RG Abrams Ins. v. Law Offices of C.R. Abrams
RG Abrams Ins. v. Law Offices of C.R. Abrams
342 F.R.D. 461 (C.D. Cal. 2022)
November 2, 2022
Aenlle-Rocha, Fernando L., United States District Judge
Summary
The court found that the defendants had violated the court's discovery orders and had acted in bad faith, warranting the imposition of monetary sanctions. The court also issued Guidelines for the Discovery of Electronically Stored Information, which included general guidelines for cooperation, proportionality, preservation, Rule 26(f) meet and confer, disputes regarding ESI issues, and E-Discovery Liaisons. The court also issued a Checklist for Rule 26(f) Meet and Confer Regarding Electronically Stored Information, and Education Guidelines.
Additional Decisions
RG ABRAMS INSURANCE, et al., Plaintiffs,
v.
LAW OFFICES OF C.R. ABRAMS, et al., Defendants.
And Related Cross-Actions
v.
LAW OFFICES OF C.R. ABRAMS, et al., Defendants.
And Related Cross-Actions
Case No. 2:21-cv-00194-FLA (MAAx)
United States District Court, C.D. California
Signed November 02, 2022
Counsel
John Russell Horstmann, Burke Williams and Sorensen LLP, Los Angeles, CA, Drew M. Tate, Fisher and Phillips LLP, Los Angeles, CA, Michael A. Slater, Slater Law Firm APC, Los Angeles, CA, Alden J. Parker, Fisher and Phillips LLP, Sacramento, CA, Patricia L. Peden, Burke Williams and Sorensen LLP, Oakland, CA, for Plaintiffs.Timothy J. Donahue, Law Offices of Timothy Donahue, Orange, CA, for Defendants Christopher R. Abrams, Rinelli Law Group, Sarah Rinelli, Jack R. Mills, Robin Armstrong, Cynthia Wooten, The Law Offices of C.R. Abrams, P.C.
Aenlle-Rocha, Fernando L., United States District Judge
ORDER ACCEPTING FINDINGS AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE [DKT. 384] REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE RE: PLAINTIFFS/ COUNTER-Defendants’ UPDATED MOTION FOR TERMINATING, ISSUE, MONETARY SANCTIONS, AND ATTORNEYS’ FEES (ECF NO. 353)
*1 Pursuant to 28 U.S.C. § 636, the court has reviewed Plaintiffs/Counter-Defendants’ Updated Motion for Terminating, Issue, Monetary Sanctions, and Attorneys’ Fees (“Motion,” Dkt. 353), the related filings and submissions, other records on file herein, and the Report and Recommendation of the United States Magistrate Judge (Dkt. 384). The court also has reviewed Defendants’ July 19, 2022 Objections to the Report and Recommendation (“Objections,” Dkt. 395), as well as Plaintiffs’ August 2, 2022 Response to the Objections (“Response,” Dkt. 398).
As required by Federal Rule of Civil Procedure 72(b)(3), the court has engaged in de novo review of the portions of the Report and Recommendation to which Defendants specifically have objected. The Objections lack merit for the reasons stated in the Report and Recommendation. The court finds no defect of law, fact, or logic in the Report and Recommendation. The court concurs with and accepts the findings, conclusions, and recommendations of the United States Magistrate Judge, and overrules the Objections.
The court further finds Defendants’ assertions of bias or partiality on the part of Magistrate Judge Audero are not supported by the record and lack merit. While Defendants argue Magistrate Judge Audero should be disqualified pursuant to 28 U.S.C. § 455 (“Section 455”), Dkt. 395 at 2, that section, on its face, concerns self-disqualification or recusal from a proceeding by a judge. Defendants do not cite any legal authority for the proposition that Section 455 provides a basis for a party to seek disqualification of a judge. Furthermore, Defendants’ request for disqualification of Magistrate Judge Audero constitutes an improper request for affirmative relief that may not be brought through an objection to a Report and Recommendation, and which may be brought only through a noticed motion. See 28 U.S.C. § 144. Defendants’ argument, thus, fails.
IT THEREFORE IS ORDERED that:
(1) the Report and Recommendation of the Magistrate Judge is ACCEPTED;
(2) the Motion is GRANTED in part and DENIED in part as detailed in the “Recommendation” section of the Report and Recommendation (Dkt. 384 at 109-113); and
(3) Plaintiffs’ request for additional monetary sanctions to reflect the attorney's fees incurred in responding to Defendants’ Objections, Dkt. 398 at 12-17, is DENIED.
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE RE: PLAINTIFFS/ COUNTER-Defendants’ UPDATED MOTION FOR TERMINATING, ISSUE, MONETARY SANCTIONS, AND ATTORNEYS’ FEES (ECF NO. 353)
MARIA A. AUDERO, UNITED STATES MAGISTRATE JUDGE
This Report and Recommendation is submitted to the Honorable Fernando L. Aenlle-Rocha, United States District Judge, pursuant to 28 U.S.C. § 636 and General Order 05-07 of the United States District Court for the Central District of California.
I. INTRODUCTION
Before the Court is Plaintiffs/Counter-Defendants’ Updated Motion for Terminating, Issue, Monetary Sanctions, and Attorneys’ Fees (“Motion”). (Mot., ECF No. 353.) The Motion was filed jointly by Plaintiffs/Counter-Defendants RG Abrams Insurance and Robin Goltsman (collectively, “Plaintiffs”), on the one hand, and Defendants/Counterclaimants Christopher R. Abrams (“Abrams”), Sarah Rinelli (“Rinelli”), Jack R. Mills (“Mills”), Cynthia Wooten (“Wooten”), Robin Armstrong (“Armstrong”), Rinelli Law Group (“Rinelli Law”), and Law Offices of C.R. Abrams (“Abrams Law”), on the other hand, in the form of a Joint Stipulation as required by Central District of California Local Civil Rule (“Local Rule”) 37-2. (Id. at 2.)[1] For ease of reference, Abrams Law and Abrams together are referred to as “Abrams Defendants”; Abrams, Rinelli, Mills, Wooten, and Armstrong collectively are referred to as “Individual Defendants”; Rinelli Law and Abrams Law together are referred to as “Entity Defendants”; and the Individual Defendants and the Entity Defendants collectively are referred to as “Defendants.”
*2 In support of the Motion, Plaintiffs filed the Declaration of Michael A. Slater (“Slater Declaration,” ECF No. 353-1), the Declaration of Patricia L. Peden (“Peden Declaration,” ECF No. 353-2), the Declaration of John R. Horstmann (“Horstmann Declaration,” ECF No. 353-3), and Exhibits A–Q (“Plaintiffs’ Exhibits,” ECF Nos. 353-4–353-20). In addition, Plaintiffs filed a Supplemental Memorandum to Plaintiffs’ Updated Motion for Terminating, Issue, Monetary Sanctions, and Attorneys’ Fees (“Plaintiff's Supplemental Brief,” ECF No. 357), a Supplemental Declaration of Michael A. Slater (“Slater Supplemental Declaration,” ECF No. 357-1) and Plaintiffs’ Exhibit R (Pls.’ Ex. R, ECF No. 357-1, at 5–7).
Defendants oppose the Motion. (See generally Mot.) In support of their opposition, Defendants filed the Declaration of Timothy Donahue (“Donahue Declaration,” ECF No. 353-21, at 1–3)—which declares, among other things, that the attorneys’ fees sought by Defendants total $18,525,00 (id. ¶ 8)—and its accompanying Exhibit 1 (“Defendants’ Exhibit 1,” id. at 4–188). Defendants also filed an Objection to the Slater Declaration (Obj. to Slater Decl., ECF No. 353-22), Objection to the Peden Declaration (Obj. to Peden Decl., ECF No. 353-23), and Objection to the Horstmann Declaration (Obj. to Horstmann Decl., ECF No. 353-24). Defendants also filed a Declaration of Timothy Donahue re: Plaintiff's Misrepresentations to the Court (“Donahue Second Declaration,” ECF No. 353-25, at 1–4), and its accompanying Exhibit 1 (“Defendants’ Second Exhibit 1,” ECF No. 353-25, at 5–8). Finally, in response to Plaintiffs’ Supplemental Brief, Defendants filed an Opposition to Plaintiff's Supplemental Brief (“Opposition to Supplemental Brief,” ECF No. 361), a Declaration of Stephen A. Basinger in Opposition to Motion for Terminating Sanctions (“Basinger Declaration,” ECF No. 361-1), a Supplemental Declaration of Timothy Donahue in Opposition to Motion for Terminating Sanctions (“Donahue Supplemental Declaration,” ECF No. 361-2), and an Objection to Declaration of Michael Slater (“Objection to Slater Supplemental Declaration,” ECF No. 362).
Having read and considered the papers by the parties and other records in this case, as well as the statements and arguments made during the related conferences, the undersigned finds the Motion suitable for disposition without a hearing and vacated the June 28, 2022 hearing on the Motion. See Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. (ECF No. 380.) For the reasons set forth below, the undersigned recommends that Plaintiffs’ Motion be GRANTED in part and DENIED in part.
II. FACTUAL BACKGROUND
A. Plaintiffs’ and Counterclaimants’ Allegations
This case is proceeding on the basis of Plaintiffs’ Complaint, filed February 20, 2020 (Compl., ECF No. 1), and four counterclaims as follows: Abrams's counterclaim against Plaintiffs, filed April 22, 2020 (“Abrams Counterclaim,” ECF No. 19); Rinelli's and Mills's counterclaim against Plaintiffs, filed June 12, 2020 (“Rinelli/Mills Counterclaim,” ECF No. 23); Wooten's and Armstrong's Counterclaim against Plaintiffs, filed June 12, 2020 (“Wooten/Armstrong Counterclaim,” ECF No. 24); and Entity Defendants’ counterclaim against Plaintiffs and Core Seminars, filed December 13, 2021 (“Entity Counterclaim,” ECF No. 282). The case was transferred to the United States District Court for the Central District of California on January 12, 2021. (ECF Nos. 71–73.)
The allegations of the Complaint are stated in detail in the December 28, 2020 Order of Magistrate Judge Robert M. Illman (ECF No. 70) and need not be repeated here. For purposes of this Order, the undersigned summarizes the relevant allegations as follows.[2] Goltsman is an insurance professional who marketed her insurance products through, among other things, presenting trust planning seminars. (Compl. 6.) Goltsman hired Abrams, an attorney, in her trusts and estates business around the year 2000. (Id.) In or around 2010, Goltsman and Abrams restructured the business into two separate companies: RG Abrams Insurance and Abrams Law. (Id. at 7.) In 2014, RG Abrams Insurance hired Mills, an insurance agent. (Id. at 2.) At some unknown point, Abrams Law hired Wooten as a seminar coordinator and marketing assistant. (Id. at 3.) In 2016, Goltsman and Abrams began to plan for retirement and together hired Rinelli, an attorney who would take over Abrams's role, and Mills, an insurance agent who would take over Goltsman's role. (Id. at 8.) They again restructured the business. (Id. at 8–9.)
*3 By 2019, this newly-structured business proved to be a less than harmonious arrangement. (Id. at 9–10.) In December 2019, Goltsman decided to downsize her business and laid off both Rinelli and Armstrong. (Id. at 10.) However, Goltsman paid Armstrong $5,000.00 to pick up and deliver her business mail while Goltsman was away from the office. (Id.) Goltsman told Mills and Wooten that she would continue to employ them. (Id.) While Goltsman was out of town in December 2019, Abrams—together with Rinelli, Mills, Armstrong, and Wooten—took Goltsman's client database, marketing software, and computer in order to start their own business. (Id. at 10.) On this basis, Plaintiffs bring claims of violation of the Computer Fraud and Abuse Act (18 U.S.C. § 1030(g)) and a number of related state law claims. (Id. at 1, 11–20.)
The Abrams Counterclaim generally alleges that Plaintiffs breached their contract with Abrams and that Goltsman committed battery against him. (See generally Abrams Counterclaim.) In general, the Wooten/Armstrong Counterclaim alleges that Plaintiffs misclassified Wooten and Armstrong as exempt employees and failed to comply with a number of California wage-and-hour laws. (See generally Wooten/Armstrong Counterclaim.) The Rinelli/Mills Counterclaim generally alleges that Plaintiffs misclassified them as independent contractors and failed to comply with a number of California wage-and-hour laws. (See generally Rinelli/Mills Counterclaim.) The Entity Counterclaim generally alleges that Plaintiffs engaged in a conspiracy and scheme to “steal, defraud, damage and disrupt” the business of the Entity Defendants and to deceive and profit from them. (See generally Entity Counterclaim.)
B. The Discovery Dispute
This case originally was filed in the U.S. District Court for the Northern District of California on February 24, 2020, Case No. 4:20-cv-01379-JST. (Compl.) Abrams was served with the Complaint on March 4, 2022; Rinelli and Mills were served on May 15, 2020; Wooten was served on May 21 2020; and Armstrong was served on May 22, 2020. (Mot. 46.) It appears that Rinelli and Mills retained counsel in or around December 2019. (Rinelli/Mills Counterclaim ¶ 29.) While the undersigned has no information regarding when the other Defendants retained counsel, all Defendants currently are represented by the same counsel, who is different from the counsel originally retained by Rinelli and Mills. The case was transferred to the Central District of California on January 12, 2021. (ECF No. 72.)
The original version of the Motion was filed on September 7, 2021 (“Original Motion”). (Orig. Mot., ECF No. 202.) Through the Original Motion, Plaintiffs sought terminating sanctions on the basis of eight discovery disputes: (1) Defendants’ non-compliance with the undersigned's July 8, 2021 order compelling further verified responses to Plaintiffs’ Interrogatories, Set One, Nos. 3–7 (“July 8 Order,” ECF No. 134); (2) the non-compliance of Abrams and Abrams Law with the undersigned's July 27, 2021 order compelling them to serve legally adequate privilege logs to support the privileges they asserted as to the data retrieved from their computers (“July 27 Order,” ECF No. 162); (3) Defendants’ non-compliance with the undersigned's August 10, 2021 order compelling Defendants’ responses to Plaintiff's Request for Production of Documents, Set Two (“August 10 Order,” ECF No. 182); (4) Defendants’ non-compliance with the undersigned's August 19, 2021 order compelling Defendants’ attendance at deposition (“August 19 Order,” ECF No. 189); (5) Defendants’ non-compliance with six orders to pay attorneys’ fees (“December 21 Order,” ECF No. 69; “January 8 Order,” ECF No. 71; “July 1 Order,” ECF No. 128; July 8 Order; “July 14 Order,” ECF No. 146; Aug. 19 Order); (6) Defendants’ misrepresentations regarding the legal status and amenability to suit of Entity Defendants; (7) Defendants’ misrepresentations regarding the existence of insurance coverage to satisfy a judgment against them; and (8) Defendants’ use of Plaintiffs’ privileged materials in public court filings and discovery responses. (See generally Orig. Mot.) On October 13, 2021, the undersigned issued an order requiring that Plaintiffs, among other things, brief a proposal for sanctions lesser than termination should the Court determine that terminating sanctions were too severe under the circumstances. (ECF No. 233, at 2.) On October 19, 2021 Plaintiffs filed the requested supplemental brief proposing, in the alternative to terminating sanctions, issue sanctions, exclusionary sanctions, striking pleadings, stay of expert discovery and trial, and monetary sanctions. (ECF No. 240, at 11–16.) On October 26, 2021, Defendants filed a response to Plaintiffs’ supplemental brief. (ECF No. 249.)
*4 During the pendency of the Original Motion, but after the close of fact discovery, Plaintiffs sought leave to file five discovery motions. (ECF Nos. 256, 261.) Upon granting leave to file those motions, the undersigned suspended its consideration of the Original Motion to allow for its amendment should Defendants not comply with any orders issued as to the five discovery motions (“December 9 Order”). (Dec. 9 Order, ECF No. 274, at 4–5.) The undersigned noted that, although Plaintiffs would not be required to seek leave to amend the Original Motion, they were required to notify the Court of their intent to amend the Original Motion no later than fifteen days after any failure by Defendants to comply with any orders stemming from the five discovery motions. (Id.)
The first discovery motion sought an order compelling the further deposition of Abrams, Mills, Rinelli, Wooten, and Armstrong. (ECF No. 276.) The undersigned granted this motion in part on December 22, 2021, ordering the additional depositions of Abrams, Rinelli, Armstrong, and Wooten by no later than January 21, 2022, the payment by these defendants of the fees associated with the motion by no later than January 20, 2022, and the payment by these defendants and their counsel of the costs associated with the four depositions within fifteen days after receipt of an accounting for same from Plaintiffs (“December 22 Order”). (Dec. 22 Order, ECF No. 287.)
The second discovery motion sought an order compelling Defendants’ supplemental responses to Plaintiffs’ Request for Production of Documents, Set Three, Nos. 118–121. (ECF No. 277.) The undersigned granted this motion in part on January 10, 2022, ordering supplemental responses and a privilege log by no later than January 31, 2022[3] (“January 10 Order”). (Jan. 10 Order, ECF No. 309.)
The third discovery motion sought an order compelling the Federal Rule of Civil Procedure (“Rule”) 34 inspection of Defendants’ cell phone devices. (ECF No. 278.) The undersigned granted this motion in part on December 15, 2021, ordering Defendants to produce their cell phone devices for inspection by no later than January 7, 2022 and to pay fees associated with the motion by no later than January 14, 2022 (“December 15 Order”). (Dec. 15 Order, ECF No. 283.)
The fourth discovery motion sought an order compelling a Rule 34 inspection of Rinelli's and Mills's computer devices. (ECF No. 279.) The undersigned granted this motion on January 5, 2022, ordering Rinelli and Mills to produce their computer devices for inspection by no later than January 26, 2022, and to pay various fees and costs associated with the motion and the inspection by no later than February 4, 2022 (“January 5 Order”). (Jan. 5 Order, ECF No. 306.)
The fifth discovery motion sought an order compelling responses of the Entity Defendants to Plaintiff's Request for Production of Documents, Set One. (ECF No. 280.) The undersigned granted this motion on January 19, 2022, ordering the Entity Defendants to supplement their responses and produce a privilege log by no later than February 9, 2022, and to pay fees associated with the motion by no later than February 18, 2022 (“January 19 Order”). (Jan. 19 Order, ECF No. 315.)
Each of the five orders cautioned Defendants that their failure to comply with the order could result in the imposition of sanctions pursuant to Rule 37(b)(2)(A), including: (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; (vii) treating as contempt of court the failure to obey any order except an order to submit to a physical examination; and/or (viii) requiring payment of reasonable expenses, including attorneys’ fees, caused by the failure to comply with the order. (Dec. 15 Order, at 28–29; Dec. 22 Order, at 64–65; Jan. 5 Order, at 8–9; Jan. 10 Order, at 36–37; Jan. 19 Order, at 54.) Plaintiffs did not notify the Court of Defendants’ failure to comply with any of the five orders or of Plaintiffs’ intent to amend the Original Motion to seek sanctions for any such non-compliance.
*5 On January 11, 2022, Plaintiffs requested an informal discovery conference seeking further depositions of Abrams, Rinelli, Mills, and Armstrong for their failure to comply with the undersigned's December 15 Order compelling the inspection of their cell phone devices. As a preliminary step toward resolution of this dispute, the undersigned ordered Defendants to answer agreed-upon interrogatories regarding their cell phone devices by no later than January 25, 2022, and deferred the decision about further depositions until after a review of Defendants’ interrogatory responses (“January 18 Order”). (Jan. 18 Order, ECF No. 313.) Plaintiffs thereafter informed the Court that a decision regarding the requested further depositions no longer was necessary. (ECF No. 316.)
On March 22, 2022, the undersigned convened a Discovery Status Conference to discuss what remained of the Original Motion given that some of the issues raised therein were the subject of the five discovery orders. (ECF No. 338.) Based upon the representations of the parties that some of the discovery disputes raised in the Original Motion had been resolved, the undersigned concluded that the Original Motion was sufficiently out of the date that it could not be ruled upon without significant revisions, denied the Original Motion without prejudice, and ordered its re-briefing (“March 22 Order”). (Mar. 22 Order, ECF No. 339.) This Motion followed.
Through the Motion, Plaintiffs seek an order: (1) imposing terminating or, in the alternative, issue and evidentiary sanctions against Defendants for their discovery misconduct, which Plaintiffs identify as (a) withholding the data obtained through the Rule 34 inspection of the computer devices of Abrams, Abrams Law, Rinelli, and Mills; (b) spoliating the text messages of Abrams, Rinelli, Mills, and Armstrong; (c) non-compliance with the undersigned's December 22 Order and January 19 Order; (d) general discovery misconduct necessitating eleven discovery motions and orders; (e) misrepresentations regarding the Entity Defendants’ amenability to suit; (f) misrepresentations regarding insurance coverage; and (g) use of Plaintiffs’ privileged materials in court filings and discovery; (2) finding that Defendants have waived the right to assert privilege as a basis for withholding the data obtained from the computer devices of Abrams, Abrams Law, Rinelli, and Mills, and ordering that all of the data be produced to Plaintiffs; (3) awarding Plaintiffs at least $120,000.00 in monetary sanctions pursuant to 28 U.S.C. § 1927 (“Section 1927”) and this Court's inherent powers; and (4) awarding Plaintiffs $43,446.00 for reasonable expenses incurred in bringing the Motion and the Original Motion, pursuant to Rule 37(a)(5)(A). (See generally Mot; Pls.’ Suppl. Brief.)
Defendants oppose the Motion and seek $29,212.50 in attorneys’ fees pursuant to Rule 37(a)(5), Section 1927, and 28 U.S.C. § 401 (“Section 401”). (See generally Mot.; Opp'n to Suppl. Brief.)[4]
III. PRELIMINARY OBJECTIONS
A. Defendants’ Objections to Plaintiffs’ Declarations
*6 Defendants raise numerous objections to the evidence Plaintiffs present through the Slater, Peden, Horstmann, and Slater Supplemental Declarations. (Mot. 36–37, 40; Obj. to Slater Decl.; Obj. to Peden Decl.; Obj. to Horstmann Decl.; Obj. to Slater Suppl. Decl.) For the reasons stated below, the undersigned recommends that the District Court OVERRULE these objections.
1. No Foundation
Defendants assert as a general objection that the Slater, Peden, Horstmann, and Slater Supplemental Declarations lack foundation. (Obj. to Slater Decl. 1; Obj. to Peden Decl. 1; Obj. to Horstmann Decl. 1; Obj. to Slater Suppl. Decl. 1.) Defendants also assert this objection with respect to Paragraph 1 of each of the four declarations, Paragraph 5 of the Peden Declaration, and Paragraph 5 of the Horstmann Declaration. (Obj. to Slater Decl. 2; Obj. to Peden Decl. 2; Obj. to Horstmann Decl. 2; Obj. to Slater Suppl. Decl. 2.) This objection is without merit. The three declarants properly have laid the foundation for each of the assertions to which Defendants object on this basis. Accordingly, this objection should be OVERRULED.
2. No Personal Knowledge
Defendants assert as a general objection, pursuant to Local Rule 7-7 and Rule 56(c)(4), that Mr. Slater, Ms. Peden, and Mr. Horstmann lack personal knowledge as to the matters asserted in their respective declarations. (Obj. to Slater Decl. 1; Obj. to Peden Decl. 1; Obj. to Horstmann Decl. 1; Obj. to Slater Suppl. Decl. 1.) Defendants also assert this objection with respect to Paragraph 9 of the Slater Supplemental Declaration. (Obj. to Slater Suppl. Decl. 2.) This objection is without merit. Rule 56 provides that a declaration used to support a motion “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” Fed. R. Civ. P. 56(c)(4); see also C.D. Cal. L.R. 7-7 (“Declarations shall contain only factual, evidentiary matter and shall conform as far as possible to the requirements of [Rule] 56(c)(4).”). Through each of their declarations, these declarants attest to their personal knowledge. (Slater Decl. ¶ 2; Peden Decl. ¶ 1; Horstmann Decl. ¶ 2; Slater Suppl. Decl. ¶ 2.) Accordingly, this objection should be OVERRULED.
3. Improper Opinions and Conclusions
Defendants assert a general objection that each of the four declarations includes improper opinions and conclusions. (Obj. to Slater Decl. 1; Obj. to Peden Decl. 1; Obj. to Horstmann Decl. 1; Obj. to Slater Suppl. Decl. 1.) Defendants also assert this objection with respect to Paragraph 1 of each of the four declarations, Paragraphs 3 and 5 of the Horstmann Declaration, and Paragraph 9 of the Slater Supplemental Declaration. (Obj. to Slater Decl. 2; Obj. to Peden Decl. 2; Obj. to Horstmann Decl. 2; Obj. to Slater Suppl. Decl. 2.) This objection is without merit. Paragraph 1 of each of the four declarations state each declarant's position within their law firms and their relationships to Plaintiffs. (Slater Decl. ¶ 1; Peden Decl. ¶ 1; Horstmann Decl. ¶ 1; Slater Suppl. Decl. ¶ 1.) Paragraph 3 of the Horstmann Declaration declares that Mr. Horstmann sent an email to counsel for Defendants regarding the amount of fees to be paid pursuant to the December 22 Order and authenticating two documents. (Horstmann Decl. ¶ 3.) Paragraph 5 of the Horstmann Declaration declares that Defendants did not make the payment required by the January 19 Order. (Id. ¶ 5.) Paragraph 9 of the Slater Supplemental Declaration declares that, because Defendants still had not served legally-adequate privilege logs, Plaintiffs seek reimbursement of their attorneys’ fees in the additional amount of $1,750.00. (Slater Suppl. Decl. ¶ 9.) None of these statements are opinion testimony; rather, they describe facts. Accordingly, this objection should be OVERRULED.
4. Vagueness
*7 Defendants assert a general objection that the matter contained in the four declarations is vague. (Obj. to Slater Decl. 1; Obj. to Peden Decl. 1; Obj. to Horstmann Decl. 1; Obj. to Slater Suppl. Decl. 1.) But Defendants fail to explain what matter within any of the declarations is vague. Accordingly, this objection should be OVERRULED.
5. Legally and Factually Improper Declaration
Defendants assert a general objection that the matter contained in the four declarations is legally and factually improper under Lee v. City, 250 F.3d 668 (9th Cir. 2001). (Obj. to Slater Decl. 1; Obj. to Peden Decl. 1; Obj. to Horstmann Decl. 1; Obj. to Slater Suppl. Decl. 1.) However, Defendants fail to provide any explanation or specificity regarding this objection and the undersigned is left to wonder its meaning. As noted above, this is not the Court's job. Accordingly, this objection should be OVERRULED.
6. Relevance
Defendants assert a relevance objection with respect to Paragraphs 25 and 26 of the Slater Declaration; Paragraphs 3, 4, and 5 of the Peden Declaration; Paragraphs 3, 4, 5, and 8 of the Horstmann Declaration; and Paragraph 1 of the Slater Supplemental Declaration. (Obj. to Slater Decl. 2; Obj. to Peden Decl. 2; Obj. to Horstmann Decl. 2; Obj. to Slater Suppl. Decl. 2.) This objection is without merit. The undersigned finds that all of the statements at issue are relevant to the resolution of the Motion and its iterations. They refer to the hours billed by each of the declarants in preparing the Motion and present a calculation of those hours multiplied by their hourly rates as the total fees billed. (Slater Decl. ¶¶ 25–26; Peden Decl. ¶¶ 3–5; Horstmann Decl. ¶¶ 3–5.) In addition, Paragraph 1 of the Slater Supplemental Declaration notes Mr. Slater's move from his former firm to his new firm, and explains that he remains counsel of record for Plaintiffs along with his former firm. Accordingly, this objection should be OVERRULED.
7. Hearsay
Defendants assert a hearsay objection to Paragraphs 3 and 5 of the Horstmann Declaration. (Obj. to Horstmann Decl. 2.) This objection is without merit. Rule 801 of the Federal Rules of Evidence (“Evidence Rule”) generally prohibits the admission of statements made outside of court that are being offered for the truth of the matter asserted. Fed. R. Evid. 801. But the contents of these paragraphs are Mr. Horstmann's own statements recounting events—that he sent an email to Defendants’ counsel and that Defendants did not wire the payment of funds ordered by the Court—and do not reference any type of matter prohibited by Rule 801. Moreover, Mr. Horstmann's reference to two documents is merely for the purpose of authentication, which does not constitute a violation of the hearsay rules because it is not intended to establish the truth of the matters contained in those documents. See id. Accordingly, this objection should be OVERRULED.
