Local Access, LLC v. Peerless Network, Inc.
Local Access, LLC v. Peerless Network, Inc.
2024 WL 4554696 (M.D. Fla. 2024)
September 6, 2024
Kidd, Embry J., United States Magistrate Judge
Summary
The court found that the defendant, Peerless, should have preserved and produced certain call detail records (CDRs) as requested by the plaintiff, Local Access, in order to accurately calculate damages for a breach of contract claim. However, the court did not find evidence of bad faith on the part of Peerless and determined that the jury should decide on the mix of traffic and rate per minute for calculating damages.
Additional Decisions
LOCAL ACCESS, LLC, Plaintiff,
v.
PEERLESS NETWORK, INC., Defendant
v.
PEERLESS NETWORK, INC., Defendant
Case No: 6:17-cv-236-JSS-EJK
United States District Court, M.D. Florida
Filed September 06, 2024
Kidd, Embry J., United States Magistrate Judge
REPORT AND RECOMMENDATION1
*1 This cause comes before the Court on Plaintiff's Amended Motion for Sanctions for Failure to Comply with Orders and for Spoliation of Evidence (Docs. 1324, S-1328) (the “Motion for Sanctions”), filed August 9, 2024. Defendant responded in opposition. (Docs. 1332, S-1337.) The Court held an evidentiary hearing on the Motion for Sanctions on August 20, 2024, where it received exhibits in evidence and heard testimony from several witnesses. (Docs. 1340; 1341 (Hrg. Tr.); 1347 (Def. Ex. List); 1350 (Pl. Ex. List).) The Court also received post-hearing briefing from the parties. (Docs. 1344 (Doc. S-1349, sealed version), 1345, 1353, 1354.) Upon consideration, I respectfully recommend that the Motion be granted in part, as set forth herein.
The current Motion for Sanctions relates to Peerless's rated call detail records (“CDRs”) for long-distance termination traffic that Local Access sought—but ultimately failed to obtain—from Peerless to calculate Local Access's potential damages. (Doc. S-1328 at 1.) To put this current conflict in context, Local Access has alleged that Peerless failed to pay Local Access 75% of Peerless's Collected Tandem Access Revenue (“CTAR”) collected on calls Peerless delivered to Local Access pursuant to the First Amendment to the Master Service Agreement (“First Amendment”). (Id.) In ruling on the parties’ motions for summary judgment, Judge Berger held that the First Amendment was ambiguous as to whether CTAR includes long-distance termination traffic. (Doc. 1201 at 18–19.) If the jury determines that CTAR includes long-distance termination traffic, the analysis below will become relevant. With that context, the undersigned relays the following background information.
I. BACKGROUND
Local Access filed its initial two-count complaint on February 9, 2017. (Doc. 1.)[2][3] To calculate its damages for its breach of contract claim, Local Access needed to know the amount of CTAR Peerless billed and collected on calls delivered to Local Access. However, the parties did not agree as to what, contractually, CTAR encompassed. According to Local Access, CTAR included, in part, long-distance termination traffic. To Peerless, it did not include long-distance termination traffic. In June 2017, shortly after this case was initiated, Local Access served its first request for production (“First RFP”), which sought Peerless's rated CDRs and invoices for interMTA and interLATA traffic Peerless billed and collected on calls delivered to Local Access. (Doc. 87-1 at 6, 7.)
*2 Peerless produced records for LERG-routed traffic billed by CSG, Peerless's third-party billing provider, but objected to the First RFP relative to long-distance calls Peerless billed itself on the basis that such documentation would be too burdensome to produce. (Doc. 87-3; Tr. 141:5–17.) In its discovery responses, Peerless stated it would be “willing to consider less-burdensome alternatives to obtain more limited information.” (See, e.g., Doc. 87-3 at 7.)
Local Access moved to compel on the First RFP in December 2017. (Doc. 87.) In its motion, Local Access informed the Court that “these requests seek the documents that will allow Local Access to complete its damages calculations. Without these documents, Local Access cannot determine what the amount of Tandem Access revenue collected by Peerless actually was.” (Id. at 16.) Peerless opposed the motion, attaching a declaration by Peerless's Executive Vice President of Operations and Engineering, Scott Kell. (Docs. 97, 97-4.) Mr. Kell declared that the production of Peerless's CDRs would require 134,000 hours to complete because the CRDs were not maintained on an invoice-by-invoice basis, and it would take a laborious effort to match the call records to those invoices. (Doc. 97-4 at 6–7; see also Doc. 142 at 88:9–90:19.) In describing this process, Mr. Kell referred to “interexchange traffic” and “access-related invoices”—terms that would not be used to describe long-distance termination traffic, but rather, LERG-routed tandem access traffic. (Doc. 97-4 ¶¶ 17–22.)
