briefing as to alternative sanctions at this time. Id. at 21. He recommends that the Court consider “an adverse inference at summary judgment or a jury instruction at trial” but suggests that such matters can be addressed by the parties in the normal course of briefing summary judgment motions and proposed jury instructions. Id.

Once findings and recommendations are served, a party has fourteen days to file specific written objections thereto. 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(2). A district judge must review de novo “those portions of the report or specified proposed findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(3). In the absence of an objection, “the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.” Fed. R. Civ. P. 72, advisory committee notes to 1983 amendment (citing Campbell v. U.S. Dist. Court, 501 F.2d 196, 206 (9th Cir. 1974)); see also United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“The statute makes it clear that the district judge must review the magistrate judge's findings and recommendation de novo if objection is made, but not otherwise.”). A district judge may “accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(3).

Falck filed no objection to Judge Spero's Recommendation. SGCS filed limited objections on September 24, 2021. Dkt. No. 124. SGCS does not object to any of Judge Spero's findings or the substance of his recommendations. Instead, it informs the Court that, “following the issuance of the Recommendation, the parties have been actively involved in settlement negotiations.” Id. at 2. SGCS thus asks the Court to modify the Recommendation by extending “the dates for conferral on forensic examination and lodging of emails for in camera review” from October 8 to November 8, 2021, “so that the parties may focus on settlement.” Id.

On October 1, 2021, Falck filed a response to SGCS's limited objections, wherein Falck opposes extension of the deadlines proposed by Judge Spero on several grounds. Dkt. No. 126. Falck asserts that the parties will have sufficient time before October 8 to conduct settlement discussions and that the extension requested by SGCS will interfere with the case schedule. Falck is concerned that further delay may hamper the recovery of spoliated evidence and that the parties’ initial meet and confer discussions regarding the search protocol for a forensic examination suggest that judicial intervention may be required before that process can be completed. According to Falck, although issuance of the R&R “sparked settlement discussions,” SGCS's requested extension “threatens to unwind that progress.” Id. at 1-2.

Given the nature and procedural history of these related actions, the Court notes that the parties would do well to focus their efforts on settlement discussions without getting distracted by trivial disputes. Even now, SGCS inexplicably failed to meet and confer with Falck before requesting an extension of the deadlines set by Judge Spero, and Falck intimates that it may withdraw from settlement discussions based on that unilateral request for an extension. This is not a productive use of the parties’ (or the Court's) time. The Court also notes that discovery disputes in this action have taken up an inordinate amount of Judge Spero's time. Nevertheless, it appears that the parties are still having difficulty reaching an agreement regarding the forensic examination recently ordered by Judge Spero. The parties shall meet and confer in good faith regarding the search protocol for a forensic examination before seeking judicial intervention on that matter. The parties are also strongly encouraged to approach their settlement discussions in good faith. In order to facilitate these efforts, the Court will extend the deadlines set by Judge Spero by one week, to October 15, 2021. This limited extension will allow the parties sufficient time to confer on these matters without interfering with the case schedule. The spoliation of evidence is not a matter to be taken lightly, however, and the avoidance of further delay in completing the forensic examination weighs against a further extension. Additionally, because SGCS's requested extension is based solely on its desire to focus on settlement, and Falck does not concur that a month-long extension is required for that purpose, the request for a longer extension is DENIED.

*3 Being satisfied that there is no clear error in Judge Spero's findings and recommendations, the Court hereby ACCEPTS the Recommendation, with modified deadlines, as follows:

Falck's Motion is DENIED IN PART and GRANTED IN PART. The Court DENIES Falck's motion insofar as it requests terminating sanctions, monetary sanctions, and waiver of SGCS's work product protection for certain emails. The Court also DENIES Falck's request for further briefing on the matter of alternative sanctions at this time. The Court reserves consideration of an adverse inference or jury instruction for summary judgment and/or trial. The Court otherwise GRANTS Falck's Motion and orders relief in accordance with Judge Spero's Recommendation as set forth below.

It is ORDERED that SGCS shall submit to a forensic examination of any smartphones, computers, or similar devices in its or LeSage's possession that LeSage has used for his work with SGCS, as well as a third-party search of LeSage's email account and any other relevant cloud services, at SGCS's expense. The parties shall meet and confer to determine a search protocol and to select a contractor to conduct the examination, with those issues to be resolved no later than October 15, 2021. SGCS shall be required to reimburse Falck's reasonable attorneys’ fees for that meet-and-confer process, with the admonition that any unreasonableness in its request for fees—whether as to billing and staffing discretion, or the choice of disputes to pursue and failure to compromise on a search protocol—may be grounds for the denial of attorneys’ fees in their entirety. The parties are strongly encouraged to stipulate to an award of fees for this process.

It is further ORDERED that, no later than October 15, 2021, SGCS shall lodge with Judge Spero its work product emails dated September 5 through September 26, 2019 for in camera review to determine whether spoliation of evidence caused a substantial need for their production.

This Order terminates Docket Nos. 102 and 122 in Case No. 19-cv-08171 and Docket Nos. 120 and 140 in Case No. 19-cv-06104.

IT IS SO ORDERED.