8. Argumentative Statements and Exhibits
Defendants assert that Paragraph 4 of the Peden Declaration, Paragraphs 3, 4, and 5 of the Horstmann Declaration, and Paragraph 9 of the Slater Supplemental Declaration contain argument rather than factual matter. (Obj. to Peden Decl. 2; Obj. to Horstmann Decl. 2; Obj. to Slater Suppl. Decl. 2.) This objection is without merit. The statements at issue are not argumentative, as they simply state the events alleged to have transpired and are not inflammatory in any way. Nor are the exhibits attached to the Horstmann Declaration, which are simply two communications from Plaintiffs’ counsel to Defendants’ counsel. Accordingly, this objection should be OVERRULED.
9. Merits
*8 Defendants also raise a variety of arguments, disguised as evidentiary objections, that appear to go to the merits of the Motion and challenge the truth of the statements made by the three declarants. Specifically, Defendants dispute the truth of the facts asserted in Paragraphs 21, 22, 25, and 26 of the Slater Declaration (Obj. to Slater Decl. 2), Paragraphs 3, 5, and 8 of the Horstmann Declaration (Obj. to Horstmann Decl. 2), and Paragraph 1 of the Slater Supplemental Declaration (Obj. to Slater Suppl. Decl. 2). The undersigned concludes that these are not evidentiary objections but rather constitute Defendants’ factual assertions and legal arguments as to the merits of the Motion. Accordingly, these purported objections should be OVERRULED.
B. Defendants’ Procedural Objections
Defendants attack Plaintiffs’ Motion on a number of procedural grounds. These procedural objections should be disregarded as meritless because they are either lacking in factual support or legally unsound.
1. Local Rule 37-2
Defendants assert that the Motion should be denied because Plaintiffs have failed to comply with the timing requirements of Local Rule 37-2 for the preparation of the Joint Stipulation. (Mot. 15–16, 36–37, 40.) Local Rule 37-2.2 provides that the moving party in a discovery motion submitted as a joint stipulation must give the opposing party seven days to prepare its portion of the joint stipulation and that, after the moving party adds the opposing party's portion to the joint stipulation, it must return the completed joint stipulation to the opposing party and provide one business day to sign and return it to the moving party for filing. See C.D. Cal. L.R. 37-2.2. Defendants contend that Plaintiffs sent their portion of the joint stipulation to Defendants on April 8, 2022, that Defendants returned their portion on April 15, 2022, and that the motion was filed without giving Plaintiffs an opportunity until the next business day—April 18, 2022—to review the final version of the joint stipulation before it was filed. (Mot. 15–16, 36–37, 40.) Indeed, the record reflects that Plaintiffs filed the joint stipulation on April 15, 2022. (ECF No. 347.) But what Defendants ignore is that Plaintiffs filed two versions of the joint stipulation: one without Defendants’ portion (ECF No. 347) and one with Defendants’ portion (ECF No. 347-21). Moreover, Defendants fail to explain how they are prejudiced by their inability to review and approve the final joint stipulation. (See generally Mot.) And they provide no evidence that the joint stipulation does not contain their arguments as provided to Plaintiffs. (Id.) Indeed, Defendants independently filed a joint stipulation on April 18, 2022 (ECF No. 348), which was a duplicate of the joint stipulation filed by Plaintiffs containing Defendants’ portion (ECF No. 347-21). This prompted the undersigned to order the parties to jointly re-file the entirety of the joint stipulation and supporting documents in their final form (ECF No. 351), which they did, on April 22, 2022, as ECF No. 353. It is this ECF No. 353 that the undersigned considers in making its recommendation to the District Court. Thus, Plaintiffs’ transgression is inconsequential and, in any event, has been rectified without apparent prejudice to Defendants. Accordingly, this argument is without merit and should be DISREGARDED.
2. Local Rule 11-6
Defendants assert that the Motion should be denied because Plaintiffs have failed to comply with Local Rule 11-6, which limits points and authorities in support of a motion to twenty-five pages in length. See C.D. Cal. L. R. 11-6. (Mot. 16.) Defendants acknowledge that Local Rule 37-2.1 exempts stipulations regarding discovery disputes from the twenty-five-page limit, but nevertheless contend that the Motion is not a discovery dispute. (Mot. 16) But Defendants fail to provide any authority for this proposition and wholly ignore Local Rule 37-1, which plainly states that motions brought pursuant to Rules 26 through 37—as is the Motion—are discovery motions. See C.D. Cal. L.R. 37-1. Accordingly, this argument is without merit and should be DISREGARDED.
3. Local Rules 37-2 and 11-8
*9 Defendants assert that the Motion should be denied because it fails to (1) state the discovery cut-off date, pretrial date, and trial date on the title page, and include a copy of the case schedule in violation of Local Rule 37-2, and (2) include an indexed table of contents in violation of Local Rules 37-2 and 11-8. (Mot. 16.) Defendants’ first claim of error is correct. However, Defendants fail to present any evidence that they have been prejudiced—even minimally—by this deficiency. (See generally id.) As such, the undersigned recommends that the District Court exercise its discretion in favor of excusing Plaintiffs’ non-compliance. As to the second claim of error, indeed, Defendants are correct that the Original Motion—which was denied without prejudice for other reasons—did not contain the indexed table of contents as required by Local Rule 37-2.1.[5] (See Orig. Mot.) However, the Motion before the Court does. (Mot. 4–6.) Accordingly, this argument is without merit and should be DISREGARDED.
4. Local Rule 37-2.1
Defendants assert that the Motion should be denied because it references other filings, including allegations made in such prior filings, in violation of Local Rule 37-2.1. (Mot. 16.) Plaintiffs explain that this is done in an effort to “promote efficient use of judicial resources.” (Id. at 58–59.) The undersigned agrees with Defendants and, as detailed below, RECOMMENDS that the District Court disregard the arguments raised by Plaintiffs that rest solely upon outside motions and declarations. However, Defendants offer no authority for their apparent broader proposition that the Court should deny the entirety of the Motion, the vast majority of which does not rely upon the referenced matter. (See generally Mot.; Opp'n to Suppl. Brief) Accordingly, this argument is without merit and should be DISREGARDED.
5. Local Rules 7-17 and 7-18
Defendants assert that the Motion should be denied because it violates Local Rules 7-17 and 7-18, because it was refiled after this Court ruled on it on March 22, 2022. (Mot. 16–17, 42 (citing March 22 Order); Opp'n to Suppl. Brief 3.) Local Rule 7-17 concerns the resubmission of motions previously acted upon by a judge in this Court and requires that, where possible, such a motion be presented to the same judge. See C.D. Cal. L.R. 7-17. Local Rule 7-18 concerns motions for reconsideration of an order and generally requires a showing of new or different facts or law. See C.D. Cal. L.R. 7-18. However, the Motion is not one previously acted or ruled upon. That the Court denied without prejudice the Original Motion because it could not be resolved without significant revisions (March 22 Order) does not render the instant Motion subject to Local Rules 7-17 or 7-18. To the contrary, the March 22 Order expressly ordered Plaintiffs to file a motion excluding the matters in the Original Motion that had been resolved since its original filing. (Mar. 22 Order.) Accordingly, this argument is without merit and should be DISREGARDED.
6. Magistrate Judge Authority
Defendants assert that the Motion should be denied because, as a dispositive motion, it exceeds the authority of a Magistrate Judge, and they do not consent or agree “to any dispositive hearing at this level.” (Mot. 17–18, 42; Opp'n to Suppl. Brief 2–3.) The undersigned concurs that the Motion is of a dispositive nature and that she lacks the authority to resolve the Motion under 28 U.S.C. § 636. But that is precisely the reason that the undersigned presents this Report and Recommendation to the District Judge presiding over the case. Accordingly, this argument is without merit and should be DISREGARDED.
7. Scheduling Order
Defendants assert that the Motion should be denied because, as a dispositive motion, it violates the current Scheduling Order because it was filed after the dispositive motion cutoff date. (Mot. 18.) But, again, this argument mischaracterizes the nature of the Motion, and disregards the Local Rule that expressly defines this as a discovery motion. See C.D. Cal. L.R. 37-1. It also disregards the District Judge's order that Plaintiffs’ motion for terminating sanctions may be heard and resolved through July 1, 2022. (ECF No. 360.) Accordingly, this argument is without merit and should be DISREGARDED.
8. Inadmissible Declarations
*10 Defendants assert that the Motion should be denied because Plaintiffs have submitted inadmissible declarations. (Mot. 40.) However, as recommended above, Defendants’ objections to Plaintiffs’ declarations are meritless and should be overruled. Accordingly, this argument is without merit and should be DISREGARDED.
9. Federal Jurisdiction and Venue
Defendants assert that the Motion should be denied because Plaintiffs filed the case in federal court, where it “has no business,” and in the wrong federal venue—the Northern District of California—where it was filed “based on the fact that [Plaintiffs’ counsel] had an externship there.” (Mot. 31, 35–36, 40.) As a starting point, Defendants provide no legal authority in support of their argument that this case does not belong in federal court. (See generally Mot.) To the contrary, this Court has jurisdiction over the case pursuant to 28 U.S.C. § 1331 because it involves a claim arising under federal law: the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (“CFAA”). (Compl. ¶ 9.) Defendants argue that Plaintiffs’ CFAA claim is a “sham cause of action” and that they filed declarations with exhibits in support of this contention in connection with their motion to dismiss the complaint. (Mot. 31, 35, 40.) However, two District Judges already have rejected Defendants’ jurisdictional challenges to the Complaint: the Honorable Jon S. Tigar of the Northern District of California rejected their facial challenge (Jan. 8 Order), and the Honorable Fernando L. Aenlle-Rocha in this District rejected their factual challenge (ECF No. 228). Moreover, Defendants’ venue argument has been resolved by Judge Tigar, who determined—based on Defendants’ own argument that the case should be venued in Orange County (ECF No. 25, at 4)—that the case should be transferred to this District. (Jan. 8 Order.) Accordingly, this argument is without merit and should be DISREGARDED.
10. Rule 1
Defendants assert that the Motion should be denied because its very filing, including its filing “a few days before Labor Day,” reveals Plaintiffs’ disregard for Rule 1, the merits and the truth, and evidences Plaintiffs’ pursuit of a path that seeks to avoid the truth and a trial. (Mot. 17, 40–42, 66–67; Opp'n to Suppl. Brief 3.) But any argument regarding the date of filing is applicable, if at all, to the filing of the Original Motion on September 7, 2021,[6] which the undersigned denied without ruling on the substantive issues and without prejudice to its re-filing. (See Orig. Mot.; Mar. 22 Order.) The instant Motion was filed on April 22, 2022, eight months after Labor Day 2021 and four months before Labor Day 2022. (See Mot.) Moreover, Defendants’ bald speculation regarding Plaintiffs’ intent in bringing the Motion is of no relevance here. At bottom, the terminating, issue, and evidentiary sanctions available to Plaintiffs through Rule 37 long have been the means to redress the precise situation Plaintiffs face here—discovery misconduct that puts them at a disadvantage at trial. Accordingly, this argument is without merit and should be DISREGARDED.
11. Exceeding Permissible Scope
*11 Defendants argue that the Motion exceeds the scope permitted by the March 22 Order because it raises issues beyond the parties’ privilege log dispute. (Mot. 17–18.) But Defendants misapprehend the March 22 Order. The March 22 Order limited the Motion to any issues that remain unresolved among the eight issues raised in the Original Motion and the five issues addressed in the five discovery motions filed after the Original Motion. (March 22 Order.) Here, the Motion seeks terminating, issue, or evidentiary sanctions for the following acts of Defendants, all of which were raised either in the Original Motion or two of the five discovery motions: (1) withholding of the Content Findings; (2) spoliation of text messages; (3) violation of the December 22 Order and January 19 Order; (4) discovery misconduct necessitating eleven discovery orders; (5) misrepresentations regarding the Entity Defendants’ amenability to suit and insurance coverage; and (6) use of Plaintiffs’ privileged materials in court filings and discovery. (See generally Orig. Mot.; Mot.) The Motion also seeks monetary sanctions pursuant to Section 1927 and this Court's inherent powers for Defendants’ misconduct as raised in the Original Motion. (Id.) Accordingly, this argument is without merit and should be DISREGARDED.
12. Plaintiffs’ Supplemental Brief
Defendants assert that the request for sanctions in Plaintiff's Supplemental Brief should be denied because it was filed without leave of the Court, raises new issues not part of the Motion, raises new discovery issues after the discovery cutoff, was filed without first meeting and conferring with Defendants, was untimely as it was filed after the last day for filing the Motion, and does not conform to the requirements of Local Rule 37-2 in that it does not contain a memorandum of law and contains exhibits and declarations. (Opp'n to Suppl. Brief 1–3.) The undersigned finds that most of these claims of error are, in fact, accurate. However, Defendants seem to ignore that the undersigned expressly accepted, and granted leave for, the filing of Plaintiff's Supplemental Brief on the ground that it contained information that would “inform the Court's decision on the [Motion].” (ECF No. 359.) Moreover, Defendants were given ample opportunity to respond—an opportunity to which they have availed themselves, including the filing of their opposition as well as declarations and an exhibit in support thereof. (See Opp'n to Suppl. Brief; Basinger Decl.; Donahue Suppl. Decl.; Obj. to Slater Suppl. Decl.) Accordingly, this argument should be DISREGARDED.
C. Plaintiffs’ Evidence and Arguments Not Properly Before the Court or Fully Developed
In support of their request for terminating or, in the alternative, issue and evidentiary sanctions, Plaintiffs point to the following eight instances of misconduct that they contend, individually or collectively, amount to bad faith and willful violation of court orders.
1. Defendants’ continued withholding of the Content Findings obtained from the computer devices of Abrams, Abrams Law, Rinelli, and Mills (Mot. 43–44; 48–50; 53–55; Pls.’ Suppl. Brief 2–6);
2. The spoliation by Abrams, Rinelli, Mills, and Armstrong of their text message conversations with and among Defendants (Mot. 44–48; 50–53; 55–57);
3. Defendants’ obstructionist discovery conduct throughout the litigation of this case (id. at 57–58);
4. Defendants’ failure to comply with the December 22 Order (id. at 57);
5. Defendants’ failure to comply with the January 19 Order (id.);
6. Defendants’ misrepresentation regarding the amenability to suit of the Entity Defendants (id. at 58);
7. Defendants’ misrepresentations regarding insurance coverage (id. at 58–59); and
8. Defendants’ use of Plaintiff's privileged material in court filings and discovery (id. at 59).
However, the fourth through eighth instances of alleged misconduct are either not properly before the Court or based on arguments not fully developed in the Motion. Accordingly, for the reasons explained below, the District Court should not consider them in its decision.
1. Evidence of Defendants’ Violation of December 22 and January Orders
Plaintiffs urge the Court to consider Defendants’ non-compliance with the December 22 Order and the January 19 Order as evidence of willful misconduct and/or bad faith for purposes of its terminating sanctions analysis. (Mot. 16–17, 57.) As noted above, the December 22 Order required Abrams, Rinelli, Armstrong, and Wooten to, among other things, pay the costs associated with the four depositions within fifteen days after receipt of a cost accounting from Plaintiffs. (Dec. 22 Order, at 64.) Plaintiffs contend that they provided the required accounting to Defendants on March 22, 2022, for a sum due of $19,237.75, and that Defendants failed to make the ordered payment. (Mot. 28.) As also noted above, the January 19 Order required Defendants pay $2,415.00 in fees associated with the Motion by February 18, 2022. (Jan. 19 Order, at 54.) Plaintiffs contend that Defendants failed to make the ordered payment. (Mot. 29.)
*12 However, Plaintiffs have failed to perfect their right to raise these violations in the Motion. As noted above, neither of these orders existed prior to the Original Motion. Accordingly, per the March 22 Order, claims of non-compliance as to these orders could be included in the Motion only if Plaintiffs first notified the Court of their intent to amend the Original Motion to include them. (Dec. 9 Order, at 5–6.) In failing to do so, Plaintiffs waived their right to raise this argument in the Motion. Moreover, Plaintiffs currently have pending a separate motion seeking a finding of contempt against Defendants for their violation of the December 22 Order and the January 19 Order. (ECF No. 363.) Thus, this matter can, and should be, resolved through that motion.
2. Evidence of Defendants’ Misrepresentations and Use of Privileged Material
Plaintiffs also urge the Court to consider Defendants’ other conduct—their misrepresentations about the Entity Defendants’ legal status and amenability to suit and their insurance coverage, and their use of Plaintiff's privileged material—as evidence of willful misconduct and/or bad faith for purposes of its terminating sanctions analysis. (Mot. 57–59.) However, as to each of these contentions, Plaintiffs fail to develop the record—purportedly “[i]n order to promote efficient use of judicial resources”—and, instead, refer the Court to the original motion and its exhibits. (Id. at 58–59.) But such a reference achieves the exact opposite of its ostensible goal. Failing to provide the Court with the materials it needs in one filing requires that the Court expend more, rather than less, resources to comb through the record and find Plaintiffs’ arguments and their supporting facts. Moreover, as Defendants’ aptly note (Mot. 16), such a reference violates Local Rule 37-2.1, which requires that a discovery motion:
contain all issues in dispute and, as to each such issue, the contentions and points and authorities of each party. The stipulation may not refer the Court to any other documents. For example, ... [i]f the allegations made in a prior filing are relevant, a copy of that prior filing should be attached as an exhibit.
C.D. Cal. L.R. 37-2.1 (emphasis added). Moreover, Plaintiffs’ argument seems to rest on the assumption that Defendants actually have engaged in this challenged conduct. (Mot. 57–59.) However, no such finding has been made in this case.
* * *
In sum, for the reasons stated above, the District Court should DISREGARD the foregoing arguments and factual assertions as purported evidence of willful misconduct and/or bad faith for purposes of its terminating sanctions analysis. That said, consideration of the above instances of misconduct would not yield a different outcome because, as detailed below, the undersigned finds that sanctions lesser than termination are appropriate.
IV. RULE 37 SANCTIONS
Pursuant to Rule 37(b)(2)(A), Plaintiffs seek terminating sanctions or, in the alternative, issue and evidentiary sanctions against Defendants for (1) the failure of Abrams Defendants, Rinelli, and Mills to comply with the undersigned's discovery orders regarding the Content Findings obtained from their computer devices; and (2) the spoliation of text messages by Abrams, Rinelli, Mills, and Armstrong, both of which Plaintiffs contend were done willfully and in bad faith. (Mot. 42–57; see generally Pls.’ Suppl. Brief.)
A. Whether Rule 37 Sanctions Should Be Levied on Defendants
1. Defendants Who Did Not Violate a Court Order or Spoliate Evidence
Plaintiffs seek sanctions against all Defendants: Abrams Defendants, Rinelli, Mills, Wooten, Armstrong, and Rinelli Law. (Mot. 2.) Defendants argue that such a request violates due process in that it “lumps [all Defendants] together as if there [were] ONE DEFENDANT,” leaving the Court “to guess” who, if any, of the Defendants—which include “a single mother, ... an insurance agent, ... a secretary, ... an attorney, ... and another attorney [who] don't work together”—committed a 25 wrong. (Mot. 31, 67; Opp'n to Suppl. Brief 2, 6.) The undersigned agrees with Defendants that it cannot impose any sanction—let alone the harsh terminating, issue, or evidentiary sanctions requested here—against a defendant that has not violated a court order or spoliated evidence. Rule 37(b)(2)(A) contemplates sanctions only where “a party or a party's officer, director, or managing agent ... fails to obey an order to provide or permit discovery ....” Fed. R. Civ. P. 37(b)(2)(A). Rule 37(e) permits the imposition of sanctions against a party that fails to take steps to preserve electronically-stored information (“ESI”). Fed. R. Civ. P. 37(e).
*13 Here, Plaintiffs claim that Abrams Defendants, Rinelli, and Mills failed to comply with discovery orders regarding their privilege logs, and that Abrams, Rinelli, Mills, and Armstrong spoliated evidence. Accordingly, the District Court should DENY Plaintiffs’ request for sanctions under Rule 37(b)(2)(A) for violation of a discovery order as to Wooten, Armstrong, and Rinelli Law, and consider it only as to Abrams Defendants, Rinelli, and Mills. The District Court also should DENY Plaintiffs’ request for sanctions under Rule 37(e) as to Wooten, Rinelli Law, and Abrams Law, and consider it only as to Abrams, Rinelli, Mills, and Armstrong.
2. Rule 37(b)(2)(A) Sanctions Against Abrams Defendants, Rinelli, and Mills for Withholding Content Findings of Computer Devices
On April 23, 2021, the undersigned ordered a Rule 34 inspection of, as relevant here, the computer devices and backups of Abrams Defendants’ work desktop and laptop computers (Abrams Devices”). (“April 23 Order,” ECF No. 104.) On January 25, 2022, the undersigned ordered a Rule 34 inspection of the computer devices of Rinelli and Mills (“Rinelli Device,” “Mills Device”). (Jan. 5 Order.) The April 23 Order provided that the inspection of the Abrams Devices would proceed subject to an inspection protocol that the parties were then developing. (Id. at 2.) The parties’ “Rule 34 Forensic Examination Protocol” ultimately issued on April 30, 2021 (“Protocol”). (Protocol, ECF No. 112.) The January 5 Order provided that the inspection of the Rinelli Device and the Mills Device would proceed pursuant to Plaintiffs’ proposed protocol specific to each of Rinelli and Mills, both of which mirror the Protocol in all parts relevant here. (Compare Protocol with ECF No. 279-1, at 10–19 (proposed protocol for the Rinelli Device) and ECF No. 279-1, at 20–30 (proposed protocol for the Mills Device).)
Pursuant to the Protocol, Plaintiffs’ computer forensic expert, Setec Investigation (“Setec”), first would conduct a forensic acquisition of the devices by generating a bit stream copy of each device and then would conduct a search of that bit stream copy for documents responsive to an agreed-upon keyword and software search criteria. (Protocol 3–4.) Setec then would divide the results of that search into two groups: Content Findings (user-generated information, such as communications and documents) and Non-Content Findings (system-generated information, such as metadata). (Id. at 3.) Setec next would provide copies of both the Content and Non-Content Findings to the corresponding defendant. (Id. at 4.) Each such defendant had ten days to review the Non-Content Finding and twenty days to review the Content Findings for privilege and provide Setec a privilege log for each. (Id.) Setec then had ten and twenty days, respectively, to produce to Plaintiffs copies of the Non-Content and Content Findings, excluding any identified privileged material, which Setec would withhold until resolution of any challenges by Plaintiffs to Defendants’ privilege designations. (Id. at 5.)
According to the Protocol, the privilege logs were to include the following information on a document-by-document basis:
(a) the attorney(s) and client(s) involved;
(b) the nature of the document;
(c) the source of the document or the person who created the document;
(d) the sender(s) of the document (if appropriate);
(e) all recipients of the document (if appropriate);
(f) all persons known to have been furnished the document or otherwise informed of its contents (if appropriate);
(g) the date the document was generated, prepared, or dated; and
*14 (h) all privileges upon which the document is being withheld.
(Id. at 4.)
1) Abrams Defendants’ Privilege Logs
Setec conducted the Rule 34 inspection of the Abrams Devices on May 3, 2021. (Mot. 18.) At a July 12, 2021 informal discovery conference regarding Abrams Defendants’ failure to comply with the Protocol, the undersigned found that Setec's file-naming convention did not make self-evident which were the Content versus the Non-Content Findings, leaving the Abrams Defendants unable to comply with their privilege log obligation (“July 12 Order”). (July 12 Order, ECF No. 139.) Upon Setec's explanation of which documents belonged in each category of findings, the undersigned ordered Abrams Defendants to serve their privilege logs for the Non-Content Findings by July 14, 2021,[7] and for the Content Findings by July 19, 2021. (Id. at 2.)
On July 19, 2021, the Abrams Defendants jointly served “Defendant's [sic] Response re: Content Findings of Setec,” which did not contain a privilege log but instead contained objections and legal argument (“Abrams July 19 Privilege Response”). (Slater Decl. ¶ 4; Pls.’ Ex. A.) On July 22, 2021, Plaintiffs requested an informal discovery conference to address the failure of Abrams Defendants to comply with the July 12 Order; the conference was set for July 26, 2021. (ECF No. 158.) On July 23, 2021, Abrams Defendants served a privilege log (“Abrams July 23 Privilege Log”). (Slater Decl. ¶ 5; Pls.’ Ex. C.)
On July 26, 2021, the undersigned held an informal discovery conference and found that Abrams Defendants had not served a privilege log regarding the Content Findings as required by July 19, 2021, and that the Abrams July 23 Privilege Log was deficient because it “(1) fail[ed] to identify any specific document, (2) provide[d] only a list of the directories and files included in the Content Findings, and (3) [fail[ed] entirely to comply with the Protocol with respect to the information to be provided [ ].” (July 27 Order, at 2.) The undersigned also concluded that the Abrams July 23 Privilege Log was “untimely and, in any event, so lacking in information that it [was] not usable for its intended purpose, as described in the Protocol.” (Id.) Abrams Defendants argued, for the first time, that their failure to provide a legally-adequate privilege log was due to “the sheer volume of the Content Findings” which they contended totaled “over 26,000 documents.” (Id.) The undersigned was unpersuaded by this argument given that Abrams Defendants had not served a privilege log for any of the 7,000 documents they admitted to having reviewed. (Id. at 3.) The undersigned ordered Abrams Defendants to produce a privilege log for the first 13,000 documents by August 2, 2021 and the second 13,000 documents by August 9, 2021, and to identify the documents “by bates number or other identifying system afforded by the Content Findings.” (Id. at 3–4.)
On August 2 and 9, 2021, Abrams Defendants served two privilege logs (“Abrams August Privilege Logs”), which together contain 1,558 entries. (Slater Decl. ¶ 6; Pls.’ Exs. D, E.) Both contain the following headers: File Directory, Document Type, Date, Author, Recipient, Subject Matter, Privilege Asserted. (Pls.’ Exs. D, E.)
2) Rinelli/Mills Privilege Log
*15 Setec conducted the Rule 34 inspection of the Rinelli and Mills Devices on January 25, 2021. (Pls.’ Suppl. Brief 2.) On April 25, 2022, Rinelli and Mills served a joint privilege log (“Rinelli/Mills Privilege Log”). (Slater Suppl. Decl. ¶ 8; Pls.’ Ex. R.) It contains two entries, each of which provides information under the following headers: File Directory, a blank header, Date, Author, Recipient, Subject Matter, Privilege Asserted. (Pls.’ Ex. R.)
3) Continued Withholding of Content Findings
None of Abrams Defendants, Rinelli, or Mills have produced any of the Content Findings obtained through the Adams Device Inspection and the Rinelli/Mills Device Inspection. (Mot. 14.) Instead, all of the Content Findings have been, and continue to be, withheld on the basis of the entries contained in the Adams August Privilege Logs and the Rinelli/Mills Privilege Log (together, where appropriate, “Privilege Logs”). Plaintiffs contend that the Privilege Logs are legally inadequate and non-compliant with the Protocol, leaving them unable to evaluate and challenge the privilege claims asserted by Adams Defendants, Rinelli, and Mills, as contemplated by the Protocol. (Id.) This, in turn, leaves Plaintiffs unable to obtain any of the Content Findings. (Id.) On this basis, they seek terminating or, in the alternative, issue and evidentiary sanctions.
Rule 37(b) provides that “[i]f a party or a party's officer, director, or managing agent ... fails to obey an order to provide or permit discovery ... the court where the action is pending may issue further just orders.” Fed. R. Civ. P. 37(b)(2)(A); Wanderer v. Johnston, 910 F.2d 652, 657 (9th Cir. 1990) (explaining that sanctions are appropriate where a party is guilty of failing to produce documents or things as ordered by the court). A judicial finding that a discovery order has been violated “is entitled to considerable weight” because the judge presiding over the case is “best equipped to assess the circumstances of non-compliance.” Payne v. Exxon Corp., 121 F.3d 503, 507 (9th Cir. 1997) (quoting Adriana Int'l Corp. v. Lewis & Co., 913 F.2d 1406, 1411 (9th Cir. 1990)).