Judge Smith, the then-presiding magistrate judge, held a hearing on the motion to compel the First RFPs in February 2018. (Doc. 131.) While many things were discussed at the hearing, Local Access stated that it was requesting documentation relating to Peerless's “direct customers that had traffic delivered to Local Access,” which was a reference to long-distance termination traffic. (Doc. 142 at 75:20–76:23.) Judge Smith ultimately ruled that Local Access's requests were disproportionate to the needs of the case and that the rated CDRs need not be produced. (Docs. 142 at 90:17–19, S-132 at ¶ 5.) Local Access continued to maintain its need for these documents, including in its Amended Complaint in March 2018 (Doc. 135) and in its Rule 26 disclosures for its damages calculation, served June 13, 2017, and May 9, 2018. (Pl. Exs. 1, 2 at Docs. 1350-1, 1350-2.)
Peerless's Vice President of Information Technology, Richard Sherman, testified at the evidentiary hearing. (Tr. 163:7–9.) At least as of the February 2018 hearing, Peerless did have the requested rated CDRs for long-distance termination traffic, but after two years, on a rolling basis and as storage space was needed, the rated CDRs were deleted automatically. (Tr. 168:9–21; 175:9–12.) These deletions have been ongoing since at least 2015. (Tr. 168:9–21.) The rated CDRs were not specific to Local Access. (Tr. 168: 22–24.) Rather, the records would have included all long-distance termination services Peerless handled (approximately 200 million per day). (Tr. 168:25–169:11.) It is unclear when the rated CDRs were deleted. (Tr. 159:6–17.)
In July 2018, Judge Smith stayed the case for sanctions-related litigation. (S-275.) The issue regarding the production of rated CDRs for long-distance termination traffic did not come before the Court again until several years later, after the sanctions litigation phase of the case had been resolved and the case had been re-set as to the merits in June 2022. (Doc. 745.)
*3 Local Access served more RFPs on March 20, 2023, and April 25, 2023, seeking Peerless's rated CDRs for calls to Local Access. (Docs. 1216-1 & 1218-1.) Peerless again objected, contending, in part, that long-distance termination traffic was not contemplated by the First Amendment, so the remaining Peerless billing was not relevant. (See, e.g., Doc. 1218-1 at 8–11.) Local Access moved to compel (Docs. 990, 992), but those motions were denied without prejudice, pending a ruling on whether Peerless had to answer Interrogatories 20 and 22, the order on which had been appealed to the presiding district judge. (Docs. 988, 1013, 1026.)
In December 2023, Judge Berger ruled on summary judgment that the First Amendment was ambiguous as to what was encompassed in the meaning of CTAR—whether it included all long-distance traffic or only LERG-routed traffic. (Doc. 1201 at 18–19). She also ordered Peerless to answer Interrogatories 20 and 22. (Doc. 1210.) As relevant here, she stated:
[I]f Local Access's interpretation of the First Amendment ultimately prevails, it will then be entitled to damages based on the actual amounts that Peerless billed and collected on all long-distance traffic, not mere approximations thereof.
....The Court recognizes that requiring Peerless to produce additional discovery is potentially burdensome, but simultaneously must acknowledge that Local Access is entitled to same so that it may precisely calculate its potential damages.
(Id. at 5.) Local Access then renewed its motions to compel. (Docs. 1216, 1218.) Peerless opposed the motions. (Doc. 1223.) Peerless also claimed its supplemental responses to Interrogatories 20 and 22 were sufficient for Local Access to calculate its damages, in part producing what is referred to by the parties as Table 20A. (Id. at 6.) While much has been made between the parties over Table 20A (see Doc. S-1231-1) and whether Peerless falsified the data in it, Table 20A was not drawn from Peerless's rated CDRs because Peerless apparently no longer had those in its possession. (See Doc.1241-2 at ¶ 5.) Peerless again opposed the production of this data when Local Access moved to compel on Interrogatory 25, which sought monthly minutes of use (“MOUs”) and dollar amounts invoiced and collected by Peerless. (Docs. 1217, S-1232 at 3.) Peerless claimed it had produced CDRs (not rated ones) and rate decks, which, in its view, should have been sufficient for Local Access to calculate its damages. (Doc. 1217-1 at 3–4.)
This cause was ultimately transferred to the current presiding district judge in March 2024. (Doc. 1233.) In April 2024, the undersigned ordered Peerless to produce, for August 2015 through March 2022, its invoices for long-distance and local traffic, invoice transmittal emails, and the underlying billing data that was available to Peerless customers at the time of each invoice. (Doc. 1283 at 1.) Peerless was also required to answer Interrogatory 25 as it related to long-distance data. (Id.) Peerless produced over 60,000 invoices it had sent to customers and 85,000 transmittal emails. (S-1328 at 7.) Peerless also provided a second supplemental response to Interrogatory 25, which referred to Table 20A for Peerless's total MOUs and total dollar amount invoiced for long-distance traffic. (Id. at 7–8.) This Motion for Sanctions followed.
II. STANDARD
Local Access moves for sanctions pursuant to Federal Rule of Civil Procedure 37 and the Court's inherent authority.
A. Rule 37
Rule 37(b), which is referenced in Local Access's Motion for Sanctions, provides for court-imposed sanctions for violating a court order. Rule 37(b)(2)(A) enumerates a list of permissible sanctions, including “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” and “prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence.” Local Access does not identify a specific order Peerless violated connected with this discovery issue, so the undersigned finds it is inapplicable here.