Rule 37(b)(2)(A) allows a court to impose a variety of discovery sanctions on a disobedient party, including:
(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.
Rule 37 sanctions must be applied diligently both “to penalize those whose conduct may be deemed to warrant such a sanction, [and] to deter those who might be tempted to such conduct in the absence of such a deterrent.” NHL v. Metro. Hockey Club, 427 U.S. 639, 643, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976). A court “has great latitude in imposing sanctions for discovery abuse.” Dahl v. City of Huntington Beach, 84 F.3d 363, 367 (9th Cir. 1996).
A Magistrate Judge may recommend such nonmonetary sanctions by report and recommendation to the District Judge presiding over the case. See 28 U.S.C. § 636(b)(1)(B); see also, e.g., Dolzhenico v. City of Los Angeles, No. CV-15-4581 AB (SSx), 2016 WL 10587935, at *––––, 2016 U.S. Dist. LEXIS 192905, at *31-32 (C.D. Cal. Oct. 28, 2016) (recommending nonmonetary sanctions for failure to comply with discovery orders), adopted, 2017 WL 5643140, 2017 U.S. Dist. LEXIS 220461 (C.D. Cal. Jan. 30, 2017).
c. Discussion
*16 Plaintiffs contend that Abrams Defendants, Rinelli, and Mills have violated multiple court orders in connection with their privilege logs and, as a result, are improperly withholding the Content Findings. As detailed below, they are correct.
1) Violation by Abrams Defendants of the Protocol and July 12 Order
Plaintiffs correctly argue that the Abrams July 19 Privilege Response and the Abrams July 23 Privilege Log violate the undersigned's discovery orders. As the undersigned already found in the July 27 Order, the Abrams July 19 Privilege Response violates both the Protocol and the undersigned's July 12 Order because it does not provide any of the privilege log information required by the Protocol. (July 27 Order, at 2.) In fact, it is not a privilege log at all; rather, it is nothing more than a series of objections and legal arguments. (Pls.’ Ex. A.) In addition, as the undersigned found in its July 27 Order, the Abrams July 23 Privilege Log also violates the Protocol and the undersigned's July 12 Order in that “(1) fails to identify any specific document, (2) provides only a list of the directories and files included in the Content Findings, and (3) fails entirely to comply with the Protocol with respect to the information to be provided ....” rendering it not only “untimely” but also “not usable for its intended purpose, as described in the Protocol.” (July 27 Order.) The Abrams Defendants did not file objections to the July 27 Order under Rule 72(a) or otherwise challenge its findings. Nor do they dispute these findings here. (See generally Mot.; Opp'n to Suppl. Brief.)
2) Violation by Abrams Defendants, Rinelli, and Mills of the Protocol and July 27 Order
Plaintiffs argue that the Privilege Logs also violate other discovery orders. (Mot. 20–26; Pls.’ Suppl. Brief 2–4.) Again, Plaintiffs are correct. As detailed below, the Privilege Logs violate the Protocol and the July 27 Order to the Abrams Defendants in multiple regards.
The July 27 Order explains that the privilege logs must “identify ... the documents contained in the Content Findings ... by bates number or other identifying system afforded by the Content Findings ....” (July 27 Order, at 3–4.) Rather than bates-numbering the Content Findings, Abrams Defendants identify the 26,000 documents according to the name of the file directory in which they are found. (Pls.’ Exs. D, E.) As such, rather than identify any individual document, the Abrams Defendants provided a categorical privilege log that groups the 26,000 documents into approximately 1,558 file directory categories. (Id.) Plaintiffs contend that this does not satisfy the privilege log obligation of Abrams Defendants to identify the 26,000 privileged documents and leaves Plaintiffs to wonder if the Abrams August Privilege Logs are complete in the first instance. (Mot. 21, 26.)
Rinelli and Mills followed suit. Rather than bates-numbering the Content Findings documents, Rinelli and Mills elected to identify their Content Findings by two file directory names. (Pls.’ Ex. R.) From this, it is impossible to determine how many documents are contained within each file directory and whether the Rinelli/Mills Privilege Log is complete. It also is impossible to determine whether both file directories contain documents for both Rinelli and Mills, or if one file directory contains Rinelli's documents and the other contains Mills's documents. Plaintiffs contend that this does not satisfy Rinelli's and Mills's privilege log obligations to identify the unquantified privileged documents. (Pls.’ Suppl. Brief 3–4.)
*17 Rule 26(b)(5) provides that when a party withholds information otherwise discoverable under the rules by claiming that it is privileged or subject to protection as trial preparation material, the party must: “(i) expressly make the claim; and (ii) describe the nature of the documents, communications, or tangible things not produced or disclosed—and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.” Fed. R. Civ. P. 26(b)(5). Rule 26(b)(5) does not expressly require the production of a “document-by-document” privilege log. See Patriot Rail Corp. v. Sierra R.R. Co., No. 2:09-cv-0009 TLN AC, 2016 WL 1213015 at *––––, 2016 U.S. Dist. LEXIS 41685, at *8 (E.D. Cal. Mar. 29, 2016). However, the Ninth Circuit has recognized that one method of expressly claiming attorney-client privilege or work product protection is a document-by-document privilege log. See In re Grand Jury Investigation, 974 F.2d 1068, 1071 (9th Cir. 1992) (finding that one of the means to sufficiently establish the attorney-client privilege is a privilege log). Blanket assertions of the attorney-client privilege are “extremely disfavored” in the Ninth Circuit. Clarke v. Am. Com. Nat'l Bank, 974 F.2d 127, 129 (9th Cir. 1992). Rather, “[t]he privilege must ordinarily be raised as to each record sought to allow the court to rule with specificity.” Id.; see also United States v. El Paso Co., 682 F.2d 530, 541 (5th Cir. 1982) (rejecting attempt to invoke privilege due in part to the failure to “particularize its assertion of the privilege” for each specific document), cert. denied, 466 U.S. 944, 104 S.Ct. 1927, 80 L.Ed.2d 473 (1984).
Here, none of Abrams Defendants, Rinelli, or Mills raise any argument or offer any authority in support of a categorical privilege log that identifies documents according to the file directory in which they are found. (See generally Mot.; Opp'n to Suppl. Brief.) Nor would such an argument prevail here given that Defendants’ category names—such as “CAbramsInspiron0/D/Users/Chris/Desktop/ The Law Offices of C.R. Abrams/LEGAL/GoldMine Backup” in the Abrams August Privilege Logs (Pls.’ Ex. D at 2), and “2835-701-701/HP” and “2835-701/HP_Wolfanoz_IMG” in the Rinelli/Mills Privilege Log (Pls.’ Ex. R)—provide no insight into the types and quantity of documents that are contained in each category, leaving Plaintiffs with no ability to (1) assess the privilege claim, as contemplated by Rule 26(b)(5), and (2) determine if the Privilege Logs are complete. Nor do Defendants argue that creation of a document-by-document privilege log would be unduly burdensome. (See generally Mot.; Opp'n to Suppl. Brief.)[8]
Rather, Defendants argue that Plaintiffs “failed and refused to properly record and copy and turn over contents and non-contents from the inspection on May 3, 2021, of computer devices at the Law office of CR Abrams.” (Mot. 41 (errors in original).) They further aver that Plaintiffs “falsely assume that categories were possible, are possible and/or necessary.” (Opp'n to Suppl. Brief 3.) They explain that “[u]pon review of the data on the drives, it was found that Setec had stored or configured the data in such a way that prevented a full and through [sic] review” and that “[t]here was information that requires specialized programs and/or equipment to view.” (Basinger Decl. ¶ 9.) Even broadly interpreting this assertion as an attempt to cast blame on Plaintiffs for not having bates-numbered the Content Findings documents, this does not excuse these defendants from their independent Rule 26(b)(5) obligation to provide privilege logs that contain the information necessary to assess their privilege designations, starting with a proper and usable identification of the withheld documents.
*18 Consistent with Ninth Circuit precedent, the Protocol requires that any documents withheld upon a claim of privilege be identified in a privilege log entry that contains the following information: (1) the attorney(s) and client(s) involved; (b) the nature of the document; (c) the source of the document or the person who created the document; (d) the sender(s) of the document (if appropriate); (e) all recipients of the document (if appropriate); (f) all persons known to have been furnished the document or otherwise informed of its contents (if appropriate); and (h) all privileges upon which the document is being withheld. (Protocol 4 (citing In re Grand Jury Investigation, 974 F.2d at 1071).) Nevertheless, Abrams Defendants, Rinelli, and Mills failed to comply with these clear instructions in crafting their Privilege Logs. Indeed, the Privilege Logs provide the following fields of information: “File Directory”; “Document Type”; “Date”; “Author”; “Recipient”; “Subject Matter”; and “Privilege Asserted.” (Pls.’ Exs. D, E, R.) Plaintiffs contend that these categories are confusing, deficient, and not synonymous with what is required by the Protocol, leaving them “to sort through Defendants’ own proffered information categories and figure out which information category is meant to match-up with the Protocol's court-ordered information categories.” (Mot. 21–22; Pls.’ Suppl. Brief 3–4.) None of Abrams Defendants, Rinelli, or Mills offer any explanation as to how their information categories reconcile with those required by the Protocol. (See generally Mot.; Opp'n to Suppl. Brief.) Because the field headers of the Privilege Logs do not comply with the instructions of the Protocol, and it is not self-evident that the Privilege Logs provide the information required by the Protocol, the undersigned agrees with Plaintiffs that the Privilege Logs are deficient.
(iii) Rule 26(b)(5)
Rule 26(b)(5) requires that a privilege log provide information that “will enable other parties to assess the claim.” Fed. R. Civ. P. 26(b)(5). Plaintiffs contend that, regardless of whether Defendants’ information categories reconcile with those of the Protocol, the Privilege Logs do not satisfy this Rule 26(b)(5) requirement. (Mot. 22–24; Pls.’ Suppl. Brief 3–4.) Defendants respond that Plaintiffs’ allegation “that they were not provided with information needed to intelligently evaluate privilege” is false and “nothing but buzzwords,” leaving Defendants “in the dark, and only able to speculate at best, based upon these unsupported shotgun allegations.” (Opp'n to Suppl. Brief 3–4.) But as detailed below, Plaintiffs are correct.
“Subject Matter” information in the Privilege Logs: The subject matter entries for each of the four-hundred-plus entries in the Abrams August 2 Privilege Log state: “Trust client note backup. Includes clients and their interactions with attorney Abrams.” (Pls.’ Ex. D.) Their counterpart in the Abrams August 9 Privilege Log and the Rinelli/Mills Privilege Logs state “Living Trust Documents.” (Pls.’ Exs. E, R.) Plaintiffs argue that these descriptions are meaningless and provide no insight into the number of documents contained in those document groupings, what a backup document is, what is meant by “interactions,” what is meant by “Living Trust Documents,” and the basis upon which such document(s) could be privileged. (Mot. 22–24; Pls.’ Suppl. Brief 4.) Defendants offer no argument to the contrary and provide no information helpful to decipher these terms. (See generally Mot.; Opp'n to Suppl. Brief.) The undersigned agrees with Plaintiffs.
Defendants argue that “Plaintiffs have utterly failed to address the primary purpose test, adopted by courts to analyze client communications.” (Opp'n to Suppl. Brief 6.) However, to the extent Defendants rely on the “primary purpose test” to shield all documents identified in the Abrams August 2 Privilege Log, that reliance is misplaced. “Under the attorney-client privilege, confidential communications made by a client to an attorney to obtain legal services are protected from disclosure.” Clarke, 974 F.2d at 129. Thus, by definition, communications not involving the seeking or giving of legal advice are not privileged. Teradata Corp. v. SAP SE, No. 18-cv-03670-WHO (EDL), 2019 U.S. Dist. LEXIS 232053, at *49–50 (N.D. Cal. Sep. 9, 2019). Moreover, the Ninth Circuit long has recognized that information relating to “the identity of a client, the amount of the fee, and the general purpose of the work performed are usually not protected from disclosure by the attorney-client privilege.” Clarke, 974 F.2d at 129 (collecting cases). Moreover, the burden to establish that a document is privileged under the primary purpose test—upon which Defendants rely—falls on the proponent of the privilege—here Defendants. See Teradata Corp., 2019 U.S. Dist. LEXIS 232053, at *50 (“In order to show that a communication relates to legal advice, the proponent of the privilege must demonstrate that the ‘primary purpose’ of the communication was securing legal advice.”) (quoting United States v. ChevronTexaco Corp., 241 F. Supp. 2d 1065, 1076 (N.D. Cal. 2002)). Thus, Defendants’ argument that Plaintiffs have failed to address the primary purpose test—about which Defendants provide no information whatsoever (see generally Mot.; Opp'n to Suppl. Brief)—is unavailing. Accordingly, because the Subject Matter information provided in the Abrams August 2 Privilege Log is insufficient to determine whether the attorney-client privilege actually is triggered, it is deficient.
*19 Defendants also argue that Plaintiffs have failed to address the work product doctrine. (Opp'n to Suppl. Brief 6.) However, to the extent they rely on the work product doctrine to shield documents related to the creation of a living trust or the living trusts themselves, that reliance is misplaced. The attorney work product doctrine “protects from discovery in litigation ‘mental impressions, conclusions, opinions, or legal theories of a party's attorney’ that were ‘prepared in anticipation of litigation or for trial.’ ” ACLU of N. Cal. v. U.S. DOJ, 880 F.3d 473, 483 (9th Cir. 2018) (quoting Fed. R. Civ. P. 26(b)(3)). The work product privilege is a qualified privilege that can be overcome by a showing that the party “has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.” Fed. R. Civ. P. 26(b)(3)(A)(ii). Because there is a possibility that the documents withheld as “Living Trust Documents” may be discoverable and are being withheld improperly, especially those unrelated to this litigation, that Subject Matter description is insufficient and renders the Privilege Logs unusable.
On this basis, the undersigned concludes that the Subject Matter entries in the Privilege Logs are deficient.
“Author” information in the Abrams August 2 Privilege Log: Plaintiffs argue that the identification of “Chris Abrams” as the only author for these four-hundred-plus entries is inaccurate because they contend—and intend to prove at trial—that “all Defendants (and not just Mr. Abrams),” including Mills's secretary Lisa, “had access to the client database as of and before December 2019.” (Mot. 23 (citing Pls.’ Ex. D).) However, the undersigned is not persuaded by Plaintiff's argument because the two circumstances are not mutually exclusive. It is altogether possible that, while all Defendants and Lisa had access to the client database, only Abrams authored the documents identified in the Abrams August 2 Privilege Log. Plaintiffs must proffer more than speculation regarding the inaccuracy of these “Author” entries to persuade the Court that they are, in fact, deficient. “The fact that a party may disbelieve or disagree with a response to a discovery request ... is not a recognized ground for compelling discovery, absent some indication beyond mere suspicion that the response is incomplete or incorrect.” Jimena v. UBS AG Bank, No. 1:07-cv-00367-OWW-SKO, 2010 WL 4363193 at *3, 2010 U.S. Dist. LEXIS 119308, at *8 (E.D. Cal. Oct. 22, 2010) (quoting Gray v. Faulkner, 148 F.R.D. 220, 223 (N.D. Ind. 1992)). On this basis, the undersigned concludes that the Author entries are not deficient on the ground stated by Plaintiffs.
“Document Type” information in the Abrams August 9 Privilege Log: Plaintiffs argue that the Document Type information provided in the Abrams August 9 Privilege Log is unclear because, instead of identifying the types of documents as “.doc, .pdf, .jpg,” this field contains what appears to be names of individual clients. (Mot. 24 (citing Pls.’ Ex. E).) The undersigned agrees. While the Protocol is silent as to the meaning of “Document Type,” it is inconceivable that it could mean “name” since that information already would be responsive to the Protocol's reference to attorney, client, author, sender, recipient, and other persons involved with the document. A person's name adds nothing to Plaintiffs’ understanding of the nature of the withheld document. Defendants offer no explanation as to the contents of this field or argument to the contrary. (See generally Mot.; Opp'n to Suppl. Brief.) On this basis, the undersigned concludes that the Document Type entries are deficient.
“Date” information in the Abrams August 9 Privilege Log: Plaintiffs argue that the Date information provided in this log is unhelpful because all entries list “Various.” (Mot. 24 (citing Pls.’ Ex. E).) The undersigned agrees. Without access to the date on which these documents were created and/or sent, Plaintiffs cannot meaningfully evaluate Defendants’ privilege assertions. Indeed, the dates on which the withheld documents were created could provide insight into whether the documents are related to the litigation in the first instance. Defendants are silent on this issue. (See generally Mot.; Opp'n to Suppl. Brief.) On this basis, the undersigned concludes that the Date entries are deficient.
*20 In addition to asserting the attorney-client and work product privileges, the Privilege Logs also assert the following bases for withholding documents: “Spousal privilege; invasion of privacy; third-party privacy rights; HIPAA; trade secrets; taxpayer privilege; and confidential materials.” (Pls.’ Exs. D, E, R.) Plaintiffs argue that the privacy and trade secret objections are improper bases for withholding documents because they are not privileges to begin with, and, in any event, the assertion of these objections is misleading because “it remains unclear ... whether certain items and materials identified on [the Privilege Logs] were withheld on the basis of the foregoing objections only, or on the basis of privilege, or both.” (Mot.25.) Defendants dispute Plaintiffs’ claim that a party's privacy and trade secrets objections are not privileges, and suggest that, in any event, it does not matter here. (Opp'n to Suppl. Brief 4.) For the reasons set forth below, the undersigned concludes that, to the extent Defendants are withholding documents pursuant to privacy and trade secret objections, it does matter and such withholding is not permissible.
First, Defendants’ privacy objections—invasion of privacy, third party privacy, HIPAA, and confidential materials—fail because Defendants have not established that there exists a reasonable right of privacy to the information contained in the Content Findings. (See generally Mot.; Opp'n to Suppl. Brief.) A party asserting a privacy objection must establish first that there exists a reasonable right of privacy to the information sought to be disclosed. Christian v. County of Los Angeles, No. 2:18-cv-05792-CJC (JDEx), 2020 WL 4820006, at *2, 2020 U.S. Dist. LEXIS 157307, at *6-8 (C.D. Cal. Jan. 28, 2020) (finding privacy claim unavailing without a showing of a reasonable right to privacy). Defendants have offered no reasoning or legal authority to support their assertion that the information sought here is protected by the right of privacy. (See generally Mot.; Opp'n to Suppl. Brief.)
Moreover, even if Defendants could establish a reasonable expectation of privacy as to the withheld documents—perhaps because they contain personal medical or financial information related to a client's family trust—this alone does not entitle them to withhold these documents. Federal courts recognize a right of privacy implicit in Rule 26. Seattle Times Co. v. Rhinehart, 467 U.S. 20, 35 n.21, 104 S.Ct. 2199, 81 L.Ed.2d 17 (1984) (noting that “[a]lthough [Rule 26(c)] contains no specific reference to privacy or to other rights or interests that may be implicated, such matters are implicit in the broad purpose and language of the Rule”). Indeed, the Ninth Circuit has recognized a constitutionally protected privacy interest in avoiding disclosure of personal medical matters. See Norman-Bloodsaw v. Lawrence Berkeley Lab., 135 F.3d 1260, 1269 (9th Cir. 1998) (finding a privacy interest medical information). This privacy right also encompasses financial and banking records. Net-Com Servs., Inc. v. Eupen Cable USA, Inc., No. CV 11-2553 PSG (SSx), 2012 WL 12887396, at *––––, 2012 U.S. Dist. LEXIS 207713, at *10 (C.D. Cal. Nov. 14, 2012) (citations omitted); see also Madrigal v. Allstate Indem. Co., No. CV 14-4242 SS, 2015 WL 12746225, ––––, 2015 U.S. Dist. LEXIS 191875, at *18-19 (C.D. Cal. Apr. 22, 2015) (“right to privacy ‘embraces confidential financial information in whatever form it takes, whether that form be tax returns, checks, statements, or other account information’ ” (citation omitted)). A party asserting a right to privacy must provide evidence that the information is considered private and describe the steps he or she has taken to maintain the privacy of such records. See, e.g., Hanson-Poulsen v. Dep't of Def., No. 2:16-cv-05786-DMG-AFMx, 2020 WL 2043999, at *2, 2020 U.S. Dist. LEXIS 76699, at *6 (C.D. Cal. Mar. 3, 2020) (overruling defendants’ objections because they had submitted no evidence “that would substantiate [the] objections.”)
Still, the right of privacy is not an absolute bar to discovery and courts must balance the need for the information against the claimed privacy right. Allen v. Woodford, No. CV-F-05-1104 OWW LJO, 2007 WL 309485, at *6, 2007 U.S. Dist. LEXIS 11002, at *16 (E.D. Cal. Jan. 30, 2007) (“Unlike a privilege, the right of privacy is not an absolute bar to discovery.”); Soto v. City of Concord, 162 F.R.D. 603, 616 (N.D. Cal. 1995) (“Resolution of a privacy objection or request for a protective order requires a balancing of the need for the information sought against the privacy right asserted.”); see also E.E.O.C. v. Cal. Psychiatric Transitions, 258 F.R.D. 391, 395 (E.D. Cal. 2009) (“[T]he right to privacy is not a recognized privilege or absolute bar to discovery, but instead is subject to the balancing of needs.”). In applying this balancing test, courts should consider:
*21 the purpose of the information sought, the effect that disclosure will have on the parties and on the trial, the nature of the objections urged by the party resisting disclosure, and ability of the court to make an alternative order which may grant partial disclosure, disclosure in another form, or disclosure only in the event that the party seeking the information undertakes certain specified burdens which appear just under the circumstances.
R. Prasad Indus. v. Flat Irons Env't Sols. Corp., No. CV-12-08261-PCT-JAT, 2014 WL 2804276, at *5, 2014 U.S. Dist. LEXIS 84193, at *13 (D. Ariz. June 19, 2014) (citation omitted).
Here, a balancing of the competing interests weighs against Defendants’ privacy objections. To begin with, Defendants do not argue that the matter contained in the Content Findings is not relevant to the claims or defenses here. (See generally Mot.; Opp'n to Suppl. Brief.) But even if so, Defendants have neither offered evidence that they consider and maintain these documents as private nor explained any steps they have taken to protect these documents from disclosure. (See generally id.) Nor have Defendants offered any evidence or argument of any harm that would be caused by disclosure of the documents Plaintiffs seek. (See generally id.) In addition, Defendants have not offered or suggested any alternative means by which Plaintiff may obtain this information. (See generally id.)
Second, Defendants’ belated insurance privacy objection, based upon the California Insurance Information and Privacy Protection Act (“CIIPPA”), is unavailing. (Opp'n to Suppl. Brief 6.) CIIPPA, codified at California Insurance Code section 791, et seq., establishes standards and a regulatory mechanism “for the collection, use and disclosure of information gathered in connection with insurance transactions by insurance institutions, agents, and insurance-support organizations.” Cal. Ins. Code § 791. Among other things, CIIPPA limits the disclosure of “personal or privileged information about an individual collected or received in in connection with an insurance transaction.” Cal. Ins. Code § 791.13. However, CIIPP is inapplicable here.
As a starting point, by failing to assert a CIIPPA objection in the Privilege Logs (see Pls.’ Exs. D, E, R), Defendants have waived the objection. Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992) (stating that failure to make timely objections to originally-propounded document requests constitutes a waiver of all objections thereto, including claims of privilege and work product). And Defendants cannot revive the missed objection by asserting it for the first time in their opposition to the Motion. See Calderon v. Experian Info. Sols., Inc., 290 F.R.D. 508, 521 n.4 (D. Idaho 2013) (holding that, when ruling on a discovery motion, a court generally considers only those objections that have been timely asserted in the initial response to the discovery request.) Moreover, because only Mills is an insurance agent subject to CIIPPA, this objection, even if applicable, would not limit the discovery responses of Abrams Defendants or Rinelli. Finally, Secton791.13 of CIIPPA contains a number of exceptions to the disclosure limitations, including Section 791.13(g) which allows disclosure where “[o]therwise permitted or required by law,” and pursuant to the procedure for seeking consent from an insured to release his or her information, as approved by the California Supreme Court in Colonial Life & Accident Ins. Co. v. Superior Court, 31 Cal.3d 785, 796, 183 Cal.Rptr. 810, 647 P.2d 86 (1982). See, e.g., Mead Reins. Co. v. Super. Ct., 188 Cal. App. 3d 313, 315, 232 Cal.Rptr. 752 (1986).
*22 Third, Defendants’ trade secret objection also fails. “[T]here is no absolute privilege for trade secrets and similar confidential information.” Upjohn Co. v. Hygieia Biological Labs., 151 F.R.D. 355, 358 (E.D. Cal. 1993) (citation and quotation marks omitted); see also Gonzales v. Google, Inc., 234 F.R.D. 674, 685 (N.D. Cal. 2006); Davis v. Leal, 43 F. Supp. 2d 1102, 1110 (E.D. Cal. 1999) (“[T]he trade secrets privilege is not absolute, but requires a balancing of the need for protecting the secret with the needs of the case”). To resist discovery of a trade secret, “a party must first demonstrate by competent evidence that the information sought through discovery is a trade secret and that disclosure of the secret might be harmful.” Upjohn Co., 151 F.R.D. at 358 (citations omitted.) Where this showing is made, “the burden shifts to the party seeking discovery to establish that the disclosure of trade secrets is relevant and necessary to the action.” (Id.); see also Davis, 43 F. Supp. 2d at 1110. Once relevancy and necessity have been established, the Court must “weigh the risk of disclosure of the trade secret to unauthorized parties with the risk that a protective order will impede prosecution or defense of the claims.” Trevino v. ACB Am., Inc., 232 F.R.D. 612, 617 (N.D. Cal. 2006). Nonetheless, “[o]nce the moving party has established relevance and necessity, the discovery is virtually always ordered.” Bare Escentuals Beauty, Inc. v. Costco Wholesale Corp., No. 07CV90, 2007 WL 4357672 at ––––, 2007 U.S. Dist. LEXIS 90893, at *6-7 (S.D. Cal. Dec. 11, 2007) (citations and quotation marks omitted). In addition, Rule 26(c)(1)(G) states that a party may obtain a protective order “requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.” Fed. R. Civ. P. 26(c)(1)(G). Here, Defendants offer no evidence in support of their trade secret objection, including that any information contained in the Content Findings is a trade secret, that disclosure of the trade secret would be harmful, and why a protective order would be ineffective in protecting those purported secrets. (See generally Mot.; Opp'n to Suppl. Brief.)
Fourth, Defendants’ belated argument that “[c]onfidential customer lists are protected from disclosure” (Opp'n to Suppl. Brief 7) (citing ABBA Rubber Co. v. Seaquist, 235 Cal. App. 3d 1, 286 Cal.Rptr. 518 (1991)) is unavailing, as they fail to provide any evidence that the Content Findings actually contain confidential customer lists in the first instance. (See Mot. 18–20.)
Finally, any risk of harm associated with the disclosure of private or trade secret information can be mitigated through a protective order. As already noted by the undersigned on multiple occasions (see July 8 Order, at 14–15; July 14 Order, at 14–15; Nov. 5 Order, at 25; Dec. 15 Order, at 14–15; Dec. 22 Order, at 33; Jan. 5 Order, at 26–27; Jan. 19 Order, at 25), it is not lost on the Court that this purported privacy and confidentiality concern is one of Defendants’ own making in that they decline to enter into a stipulated protective order that would shield the purportedly private and confidential information from the public. See Artis v. Deere & Co., 276 F.R.D. 348, 352–53 (N.D. Cal. 2011) (ordering disclosure of names, addresses, and telephone numbers subject to a protective order limiting the use of the information to the parties in the litigation and protecting it from public disclosure). Despite the Court's many admonitions on the subject, Defendants persist in their unwillingness to protect the privacy interests they so fervently have claimed in the past by entering into a protective order, and yet continue to assert their same privacy and confidentiality objections here. While a decision to not enter into a stipulated protective order is Defendants’ prerogative, Defendants make this decision at their own peril because, in so doing, they undermine their own argument that the information at issue is private and/or confidential. See, e.g., Brooks v. Motsenbocker Advanced Devs., Inc., No. 07cv773 BTM (NLS), 2008 WL 109061, at *4, 2008 U.S. Dist. LEXIS 1350, at *11 (S.D. Cal. Jan. 8, 2008) (overruling privacy objection where responding parties seeking to protect documents from disclosure failed to take any steps to protect the information, such as entering into a stipulated protective order or moving for their own protective order before their deadline to respond); Roman v. Wolf, No. EDCV 20-0768 TJH (PVC), 2020 WL 6588399 ––––, 2020 U.S. Dist. LEXIS 213025, at *11-12 (C.D. Cal. July 16, 2020) (holding that stipulated protective order would adequately address trade secret concerns).
3) Defendants’ General Arguments
*23 Although not altogether clear to the undersigned, it appears that, in response to the privilege log and Content Findings dispute, Defendants assert defensively that Plaintiffs have “submitted nothing from their so-called computer expert Setec,” “who allegedly extracted data from certain devices.” (Mot. 40, 73; Opp'n to Suppl. Brief 2.) But Plaintiffs’ argument is not undermined by the absence of a Setec declaration. Because Setec plays no role in the creation of Defendants’ privilege logs, Setec's silence here is of no consequence. Indeed, Setec has performed its obligations under the Protocol: it extracted data from the computers of Abrams Defendants, Rinelli, and Mills; it thereafter submitted the Content Findings to Defendants for review; it received the Privilege Logs from Defendants related to the Content Findings; and, based thereon, withheld the Content Findings from Plaintiffs. (Mot. 18–19; see generally Protocol.) Moreover, to the extent Defendants intend to impugn the qualification of Setec to perform the functions of the Protocol by referring to them as a “so-called computer expert,” the undersigned already heard and resolved this argument, appointing Setec as the forensic inspector on behalf of Plaintiffs. (Protocol 1.)
* * *
In sum, the District Court should sanction Abrams Defendants, Rinelli, and Mills under Rule 37(b)(2) for withholding the Content Findings obtained from their computer devices based upon inadequate privilege logs.
3. Sanction of Abrams, Rinelli, Mills, and Armstrong Under Rules 37(e)(1) and 37(e)(2) for Spoliation of Text Messages
Plaintiffs filed the Complaint on February 24, 2020. (Mot. 27; Compl.) They served the Complaint as follows: Abrams was served on March 4, 2020; Rinelli and Mills were served on May 15, 2020; Wooten was served on May 21, 2020; and Armstrong was served on May 22, 2020. (Mot. 46.)
Only months after service of the Complaint, Rinelli, Mills, and Armstrong traded in their cell phone devices. Rinelli traded in her Google Pixel 3 on October 23, 2020 to AT&T in order “to offset the cost of the new device.” (Mot. 46; Pls.’ Ex. N at 24–25.) Mills traded in his Google Pixel 3 on November 5, 2020 to Verizon “because the device was running slowly” and “to offset the cost of the new device.” (Mot. 46; Pls.’ Ex. N at 17–18.) Armstrong traded in her Apple iPhone (model uncertain) on December 21, 2020 to AT&T because she “changed their [sic] phone number” and “to offset the cost of the new device, as it was more cost effective to get a new device than continue using the old device.” (Mot. 46; Pls.’ Ex. N at 10–11.)
On March 2, 2021, Plaintiffs served the Individual Defendants with identical Rule 34 requests for production of documents (“RFP”) which sought, among other things, text messages sent between and among them for the months of November 2019 (RFP No. 109) and December 2019 (RFP No. 110). (Mot. 27; Pls.’ Ex. H at 5, 10, 15, 20, 25.) On July 1, 2021, the Court issued an order compelling Abrams, Rinelli, Mills, and Wooten to produce any non-privileged text messages responsive to RFP Nos. 109 and 110. (July 1 Order.) Recognizing that the July 1 Order did not include Armstrong, on August 10, 2021, the undersigned issued an order superseding the July 1 Order, this time compelling the five Individual Defendants to produce any non-privileged text messages responsive to RFP Nos. 109 and 110. (Aug. 10 Order.) Despite the two orders compelling production, the Individual Defendants still did not produce text messages responsive to RFP Nos. 109 and 100. (Mot. 27; July 1 Order; Aug. 10 Order.) Having failed to obtain cooperation from the Defendants as to RFP Nos. 109 and 110, Plaintiffs noticed a Rule 34 inspection of Defendants’ cell phone devices for September 27, 2021. (Mot. 27; Pls.’ Ex. I.) Defendants did not appear. (Mot. 27.) Thereafter, on November 21, 2021, Abrams traded in his Google Pixel 2 XL to Google “because the device was running poorly and to offset the cost of a new phone.” (Mot. 46; Pls.’ Ex. N. at 3–4.)
When Defendants still had not produced their cell phone devices for inspection by December 10, 2021, Plaintiffs filed a motion to compel the inspection, this time for the period November 2019 through the date of inspection. (Mot. 27–28.) On December 15, 2021, the undersigned granted the request in part, ordering inspection of the Individual Defendants’ cell phones for the period November 1, 2019 through June 30, 2020. (Dec. 15 Order, at 9–10, 28.) At the January 6, 2022 inspection, only Wooten produced her cell phone, which was imaged pursuant to this Court's inspection protocol. (Mot. 28.)
*24 On January 25, 2022, in response to the January 18 Order requiring Defendants to answer interrogatories about their cell phone devices (Jan. 18 Order), Abrams, Rinelli, Mills, and Armstrong each declared under oath that their text messages no longer were available from the entity to which they traded them. Rinelli declared that she “was advised by AT&T that they no longer have any text messages.” (Pls.’ Ex. N at 25.) Mills declared that “Verizon advised that they were unable to obtain any test [sic] messages” from the relevant time period. (Id. at 18.) Armstrong declared that he was “unaware of what AT&T did with the device upon trade-in.” (Id. at 11.) Abrams declared that he was “unaware of what Google did with the device upon trade-in.” (Id. at 4.)
To date, Plaintiffs have been unable to obtain the text messages responsive to RFP Nos. 109 and 110. In light of the unavailability of the cell phone devices that contain those text messages, Plaintiffs now seek sanctions for spoliation.
Although Plaintiffs bring their Motion pursuant to Rule 37(b)(2), the text messages stored on the cell phones of Abrams, Rinelli, Mills, and Armstrong constitute ESI and thus trigger analysis under Rule 37(e). See Colonies Partners L.P. v. County of San Bernardino, No. 5:18-cv-00420-JGB (SHK), 2020 WL 1496444, at *4, 2020 U.S. Dist. LEXIS 56922, at *11 (C.D. Cal. Feb. 27, 2020) (“Because the text messages ... are electronically stored information ... this Court needs to apply Rule 37(e).” (quoting Oppenheimer v. City of La Habra, No. SA CV 16-00018-JVS (DFMx), 2017 WL 1807596, at *4, 2017 U.S. Dist. LEXIS 23275, at *7 (C.D. Cal. Feb. 17, 2017))). Rule 37(e) governs the loss of ESI and applies “[i]f electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery.” Fed. R. Civ. P. 37(e). The advisory committee notes to the 2015 Amendment provide that the amended rule “forecloses reliance on inherent authority or state law to determine when certain measures should be used” for failure to preserve electronically stored information. Fed. R. Civ. P. 37(e) advisory committee's note to 2015 amendment (“Committee Notes”).[9] Like Rule 37(b)(2)(A), Rule 37(e) provides for terminating sanctions as well as lesser sanctions. Compare Fed. R. Civ. P. 37(b)(2)(A)(v)–(vi) with Fed. R. Civ. P. 37(e)(1)–(2). Accordingly, because the text messages at issue constitute ESI, and because Rule 37(e) provides for both terminating and lesser sanctions, as requested by Plaintiffs, the undersigned will analyze Plaintiffs’ spoliation claim under Rule 37(e) rather than Rule 37(b)(2)(A).
Spoliation is the destruction or significant alteration of evidence, or the failure to preserve evidence, in pending or reasonably foreseeable litigation. Compass Bank v. Morris Cerullo World Evangelism, 104 F. Supp. 3d 1040, 1051–52 (S.D. Cal. 2015) (citing United States v. Kitsap Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002)). The standard of proof for spoliation in the Ninth Circuit is “preponderance of the evidence.” Id. at 1052–53; Ramos v. Swatzell, Case No. ED CF 12-1089-BRO (SPx), 2017 WL 2857523, at *5, 2017 U.S. Dist. LEXIS 103014, at *16 (C.D. Cal. June 5, 2017);
*25 The common-law duty to preserve continues to apply even under Rule 37(e). See Fed. R. Civ. P. 37(e) advisory committee's note to 2015 amendment. “A party must preserve evidence it knows or should know is relevant to a claim or defense of any party, or that may lead to the discovery of relevant evidence.” Compass Bank, 104 F. Supp. 3d at 1051. This is an objective standard that asks not whether the party in fact reasonably foresaw litigation, but whether a reasonable party in the same factual circumstances reasonably would have foreseen litigation. ILWU-PMA Welfare Plan Bd. of Trs. v. Conn. Gen. Life Ins. Co., No. C 15-02965 WHA, 2017 WL 345988 at *3, 2017 U.S. Dist. LEXIS 10529, at *11 (N.D. Cal. Jan. 24, 2017). To satisfy Rule 37(e), the electronically stored information must have been lost “because a party failed to take reasonable steps to preserve it.” Fed. R. Civ. P. 37(e).
Rule 37(e) authorizes two tiers of sanctions for spoliation, both of which apply only if (1) information should have been preserved in the anticipation or conduct of litigation, (2) a party failed to take reasonable steps to preserve the information, (3) information was lost as a result, and (4) the information could not be restored or replaced by additional discovery. See Fed. R. Civ. P. 37(e) advisory committee's note to 2015 amendment. Under Rule 37(e)(1), upon a finding of prejudice to another party from loss of the information, a court may employ measures “no greater than necessary to cure the prejudice.” Fed. R. Civ. P. 37(e)(1). Rule 37(e)(1) does not place the burden of proving or disproving prejudice on one party or the other. See Fed. R. Civ. P. 37(e) advisory committee's note to 2015 amendment. Curative measures under subdivision (e)(1) must not have the effect of measures permitted under subdivision (e)(2). Id. If a court finds that the spoliating party “acted with the intent to deprive another party of the information's use in the litigation,” Rule 37(e)(2) permits a court to impose harsh sanctions, including presuming that the lost information was unfavorable to that party, instructing the jury that it may or must presume the information was unfavorable to that party, dismissing the action, or entering a default judgment. However, a finding of intent to deprive does not require a court to adopt any of the measures listed in subdivision (e)(2). Id. “Rule 37(e) intentionally leaves to the court's discretion exactly what measures are necessary.” Matthew Enter., Inc. v. Chrysler Grp. LLC, No. 13-cv-04236-BLF, 2016 WL 2957133 at *3, 2016 U.S. Dist. LEXIS 67561, at *9 (N.D. Cal. May 23, 2016) (citing Fed. R. Civ. P. 37(e)(1) advisory committee's note to 2015 amendment).
c. Discussion
1) Duty to Preserve Text Messages that Attached Before Trading in Cell Phones
Rule 37(e) applies only if the party accused of spoliation had a duty to preserve the ESI at issue in anticipation or conduct of litigation.” Fed. R. Civ. P. 37(e). Rule 37(e) does not, however, identify a starting date for this duty and relies instead on the common law. See id. advisory committee's note to 2015 amendment (“Rule 37(e) is based on this common-law duty; it does not attempt to create a new duty to preserve.”) Under the common law, the duty to preserve 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.” Colonies Partners, 2020 WL 1496444, at *6, 2020 U.S. Dist. LEXIS 56922, at *16 (citations omitted). “As soon as a potential claim is identified, a litigant is under a duty to preserve evidence which [he or she] knows or reasonably should know is relevant to the action or may be relevant to future litigation.” Id. (citations and internal quotation marks omitted).
*26 Plaintiffs argue that Defendants’ duty to preserve the text messages arose as early as December 2019, when they allegedly “conspired to take (and indeed took) without Ms. Goltsman's permission, Ms. Goltsman's client database, stand-alone marketing computer, and other proprietary materials in violation of the Computer Fraud & Abuse Act.” (Mot. 45.) Plaintiffs note that “Mills went so far as to obtain counsel and to send Ms. Goltsman a ‘Cease and Desist’ letter ... on December 27, 2019 to cease communications with him.” (Id. at 46.)
Defendants do not dispute this. (See generally Mot.; Opp'n to Suppl. Brief.) Nor could they, as Plaintiff's assertions are confirmed by the Rinelli/Mills Counterclaim and the Entity Counterclaim. The Rinelli/Mills Counterclaim alleges that in December 2019, Goltsman “intentionally, maliciously and recklessly threatened, harassed, intimidated[,] alarmed ... attempted to blackmail [and] stalked” Rinelli and Mills and they “were afraid for their health and safety.” (Rinelli/Mills Counterclaim. ¶ 29.) Rinelli and Mills thereafter were “compelled to hire attorneys” who “sent cease and desist letters to Goltsman in an effort to get her to stop” this conduct. (Id.) The letter sent on behalf of Mills was motivated “[i]n part because Goltsman told Mills ‘If you don't pay me for the next (5) five years, a portion of every commission that you make,’ I will sue you and the others.” (Id.) The Entity Counterclaim, asserted on behalf of two entities of which Rinelli and Abrams are principals, alleges that Goltsman stated in December 2019 that, although she had no claims or rights against the Entity Defendants, she would “use litigation to bankrupt them anyway.” (Entity Counterclaim ¶ 9.) It also alleges that Rinelli Law “was required to hire legal counsel” due to Goltsman's continued threats, contact, intimidation, disruption, and interference with its business, and that counsel sent “cease and desist letters” to Plaintiffs due to their “continuing efforts to disrupt Rinelli Law Group.” (Id. at ¶ 17.) On this basis, the undersigned concludes that Abrams, Rinelli, and Mills were under a duty to preserve evidence commencing in December 2019, when they were aware that litigation might be forthcoming.
In addition, regardless of whether Abrams, Mills and Rinelli were on notice of the anticipated litigation involving Plaintiffs as of December 2019, it is clear that they, as well as Armstrong, were on notice of the claims against them once they were served with the Complaint—Abrams on March 4, 2020, Rinelli and Mills on May 15, 2020, and Armstrong on May 22, 2020 (Mot. 46)—all months before they traded in their cell phone devices. The Complaint's conspiracy allegations alone were sufficient to put them on notice that the communications between and among them before, during, and after the alleged incident in December 2019 would be relevant to the case. See City of Industry v. City of Fillmore, 198 Cal. App. 4th 191, 212, 129 Cal.Rptr.3d 433 (2011) (identifying the elements of a civil conspiracy claims as “(1) the formation of a group of two or more persons who agreed to a common plan or design to commit a tortious at; (2) a wrongful act committed pursuant to the agreement; and (3) resulting damages”).
Indeed, Rinelli and Mills had the assistance of experienced counsel as early as December 2019 to guide them through their preservation duty. (Pls.’ Ex. M.) Even assuming, arguendo, that Rinelli and Mills retained counsel only for purposes of issuing cease and desist letters to Plaintiff, this fact would be of no consequence here because “a duty to preserve ESI can arise far in advance of the formal retention of a lawyer or the filing of a lawsuit.” Fast v. GoDaddy.com LLC, 340 F.R.D. 326, 337 (2022) (gathering cases holding same).
*27 Moreover, if any reasonable doubt existed among Abrams, Rinelli, Mills, and Armstrong regarding their duty to preserve their text messages even after they were served the Complaint, such was resolved through the preservation orders of the Northern District of California that applied upon the filing of the Complaint. One such standing order is the Northern District's Guidelines for the Discovery of Electronically Stored Information, effective December 1, 2015 (“Guidelines”), attached hereto as Attachment A. The Guidelines note that “[t]he Court expects cooperation on issues relating to the preservation ... of ESI.” (Guideline 1.02.) The Guidelines instruct the parties to discuss preservation “[a]t the outset of the case, or sooner if feasible” and to continue such discussions “periodically as the case and issues evolve.” (Id. at 2.01(a).) The Guidelines further provide that “[p]arties are not required to use preservation letters to notify an opposing party of the preservation obligation,” that the parties should meet and confer to resolve issues regarding preservation, and that they should involve the court if unable to resolve such issues. (Id. at 2.01(c).) In addition, the Guidelines require the parties to discuss “what ESI from sources that are not reasonable accessible will be preserved ....” (Id. at 2.01(e).) The Guidelines also direct the parties to discuss preservation at the Rule 26(f) conference, and to address such matters in their Rule 16 joint case management statement, including “the source, scope and type of ESI that has been and will be preserved” and “any difficulties related to preservation.” (Id. at 2.02.) The Guidelines conclude by noting the expectation that counsel for the parties will be familiar with, among other things, the Advisory Committee Report on the 2015 Amendments to the Federal Rules of Civil Procedure, the Guidelines, and the court's Checklist for Rule 26(f) Meet and Confer Regarding ESI and Stipulated E-Discovery Order for Standard Litigation (“Checklist”). (Id. at 3.01.)
The Checklist, attached hereto as Attachment B, in turn direct the parties’ attention to eight points of discussion regarding their preservation obligations, including a “description of data from sources that are not readily accessible,” “[a]ny disputes related to scope or manner of preservation,” “[l]imits on the scope of preservation ...,” and “[w]hether there is relevant ESI that will not be preserved” pursuant to proportionality concerns. (See generally Checklist.)
In addition, the Standing Order for All Judges of the Northern District of California – Contents of Joint Case Management Statement (“Case Management Order”), attached hereto as Attachment C, also applied. The Case Management Order requires the parties to provide: “[a] brief report certifying that the parties have reviewed the [Guidelines], and confirming that the parties have met and conferred pursuant to Fed. R. Civ. P. 26(f) regarding reasonable and proportionate steps taken to preserve evidence relevant to the issues reasonable evident in this action.” (Case Management Order ¶ 6.)
On July 7, 2020, and again on September 15, 2020, the parties filed their Joint Statement for Case Management Conference (“Statements”). (Statements, ECF Nos. 37, 47.) In each, the parties advise the Court that they met and conferred about ESI, and did not believe the scope of discovery would be unreasonably burdensome. (ECF No. 37, at 4; ECF No. 47, at 5.) Notably, in both statements, only Plaintiffs’ counsel advises the Court that they had reviewed the Guidelines, issued a document preservation notice at the outset of the litigation, and taken reasonable and proportional steps to preserve relevant evidence, including ESI. (ECF No. 37, at 5; ECF No. 47, at 5.) Rinelli, Mills, and Armstrong traded in their cell phones after the filing of the Statements.
Finally, if any further doubt existed regarding the duty to preserve the text messages, the duty could not have become more well-defined than through Plaintiffs’ March 2, 2021 request for the text messages, the undersigned's July 1 Order, as amended by the August 10 Order, compelling their production, and Plaintiffs’ August 27, 2021 demand for a Rule 34 inspection of the devices set for September 27, 2021. Abrams traded in his cell phone device after all of these unmistakable markers of his duty to preserve.
On this basis, there is no question that Abrams, Rinelli, Mills, and Armstrong had a duty to preserve the text messages and were, or reasonably should have been, well aware of that duty before they traded in the cell phone devices that contained those text messages.
2) Reasonable Steps to Preserve Text Messages
Rule 37(e) requires a party under a duty to preserve ESI to take reasonable steps to preserve it. Fed. R. Civ. P. 37(e). This duty extends to the suspension of document destruction policies, where appropriate, and the preservation of all documents relevant to the litigation. Apple Inc. v. Samsung Elecs. Co., 888 F. Supp. 2d 976, 991 (N.D. Cal. 2012). The advisory committee note to the 2015 amendment of Rule 37(e) provides that the Court should consider a party's sophistication in determining whether the party took reasonable steps to preserve ESI. See Fed. R. Civ. P. 37(e) advisory committee's note to 2015 amendment.
*28 Plaintiffs argue that Abrams, Rinelli, Mills, and Armstrong failed to comply with their duty to preserve the text messages. (Mot. 46.) Defendants do not dispute this. (See generally Mot.; Opp'n to Suppl. Brief.) Nor could they, as Plaintiffs’ assertion is confirmed by these defendants’ own responses to Plaintiffs’ discovery in which they admit that they traded in their phones—Rinelli on October 23, 2020; Mills on November 5, 2020; Armstrong on December 21, 2020; and Abrams on November 12, 2021—well after the time their duty to preserve was triggered. (Pls.’ Ex. N.) And Defendants offer no evidence to suggest that any of Abrams, Rinelli, Mills, or Armstrong backed up or imaged their devices before trading them in, or that they lacked the sophistication to do so. (See generally Mot; Opp'n to Suppl. Brief.) Startling to the undersigned is the fact that both Abrams and Rinelli are California-licensed attorneys[10] who independently knew, or should have known, of their duty to preserve evidence. Most disturbing is the fact that Abrams traded in his cell phone after he was served with RFP Nos. 109 and 110 seeking the texts from his cell phone device, after he was ordered by the undersigned to produce the text messages (July 1 Order; Aug. 10 Order), and after Plaintiffs noticed the Rule 34 inspection of the cell phones.
On this basis, the undersigned can only conclude that the trading in of the cell phone devices by Abrams, Rinelli, Mills, and Armstrong evidences not merely a failure to take the required reasonable steps to preserve the text messages, but rather an indisputably intentional destruction of evidence.
3) Lost and Cannot be Recovered
Rule 37(e) sanctions are available only where the ESI is “lost” and “cannot be restored or replaced through additional discovery.” Fed. R. Civ. P. 37(e). The party seeking spoliation sanctions “has the burden of showing that evidence was in fact destroyed or not preserved.” Colonies Partners, 2020 WL 1496444, at *5, 2020 U.S. Dist. LEXIS 56922, at *11 (citations omitted). ESI is considered “lost” where a party makes no effort to preserve the communication and fails to complain when the “outside vendor storing the [ ] communications deleted them automatically.” Matthew Enter. v. Chrysler Grp. LLC, No. 13-cv-04235-BLF, 2016 WL 2957133, at *1, 2016 U.S. Dist. LEXIS 67561, at *2 (N.D. Cal. May 23, 2016). The showing that ESI actually was lost, or likely lost, must be made through “competent evidence, which could take the form of expert testimony or other evidence.” Colonies Partners, 2020 WL 1496444, at *5, 2020 U.S. Dist. LEXIS 56922, at *12. Evidence that is duplicative of other evidence in the record is not irreplaceable. See id. at *––––, 2020 U.S. Dist. LEXIS 56922, at *13.
Here, the irretrievable loss of the text messages is evidenced by the very admissions of Abrams, Rinelli, Mills, and Armstrong, who stated under oath that (1) they traded in their cell phone devices; (2) Rinelli and Mills were told by the service carriers that their text messages are not obtainable or available; and (3) Abrams and Armstrong are unaware of what their service carriers did with their cell phones upon trade-in. (Pls.’ Ex. N.) Despite these admissions, these defendants argue that they served responses to the relevant RFPs, which “responses were entirely proper” and “included all text messages and emails”; that Plaintiffs have failed to serve subpoenas on Defendants’ cell phone providers, to which they have not and would not object; and that Plaintiffs still have the opportunity to complete meaningful discovery and, in fact, still are performing discovery. (Mot. 17, 35–37, 66–67.)
The undersigned is not persuaded by these arguments. To begin with, Plaintiffs amply have demonstrated, through no less competent evidence than these defendants’ own words, that Abrams, Rinelli, Mills, and Armstrong traded in their cell phones and that the text messages contained therein no longer are available. That Plaintiffs failed to subpoena the cell phone carriers of these defendants is beside the point because Rinelli and Mills have confirmed with their cell phone carriers that the text messages no longer are available, and Abrams and Armstrong have declared that they have no knowledge of what happened to their phones after the trade-in. Thus, subpoenaing the cell phone carriers would be a futile act. Moreover, despite Plaintiffs having requested the text messages as early as March 2021, Defendants only admitted that they traded in their cell phones on January 25, 2022, after two discovery orders that compelled the production of the text messages 58 (July 1 Order; Aug. 10 Order), one discovery order that compelled a Rule 34 inspection of their cell phones (Dec. 15 Order), and months after the close of discovery. Finally, it is patently incorrect that Plaintiffs still have an opportunity to conduct discovery and still are conducting discovery given that discovery is closed. (ECF No. 170 (closing fact discovery on October 1, 2021).) Based on these facts, there is sufficient evidence that the text messages contained in the cell phones of Abrams, Rinelli, Mills, and Armstrong are lost and cannot be restored.
*29
* * *
With this, the undersigned finds that the prerequisites of Rule 37(e) are satisfied with respect to the text messages of Abrams, Rinelli, Mills, and Armstrong: they were under a duty to preserve the text messages in the anticipation or conduct of litigation, they actively destroyed the text messages in derogation of their duty to preserve them, and now the text messages are lost and cannot be restored or replaced through additional discovery. Accordingly, sanctions are available under Rule 37(e).
Having determined that Rule 37(e) sanctions are available here, the undersigned must determine what sanctions are warranted. As noted above, Rule 37(e)(1) sanctions require a showing of prejudice, while Rule 37(e)(2) sanctions require a showing of intent to deprive a party of the use of the information. Fed. R. Civ. P. 37(e)(1), (e)(2). The Court examines each in turn.
a) Prejudice
Rule 37(e)(1) sanctions require a showing of prejudice to the party seeking the information. Fed. R. Civ. P. 37(e)(1). If the party seeking the information has been prejudiced, the Court may order whatever measures are necessary to cure the prejudice. Id. Prejudice exists where “the [spoiling party's] actions impaired [the moving party's] ability to go to trial or threatened to interfere with the rightful decision of the case.” United States ex rel. Wiltec Guam, Inc. v. Kahaluu Constr. Co., 857 F.2d 600, 604 (9th Cir. 1988). In Anheuser-Busch, Inc. v. Natural Beverage Distributors, 69 F.3d 337, 354 (9th Cir. 1995), the Ninth Circuit found prejudice when a party's refusal to provide certain documents “forced [plaintiff] to rely on incomplete and spotty evidence” at trial. Rule 37(e)(1) does not always place the burden of proving or disproving prejudice on one party or the other. Fed. R. Civ. P. 37 advisory committee's notes to 2015 amendment. The Committee Notes acknowledge that, in some circumstances, determining the content of lost ESI will be difficult and placing the burden of proving prejudice on the moving party may be unfair. Id. Courts have discretion under Rule 37(e)(1) to determine how to assess prejudice on a case-by-case basis. Id. “Proving that lost evidence is relevant can be a difficult task, however, because the evidence no longer exists.” Fast, 340 F.R.D. at 339. Thus, a party need only “come forward with plausible, concrete suggestions as to what [the destroyed] evidence might have been.” Id. (citations omitted, internal quotation marks omitted).
The concern raised by the Advisory Committee regarding the difficulty in proving prejudice is exactly the situation here—it is impossible to determine what information has been destroyed. Indeed, while Plaintiffs find themselves at a disadvantage because they cannot say with certainty what the text messages would have shown, Defendants do not contest the relevance of the text messages in this case. (See generally Mot.; Opp'n to Suppl. Brief.) Nor could they, given that the undersigned already has overruled their relevance objection to the production of the text messages and ordered them produced. (July 1 Order; Aug. 10 Order.)
*30 As Plaintiffs explain, by trading in their cell phone devices, Abrams, Rinelli, Mills, and Armstrong have, in effect, deprived Plaintiffs of the opportunity to “evaluat[e] and/or present[ ] relevant text messages to a jury—text messages which may be the only documentary evidence of the conspiracy Plaintiffs allege to have occurred.” (Mot. 47.) The undersigned agrees that the spoliation of the text messages has “threatened to distort the resolution of the case” in that any number of text messages could have revealed conspiratorial discussions among the Defendants. See Leon v. IDX Sys. Corp., 464 F.3d 951, 960 (9th Cir. 2006) (quoting Wiltec Guam, 857 F.2d at 604).
Defendants’ repeated bald assertions that no prejudice has occurred (Mot. 17, 36–37, 40, 42, 66, 73; Opp'n to Suppl. Brief 2) are unconvincing given that, as detailed above, it is impossible to determine precisely what the text messages contained or how severe the prejudice might be. A party that spoliates evidence “is in no position to argue for a presumption of irrelevance” as to documents destroyed while on notice of their potential relevance. Skyline Advanced Tech. Servs. v. Shafer, No. 18-cv-06641-CRB (RMI), 2020 WL 13093877, at *10, 2020 U.S. Dist. LEXIS 263064, at *39-40 (N.D. Cal. Jul. 14, 2020). There is no question that Plaintiffs now are forced to try to piece together the facts surrounding the events at issue in this case from whatever discovery they may have, all to their cost and expense. Sanctions therefore are warranted under Rule 37(e)(1).
b) Intent
Sanctions also are warranted under Rule 37(e)(2) because the undersigned finds that Abrams, Rinelli, Mills, and Armstrong acted with the intent to deprive Plaintiffs of evidence. The harsh sanctions under Rule 37(e)(2) are available only upon a finding that the spoliating party acted with the intent to deprive the party seeking the information of its use. See Fed. R. Civ. P. 37(e)(2) advisory committee's notes to 2015 amendment; Porter v. City & County of San Francisco, No. 16-cv-03771-CW (DMR), 2018 WL 4215602 at *3, 2018 U.S. Dist. LEXIS 151349, at *7 (N.D. Cal. Sept. 5, 2018). Although Rule 37(e) does not define intent, courts have found that a party's conduct satisfies the Rule 37(e)(2) “intent requirement when the evidence shows or it is reasonable to infer[ ] that the [ ] party purposefully destroyed evidence to avoid its litigation obligations.” Id. at *3, 2018 U.S. Dist. LEXIS 151349 at *8 (citation omitted). In the Ninth Circuit, destruction of evidence is considered willful spoliation when a party has “some notice that documents were potentially relevant to litigation before they were destroyed.” Leon, 464 F.3d at 959 (quoting United States v. Kitsap Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002)). Moreover, intent may be inferred where a party is on notice that documents potentially are relevant but fails to take the steps necessary to preserve them, or otherwise seeks to keep incriminating facts out of evidence. See id.; First Fin. Sec., Inc. v. Freedom Equity Grp., LLC, No. 15-cv-1893-HRL, 2016 WL 5870218 at *––––, 2016 U.S. Dist. LEXIS 140087 at *10 (N.D. Cal. Oct. 7, 2016); Blumenthal Distrib., Inc. v. Herman Miller, Inc., No. ED CV 14-1926-JAK (SPx), 2016 WL 6609208, at *––––, 2016 U.S. Dist. LEXIS 184932, at *75 (C.D. Cal. July 12, 2016) (finding conduct was willful and in bad faith where party had control over the evidence and a duty to preserve it, and misrepresented and delayed searches of ESI). Also informative to the intent analysis is the timing of the document loss. See GN Netcom, Inc. v. Plantronics, Inc., No. 12-1318-LPS, 2016 WL 3792833 at *––––, 2016 U.S. Dist. LEXIS 93299, at *24 (D. Del. Jul. 12, 2016).
*31 Plaintiffs argue that the conduct of Abrams, Rinelli, Mills, and Armstrong in failing to preserve their text messages amounts to the willful spoliation of evidence. (Mot. 44.) They note that Plaintiffs have been attempting to obtain the text messages of these defendants through discovery since March 2, 2021 (Pls.’ Ex. H); that these defendants have refused to produce the text messages; that they have failed to produce them even after the undersigned's orders of July 1, 2021, as amended on August 10, 2021, directing them to do so (July 1 Order; Aug. 10 Order); that they did not appear for the Rule 34 inspection of their cell phones set for September 27, 2021 (Pls.’ Ex. I), and that they have failed to produce their cell phone devices for inspection even after the undersigned's December 15 Order. (Mot. 27–28.) Moreover, Plaintiffs note the suspect circumstances and timing of the trading in of the cell phone devices, only a few months after service of the Complaint and, in the case of Abrams, also months after Plaintiffs’ service of the discovery requests specifically seeking the text messages, two orders to produce them, and a noticed Rule 34 inspection of the cell phones. (Id. at 46.)
Defendants do not dispute any of these facts. (See generally Mot.; Opp'n to Suppl. Brief.) Rather, they argue (1) that they “have responded timely and earnestly to all discovery requests and Court Orders”; (2) that Plaintiffs have shown no prejudice; and (3) that Plaintiffs “ha[ve] not and cannot prove[ ] that any conduct or information or activity was within the control of EACH defendant or a particular defendant.” (Mot. 17, 32–37, 40–42, 67–68; Opp'n to Suppl. Brief 2–3, 5.)
But none of these arguments have any merit and, strikingly, some of the asserted facts are provably wrong. Taking each in turn, the undersigned notes as follows: First, it is undisputed, despite their bald assertion to the contrary, that Abrams, Rinelli, Mills, and Armstrong have not produced their text messages to date. Second, Plaintiffs’ prejudice is not the question under the Rule 37(e)(2) analysis. Compare Fed. R. Civ. P. 37(e)(2) (requiring intent to deprive as the basis for Rule 37(e)(2) sanctions) with Fed. R. Civ. P. 37(e)(1) (requiring prejudice from loss of information as the basis for Rule 37(e)(1) sanctions). Nevertheless, as discussed above, Plaintiffs indeed have demonstrated prejudice. Third, contrary to their disingenuous contention that they lacked control over the text messages, it is undeniable that each of Abrams, Rinelli, Mills, and Armstrong had control over their respective cell phone devices, their discrete decisions to trade them in, and their independent election to not back-up or otherwise image the devices before trading them in. Moreover, the undersigned does not find credible that Rinelli, Mills, and Armstrong traded in their cell phone devices, by happenstance, within a month of each other and within a few months after they were served with the Complaint. In addition, the undersigned finds it even less credible that Abrams also traded in his cell phone device, by happenstance, after being served with the discovery specifically seeking the text messages contained therein and a Rule 34 inspection of the cell phone. Finally, there is no evidence that any of Abrams, Rinelli, Mills, or Armstrong made any effort to inquire of the entity to which they traded in their cell phones whether there was a way to preserve the electronic information stored thereon before trading them in.
In light of all the facts presented here—including the tell-tale timing of the trading in of the cell phone devices, the legal sophistication of Abrams and Rinelli as attorneys, and the fact that Rinelli and Mills had legal representation before the filing of this action—the undersigned concludes that Abrams, Rinelli, Mills, and Armstrong acted with the intent to deprive Plaintiffs of the information contained in the text messages. The undersigned further concludes that the extraordinary measures employed by Abrams, Rinelli, Mills, and Armstrong to deceive both Plaintiffs and the Court—from initially declining to produce the text messages, to failing to comply with subsequent discovery orders to produce the messages, to declining to appear for a duly noticed Rule 34 inspection of their cell phones, to failing to comply with a subsequent discovery order compelling the Rule 34 inspection, all without advising Plaintiffs and the Court that the cell phone devices had been traded in, and then waiting until January 25, 2022 (ten months after Plaintiffs’ request for the text messages) to admit that they had traded in their phones—amounts to nothing short of bad faith.
4. Defendants’ Defenses Against Imposition of Sanctions
*32 Defendants assert a number of defenses against the imposition of sanctions based upon Plaintiffs’ purported misconduct in this litigation. For the reasons stated below, the District Court should disregard these defenses as none—alone or in combination—excuse Defendants’ discovery misconduct.
Defendants argue that Plaintiffs are equitably estopped from seeking terminating—or, in the alternative, issue and evidentiary sanctions—against Defendants because of Plaintiffs’ own discovery and litigation misconduct. (Mot. 32–35, 37, 40–41, 66–67, 73; Opp'n to Suppl. Brief 5–6.) Specifically, Defendants argue that Plaintiffs have not complied with their discovery obligations by failing to produce Goltsman's two iPads and cellphone, deleting emails after the litigation was pending, allowing Goltsman's son to “crush” the “computer ... at the epicenter of all of this,” and refusing to produce RG Abrams Insurance for deposition. (Id.) Defendants characterize this as “more than spoilation [sic]” and as “cr[ying] wolf” after engaging in a “hypocritical response to discovery” and “double standard rules of discovery.” (Mot. 40–41, 73.) In addition, Defendants contend that Plaintiffs have violated numerous (unspecified) court orders. (Id. at 40–41, 66.) Further, Defendants aver that Plaintiffs have “willfully failed to act diligently or in an expeditious manner” while Defendants “have sought no continuances and participated in mediation, in good faith.” (Id. at 66.) Finally, Defendants note that Plaintiffs are still conducting discovery, even after the discovery cut-off date. (Id. at 66–67.)
This argument is unavailing. That Plaintiffs may have spoliated evidence or engaged in discovery misconduct—which Defendants have not demonstrated here—is neither a defense nor an excuse for the withholding of the Content Findings and the spoliation of text messages by Defendants. As this Court already has admonished Defendants (July 1 Order, at 18–19, as amended by Aug. 10 Order, at 18–19), they “should not seek this Court's approval of a ‘tit for tat approach to litigation.’ ” Acushnet Co. v. Birdie Golf Ball Co., Inc., 166 F.R.D. 42, 43 (S.D. Fla. 1996). The Federal Rules do not contain a provision “authorizing a litigant to behave only as well as his opponent.” Id. Defendants’ remedy for discovery responses they consider inadequate is, of course, to meet and confer and timely file a discovery motion if the dispute cannot be resolved without the Court's assistance. This argument is without merit.
Defendants argue that Plaintiffs have “failed to serve defendants.” (Mot. 40–41.) Other than this bare proclamation, Defendants do not develop this argument. (Id.) The undersigned is left to guess the significance of this assertion and is unable to tie it to any issue in the Motion. Indeed, Defendants fail to advise the Court exactly which defendant was not served with what. (See generally Mot.) This argument is without merit.
Defendants argue that Plaintiffs named the wrong defendant—“the Law Offices of C.R. Abrams, a California Limited Liability Company”—then tried to serve that entity, and then deceived the Court Clerk to issue an improper summons in the name of the correct defendant—“The Law offices of C.R. Abrams, P.C.” (Mot. 41.) But the District Court already rejected this argument as “a mere technical error in service,” and substituted The Law Offices of C.R. Abrams, P.C. for the formerly named defendant in the Complaint. (ECF No. 245, at 6–7.) This argument is without merit.
*33 Defendants argue that Plaintiffs’ motion is frivolous. (Mot. 66.) Setting aside for the moment that Defendants fail to state what is frivolous about Plaintiffs’ Motion, as the undersigned explains throughout this Order, the Motion is not frivolous and, indeed, should be granted in large part. This argument is without merit.
Defendants argue that “Plaintiff is seeking a dismissal because defendants cannot pay,” which they contend constitutes harassment and is intended to “[p]unish the poor.” (Mot. 68.) They rely on “America Unites -vs- Sylvia Rousseau No. 16-5390. D.C. No. 2:15-CV-02124-PA-AJW[11]” and “Lasar v. Ford Motor Company, 399 F.3d 1101, 1110 (9th Cir. 2005)” for the propositions that the imposition of punitive sanctions requires the implementation of “criminal type safeguards,” that “bad faith conduct can only be proven with proof of bad intent or improper purpose, done vexatiously, wantonly, or for repressive reasons,” and that “even compensatory sanctions require notice and opportunity to be heard.” (Opp'n to Suppl. Brief 6 (errors in original).)
This argument is unavailing. As a threshold matter, Defendants fail to specify what exactly Defendants are unable to pay. (See generally Mot.; Opp'n to Suppl. Brief.) To the extent this is a reference to the undersigned's December 22 Order that they pay Plaintiffs’ fees and costs for the additional sessions of Defendants’ depositions, which totaled $19,237.75 (Mot. 28) and/or the January 19 Order that they pay Plaintiffs’ reasonable expenses in the amount of $2,415.00 in the bringing of a motion to compel Defendants’ further responses to Plaintiffs’ document requests (Mot. 29), Defendants’ recourse for their purported inability to pay was to seek reconsideration of the orders at the appropriate time, not refuse to act as ordered and then complain in response to a sanctions motion.
In any event, Defendants’ authorities do not support their defense against the sanctions sought here. Defendants are correct that the Ninth Circuit held in America Unites for Kids v. Rousseau, 985 F.3d 1075, 1089 (9th Cir. 2021), that a contemnor facing criminal penalties for contempt “must be afforded the full protection of a criminal jury trial.” However, the Ninth Circuit went on to hold that where the “sanctions are strictly limited to compensatory or remedial measures,” as they are here, “these criminal-type protections are not required.” Id. at 1089–1090. Moreover, Lasar v. Ford Motor Co., 399 F.3d 1101, 1110 (9th Cir. 2005), stands for the unremarkable proposition that a court must, as the undersigned has done here, provide adequate notice and an opportunity to be heard before imposing civil sanctions. Indeed, Defendants have received notice of the Motion and have been given an opportunity to be heard, of which they have availed themselves fully by filing their opposition to the Motion, numerous declarations, and their opposition to Plaintiffs’ Supplemental Brief. And, as the Ninth Circuit has made clear, “the opportunity to submit briefs” satisfies the “opportunity to be heard” requirement. See, e.g., Paladin Assocs. v. Mont. Power Co., 328 F.3d 1145, 1164–65 (9th Cir. 2003) (holding that, because the Rule 37 sanctions issues to be resolved were such that an evidentiary hearing would not have aided the decisionmaking process, district court did not abuse its discretion by ruling on the briefing); see also Pac. Harbor Cap., Inc. v. Carnival Airlines, Inc., 210 F.3d 1112, 1118 (9th Cir. 2000) (“an opportunity to be heard does not require an oral or evidentiary hearing on the issue.” (citations omitted)); Lynch v. Cassavetes, No. 13-4317 DSF (JC), 2014 WL 12591179 at *3, 2014 U.S. Dist. LEXIS 195015, at *10 (C.D. Cal. Oct. 1, 2014) (finding that an opportunity to be heard is satisfied by an opportunity to respond in writing). Moreover, because the undersigned submits this recommendation to the District Court subject to the fourteen-day objection period afforded by Rule 72(a), Defendants will have yet another opportunity to object to the recommended ruling before it is made. This argument is without merit.
*34 Defendants argue that expert discovery is cut off and that “the parties have exchanged expert witnesses and supplemental experts are due in the future.” (Mot. 67; Opp'n to Suppl. Brief 7.) While this may very well be (see ECF No. 170, setting expert discovery cut-off date of November 15, 2021), Defendants do not explain—and it is not self-evident to the undersigned—why this assertion is of any significance to the Motion. (See generally Mot.; Opp'n to Suppl. Brief.) This argument is without merit.
* * *
In sum, the District Court should sanction Abrams, Rinelli, Mills, and Armstrong under Rules 37(b)(2)(A), 37(e)(1), and 37(e)(2) for their discovery misconduct.
B. Nature and Extent of Rule 37 Sanctions
Having recommended that the Abrams Defendants, Rinelli, and Mills be sanctioned under Rule 37(b)(2) for their withholding of the Content Findings obtained from their computer devices pursuant to inadequate Privilege Logs, and that Abrams, Rinelli, Mills, and Armstrong be sanctioned under Rules 37(e)(1) and 37(e)(2) for their spoliation of text messages, the undersigned now turns to a determination of the nature and extent of such sanctions.
Plaintiffs argue that termination is the most appropriate sanction for the withholding of the Content Findings by the Abrams Defendants, Rinelli, and Mills on the basis of inadequate privilege logs, and for the spoliation of text messages by Abrams, Rinelli, Mills, and Armstrong. (Mot. 42.) For the reasons stated below, the undersigned disagrees.
1. Legal Standard
Rule 37(b)(2)(A)(vi) authorizes a court to enter terminating sanctions against a party that disobeys a court order. Fed. R. Civ. P. 37(b)(2)(A)(v)–(vi). Courts have dismissed an action with prejudice for various reasons. See, e.g., Malone v. USPS, 833 F.2d 128, 130–31 (9th Cir. 1987) (dismissing action for failure to comply with court order); Henderson v. Duncan, 779 F.2d 1421, 1424 (9th Cir. 1986) (dismissing action for failure to prosecute and for failure to comply with local rules); Sanchez v. Rodriguez, 298 F.R.D. 460, 464 (C.D. Cal. 2014) (applying terminating sanctions for plaintiff's failure to respond to discovery requests). Rule 37(e)(2)(C) also authorizes a court to enter terminating sanctions against a party that intentionally spoliates evidence. Fed. R. Civ. P. 37(e)(2)(C). However, a dismissal or default judgment is a “drastic” sanction that only may be invoked if the party's noncompliance is due to “willfulness, fault, or bad faith.” Payne, 121 F.3d at 507 (quoting Henry v. Gill Indus., 983 F.2d 943, 946 (9th Cir. 1993)). In addition, before granting terminating sanctions under Rule 37, the court must weigh the following factors:
(1) The public's interest in expeditious resolution of the litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to the [party seeking sanctions]; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions.
Id. (citing Malone, 833 F.2d at 130). “Where a court order is violated, the first and second factors weigh in favor of default, while the fourth weighs against default; the third (risk of prejudice to the party seeking sanctions) and the fifth factors (availability of less drastic actions) are therefore decisive.” Guifu Li v. A Perfect Day Franchise, Inc., 281 F.R.D. 373, 392 (2012).
Defendants assert repeatedly that Plaintiffs are seeking to avoid the merits, the truth, and trial, and that this case is meritless. (Mot. 17, 40–42, 66–67, 73; Opp'n to Suppl. Brief 3.) However, notwithstanding these barren accusations, the critical question in assessing prejudice to the party seeking sanctions is whether the non-compliant party's actions impair the ability of the party seeking sanctions to go to trial or threaten to interfere with the rightful decision of the case. Malone, 833 F.2d at 131. Accordingly, the undersigned focusses the analysis on the question of Defendants’ willfulness, fault, or bad faith, along with a weighing of the third and fifth factors in the five-part test.
2. Terminating Sanctions
*35 For purposes of considering dismissal or other terminating sanctions, a party's disobedient conduct must be deemed by the Court to have been willful, in bad faith, or the fault of the party. See In re Exxon Valdez, 102 F.3d 429, 432 (9th Cir. 1996). “ ‘[D]isobedient conduct not shown to be outside the control of the litigant’ is all that is required to demonstrate willfulness, bad faith, or fault.” Henry, 983 F.2d at 948 (quoting Fjelstad v. Am. Honda Motor Co., 762 F.2d 1334, 1341 (9th Cir. 1985)). In determining whether the disobedient conduct was beyond the party's control, “[t]he court may consider the party's motivations, and can consider his dilatory and obstructive conduct in the case and other related cases.” Compass Bank, 104 F. Supp. 3d at 1053 (citation omitted, quotations marks omitted).
Here, Abrams Defendants, Rinelli, and Mills have failed to date to provide compliant privilege logs as ordered by the Court not just once, but three times. (See Protocol; July 12 Order; July 27 Order.) As noted above, the Privilege Logs: fail to properly identify the Content Findings withheld on the basis of privilege; appear incomplete; assert objections in the form of purported privileges that the Court already has overruled; fail to provide the Court-ordered information; and, even aside from specific information required by the Court, fail to provide information sufficient for Plaintiffs to conduct a meaningful evaluation of the appropriateness of their privilege assertions. In addition, the Abrams Privilege Logs were untimely.
As also noted above, Abrams, Rinelli, Mills, and Armstrong spoliated their text messages after being aware that Plaintiffs had claims against them and after being served the Complaint that clearly alleged a conspiracy claim that requires a finding of an agreement between the parties. Further, Abrams spoliated his text messages after being served with discovery specifically seeking the text messages.
Finally, all Defendants have a long history of failing to comply with their discovery obligations. Since April 14, 2021, the undersigned has held nine informal discovery conferences (some across multiple days) brought by Plaintiffs against Defendant, resulting in fourteen orders against Defendants (ECF Nos. 95, 101, 104, 105, 106, 111, 112, 113, 114, 115, 139, 157, 162, 173,313); three discovery status conferences resulting in orders (ECF Nos. 141, 173, 187); and eleven discovery motions against Defendants, resulting in ten orders adverse to Defendants and requiring that they pay a total of $21,526.50 in attorneys’ fees and in excess of $2,000 in discovery-related costs. (Mot. 29–30 (citing July 1 Order, as amended by Aug. 10 Order; July 8 Order; July 14 Order; Aug. 10 Order; ECF No. 185; Aug. 19 Order; Nov. 5 Order; Dec. 15 Order; Dec. 22, Order; Jan. 5 Order; Jan. 10 Order; Jan. 19 Order.) In addition, the District Court already has found the Individual Defendants in civil contempt for failing to comply with two sanctions orders emanating from the Northern District of California and three in this District. (Mot. 30 (citing ECF Nos. 249, 251).)
As best as the undersigned can decipher, Defendants’ arguments against a finding of willfulness, fault, or bad faith appear to be that (1) Plaintiff cannot prove that the activity or conduct complained of in the Motion was within the control of each defendant (Id. at 68); (2) Defendants cooperated in the taking of their depositions by providing dates as ordered (id. at 35–36, 67); and (3) Abrams appeared for his deposition (id. at 33). In addition, in their Opposition to Plaintiffs’ Supplemental Brief, Defendants assert as follows:
*36 Neither plaintiff makes any showing of good cause, and:
1. No showing of willfulness
2. No showing of bad faith
3. No showing that matter was within defendants [sic] control
4. No showing of fault on the part of any defendant
(Opp'n to Suppl. Brief 4.) Finally, Defendants challenge Plaintiffs’ reliance on Connecticut General Life Insurance Co. v. New Images of Beverly Hills, 482 F.3d 1091, 1096 (9th Cir. 2007), and Consumer Financial Protection Bureau v. Morgan Drexen, Inc., 101 F. Supp. 3d 856, 858 (C.D. Cal. 2015). (Opp'n to Suppl. Brief 5.)
But Defendants must do more than simply proclaim in a conclusory manner that their conduct does not rise to the level of willfulness, bad faith, or fault. They must explain in what way compliance with their discovery obligations was outside their control. They have not done so. As noted above, with respect to the Privilege Logs, Defendants cast blame on Plaintiffs for storing or configuring the data obtained from their computer devices “in such a way that prevented a full and through [sic] review,” noting that “specialized programs and/or equipment” was required to view the data. (Basinger Decl. ¶ 9.) But this does not explain why it was out of Defendants’ control to identify individual documents in a manner more meaningful than a mere directory path, including by bates-numbering the documents. Moreover, with respect to the spoliation of text messages, as discussed above, the argument that Abrams, Rinelli, Mills, and Armstrong lacked control over their respective cell phone devices, their discrete decisions to trade them in, and their independent election to not back-up or otherwise image the devices before trading them in is disingenuous at best. Moreover, that Defendants may have cooperated with their discovery obligations on other occasions does not dispose of their obligation to provide an adequate privilege log and protect evidence from spoliation.
Moreover, Defendants’ challenge to Plaintiffs’ authorities is unavailing. Plaintiffs cite Connecticut General for the proposition that terminating sanctions are very severe; that only willfulness, bad faith, and fault justify such sanctions; and that the test is not mechanical. (Mot. 38, 42, 60.) Defendants contend that Plaintiffs misstate the rule by changing the “and” to an “or” such that any of willfulness, bad faith, or fault justify terminating sanctions, while the rule is stated with an “and.” (Opp'n to Suppl. Brief 5.) Indeed, two of the three times Plaintiffs cite this rule, they state it as a disjunctive—“or”—test, while the first time Plaintiffs cite it they state it as a conjunctive—“and”—test. (Mot. 38, 42, 60.) However, the undersigned notes that the Ninth Circuit has stated this rule in the disjunctive. See, e.g., Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d 585, 589 (9th Cir. 1983) (“Dismissal ... is authorized only where the failure to comply is due to willfulness, bad faith, or fault of the party.” (emphasis added)). In any event, this distinction is of no consequence here because, as noted below, the undersigned concludes that Defendants’ conduct was willful, in bad faith, and at fault. Defendants’ next challenge to Plaintiff's reliance on Connecticut General is that, while Connecticut General states a five-part test, “[n]either plaintiff has provided anything or analyzed anything in this respect.” (Opp'n to Suppl. Brief 5.) But Defendants seem to disregard the entirety of Plaintiffs’ discussion addressing each of the five factors at length in the Motion. (Mot. 61–65.)
*37 Equally unavailing is Defendant's challenge to Plaintiffs’ second authority—Consumer Financial. (Opp'n to Suppl. Brief 5.) Plaintiffs cite Consumer Financial for the proposition that “terminating sanctions are warranted when the disobedient party has, inter alia, ‘engaged in conduct utterly inconsistent with the orderly administration of justice.’ ” (Mot. 43, 57.) Defendants contend that Consumer Financial is inapplicable because the “defendant there falsely created documents, and employees were ‘directed to cull’ information from the computer files.” (Opp'n to Suppl. Brief 5.) What Defendants ignore is that, while the defendants in Consumer Financial did create documents, they did so to replace documents they “manipulated, altered, and destroyed,” about which they lied to the court on multiple occasions, which the court characterized as a “willful[ ] and ... bad faith ... coordinated and extensive effort to deceive the [c]ourt [and] opposing counsel.” Consumer Fin., 101 F. Supp. 3d at 862–63, 872. Indeed, this is not dissimilar from the conduct of Defendants here, who spoliated their text messages and failed, across multiple opportunities, to advise the Court and Plaintiffs that the true reason for not producing them was that they had traded in their cell phone devices months before Plaintiffs requested the text messages (except as to Abrams who—worse—traded in his cell phone device after Plaintiffs’ request for text messages).
In sum, the undersigned is persuaded by the record that Defendants’ discovery misconduct was willful, in bad faith, and at fault. As documented in detail above, Defendants have obstructed the discovery process for over a year, successfully achieving their apparent goal of avoiding disclosure of the Content Findings from their computer devices and the text messages from their cell phone devices. The nature and extent of this evasive behavior—from the similarity in the deficiencies of the Privilege Logs; to the temporal proximity in the spoliation of Rinelli's, Mills's, and Armstrong's text messages after being served with the Complaint; to the timing of the spoliation of Abrams's text messages after being served the Complaint and requests expressly seeking them; to the joint representation of all of these defendants by the same counsel—lead the undersigned to conclude that their conduct is not only willful, in bad faith, and at fault, but resoundingly coordinated.
The third factor—prejudice to the moving party—weighs in favor of termination. The Ninth Circuit succinctly described the analytical framework for prejudice as follows:
A defendant suffers prejudice if the plaintiff's actions impair the defendant's ability to go to trial or threaten to interfere with the rightful decision of the case. Failing to produce documents as ordered is considered sufficient prejudice. Late tender is no excuse. The law also presumes prejudice from unreasonable delay. The presumption may be rebutted and if there is a showing that no actual prejudice occurred, that fact should be considered when determining whether the district court exercised sound discretion. A [responding party] may proffer an excuse for delay that, if anything but frivolous, shifts the burden of production to the [moving party] to show at least some actual prejudice; if it does, the [responding party] must persuade the court that the claims of prejudice are illusory or relatively insignificant in light of his excuse. In this circumstance prejudice, delay, and excuse all inform the district court's discretion. Prejudice normally consists of loss of evidence and memory; it may also consist of costs or burdens of litigation, although it may not consist of the mere pendency of the lawsuit itself.
In re Phenylpropanolamine (PPA) Prods. Liab. Litig., 460 F.3d 1217, 1227 (9th Cir. 2006) (internal quotation marks and citations omitted).
Plaintiffs contend that “Defendants [sic] refusal to provide legally adequate privilege logs ..., and consequently the total withholding of all evidence from that inspection, deprives Plaintiffs of crucial evidence that goes directly to the heart of Plaintiffs’ claims against Defendants.” (Mot. 43–44.) They argue that the withheld evidence is relevant to their CFAA claim (Count 1) and their conversion claim (Count 6), because it could reveal whether Abrams, Rinelli, and Mills: “took, by wrongful act, Ms. Goltsman's client database, marketing materials, and other proprietary business materials [including] the computers in which [these] business materials were housed”; “intentionally accessed Plaintiffs [sic] computer and saved the illegally obtain[ed] data on the computer that was inspected”; and “solicited Plaintiffs’ clients using information he accessed without authorization”—all evidence that is “material to proving Plaintiffs’ claims.” (Id. at 43, 54.) Plaintiffs also note that their forensics computer expert “cannot form his Rule 26 opinions without the [Content Findings].” (Id. at 44.)
*38 Defendants argue that they fully cooperated with the Rule 34 inspection of their computers, “plac[ing] them in the hands of plaintiff/Setec,” and therefore Plaintiffs have the information at issue here.[12] (Opp'n to Suppl. Brief 2.) However, any cooperation that Abrams Defendants, Rinelli, and Mills may have lent to the inspection itself—the process through which Setec obtained the data from their computer devices in the first instance—is beside the point and, in any event, does not invite the ready conclusion that Plaintiffs have the data they seek. Rather, it is the failure of these defendants at the next step of the process—identification of the information withheld pursuant to privilege—that is at issue here. Setec obtained 26,000 documents from the Abrams Defendants’ computer devices and an unspecified number of documents from Rinelli's and Mills's computer devices, all of which are being withheld from Plaintiffs because Defendants claim they are privileged. As the Protocol makes clear, without Defendants’ identification of the withheld material through a proper privilege log, Plaintiffs are unable to challenge the privilege claim and, as a result, Setec is precluded from turning over any documents to Plaintiffs.
In addition, Plaintiffs contend that “Defendants’ spoliation of relevant text message evidence ... means that Plaintiffs are precluded from evaluating and/or presenting relevant text messages to a jury.” (Mot. 47.) They argue that the spoliated evidence is relevant to, and the only evidence of, their Fraud and Intentional Deceit claim (Count 2), their Negligent Misrepresentation claim (Count 3), and their Civil Conspiracy claim (Count 10), in that they could reveal a number of misrepresentations made to Goltsman by these defendants and that the misrepresentations were made with the intent to induce Goltsman to rely on them. (Mot. 50–53, 55–57.) Defendants counter only that their responses to the requests for text messages was “entirely proper” and “included all text messages and emails on defendants.” (Mot. 35.) However, Defendants offer no evidence to rebut Plaintiffs’ contention that this simply is not so, and, more importantly, they do not even attempt to reconcile this assertion with their own admission that they traded in the cell phone devices before they produced any text messages.
Still, Plaintiffs fail to explain, and it is not self-evident, how the text messages could be the only evidence of statements made to Goltsman by Abrams, Rinelli, Mills, and Armstrong, given that Goltsman could testify to those statements herself. The undersigned recognizes that, in light of what likely will be a highly contested factual record, the text messages ultimately could corroborate Goltsman's testimony about Defendants’ misrepresentations to her and their conspiracy to steal her business materials and use them for their gain. The undersigned also recognizes that Goltsman likely would not be able to testify to conspiratorial communications that occurred, if at all, only among Defendants to her obvious exclusion.
Defendants’ repeated assertions that Plaintiffs have suffered no prejudice and that Plaintiffs have not shown that their ability to go to trial has been impaired or that the proper decision in the case is threatened (Mot. 33, 36, 66–67, 73; Opp'n to Suppl. Brief 2) are not only conclusory, but fail to address the Ninth Circuit rule that a failure to produce documents as ordered is per se prejudice. See In re Phenylpropanolamine (PPA), 460 F.3d at 1227. There is no doubt that the Content Findings could inform important questions regarding Plaintiffs’ CFAA and conversion claims, and that the text messages could inform important questions regarding Plaintiffs’ misrepresentation and conspiracy claims. The undersigned finds that the absence of this evidence presents a real, rather than speculative, possibility that Plaintiffs’ ability to go to trial is impaired and the rightful decision of the case is threatened. Accordingly, the undersigned concludes that Plaintiffs are prejudiced by Defendants’ withholding of the Content Findings and the spoliation of their text messages and that the third factor weighs in favor of termination.
*39 The fifth factor—the availability of lesser sanctions—weighs against termination. Default judgment or dismissal “is only justified in extreme circumstances, and is only permitted after considering less drastic sanctions.” Cooley v. Leonard, No. 4:18-cv-00719-YGR (KAW), 2019 WL 6250964 at *2, 2019 U.S. Dist. LEXIS 203478, at *7 (N.D. Cal. Nov. 22, 2019) (citing Halaco Eng'g Co. v. Costle, 843 F.2d 376, 381 (9th Cir. 1988)). Thus, before ordering terminating sanctions, a court must (1) consider less drastic sanctions and explain why such alternate sanctions would be inappropriate; (2) implement alternative sanctions; and (3) warn the party of the possibility of terminating sanctions before ordering such sanctions. Anheuser-Busch, Inc., 69 F.3d at 352.
The first consideration of the fifth factor—a consideration of less drastic sanctions—weighs against termination. Terminating sanctions have been found appropriate only in cases where a party's discovery misconduct in effect forecloses a meaningful defense. For example, in Leon, 464 F.3d at 960–61, the Ninth Circuit affirmed dismissal in a spoliation case upon a finding that the spoliated files likely were “at the heart of [the] defense.” Likewise, in Atlantic Recording Corp. v. Howell, No. CV-06-02076-PHX-NVW, 2008 WL 4080008 at *2, 2008 U.S. Dist. LEXIS 113242, at *8 (D. Ariz. Aug. 29, 2008), the District Court found that terminating sanctions were warranted because the spoliation of certain computer files “made it impossible to decide the case on its merits” rendering “[t]he prejudice to the court and [the moving parties] irretrievable.”
Defendants note that “[a]s for less drastic measures, there are many. None are warranted in the [D]efendant's view, but there are many.” (Mot. 67.) The undersigned cannot help but comment that this is not a persuasive argument coming from Defendants who have been the subject of, but nevertheless have disregarded, ten orders imposing such “less drastic measures” as detailed above, including $1,855.00 in monetary sanctions for their failure to produce the very text messages at issue here. (July 1 Order, as amended by Aug. 10 Order.) Indeed, Defendants’ disregard for these lesser sanctions is so flagrant and unabashed that it ultimately took the District Court holding them in civil contempt, ordering daily penalties, and threatening to jail them before they paid the many ordered lesser, monetary sanctions. (ECF Nos. 249, 251.) Moreover, Defendants’ counsel derided this Court's efforts to resolve discovery disputes through the imposition of monetary sanctions by characterizing the circumstance as “[e]verybody gets lucky once in a while.” (Pls.’ Ex. O at 5:13–24.)
Nevertheless, as described below, the undersigned believes that sanctions greater than the thus-far-ineffective monetary sanctions, but lesser than terminating sanctions, are proper here. Defendants point to jury instructions as a way to “adequately address[ ]” this issue. (Opp'n to Suppl. Brief 3.) However, Defendants make no proposal regarding what such jury instructions would state. (See generally Mot.; Opp'n to Suppl. Brief.) Still, the undersigned agrees with Defendants and finds that these circumstances can be addressed effectively by the imposition of the evidentiary sanctions more fully discussed below. Accordingly, the undersigned finds that the first consideration of the fifth factor weighs against terminating sanctions.
The second consideration—prior implementation of lesser sanctions—is only partly applicable here and thus weighs against termination. With respect to the withholding of the Content Findings on the basis of inadequate privilege logs, this consideration is inapplicable to any of the Abrams Defendants, Rinelli, and Mills because the undersigned did not impose lesser sanctions against them. With respect to the spoliation of text messages, this consideration is inapplicable to Rinelli, Mills, and Armstrong because they spoliated their text messages before the Court had an opportunity to compel their production or order lesser sanctions. On the other hand, this consideration weighs in favor of dismissal as to Abrams because, although he too spoliated his cell phone before the December 15 Order compelling its Rule 34 inspection, the spoliation nevertheless occurred after the July 1 Order, as amended by the August 10 Order, compelling production of the text messages and imposing lesser, monetary sanctions, and after he was served with a notice for Rule 34 inspection of his cell phone. Because it cannot be said that Rinelli, Mills, and Armstrong failed to respond to the prior imposition of lesser sanctions, this consideration weighs against termination. As to Abrams, this consideration weighs in favor of termination.
*40 The third consideration—warnings of possible terminating sanctions—generally weighs against termination here. With respect to the withholding of the Content Findings on the basis of inadequate privilege logs, this consideration weighs against termination as to Abrams Defendants—who were not warned of possible termination for failure to comply with the Protocol, the July 12 Order, or the July 27 Order—but in favor of termination as to Rinelli and Mills—who were warned of possible termination for failure to comply with the Protocol. (Jan. 5 Order, at 6–8.) With respect to the spoliation of text messages, this consideration weighs against termination because the undersigned did not warn Abrams, Rinelli, Mills, or Armstrong about the possibility of terminating sanctions until its December 15 Order in which it compelled the Rule 34 inspection of the cell phone devices. By then, unbeknownst to Plaintiffs and the undersigned, the four cell phone devices had been traded in and their text messages spoliated.
In sum, the undersigned is persuaded that the lesser sanctions discussed below can effectively cure the consequences of Defendants’ improper withholding of the Content Findings and spoliation of text messages. Moreover, as discussed above, sanctions are not warranted as to Wooten and Rinelli Law, and, as to those defendants who should be sanctioned—Abrams Defendants, Rinelli, Mills, and Armstrong—they are not equally culpable for the discovery violations that have occurred. Accordingly, because terminating sanctions are the most severe of measures permitted by Rules 37(b)(2) and 37(e)(2), and would affect all Defendants, the District Court should not award such sanctions on this record.
3. Rule 37(b)(2)(A)(1) Evidentiary Sanctions for Improper Withholding of Content Findings
Plaintiffs urge the Court to award lesser sanctions—issue and evidentiary—should it conclude that terminating sanctions are not warranted. In connection with Defendants’ withholding of the Content Findings, Plaintiffs ask the Court to order certain facts be taken as established pursuant to Rule 37(b)(2)(A)(i).
As a sanction for failure to comply with a discovery order, a District Court may order the matters at issue or other designated facts to be “established” for purposes of the action. Fed. R. Civ. P. 37(b)(2)(A)(i); Guifu Li, 281 F.R.D. at 393 (citing Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee (Compagnie de Bauxites), 456 U.S. 694, 695, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982)). But Rule 37(b)(2) sanctions are limited by two considerations: the sanction must be “just” and “specifically related to the particular claim which was at issue in the order to provide discovery.” Id. (citing Compagnie de Bauxites, 456 U.S. at 707, 102 S.Ct. 2099 (quotation marks omitted)).
As noted above, Plaintiffs contend that the Content Findings withheld by Defendants would be relevant to whether or not Defendants stole and accessed Plaintiffs’ computer, and used the information contained therein. On this basis, Plaintiffs ask the Court to order the following facts “established” as to the CFAA and conversion claims:
CFAA Claim (Count 1):
1. Plaintiffs’ computers contain Plaintiffs’ client database and proprietary marketing materials.
2. One of Plaintiffs’ computers was Ms. Goltsman's marketing computer, on which she purchased, maintained and developed unique content using advertising software.
3. Plaintiffs’ marketing materials and data base were the primary vehicle through which Ms. Goltsman built her business.
4. On or about December 2019, Defendants removed Plaintiffs [sic] computers from Plaintiffs’ office without Ms. Goltsman's permission and remain in possession of Ms. Goltsman's computers without Ms. Goltsman's permission.
5. On or about December 2019 and continuing to the present, Defendants have accessed, without Ms. Goltsman's authorization, Plaintiffs’ computers, client database, marketing materials and other proprietary business materials with the intent to obtain information.
*41 6. On or about December 2019 and continuing to the present, Defendants have accessed, without Ms. Goltsman's authorization, Plaintiffs’ computers, client database, marketing materials and other proprietary business materials with the intent to further a fraud.
7. On or about December 2019 and continuing to the present, Defendants have accessed, without Ms. Goltsman's authorization, Plaintiffs’ computers, client database, marketing materials and other proprietary business materials with the intent to damage the computers or data contained thereon.
8. Defendant Abrams, alone and in concert with the other Defendants, used the Marketing Computer and New Office Computers in interstate commerce.
9. All Defendants used, and continue to use, Ms. Goltsman's computers and the information contained on those computers to solicit clients throughout California.
Conversion Claim (Count 9):
1. Ms. Goltsman had a property interest in her client database, marketing materials, and other proprietary business materials–and a property interest in the computers in which the foregoing business materials were housed.
2. In December 2019, Defendants took, by wrongful act, Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which the foregoing business materials were housed.
3. As a result of Defendants’ wrongful act of taking Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which the foregoing materials were housed—Defendants caused Ms. Goltsman to suffer monetary damages.
4. As a result of Defendants’ wrongful act of taking Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which they were housed—Defendants caused Ms. Goltsman to suffer reputational damages.
(Mot. 49–50 (citing Compl. at Facts ¶¶ 2, 10, 13, 18; at Count I ¶¶ 2–5), 54–55 (citing Compl. at Count VI ¶¶ 35, 36).)
The undersigned finds that the matters Plaintiffs seeks to have “established” exceed the spirit of Rule 37(b)(2)(A)(i) because it is unlikely that some of those facts could be proven or disproven by the Content Findings. There is no question that the Content Findings could contain information that would help establish whether or not Defendants took Plaintiffs’ computers, accessed them, used and continue to use them in interstate commerce, and remain in possession thereof; whether the computers contained Plaintiffs’ work materials, including her uniquely created content and software; and whether the computers were the primary vehicle through which Plaintiff built her business. However, Plaintiffs offer no reason to conclude that the Content Findings could reveal whether Defendants had Plaintiffs’ permission to take her computer and remain in possession thereof, what their intent was in accessing the information in the computers, whether Abrams acted alone or in concert with the other Defendants in using the computers, or whether Goltsman had a property interest in her computer. (See generally Mot.) On this basis, the undersigned concludes that some of the matters Plaintiffs seek to have established are not specifically related to the harm that is caused by Defendants’ withholding of the Content Findings and, as such, the remedy they seek is not narrowly-tailored.
*42 Accordingly, as to Plaintiffs’ Count 1 (CFAA) and Count 9 (conversion) the District Court should order established only the following matters:
CFAA Claim (Count 1):
1. Plaintiffs’ computers contain Plaintiffs’ client database and proprietary marketing materials.
2. One of Plaintiffs’ computers was Ms. Goltsman's marketing computer, on which she purchased, maintained and developed unique content using advertising software.
3. Plaintiffs’ marketing materials and data base were the primary vehicle through which Ms. Goltsman built her business.
4. On or about December 2019, Abrams Defendants, Rinelli, and Mills removed Plaintiffs’ computers from Plaintiffs’ office and remain in possession of Ms. Goltsman's computers.
5. On or about December 2019, and continuing to the present, Abrams Defendants, Rinelli, and Mills have accessed Plaintiffs’ computers, client database, marketing materials and other proprietary business materials.
6. Abrams used the Marketing Computer and New Office Computers in interstate commerce.
7. Abrams Defendants, Rinelli, and Mills used, and continue to use, Ms. Goltsman's computers and the information contained on those computers to solicit clients throughout California.
Conversion Claim (Count 9):
1. In December 2019, Abrams Defendants, Rinelli, and Mills took Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which the foregoing business materials were housed.
2. As a result of the act of Abrams Defendants, Rinelli, and Mills of taking Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which the foregoing materials were housed—Ms. Goltsman suffered and suffers monetary damages.
3. As a result of the act of Abrams Defendants, Rinelli, and Mills of taking Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which they were housed—Ms. Goltsman suffered and suffers reputational damages.
In addition, the District Court should order that no party may use the Content Findings as evidence for any purpose in this Action.
4. Rule 37(e)(2) Adverse Inference Sanctions for Spoliation of Text Messages
As an alternative to terminating sanctions, Plaintiffs urge the Court to punish Defendants’ spoliation misconduct by granting issue and evidentiary sanctions in the form of finding certain facts established under Rule 37(b)(2)(A)(i). (Mot. 51–53, 55–57.) However, such sanctions are not available under Rule 37(e)(2), the framework under which spoliation sanctions must be considered. Instead, short of terminating or default sanctions, Rule 37(e)(2) permits only an adverse inference, to be made by the Court and/or the jury, that the lost information was unfavorable to the spoliating party. Fed. R. Civ. P. 37(e)(2)(A)–(B). Specifically, under Rule 37(e)(2)(A), the Court may “presume that the lost information was unfavorable to the party,” and under Rule 37(e)(2)(B), the Court may “instruct the jury that it may or must presume the information was unfavorable to the party.” Id. An adverse inference instruction under Rule 37(e)(2) is appropriate if: “(1) the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the records were destroyed with a culpable state of mind; and (3) the evidence was relevant to the party's claims or defense such that a reasonable trier of fact could find that it would support the claim or defense.” Cooley, 2019 WL 6250964, at *3, 2019 U.S. Dist. LEXIS 203478, at *8 (citation omitted).
*43 On the record before it, the undersigned concludes that the adverse inference remedy is appropriate. It is warranted by the intentional destruction of the relevant text messages by Abrams, Rinelli, Mills, and Armstrong, all of whom had control over the text messages and had an obligation to preserve them at the time of their destruction. Moreover, such a remedy will help to mitigate the prejudice suffered by Plaintiffs at the hands of these defendants. See Fast, 340 F.R.D. at 354.
Little guidance exists with respect to whether the adverse inference sanction should be in the form of a rebuttable or irrebuttable presumption. Nevertheless, relying on Leon, where the Ninth Circuit touches on the issue, the undersigned concludes that the lesser rebuttable presumption would not be effective here. As the court in Leon recognized, a jury instruction that creates a presumption in favor of Plaintiffs would nevertheless leave Plaintiffs “helpless to rebut any material that [Defendants] might use to overcome the presumption.” See Leon, 464 F.3d at 960.
Accordingly, as to Plaintiffs’ Counts 2 (fraud and intentional deceit), 3 (negligent misrepresentation), and 10 (conspiracy), the District Court should: (1) permit Plaintiffs to present evidence to the jury about destruction of text messages by Abrams, Rinelli, Mills, and Armstrong; (2) give an adverse inference instruction at trial that the jury must presume—irrebuttably—that the information contained in the spoliated text messages was unfavorable to Abrams, Rinelli, Mills, and Armstrong; and (3) itself presume—irrebuttably—for purposes of any pre-trial, trial, or post-trial motions, that the lost text messages contained information unfavorable to Abrams, Rinelli, Mills, and Armstrong.
5. Monetary Sanctions Pursuant to Rules 37(b)(2)(C), (e)(1), (e)(2)
In addition to non-monetary sanctions, Plaintiffs also seek reimbursement of their reasonable expenses incurred as a result of Defendants’ discovery disobedience, including attorneys’ fees. (Mot. 68–73.) They seek $43,446.00 in attorneys’ fees for the preparation of the Original Motion, the supplemental brief ordered by the Court, the Motion, and the supplementation permitted by the Court. (Mot. 68–73; Pls.’ Suppl. Brief 6; Slater Decl. ¶¶ 14–26; Peden Decl. ¶¶ 2–5; Horstmann Decl. ¶¶ 3–11; Slater Suppl. Decl. ¶¶ 3–9.) For the reasons stated below, the District Court should GRANT this request in part.
Plaintiffs seek attorneys’ fees pursuant to Rule 37(a)(5)(A). (Mot. 68.) However, Rule 37(a)(5)(A) applies only to a motion to compel discovery in the first instance, not a motion for sanctions for a party's failure to comply with a discovery order issued under Rule 37(a). See Fed. R. Civ. P. 37(a)(5)(A). The applicable rules here are Rules 37(b)(2)(C), 37(e)(1), and 37(e)(2). The undersigned discusses each in turn and, for the reasons stated below, concludes that Plaintiffs are entitled to attorneys’ fees under the three provisions.
Rule 37(b)(2)(C) requires that a district court, instead of or in addition to nonmonetary sanctions allowed in Rule 37(b)(2)(A), “order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the [discovery] failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C). The disobedient party shoulders the burden of avoiding expenses by establishing substantial justification for the discovery misconduct or that special circumstances make the award of expenses unjust. See Fed. R. Civ. P. 37(b)(2) advisory committee's note to 1970 amendment.
*44 As detailed above, Abrams Defendants, Rinelli, and Mills, have failed to comply with the undersigned's orders—the Protocol, the July 12 Order, and the July 27 Order—to provide a legally-adequate privilege log and thereby allow Plaintiffs the opportunity to challenge the privilege designation as to the 26,000 documents obtained from the Abrams Defendants’ computer and the unspecified number of documents retrieved from the Rinelli and Mills computers.
The undersigned next turns to the question whether either of the rule's exceptions bar an award of monetary sanctions here. As a threshold matter, Defendants do not argue that their discovery failures were substantially justified. (See generally Mot.) Rather, they contend that it is they who are entitled to an award of attorneys’ fees because of Plaintiff's alleged discovery misconduct. (Mot. 73.)
Both the Ninth Circuit and the Supreme Court have offered guidance regarding the standard for establishing “substantial justification” sufficient to avoid a discovery sanction. In Hyde & Drath v. Baker, 24 F.3d 1162 (9th Cir. 1994), the Ninth Circuit stated that “a good faith dispute concerning a discovery question might, in the proper case, constitute ‘substantial justification ....’ ” Id. at 1171 (quoting Liew v. Breen, 640 F.2d 1046, 1050 (9th Cir. 1981)). The Supreme Court has explained that the standard is “satisfied if there is a ‘genuine dispute’ or ‘if reasonable people could differ as to the appropriateness of the contested action.’ ” Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988) (citations and alterations omitted). As discussed above, the vast majority of Defendants’ arguments in opposition to this Motion are not well-taken. Defendants do not offer explanations and/or clarify their objections in order to justify their inadequate privilege logs, their failure to produce the Content Findings, and their spoliation of the text messages. Instead, Defendants assert a number of unmeritorious arguments, confuse legal issues and standards, misrepresent case law, and generally fail to address directly Plaintiffs’ legal arguments. For these reasons, the undersigned cannot conclude that Defendants’ discovery conduct is one on which reasonable people could differ or was justified in any way, let alone “substantially” justified, as required to trigger the exception here.
Nor do Defendants argue that other circumstances would make an award of expenses unjust. (See generally Mot.) And the undersigned can find no evidence of such a circumstance. On this basis, the undersigned concludes that Plaintiffs are entitled to attorneys’ fees under Rule 37(b)(2)(C).
In addition to the sanctions available under Rule 37(b)(2)(C), courts may award costs and fees associated with spoliation as a sanction under Rule 37(e)(1). Upon a finding of prejudice to the party deprived of the information, a court “may order measures no greater than necessary to cure the prejudice.” Fed. R. Civ. P. 37(e)(1). “The range of such measures is quite broad if they are necessary for this purpose, and “[m]uch is entrusted to the court's discretion.” Fed. R. Civ. P. 37(e)(1) advisory committee's note to 2015 amendment; see Spencer v. Lunada Bay Boys, No. CV 16-02129-SJO (RAOx), 2018 WL 839862, at *––––, 2018 U.S. Dist. LEXIS 22779, at *5–6 (C.D. Cal. Feb. 12, 2018) (finding monetary sanctions appropriate under Rule 37(e)(1) given a finding of prejudice for loss of text messages); Sec. Alarm Fin. Enters., L.P. v. Alarm Prot. Tech., LLC, No. 3:13-cv-00102-SLG, 2016 WL 7115911, at *7, 2016 U.S. Dist. LEXIS 168311, at *17-18 (D. Alaska Dec. 6, 2016) (awarding reasonable attorney's fees incurred in bringing a discovery motion after determining the moving party was prejudiced by spoliation). As detailed above, the undersigned has found that Plaintiffs have been prejudiced by the spoliation of text messages by Abrams, Rinelli, Mills, and Armstrong. Accordingly, Plaintiffs are entitled to monetary sanctions under Rule 37(e)(1).
*45 In addition, monetary sanctions also are available under Rule 37(e)(2). Although Rule 37(e)(2) specifies three types of sanctions that may be imposed upon a finding that a party acted with the intent to deprive another of the use of information in litigation, these options are not exclusive. Instead, the Court may order any remedy that “fit[s] the wrong.” Fed. R. Civ. P. 37(e) advisory committee's note to 2015 amendment. On this basis, the undersigned concludes that monetary sanctions are available under Rule 37(e)(2). See, e.g., Paisley Park Enters. v. Boxill, 330 F.R.D. 226, 238 (D. Minn. 2019) (granting monetary sanctions for spoliation under both Rules 37(e)(1) and (e)(2)). Accordingly, because the undersigned has found that Abrams, Rinelli, Mills, and Armstrong spoliated their text messages with the intent to deprive Plaintiffs of the information contained therein, Plaintiffs also are entitled to their attorneys’ fees under Rule 37(e)(2).
When an award of attorneys’ fees is authorized, the court must calculate the proper amount of the award to ensure that it is reasonable. Hensley v. Eckerhart, 461 U.S. 424, 433–34, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). In the Ninth Circuit, the court must perform a two-step process to determine the reasonableness of any fee award. Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1119 (9th Cir. 2000). First, the Court determines the “lodestar figure.” See Gates v. Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992). “The ‘lodestar’ is calculated by multiplying the number of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008) (citation omitted). Second, where appropriate, the Court may adjust the lodestar amount based on several factors adopted by the Ninth Circuit in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975), known as the Kerr factors:
(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the ‘undesirability’ of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases.
Id.
A strong presumption exists “that the lodestar figure represents a reasonable fee.” Morales v. City of San Rafael, 96 F.3d 359, 363 n.8 (9th Cir. 1996). The Ninth Circuit has made clear that “[o]nly in rare instances should the lodestar figure be adjusted on the basis of other considerations.” Id. (citations omitted). “Under the lodestar approach, many of the Kerr factors have been subsumed as a matter of law.” Id. (citation omitted). The Kerr factors that are subsumed within the initial lodestar calculation are the novelty and complexity of the issues, the special skill and experience of counsel, the quality of representation, the results obtained in the action, and the contingent nature of the fee agreement. Id. at 364 n.9 (citations omitted). “Adjusting the lodestar on the basis of subsumed reasonableness factors after the lodestar has been calculated, instead of adjusting the reasonable hours or reasonable hourly rate at the first step ... is a disfavored procedure.” Id. (citation omitted).
The party seeking the award of fees must submit evidence to support the request. Van Gerwen v. Guar. Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000). Specifically, the party must support the request with evidence regarding the “number of hours worked and the rates claimed.” Id. The party opposing the fee request bears the “burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in submitted affidavits.” Common Cause v. Jones, 235 F. Supp. 2d 1076, 1079 (C.D. Cal. 2002) (quoting Gates, 987 F.2d at 1397).
*46 Plaintiffs request $43,446.00 in attorneys’ fees based upon the following lodestar calculation:
(Slater Decl. ¶¶ 14–26; Peden Decl. ¶¶ 3–5; Horstmann Decl. ¶¶ 3–10; Slater Suppl. Decl. ¶¶ 3–9.)
Defendants challenge neither the hours spent in bringing the Motion and its iterations nor the hourly rate requested for each attorney. (See generally Mot.; Opp'n to Suppl. Brief.) Nevertheless, the undersigned conducts an independent review of both to ensure that the lodestar requested is appropriate for the Motion. For the reasons stated below, the District Court should AWARD Plaintiffs the sum of $20,000.00 as and for the attorneys’ fees expended in bringing the Motion.
1) Attorney Hourly Rates
Plaintiffs claim the following hourly rates for their counsel: $510.00 for Ms. Peden, $350.00 for Mr. Slater until February 18, 2022 and $300.00 commencing on April 8, 2022, and $350.00 for Mr. Horstmann. (Mot. 70–72; Slater Decl. ¶¶ 21–24; Peden Decl. ¶ 3; Horstmann Decl. ¶¶ 9–10; Slater Suppl. Decl. ¶ 7.) Defendants do not dispute this rate. (See generally Mot.; Opp'n to Suppl. Brief.)
In determining whether the hourly rate billed is reasonable for purposes of an attorneys’ fees award, the Court must ensure that the requested rates “are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Blum v. Stenson, 465 U.S. 886, 895 n.11, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984); accord Carson v. Billings Police Dep't, 470 F.3d 889, 891 (9th Cir. 2006) (noting that the party seeking fees must prove that the rate charged is in line with the “prevailing market rate of the relevant community.” (citation omitted)). The burden is on the fee applicant “to produce satisfactory evidence—in addition to the attorney's own affidavits—that the requested rates are in line with those prevailing in the community....” Camacho, 523 F.3d at 980 (citation omitted). For this purpose, “the relevant community is the forum in which the district court sits.” Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997). “[R]ates outside the forum may be used if local counsel was unavailable, either because they are unwilling or unable to perform because they lack the degree of experience, expertise, or specialization required to handle properly the case.” Id. (citation and quotation marks omitted). Accordingly, the relevant community here is the Central District of California. In addition, the court may rely on its own experience to determine a reasonable hourly rate. See Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011). Finally, in exercising its discretion in setting a fee, the court must assess the “reasonableness of the fee in light of the totality of the circumstances.” Jordan v. Multnomah County, 815 F.2d 1258, 1262 n.7 (9th Cir. 1987).
*47 Here, Plaintiffs do not offer a declaration of an attorneys’ fees expert. (See generally Mot.) Instead, Plaintiffs’ counsel attest that their respective hourly rates fall below $585.00—the median billing rate for attorneys comparable to them in Los Angeles according to the Wolters Kluwer 2020 Real Rate Report (Mid-Year Update) (“Real Rate Report”).[13] (Slater Decl. ¶ 19; Peden Decl. ¶ 3; Horstmann Decl. ¶ 10; Slater Suppl. Decl. ¶ 4.) In addition, Ms. Peden provides the following information about her experience:
I graduated from the University of California, Berkeley in 1999 and have practiced law for more than 20 years. I clerked for two federal judges, the Honorable David Folsom in the Eastern District of Texas and the Honorable Richard C. Tallman at the Ninth Circuit court of Appeals. I have litigated disputes ranging from large, complex cases with multi-million-dollar claims to smaller suits between private parties.
(Peden Decl. ¶ 2.) Mr. Slater adds that his $300.00 hourly rate is lower than the $350.00 rate previously approved in connection with fees motions in this case. (Slater Suppl. Decl. ¶ 4.)
With this, the undersigned is persuaded that hourly rates of $350.00 and $300.00 for Mr. Slater, $350.00 for Mr. Horstmann, and $510.00 for Ms. Peden are appropriate here. This is consistent with prior discovery rulings in this matter by the Northern District of California and this Court finding that the hourly rate of $350.00 for Mr. Slater was reasonable. (See Jan. 8 Order, at 6 n.4; July 1 Order, as amended by Aug. 10 Order, at 33–34; July 8 Order, at 43–44; July 14 Order, at 36–37; Aug. 19 Order, at 23–25; Nov. 5 Order, at 41–43; Dec. 15 Order, at 25–27; Dec. 22 Order, at 60–62; Jan. 19 Order, at 50–52.)
2) Hours Billed
As a threshold matter, the undersigned finds that Plaintiffs’ documented 119.20 hours fall far beyond those awarded in this district for a discovery motion. See, e.g., Nguyen v. Regents of the Univ. of Cal., No. 8:17-cv-00423-JVS-KESx, 2018 WL 6112616, at *––––, 2018 U.S. Dist. LEXIS 226622, at *9-12 (C.D. Cal. May 18, 2018) (approving 38.9 hours for the preparation of a joint stipulation); Dish Network L.L.C. v. Jadoo TV, Inc., No. 2:18-cv-9768-FMO (KSx), 2019 WL 7166067, at *––––, 2019 U.S. Dist. LEXIS 221869, at *18 (C.D. Cal. Nov. 8, 2019) (approving 32 hours for the preparation of a discovery motion). However, the total hours in effect reflect three motions: the Original Motion, the Court-ordered Supplement to Original Motion briefing sanctions lesser than termination, and the instant Motion. Accordingly, the average hours billed on the three briefs is appropriate when adjusted for the reasons set forth below.
3) Reduction of Hours Billed
*48 While the undersigned appreciates the history and magnitude of the motion practice involved in this Motion, there is no doubt that some of the work performed in the preparation of the Original Motion and the Supplement to the Original Motion was leveraged as Plaintiffs iterated to the instant Motion. Specifically, Plaintiffs raised the following eight grounds upon which Plaintiffs requested terminating sanctions in the Original Motion, and ultimately lesser sanctions through the Supplement to the Original Motion: (1) failure to provide complete responses to Plaintiffs’ Interrogatories Set One, Nos. 3 through 7, in compliance with the July 8 Order; (2) failure to provide privilege logs to support the privileges asserted by Abrams Defendants as to the Content Findings, in compliance with the Protocol and the July 27 Order; (3) failure to provide complete responses and produce documents responsive to Plaintiff's Request for Production of Documents Set Two, Nos. 109 and 110—which requested the text messages at issue here—in compliance with the July 1 Order, as superseded by the August 10 Order; (4) failure to appear for their duly noticed depositions—as to Defendants Rinelli, Mills, and Abrams only—in compliance with the August 19 Order; (5) failure to pay attorneys’ fees ordered in connection with a number of the undersigned's earlier discovery orders (Dec. 21 Order; Jan. 8 Order; July 1 Order; July 8 Order; July 14 Order; Aug. 19 Order); (6) misrepresentation of the legal status and amenability to suit of Entity Defendants; (7) misrepresentation of the existence of Defendants’ insurance agreements under which insurers could be liable to satisfy a judgment against Defendants; and (8) use in public court filings and discovery responses material over which Plaintiffs have claimed privilege. (See generally Orig. Motion.) Notably, five of the eight grounds in the Original Motion and the Supplement to the Original Motion—Grounds 2, 3, 6, 7, and 8—appear again in the instant Motion. (See generally Mot.) In addition, two of the five discovery motions, filed by Plaintiffs after the Original Motion and the Supplement to the Original Motion, involved issues that appear again in the instant Motion—inspection of the cell phone devices and inspection of Rinelli's and Mills's computer devices. (Id.) Accordingly, pursuant to the discretion afforded courts under Kerr to adjust the lodestar based upon the time and labor required, the undersigned concludes that the duplicative nature of the work between the Original Motion, the Supplement to the Original Motion, and the two additional discovery motions, on the one hand, and the instant Motion, on the other, requires a thirty-percent (30%) reduction in the number of hours worked in iterating to the instant Motion. This reduces the attorneys’ fees from the requested $43,446.00 to $30,412.20 ($43,446.00 less 30%).
4) Further Reduction in the Interests of Justice
The undersigned is not unsympathetic to the burden this attorneys’ fees award will impose on Abrams Defendants, Rinelli, Mills, and Armstrong. Indeed, Defendants already have been sanctioned in this case for approximately $33,448.30. (See Dec. 21 Order; Jan. 8 Order; July 1 Order, as amended by Aug. 10 Order; July 8 Order; July 14 Order; Aug. 19 Order; Nov. 5 Order; Dec. 15 Order; Dec. 22 Order; Jan. 5 Order; Jan. 19 Order.) Nevertheless, the undersigned cannot help but reflect on the obstinate and unreasonable discovery conduct that has necessitated these sanctions, noting disappointingly that even these self-inflicted, interim sanctions proved to be of little incentive to change this behavior, as evidenced by the instant Motion. On balance, however, the undersigned concludes that the interests of justice warrant a further one-third reduction in this attorneys’ fees award. On this basis, the District Court should REDUCE the amount of reasonable expenses to be awarded to Plaintiffs from $30,412.20 to $20,000.00 ($30,412.20 less 33% and rounded to the nearest thousand).
The interests of justice also counsel that the $20,000.00 payment be shared according to the culpability of the various defendants. The undersigned estimates roughly that Plaintiffs expended approximately one half of their efforts on the Content Findings issue and one half on the spoliation issue. Accordingly, the District Court should ORDER that the $10,000.00 in fees associated with the Content Findings be borne equally and severally by the defendants at fault there (Abrams Defendants, Rinelli, and Mills), and that the $10,000.00 in fees associated with the spoliation issue be borne equally and severally by the defendants at fault there (Abrams, Rinelli, Mills, and Armstrong).
V. WAIVER OF PRIVILEGE
In addition to their request for terminating or lesser sanctions in connection with the withheld Content Findings, Plaintiffs seek a finding that Abrams Defendants, Rinelli, and Mills have waived their right to assert any claim of privilege as to the Content Findings and, based on that waiver, an order that Setec produce all the withheld Content Findings to Plaintiffs. (Mot. 59.)
In Burlington Northern & Santa Fe Railway v. United States District Court, 408 F.3d 1142, 1147 (9th Cir. 2005), the Ninth Circuit rejected a per se rule of waiver even where a privilege log is untimely or the privilege claim is inadequate under Rule 26(b)(5). Instead, it adopted a “holistic reasonableness test” for waiver. Id. at 1149. In determining whether an assertion of privilege or protection is sufficient, courts “should make a case-by-case determination, taking into account the following factors: [1] the degree to which the objection or assertion of privilege enables the litigant seeking discovery and the court to evaluate whether each of the withheld documents is privileged ...; [2] the timeliness of the objection and accompanying information about the withheld documents ...; [3] the magnitude of the document production; and [4] other particular circumstances of the litigation that make responding to discovery unusually easy ... or unusually hard.” Id. “These factors should be applied in the context of a holistic reasonableness analysis” including a review of “mitigating considerations” or other circumstances that support a finding of waiver, including the sophistication of the party failing to comply with privilege log requirements. Id.
*49 Here, Plaintiffs argue that Defendants waived the privilege as to the Content Findings because Abrams gave Mills's assistant Lisa—a person who is not Abram's employee, nor an attorney, nor a paralegal—access to the client database. (Mot. 23–24.) Defendants respond that Plaintiffs’ contention is without factual support as it is false that Abrams disclosed attorney work product material to Lisa and Plaintiffs make no such showing. (Id. at 42.) The undersigned agrees with Defendants. As a threshold matter, Plaintiffs offer no evidence that Lisa's access to the client database—which Abrams admitted at deposition (Pls.’ Ex. G at 4–5)—included access to the documents over which Abrams Defendants claims privilege. (See generally Mot.) Moreover, even it did, the privilege “covers communications between the attorney, the client, or their agents, so long as the communications were intended to be confidential and made in rendering legal advice.” Segerstrom v. United States, No. C 00-0833 SI, 2001 WL 283805, *3, 2001 U.S. Dist. LEXIS 2949, at *8-9 (N.D. Cal. Feb. 6, 2001). And Plaintiffs offer no evidence of the capacity in which Lisa accessed the client database, leaving open the possibility that Lisa, although employed by Mills rather than Abrams, also was acting as Abrams's agent when she accessed it. In sum, as Defendants correctly note, Plaintiffs’ theory that Lisa's access to the client database results in a waiver of privilege is based upon “nothing but guess work” (Mot. 42), and, as explained above, is insufficient to support even a reasonable inference that the privilege has been waived.
Plaintiffs also argue that the paradoxical position taken by Abrams Defendants, Rinelli, and Mills to avoid disclosure of the Content Findings—that, on the one hand, they cannot claim privilege over the documents at issue because the privilege belongs to their clients, and that, on the other, they have no obligation to notify their clients that their privileged documents are at issue here—is unsupported by legal authority. (Id. at 25–26.) However, it appears that these defendants have done an about-face and now argue that they must raise, and cannot waive, the privilege on behalf of their clients. (Opp'n to Suppl. Brief 5–6.) Either way, the service of the Privilege Logs—which now ostensibly assert privilege on behalf of these defendants’ clients (Pls.’ Exs. D, E, R)—moots Plaintiffs’ argument.
But these two issues are beside the point because the undersigned concludes that the conduct of Abrams Defendants, Rinelli, and Mills in connection with the Content Findings warrants a finding of waiver under Burlington. The first Burlington factor—which hinges on the other party's ability to assess the applicability of the privilege—weighs heavily in favor of waiver for the reasons stated in detail above. The second Burlington factor—which asks the Court to assess the timeliness of the objection and information about the withheld documents—also weighs heavily in favor of waiver as there has been gross untimeliness here. The Rule 34 inspection of Abrams Defendants’ computers occurred on May 3, 2021, and they produced their first purported privilege log—which was not a privilege log at all—on July 19, 2021. The Rule 34 inspection of Rinelli's and Mills's computers occurred on January 25, 2022, and they produced the Rinelli/Mills Privilege Log on April 25, 2022. More importantly, none of these defendants has, to date, produced the information necessary for Plaintiffs to evaluate the claimed privilege. See Burlington, 408 F.3d at 1149 (finding a five-month delay in producing a privilege log sufficient for a finding of waiver); Carl Zeiss Int'l GmbH v. Signet Armolite Incl., No. 07-cv-0894-DMS (POR), 2009 WL 4642388 at *4, 2009 U.S. Dist. LEXIS 111877, at *14 (S.D. Cal. Dec. 1, 2009) (finding a nine-month delay in producing a privilege log militates in favor of waiver). The third Burlington factor—which inquires into the magnitude of the documents at issue—weighs against waiver for Abrams Defendants, who apparently had to contend with 26,000 documents in the Content Findings. However, because neither Rinelli nor Mills has provided any information to the Court regarding the volume of their Content Findings, this factor cannot be assessed as to them. Finally, the fourth Burlington factor—which looks to the ease or difficulty of responding to the discovery—weighs in favor of waiver. Indeed, Defendants’ counsel advised the Court on July 26, 2021 that he was able to review 7,000 of the 26,000 Abrams Defendants’ documents in the six weeks since their receipt on June 21, 2021. (July 27 Order, at 3.) Rinelli and Mills reviewed their unknown quantity of Content Findings in a timely manner. (Mot. 33.) Yet, the Abrams Defendants offer no explanation why the remaining 19,000 documents could not be reviewed as swiftly as the first 7,000, and none of these defendants offers an explanation why a privilege log that properly identifies the Content Findings could not have been produced to date—one year after the Abrams Defendants’ receipt of their Content Findings and two months after Rinelli and Mills produced the Rinelli/Mills Privilege Log.
*50 Viewing this matter from a holistic perspective, the undersigned finds that the Burlington factors weigh heavily in favor of a finding that Abrams Defendants, Rinelli and Mills have waived any privilege they assert as to their respective Content Findings. The undersigned concludes that the behavior of these defendants—from the inexplicable delay in producing the Privilege Logs, to the persistent inadequacy of the Privilege Logs which has not been cured to date, to the sophistication of Abrams and Rinelli (both lawyers who know or should know better)—is unreasonable under the circumstances. Accordingly, the District Court should FIND that Abrams Defendants, Rinelli, and Mills have waived their privilege claim as to their respective Content Findings.
Nevertheless, consistent with the requirement of a holistic review, the District Court should DENY Plaintiffs’ request that Setec turn over the Content Findings to Plaintiffs. This is because, given the evidentiary sanctions recommended above, the undersigned is unable to find that Plaintiffs remain prejudiced by their inability to review or use the Content Findings, or that their claim of wrong is going unremedied. And Plaintiffs provide no explanation of how any such prejudice could persist if the evidentiary sanctions they seek are granted. (See generally Mot.; Pls.’ Suppl. Brief.) To the contrary, a grant of both requests—evidentiary sanctions and production of the Content Findings—would result in a double recovery by Plaintiffs for the same, single wrong. Moreover, such a grant could create evidentiary chaos in the remainder of the litigation given that, once produced, Defendants themselves would be free to use the Content Findings to possibly undermine the facts established here as evidentiary sanctions.
VI. SANCTIONS PURSUANT TO SECTION 1927 AND THE COURT'S INHERENT POWERS
Plaintiffs ask the Court to order Defendants to pay a substantial monetary sanction, pursuant to Section 1927 and this Court's inherent powers, “because their shocking conduct has resulted in unreasonable expenses and attorneys’ fees for Plaintiffs.” (Mot. 65.)
A. Legal Standard
Federal courts are empowered to levy sanctions by many sources, including Section 1927, which addresses “conduct that unreasonably and vexatiously multiplies the proceedings,” 28 U.S.C. § 1927, and the court's inherent power, which addresses the willful or bad faith conduct of litigation, Fink v. Gomez, 239 F.3d 989, 991 (9th Cir. 2001).
Section 1927 provides that any attorney “who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” 28 U.S.C. § 1927. Thus, Section 1927 sanctions are limited to the conduct of an attorney, not a party. See, e.g., Kanbar v. Kaufman, No. C 07-2123 VRW, 2009 WL 10698210, at *4, 2009 U.S. Dist. LEXIS 148215, at *9-10 (N.D. Cal. Feb. 24, 2009) (finding that declaration regarding the subjective bad faith of a party rather than of the party's attorney not relevant to Section 1927 sanctions). Because Section 1927 punishes the multiplication of proceedings, the initial pleadings are beyond its reach. Willis v. City of Oakland, 231 F.R.D. 597, 598 (N.D. Cal. 2005). However, Section 1927 applies broadly to unnecessary filings and tactics once a lawsuit has begun. In re Keegan Mgmt. Co., 78 F.3d 431, 435 (9th Cir. 1996). Proceedings subject to Section 1927 sanctions include not only the bringing of motions, but also the “failure[ ] to withdraw moot motions.” Mostowfi v. 12 Telecom Int'l, No. C-03-5784 VRW, 2005 WL 8162688 at *2, 2005 U.S. Dist. LEXIS 62075, at *7 (N.D. Cal. Mar. 14, 2015).
A court also may impose sanctions under its inherent authority. It long has been established that a court's inherent powers “derive from the absolute need of a trial judge to maintain order and preserve the dignity of the court.” Cooke v. United States, 267 U.S. 517, 539, 45 S.Ct. 390, 69 L.Ed. 767 (1925). However, “because of their very potency, inherent powers must be exercised with restraint and discretion.” Chambers v. NASCO, Inc., 501 U.S. 32, 44, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) (citations omitted). A court's inherent power “is not limited by overlapping statutes or rules.” Haeger v. Goodyear Tire & Rubber Co., 813 F.3d 1233, 1243 (9th Cir. 2016). Indeed, “ ‘the inherent power of a court can be invoked even if procedural rules exist which sanction the same conduct.’ ” Id. (quoting Chambers, 501 U.S. at 49, 111 S.Ct. 2123 (1991)). Thus, “[w]hile Rule 37 also provides a method to sanction a party for failing to comply with discovery rules, it is not the exclusive means for addressing the adequacy of a discovery response.” Id. (citing Chambers, 501 U.S. at 49, 111 S.Ct. 2123). Where, in its informed discretion, the court determines that “neither the statute nor the [Federal Rules of Civil Procedure] are up to the task, the court may safely rely on its inherent power.” Id. (quoting Chambers, 501 U.S. at 50, 111 S.Ct. 2123). Because “inherent powers are shielded from direct democratic controls, they must be exercised with restraint and discretion.” Roadway Express Inc. v. Piper, 447 U.S. 752, 764, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980). Thus, courts may not exercise these powers without a “specific finding of bad faith.” United States v. Stoneberger, 805 F.2d 1391, 1393 (9th Cir. 1986).
*51 The imposition of sanctions rests in the sound discretion of the district court. See, e.g., Trulis v. Barton, 107 F.3d 685, 694 (9th Cir. 1996) (holding that the district court abused its discretion by not awarding Section 1927 sanctions); MGIC Indem. Corp. v. Moore, 952 F.2d 1120, 1121 (9th Cir. 1991) (holding that the district court abused its discretion by awarding Section 1927 sanctions). However, sanctions under Section 1927 or the court's inherent power must be tailored to the particular conduct at issue. See, e.g., United States v. Blodgett, 709 F.2d 608, 610–11 (9th Cir. 1983) (“Section 1927 only authorizes the taxing of excess costs arising from an attorney's unreasonable and vexatious conduct; it does not authorize imposition of sanctions in excess of costs reasonably incurred because of such conduct. Similarly, cases that have considered the district court's inherent power to sanction attorneys for litigating in bad faith have related such sanctions to the amount of fees incurred by the opposing party.”) (internal citations omitted). In Chambers, the Supreme Court found proper the assessment of attorneys’ fees as a sanction. Chambers, 501 U.S. at 55, 111 S.Ct. 2123. Other courts have considered sanctions including assessment of attorney's fees and costs, disqualification of counsel, or monetary penalties. See, e.g., Kleiner v. First Nat'l Bank of Atlanta, 751 F.2d 1193, 1209 (11th Cir. 1985).
B. Discussion
Plaintiffs note that “the issues in this motion are only a fraction of Defendants’ overall misconduct that has grossly over-complicated this case.” (Mot. 65.) They contend that they incurred $32,516.00[14] in attorneys’ fees drafting the Original Motion and the Court-ordered supplemental brief, and $92,127.26 in expert fees and expenses related to Defendants’ spoliation misconduct. (Id.) On this basis, they ask the Court to award them “at least $120,000.” (Id.) Defendants respond that Plaintiff “ha[ve] not and cannot prove [bad] faith or any basis for sanctions against counsel.” (Id. at 68.)
The undersigned agrees with Defendants that Plaintiffs have not met their burden to establish their entitlement to sanctions under either Section 1927 or the Court's inherent powers. As a starting point, Plaintiffs do not distinguish between the acts of Defendants and those of Defendants’ counsel as the predicate for Section 1927 sanctions. (See id. at 65.) Instead, their argument rests solely on an accounting—detailed as it may be—of the attorneys’ fees and expenses they incurred in preparing the Original Motion and in obtaining the Content Findings and the spoliated text messages, without any attribution whatsoever of whose conduct caused that expenditure. (Id.; Pls.’ Ex. L.) In that only an attorneys’ conduct is sanctionable under Section 1927, the absence of facts specifically pointing to counsel's misconduct renders it impossible for the Court to award Section 1927 sanctions here. Moreover, Plaintiffs fail to explain what specific conduct multiplied the proceedings and, as to such conduct, how it was unreasonable or vexatious, as required by Section 1927. On this basis, the District Court should DENY Plaintiffs’ request for sanctions under Section 1927.
Nor should the District Court order sanctions under its inherent powers. As with their deficient request for Section 1927 sanctions, Plaintiffs also fail to establish the bad faith conduct that is the factual predicate for sanctions under the Court's inherent powers. Instead, they point to the attorneys’ fees they have expended in bringing this Motion and the expert fees they have incurred in connection with Defendants’ spoliation conduct. (Mot. 65.) However, Plaintiffs’ bid for attorneys’ fees is addressed above, in response to their request for fees under Rule 37. And their bid for expert fees will be addressed at the end of the litigation. On this basis, the District Court should DENY Plaintiffs’ request for sanctions under its inherent powers.
VII. DEFENDANTS’ REQUEST FOR SANCTIONS ON PLAINTIFFS
*52 Defendants request $29,212.50 as and for attorneys’ fees expended opposing the Motion pursuant to Rule 37(a)(5), Section 1927, and Section 401. (Mot. 73.) Although this amount is not explicitly specified in the Motion (see id. (seeking attorneys’ fees “in the amount of $-------------”)), Defendants’ counsel Donahue declares that he expended twenty-six (26) hours opposing the Motion, ten (10) hours preparing a declaration regarding “Plaintiff's Misrepresentations to the Court,” and seven (7) hours opposing Plaintiff's Supplemental Brief, for a total of forty-one (41) hours, all at Mr. Donahue's hourly rate of $475.00, and all enhanced by a 1.5 multiplier (for an unspecified reason), for a grand total of $30,637.50.[15] (Donahue Decl. ¶ 8; Donahue Second Decl. ¶¶ 7–8; Donahue Suppl. Decl. ¶ 9.)
However, such an award is not available to Defendants under any of these statutory provisions. As a threshold matter, Defendant may not seek affirmative relief through their opposition to the Motion. Courts in this and other districts have concluded that a request for affirmative relief is not proper when raised for the first time in an opposition. See, e.g., Interworks Unlimited, Inc. v. Digital Gadgets, LLC, No. CV 17-04983 TJX (KSx), 2019 WL 4570013, at *1, 2019 U.S. Dist. LEXIS 167149, at *3-4 (C.D. Cal. June 11, 2019) (party responding to motion “cannot seek affirmative relief by way of an opposition brief”); Finjan, Inc. v. Blue Coat Sys., Inc., No. 13-cv-03999-BLF, 2015 WL 3630000, 2015 U.S. Dist. LEXIS 74566 (N.D. Cal. June 2, 2015) (asking to strike infringement theories is not “a request for relief properly presented in an opposition brief”); Pac. Coast Steel v. Stoddard, No. 11cv2073 H(RBB), 2013 WL 12064545, at *14, 2013 U.S. Dist. LEXIS 199213, at *41 (S.D. Cal. Feb. 15, 2013) (declining to grant affirmative relief, “precluding an expert witness from testifying at trial, based on a request included in an opposition to a motion”); Thomasson v. GC Servs. L.P., No. 05cv0940-LAB (CAB), 2007 WL 9770702, at *6, 2007 U.S. Dist. LEXIS 54693, at *21 (S.D. Cal. July 16, 2007) (“[T]he court rejects any discovery-related or other requests for affirmative relief Plaintiffs attempt to piggy-back on their Opposition as inappropriate, untimely, and obfuscating.”).
In addition, Rule 37(a)(5) does not apply here because this is not a motion to compel discovery. See Fed. R. Civ. P. 37(a) (setting forth the rules for bringing a motion to compel disclosures or discovery). Rather, it is a motion for sanctions under Rule 37(b)(2) for Defendants’ failure to comply with court orders and Rule 37(e) for Defendants’ spoliation of evidence. See Fed. Rs. Civ. P. 37(b), 37(e). However, Rule 37(b)(2) contemplates only a payment of the reasonable expenses of the moving party—here, Plaintiffs—by the disobedient party and/or its counsel—here, Defendants and Messrs. Donahue and Basinger. See Fed. R. Civ. P. 37(b)(2)(C). Similarly, Rule 37(e) contemplates only a payment of reasonable expenses by the spoliating party—here, Defendants. See Fed. R. Civ. P. 37(e).
Nor is such an award available under Section 1927. As detailed above, sanctions under Section 1927 require a showing that counsel has engaged in “conduct that unreasonably and vexatiously multiplies the proceedings.” 28 U.S.C. § 1927. Defendants argue that Plaintiffs’ counsel “has engaged in deceptive, and willful misrepresentations multiplying these proceedings [under] Rule 37(a)(5)” and “violated [Local Rules] 37-2.2 and 37-2.4.” (Mot. 73.) They appear to support this argument with the assertion that Plaintiffs’ counsel—Mr. Slater—unreasonably and vexatiously filed the Complaint in the name of RG Abrams Insurance, which Defendants claim is a non-existent entity as it is “nothing but a nonexistent entity, a DBA,” and, as a result, “ran up the attorney [sic] fees, complicated issues[,] ... is willfully misleading and reprehensible[,] ... multiplies the proceedings unnecessarily[,] and is a fraud upon the court.” (Id. at 31–32.) But this argument rings hollow, given that Defendants themselves filed four counterclaims that name RG Abrams Insurance as a counter-defendant. (See generally Abrams Counterclaim; Rinelli/Mills Counterclaim; Armstrong/Wooten Counterclaim; Entity Counterclaim.) Moreover, other than their bald assertions, Defendants offer no evidence regarding the legal existence—or lack thereof—of RG Abrams Insurance, from which the undersigned could determine the merit of their argument. (See generally Mot.; Opp'n to Suppl. Brief.) But even if Defendants were correct in their assertion that RG Abrams lacked capacity to bring suit, Section 1927 sanctions are not available for filing a complaint. See In re Keegan Mgmt. Co., Sec. Litig., 78 F.3d 431, 435 (9th Cir. 1996). This is because Section 1927 “applies only to unnecessary filings and tactics once a lawsuit has begun.” Id.; see also Zaldivar v. City of Los Angeles, 780 F.2d 823, 831 (9th Cir. 1986) (noting that under Section 1927, “the multiplication of proceedings is punished, thus placing initial pleadings beyond [Section 1927’s] reach.”); In re Yagman, 796 F.2d 1165, 1187 (9th Cir. 1986) (“It is only possible to multiply or prolong proceedings after the complaint is filed.”), amended by 803 F.2d 1085 (9th Cir. 1986), cert. denied, 484 U.S. 963, 108 S.Ct. 450, 98 L.Ed.2d 390 (1987).
*53 Finally, Section 401 also is inapplicable here. Under Section 401, a district court has the power to hold any party who disobeys “its lawful writ, process, order, rule, decree, or command” in civil contempt. 18 U.S.C. § 401(3). “Sanctions for civil contempt may be imposed to coerce obedience to a court order, or to compensate the party pursuing the contempt action for injuries resulting from the contemptuous behavior, or both.” Gen. Signal Corp. v. Donallco, Inc., 787 F.2d 1376, 1380 (9th Cir. 1986). Compensatory sanctions are intended “to compensate the contemnor's adversary for the injuries which result from the noncompliance.” Falstaff Brewing Corp. v. Miller Brewing Co., 702 F.2d 770, 778 (9th Cir. 1983). “Where compensation is intended, a fine is imposed, payable to the complainant.” United States v. United Mine Workers of Am., 330 U.S. 258, 304, 67 S.Ct. 677, 91 L.Ed. 884 (1947). “Such fines must of course be based upon evidence of complainant's actual loss, and his right, as a civil litigant, to the compensatory fine is dependent upon the outcome of the basic controversy.” Id. Here, Defendants offer no evidence that they are entitled to Section 401 sanctions in the first instance. (Mot. 73.) They argue only that Plaintiffs’ conduct—submission of inadmissible declarations, failure to produce discovery, failure to cooperate throughout, use of double standards in discovery, “crying ‘bad faith’ ” despite their own disturbing conduct, efforts to avoid a trial on the merits, and failure to submit declarations from their expert Setec—entitles Defendants to sanctions. (Id.) But this misses the mark altogether in that, even if Defendants could prove any or all of the above—and they have not—they point to no writ, process, order, rule, decree, or command, issued by this or any other Court, that Plaintiffs have violated by engaging in such conduct. (See generally id.; Opp'n to Suppl. Brief.)
Accordingly, the District Court should DENY Defendants’ request for attorneys’ fees.
VIII. RECOMMENDATION
For the reasons set forth above, IT IS RECOMMENDED that the District Court issue an Order approving and accepting this Report and Recommendation, and ordering that Plaintiffs’ Motion be GRANTED in part and DENIED in part as follows:
1. Defendants’ objections to the Slater, Peden, Horstmann, and Slater Supplemental Declarations should be OVERRULED.
2. Defendants’ procedural objections to the Motion should be DISREGARDED.
3. Plaintiffs’ evidence and arguments not properly before the Court or fully developed should be DISREGARDED.
4. Plaintiffs’ request for sanctions against Wooten, Armstrong, and Rinelli Law under Rule 37(b)(2) should be DENIED.
5. Plaintiffs’ request for evidentiary sanctions for the withholding of the Content Findings should be GRANTED under Rule 37(b)(2) as to Abrams Defendants, Rinelli, and Mills as follows:
a. The following matters should be deemed established for purposes of this action:
As to Plaintiffs’ CFAA Claim (Count 1):
1. Plaintiffs’ computers contain Plaintiffs’ client database and proprietary marketing materials.
2. One of Plaintiffs’ computers was Ms. Goltsman's marketing computer, on which she purchased, maintained and developed unique content using advertising software.
3. Plaintiffs’ marketing materials and data base were the primary vehicle through which Ms. Goltsman built her business.
4. On or about December 2019, Abrams Defendants, Rinelli, and Mills removed Plaintiffs’ computers from Plaintiffs’ office and remain in possession of Ms. Goltsman's computers.
5. On or about December 2019, and continuing to the present, Abrams Defendants, Rinelli, and Mills have accessed Plaintiffs’ computers, client database, marketing materials and other proprietary business materials.
6. Abrams used the Marketing Computer and New Office Computers in interstate commerce.
7. Abrams Defendants, Rinelli, and Mills used, and continue to use, Ms. Goltsman's computers and the information contained on those computers to solicit clients throughout California.
As to Plaintiffs’ Conversion Claim (Count 9):
1. In December 2019, Abrams Defendants, Rinelli, and Mills took Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which the foregoing business materials were housed.
2. As a result of the act of Abrams Defendants, Rinelli, and Mills of taking Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which the foregoing materials were housed—Ms. Goltsman suffered and suffers monetary damages.
3. As a result of the act of Abrams Defendants, Rinelli, and Mills of taking Ms. Goltsman's client database, marketing materials, and other proprietary business materials—and the computers in which they were housed—Ms. Goltsman suffered and suffers reputational damages.
*54 b. No party should be allowed to use the Content Findings as evidence for any purpose in this Action.
6. Plaintiffs’ request for sanctions against Wooten, Rinelli Law, and Abrams Law under Rule 37(e) should be DENIED.
7. Plaintiffs’ request for evidentiary sanctions for the spoliation of text messages should be GRANTED under Rule 37(e)(2) as to Abrams, Rinelli, Mills, and Armstrong, as follows:
a. Plaintiffs should be permitted to introduce evidence at trial regarding the spoliation of text messages by Abrams, Rinelli, Mills, and Armstrong and no Defendants should be permitted to rebut this evidence;
b. the District Court should give an adverse inference instruction at trial that the jury must presume—irrebuttably—that the information contained in the spoliated text messages was unfavorable to Abrams, Rinelli, Mills, and/or Armstrong, with the specific language of the instruction to be decided by the District Court at the pretrial conference;
c. in the course of adjudicating any pre-trial, trial, and post-trial motions, the District Court should presume—irrebuttably—that the lost text messages contained information unfavorable to Abrams, Rinelli, Mills, and/or Armstrong.
8. Plaintiffs’ request for reasonable expenses incurred in bringing the Motion should be GRANTED in part, pursuant to Rule 37(b)(2)(C), 37(e)(1), and 37(e)(2), as follows: by no later than thirty (30) days after the acceptance of this Report and Recommendation by the District Court,
a. Abrams Defendants, Rinelli, and Mills, jointly and severally, shall pay to Plaintiffs the sum of $10,000.00;
b. Abrams, Rinelli, Mills, and Armstrong, jointly and severally, shall pay to Plaintiffs the sum of $10,000.00.
9. Plaintiffs’ request for a finding that Defendants have waived privilege as to the Content Findings should be GRANTED, but their request that Setec produce the Content Findings to Plaintiffs should be DENIED.
10. Plaintiffs’ request for monetary sanctions against Defendants pursuant to Section 1927 and the Court's inherent powers should be DENIED.
11. Defendants’ request for monetary sanctions against Plaintiffs pursuant to Rule 37(a)(5), Section 1927, and Section 801 should be DENIED.
*55 12. Abrams Defendants, Rinelli, Mills, and Armstrong are hereby cautioned that failure to comply with this Order, including compliance on a timely basis, may result in the imposition of sanctions pursuant to Rule 37(b)(2)(A), which includes (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. Fed. R. Civ. P. 37(b)(2)(A)(i)–(vii). Abrams Defendants, Rinelli, Mills, and Armstrong also are cautioned that instead of or in addition to the above sanctions, the Court could order them, their attorney, or both, to pay the reasonable expenses, including attorneys’ fees, caused by their failure to comply with this Order.
Attachments:
A – Northern District of California Guidelines for the Discovery of Electronically Stored Information, effective December 1, 2015.
B – Northern District of California Checklist for Rule 26(f) Meet and Confer Regarding ESI and Stipulated E-Discovery Order for Standard Litigation.
C – Northern District of California Standing Order for All Judges of the Northern District of California – Contents of Joint Case Management Statement.
United States District Court
Northern District of California
GUIDELINES FOR THE DISCOVERY OF ELECTRONICALLY STORED INFORMATION
GENERAL GUIDELINES
Guideline 1.01 (Purpose)
Discoverable information today is mainly electronic. The discovery of electronically stored information (ESI) provides many benefits such as the ability to search, organize, and target the ESI using the text and associated data. At the same time, the Court is aware that the discovery of ESI is a potential source of cost, burden, and delay.
These Guidelines should guide the parties as they engage in electronic discovery. The purpose of these Guidelines is to encourage reasonable electronic discovery with the goal of limiting the cost, burden and time spent, while ensuring that information subject to discovery is preserved and produced to allow for fair adjudication of the merits. At all times, the discovery of ESI should be handled by the parties consistently with Fed. R. Civ. P. 1 to “secure the just, speedy, and inexpensive determination of every action and proceeding.”
These Guidelines also promote, when ripe, the early resolution of disputes regarding the discovery of ESI without Court intervention.
Guideline 1.02 (Cooperation)
The Court expects cooperation on issues relating to the preservation, collection, search, review, and production of ESI. The Court notes that an attorney's zealous representation of a client is not compromised by conducting discovery in a cooperative manner. Cooperation in reasonably limiting ESI discovery requests on the one hand, and in reasonably responding to ESI discovery requests on the other hand, tends to reduce litigation costs and delay. The Court emphasizes the particular importance of cooperative exchanges of information at the earliest possible stage of discovery, including during the parties’ Fed. R. Civ. P. 26(f) conference.
Guideline 1.03 (Discovery Proportionality)
The proportionality standard set forth in Fed. R. Civ. P. 26(b)(1) should be applied to the discovery plan and its elements, including the preservation, collection, search, review, and production of ESI. To assure reasonableness and proportionality in discovery, parties should consider factors that include the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. To further the application of the proportionality standard, discovery requests for production of ESI and related responses should be reasonably targeted, clear, and as specific as practicable.
ESI DISCOVERY GUIDELINES Guideline 2.01 (Preservation)
*56 a) At the outset of a case, or sooner if feasible, counsel for the parties should discuss preservation. Such discussions should continue to occur periodically as the case and issues evolve.
b) In determining what ESI to preserve, parties should apply the proportionality standard referenced in Guideline 1.03. The parties should strive to define a scope of preservation that is proportionate and reasonable and not disproportionately broad, expensive, or burdensome.
c) Parties are not required to use preservation letters to notify an opposing party of the preservation obligation, but if a party does so, the Court discourages the use of overbroad preservation letters. Instead, if a party prepares a preservation letter, the letter should provide as much detail as possible, such as the names of parties, a description of claims, potential witnesses, the relevant time period, sources of ESI the party knows or believes are likely to contain relevant information, and any other information that might assist the responding party in determining what information to preserve.
d) If there is a dispute concerning the scope of a party's preservation efforts, the parties or their counsel should meet and confer and fully discuss the reasonableness and proportionality of the preservation. If the parties are unable to resolve a preservation issue, then the issue should be raised promptly with the Court.
e) The parties should discuss what ESI from sources that are not reasonably accessible will be preserved, but not searched, reviewed, or produced. As well as discussing ESI sources that are not reasonably accessible, the parties should consider identifying data from sources that (1) the parties believe could contain relevant information but (2) determine, under the proportionality factors, should not be preserved.
Guideline 2.02 (Rule 26(f) Meet and Confer)
At the required Rule 26(f) meet and confer conference, when a case involves electronic discovery, the topics that the parties should consider discussing include: 1) preservation; 2) systems that contain discoverable ESI; 3) search and production; 4) phasing of discovery; 5) protective orders; and 6) opportunities to reduce costs and increase efficiency. In order to be meaningful, the meet and confer should be as sufficiently detailed on these topics as is appropriate in light of the specific claims and defenses at issue in the case. Some or all of the following details may be useful to discuss, especially in cases where the discovery of ESI is likely to be a significant cost or burden:
a) The sources, scope and type of ESI that has been and will be preserved -- considering the needs of the case and other proportionality factors--including date ranges, identity and number of potential custodians, and other details that help clarify the scope of preservation;
b) Any difficulties related to preservation;
c) Search and production of ESI, such as any planned methods to identify discoverable ESI and filter out ESI that is not subject to discovery, or whether ESI stored in a database can be produced by querying the database and producing discoverable information in a report or an exportable electronic file;
d) The phasing of discovery so that discovery occurs first from sources most likely to contain relevant and discoverable information and is postponed or avoided from sources less likely to contain relevant and discoverable information;
*57 e) The potential need for a protective order and any procedures to which the parties might agree for handling inadvertent production of privileged information and other privilege waiver issues pursuant to Fed. R. Evid. 502(d) or (e), including a Rule 502(d) Order;
f) Opportunities to reduce costs and increase efficiency and speed, such as by conferring about the methods and technology used for searching ESI to help identify the relevant information and sampling methods to validate the search for relevant information, using agreements for truncated or limited privilege logs, or by sharing expenses like those related to litigation document repositories.
The Court encourages the parties to address any agreements or disagreements related to the above matters in the joint case management statement required by Civil Local Rule 16-9.
Guideline 2.03 (Cooperation and Informal Discovery Regarding ESI)
The Court strongly encourages an informal discussion about the discovery of ESI (rather than deposition) at the earliest reasonable stage of the discovery process. Counsel, or others knowledgeable about the parties’ electronic systems, including how potentially relevant data is stored and retrieved, should be involved or made available as necessary. Such a discussion will help the parties be more efficient in framing and responding to ESI discovery issues, reduce costs, and assist the parties and the Court in the event of a dispute involving ESI issues.
Guideline 2.04 (Disputes Regarding ESI Issues)
Disputes regarding ESI that counsel for the parties are unable to resolve shall be presented to the Court at the earliest possible opportunity, such as at the initial Case Management Conference. If the Court determines that any counsel or party in a case has failed to cooperate and participate in good faith in the meet and confer process, the Court may require additional meet and confer discussions, if appropriate.
Guideline 2.05 (E-Discovery Liaison(s))
In most cases, the meet and confer process will be aided by participation of e-discovery liaisons as defined in this Guideline. If a dispute arises that involves the technical aspects of e-discovery, each party shall designate an e-discovery liaison who will be knowledgeable about and responsible for discussing their respective ESI. An e-discovery liaison will be, or have access to those who are, knowledgeable about the location, nature, accessibility, format, collection, searching, and production of ESI in the matter. Regardless of whether the e-discovery liaison is an attorney (in-house or outside counsel), an employee of the party, or a third party consultant, the e-discovery liaison should:
a) Be prepared to participate in e-discovery dispute resolution to limit the need for Court intervention;
b) Be knowledgeable about the party's e-discovery efforts;
c) Be familiar with, or gain knowledge about, the party's electronic systems and capabilities in order to explain those systems and answer related questions; and
d) Be familiar with, or gain knowledge about, the technical aspects of e-discovery in the matter, including electronic document storage, organization, and format issues, and relevant information retrieval technology, including search methodology.
EDUCATION GUIDELINES
Guideline 3.01 (Judicial Expectations of Counsel)
*58 It is expected that counsel for the parties, including all counsel who have appeared, as well as all others responsible for making representations to the Court or opposing counsel (whether or not they make an appearance), will be familiar with the following in each litigation matter:
a) The electronic discovery provisions of the Federal Rules of Civil Procedure, including Rules 26, 33, 34, 37, and 45, and Federal Rule of Evidence 502;
b) The Advisory Committee Report on the 2015 Amendments to the Federal Rules of Civil Procedure, available at www.uscourts.gov/rules-policies/archives/committee-reports/advisory-committee-rules-civil-procedure-...; and
c) These Guidelines and this Court's Checklist for Rule 26(f) Meet and Confer Regarding ESI and Stipulated E-Discovery Order for Standard Litigation.
United States District Court
Northern District of California
CHECKLIST FOR RULE 26(f) MEET AND CONFER REGARDING ELECTRONICALLY STORED INFORMATION
In cases where the discovery of electronically stored information (“ESI”) is likely to be a significant cost or burden, the Court encourages the parties to engage in on-going meet and confer discussions and use the following Checklist to guide those discussions. These discussions should be framed in the context of the specific claims and defenses involved. The usefulness of particular topics on the checklist, and the timing of discussion about these topics, may depend on the nature and complexity of the matter.
I. Preservation
• The ranges of creation or receipt dates for any ESI to be preserved.
• The description of data from sources that are not reasonably accessible and that will not be reviewed for responsiveness or produced, but that will be preserved pursuant to Federal Rule of Civil Procedure 26(b)(2)(B).
• The description of data from sources that (a) the party believes could contain relevant information but (b) has determined, under the proportionality factors, is not discoverable and should not be preserved.
• Whether or not to continue any interdiction of any document destruction program, such as ongoing erasures of e-mails, voicemails, and other electronically-recorded material.
• The names and/or general job titles or descriptions of custodians for whom ESI will be preserved (e.g., “HR head,” “scientist,” “marketing manager,” etc.).
• The number of custodians for whom ESI will be preserved.
• The list of systems, if any, that contain ESI not associated with individual custodians and that will be preserved, such as enterprise databases.
• Any disputes related to scope or manner of preservation.
II. Liaison
• The identity of each party's e-discovery liaison.
III. Informal Discovery About Location and Types of Systems
• Identification of systems from which discovery will be prioritized (e.g., email, finance, HR systems).
• Description of systems in which potentially discoverable information is stored.
• Location of systems in which potentially discoverable information is stored.
• How potentially discoverable information is stored.
• How discoverable information can be collected from systems and media in which it is stored.
IV. Proportionality and Costs
• The amount and nature of the claims being made by either party.
• The nature and scope of burdens associated with the proposed preservation and discovery of ESI.
• The likely benefit of the proposed discovery.
*59 • Costs that the parties will share to reduce overall discovery expenses, such as the use of a common electronic discovery vendor or a shared document repository, or other cost-saving measures.
• Limits on the scope of preservation or other cost-saving measures.
• Whether there is relevant ESI that will not be preserved pursuant to Fed. R. Civ. P. 26(b)(1), requiring discovery to be proportionate to the needs of the case.
V. Search
• The search method(s), including specific words or phrases or other methodology, that will be used to identify discoverable ESI and filter out ESI that is not subject to discovery.
• The quality control method(s) the producing party will use to evaluate whether a production is missing relevant ESI or contains substantial amounts of irrelevant ESI.
VI. Phasing
• Whether it is appropriate to conduct discovery of ESI in phases.
• Sources of ESI most likely to contain discoverable information and that will be included in the first phases of Fed. R. Civ. P. 34 document discovery.
• Sources of ESI less likely to contain discoverable information from which discovery will be postponed or avoided.
• Custodians (by name or role) most likely to have discoverable information and whose ESI
• will be included in the first phases of document discovery.
• Custodians (by name or role) less likely to have discoverable information and from whom discovery of ESI will be postponed or avoided.
• The time period during which discoverable information was most likely to have been created or received.
VII. Production
• The formats in which structured ESI (database, collaboration sites, etc.) will be produced.
• The formats in which unstructured ESI (email, presentations, word processing, etc.) will be produced.
• The extent, if any, to which metadata will be produced and the fields of metadata to be produced.
• The production format(s) that ensure(s) that any inherent searchablility of ESI is not degraded when produced.
VIII. Privilege
• How any production of privileged or work product protected information will be handled.
• Whether the parties can agree upon alternative ways to identify documents withheld on the grounds of privilege or work product to reduce the burdens of such identification.
• Whether the parties will enter into a Fed. R. Evid. 502(d) Stipulation and Order that addresses inadvertent or agreed production.
STANDING ORDER FOR ALL JUDGES OF THE NORTHERN DISTRICT OF CALIFORNIA
CONTENTS OF JOINT CASE MANAGEMENT STATEMENT
All judges of the Northern District of California require identical information in Joint Case Management Statements filed pursuant to Civil Local Rule 16-9. The parties must include the following information in their statement which, except in unusually complex cases, should not exceed ten pages:
1. Jurisdiction and Service: The basis for the court's subject matter jurisdiction over plaintiff's claims and defendant's counterclaims, whether any issues exist regarding personal jurisdiction or venue, whether any parties remain to be served, and, if any parties remain to be served, a proposed deadline for service.
2. Facts: A brief chronology of the facts and a statement of the principal factual issues in dispute.
3. Legal Issues: A brief statement, without extended legal argument, of the disputed points of law, including reference to specific statutes and decisions.
*60 4. Motions: All prior and pending motions, their current status, and any anticipated motions.
5. Amendment of Pleadings: The extent to which parties, claims, or defenses are expected to be added or dismissed and a proposed deadline for amending the pleadings.
6. Evidence Preservation: A brief report certifying that the parties have reviewed the Guidelines Relating to the Discovery of Electronically Stored Information (“ESI Guidelines”), and confirming that the parties have met and conferred pursuant to Fed. R. Civ. P. 26(f) regarding reasonable and proportionate steps taken to preserve evidence relevant to the issues reasonably evident in this action. See ESI Guidelines 2.01 and 2.02, and Checklist for ESI Meet and Confer.
7. Disclosures: Whether there has been full and timely compliance with the initial disclosure requirements of Fed. R. Civ. P. 26, and a description of the disclosures made.
8. Discovery: Discovery taken to date, if any, the scope of anticipated discovery, any proposed limitations or modifications of the discovery rules, a brief report on whether the parties have considered entering into a stipulated e-discovery order, a proposed discovery plan pursuant to Fed. R. Civ. P. 26(f), and any identified discovery disputes.
9. Class Actions: If a class action, a proposal for how and when the class will be certified, and whether all attorneys of record for the parties have reviewed the Procedural Guidance for Class Action Settlements.
10. Related Cases: Any related cases or proceedings pending before another judge of this court, or before another court or administrative body.
11. Relief: All relief sought through complaint or counterclaim, including the amount of any damages sought and a description of the bases on which damages are calculated. In addition, any party from whom damages are sought must describe the bases on which it contends damages should be calculated if liability is established.
12. Settlement and ADR: Prospects for settlement, ADR efforts to date, and a specific ADR plan for the case, including compliance with ADR L.R. 3-5 and a description of key discovery or motions necessary to position the parties to negotiate a resolution.
13. Consent to Magistrate Judge For All Purposes: Whether all parties will consent to have a magistrate judge conduct all further proceedings including trial and entry of judgment. ____ Yes ____ No
14. Other References: Whether the case is suitable for reference to binding arbitration, a special master, or the Judicial Panel on Multidistrict Litigation.
15. Narrowing of Issues: Issues that can be narrowed by agreement or by motion, suggestions to expedite the presentation of evidence at trial (e.g., through summaries or stipulated facts), and any request to bifurcate issues, claims, or defenses.
16. Expedited Trial Procedure: Whether this is the type of case that can be handled under the Expedited Trial Procedure of General Order No. 64 Attachment A. If all parties agree, they shall instead of this Statement, file an executed Agreement for Expedited Trial and a Joint Expedited Case Management Statement, in accordance with General Order No. 64 Attachments B and D.
*61 17. Scheduling: Proposed dates for designation of experts, discovery cutoff, hearing of dispositive motions, pretrial conference and trial.
18. Trial: Whether the case will be tried to a jury or to the court and the expected length of the trial.
19. Disclosure of Non-party Interested Entities or Persons: Whether each party has filed the “Certification of Interested Entities or Persons” required by Civil Local Rule 3-15. In addition, each party must restate in the case management statement the contents of its certification by identifying any persons, firms, partnerships, corporations (including parent corporations) or other entities known by the party to have either: (i) a financial interest in the subject matter in controversy or in a party to the proceeding; or (ii) any other kind of interest that could be substantially affected by the outcome of the proceeding. In any proposed class, collective, or representative action, the required disclosure includes any person or entity that is funding the prosecution of any claim or counterclaim.
20. Professional Conduct: Whether all attorneys of record for the parties have reviewed the Guidelines for Professional Conduct for the Northern District of California.
21. Such other matters as may facilitate the just, speedy and inexpensive disposition of this matter.
Footnotes
Pinpoint citations to page numbers refer to the page numbers in the CM/ECF-generated headers of cited documents.
In summarizing the claims alleged here, the Court neither opines on the veracity or merit of the allegations and claims, nor makes any findings of fact.
The order contains a typographical error noting a compliance date in January 2021, rather than 2022. The error is of no consequence because compliance with that order is not at issue here.
Defendants’ briefs and supporting declarations mainly are comprised of stream-of-consciousness recitals of fact (usually without citation to the record) and undeveloped argument (usually without citation to the law), seemingly without apparent regard for the procedural posture of the Motion. Defendants’ briefing has forced the undersigned to attempt to decipher which of Defendants’ many facts and contentions are responsive to Plaintiffs’ arguments. This is not the Court's role. See Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (“[J]udges are not like pigs, hunting for truffles buried in briefs.” (quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991) (per curiam))). “[O]ur adversary system is designed around the premise that the parties know what is best for them, and are responsible for advancing the facts and arguments entitling them to relief.” Greenlaw v. United States, 554 U.S. 237, 244, 128 S.Ct. 2559, 171 L.Ed.2d 399 (2008) (quoting Castro v. United States, 540 U.S. 375, 386, 124 S.Ct. 786, 157 L.Ed.2d 778 (2003) (Scalia, J., concurring)). Nevertheless, in the interest of resolving matters on their merits, the undersigned has attempted to discern Defendants’ intent in their filings.
Although Defendants point to Local Rule 11-8 as a source of this requirement, Local Rule 11-8 does not apply because the Motion is a discovery motion subject to the requirements of Local Rule 37.
In any event, Defendants’ assertion is factually incorrect because Labor Day 2021 fell on September 6, 2021. Thus, the Original Motion was filed the day after Labor Day 2021, not “a few days before Labor Day.” See Fed. R. Evid. 201(b)(2) (“The court may judicially notice a fact that is not subject to reasonable dispute because it ... can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”); see, e.g., Markowitz v. UPS, No. SACV 15-1367 AG (DFMx), 2016 WL 3598728, at *4, 2016 U.S. Dist. LEXIS 86245, at *11-12 (C.D. Cal. June 30, 2016) (finding a calendar is appropriate for judicial notice as it is not subject to reasonable dispute).
The privilege logs for the Non-Content Findings are not at issue here.
The undersigned acknowledges that Defendants raised an undue burden argument at the July 26, 2021 informal discovery conference. In opposing the Motion, however, Defendants do not assert—let alone develop—this argument. (See generally Mot.; Opp'n to Suppl. Brief.) Objections not defended in the Motion are deemed waived and will not be considered here. See MarketLinx, Inc. v. Indus. Access Inc., No. CV 12-3496 CBM (FMOx), 2013 WL 12133884, at *2, 2013 U.S. Dist. LEXIS 197683, at *5 (C.D. Cal. Jan. 2, 2013) (“[O]bjections that were raised in response to a particular discovery request, but were not argued in the Joint Stipulation, are deemed waived.”); Calderon v. Experian Info. Sols., Inc., 290 F.R.D. 508, 521 n.4 (D. Idaho 2013) (“[W]hen ruling on a motion to compel, a court generally considers only those objections that have been timely asserted in the initial response to the discovery request and that are subsequently reasserted and relied upon in response to the motion to compel; thus when an objection or privilege is initially raised but not relied upon in response to the motion to compel, the court will deem the objection or privilege waived.”) (quotation marks and citation omitted).
Courts in the Central District of California are divided on the application of post-amendment Rule 37(e) to spoliation claims. Some authorize spoliation sanctions only under Rule 37(e) while others continue to invoke their inherent authority to sanction parties for discovery violations. See Colonies Partners, 2020 WL 1496444, at *2 n.2, 2020 U.S. Dist. LEXIS 56922, at *35 n.2 (collecting cases and deciding to rely exclusively on the Rule 37 authority for spoliation sanctions).
See Fed. R. Evid. 201(b)(2) (“The court may judicially notice a fact that is not subject to reasonable dispute because it ... can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”); Davis v. Hollins Law, 25 F. Supp. 3d 1292, 1304 n.5 (E.D. Cal. 2014) (taking judicial notice of State Bar of California's website regarding attorney's dates of admission to bar).
The undersigned is unable to locate this case under this citation. However, as detailed below, the undersigned believes that Defendants intended to cite America Unites for Kids v. Rousseau, 985 F.3d 1075 (9th Cir. 2021).
Despite this assertion, Defendants also argue that the defendants other than Abrams “have not had their computers searched—no request.” (Mot. 68.) Because it is evident that Rinelli and Mills had their computer devices inspected by Setec, the undersigned disregards this statement as contradicted by Defendants themselves.
The Court gives due weight to information contained in the Real Rate Report, a publication that provides data-driven benchmarking for attorney hourly rates. See, e.g., Smith v. County of Riverside, No. EDCV 16-227 JGB (KKx), 2019 WL 4187381, at *2, 2019 U.S. Dist. LEXIS 170421, at *5 (C.D. Cal. June 17, 2019) (“[A] number of district courts in California have relied on the Real Rate Report.”). The information provided by the Real Rate Report is persuasive because, rather than using self-reported rates aggregated across all practice areas throughout the country, as appear in other surveys, it reflects actual legal billing through paid and processed invoices disaggregated for location, experience, firm size, areas of expertise, industry, and practice areas. (See Real Rate Report 4.)
The undersigned's calculation, based on the hours claimed and supported by the declarations of Plaintiffs’ counsel, yields a sum of $32,306.00.