*4 Rule 37(e) provides for court-imposed sanctions for failing to preserve electronically stored information (“ESI”). Rule 37(e)(1) provides that if ESI 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,” the Court “upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice.” Fed. R. Civ. P. (e)(1). Rule 37(e)(2) goes a step further, stating that “only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation may” the Court, “(A) presume that the lost information was unfavorable to the party; (B) instruct the jury that it may or must presume the information was unfavorable to the party; or (C) dismiss the action or enter a default judgment.”
B. Inherent Authority
Courts are also vested with the inherent authority to sanction. Peer v. Lewis, 606 F.3d 1306, 1315 (11th Cir. 2010). “The key to unlocking a court's inherent power is a finding of bad faith.” Barnes v. Dalton, 158 F.3d 1212, 1214 (11th Cir. 1998). If, in the Court's discretion, neither the Federal Rules of Civil Procedure nor 28 U.S.C. § 1927 provides an adequate remedy, the Court may rely on its inherent authority to sanction bad faith conduct. Peer, 606 F.3d at 1315 (citing Chambers v. NASCO, Inc., 501 U.S. 32, 50 (1991)).
III. DISCUSSION
A. The rated CDRs should have been preserved.
Peerless argues that Local Access cannot show that Peerless should have preserved its rated CDRs. (Doc. S-1337 at 12.) The undersigned disagrees. Peerless was on notice in this litigation that this information was, at a minimum, being sought by Local Access as far back as February 2018 in the motion to compel hearing before Judge Smith, and that Local Access contended its damages calculation relied on obtaining this data. (Docs. 87-1; 142 at 75:20–76:23, 90:17–19; S-132 at ¶ 5.).) As Local Access points out, Judge Smith never ruled that the rated CDRs were not relevant. (Docs. 142 at 90:17–19, S-132 at ¶ 5.) Rather, Judge Smith's ruling was directed at burdensomeness, which he deemed to be too great at the time to justify the CDRs’ production, based on Peerless's representations to the Court. (Id.) Importantly, the responses anticipated a less burdensome question to which this data would be responsive. In its discovery responses, Peerless stated it would be “willing to consider less-burdensome alternatives to obtain more limited information.” (Doc. 87-3 at 7.)
“Courts should consider the extent to which a party was on notice that litigation was likely and that the information would be relevant.” Fed. R. Civ. P. 37 advisory committee notes to 2015 amendment. Similarly, the rule is inapplicable where information is lost before a duty to preserve arises. Id. To that end, the Court must ensure that it is not “blinded to [the] reality by hindsight” as to whether ESI should have been preserved. Id. The undersigned credits Peerless's statement that it was surprised that Local Access was claiming damages from traffic other than switched access (LERG-routed) traffic at the February 2018 hearing. But after that hearing, Peerless could not credibly claim that it did not know Local Access sought damages for long-distance termination traffic. Rule 37 calls for reasonable steps to preserve, and Peerless has provided no evidence that it took any steps to preserve this data. Fed. R. Civ. P. 37(e). Therefore, the undersigned recommends that the Court find that Peerless's rated CDRs for long-distance termination traffic should have been preserved during this litigation but were lost because Peerless failed to take adequate steps to preserve it.
It is also apparent to the undersigned that the rated CDRs cannot be restored or replaced, nor is there an adequate replacement for this data. “When a party fails to take reasonable steps to preserve [ESI] that should have been preserved in the anticipation or conduct of litigation, and the information is lost as a result, Rule 37(e) directs that the initial focus should be on whether the lost information can be restored or replaced through additional discovery.” Fed. R. Civ. P. 37 advisory committee notes to 2015 amendment. For years, Peerless insisted that Local Access could determine the rate of long-distance termination traffic it delivered using other methods. That turned out not to be the case, as Judge Berger has ruled. In the absence of this data, Local Access is merely left with an approximation of what the rate would have been for each MOU Peerless collected for its long-distance termination traffic delivered to Local Access. Peerless admits as much as well. This inherently prejudices Local Access, which Judge Berger ruled was entitled to a precise damages calculation. “An evaluation of prejudice from the loss of information necessarily includes an evaluation of the information's importance in the litigation.” Fed. R. Civ. P. 37 advisory committee notes to 2015 amendment. Here, the information for the rated CDRs was critically important to Local Access to prove the full extent of its sought-after damages. Therefore, pursuant to Rule 37(e)(1), the Court must craft a remedy that is no greater than necessary to cure the effect of the deletion of the rated CDRs.
*5 However, the undersigned separately notes that the Court does not recommend a finding that Peerless acted in bad faith. While Peerless should have stored and maintained the rated CDRs when this litigation was initiated, and certainly after the hearing February 2018 hearing before Judge Smith, when it was put on specific notice that Local Access sought them, the undersigned finds that it did not act in bad faith in failing to preserve the data. There is a meaningful difference between, on the one hand, the failure to act diligently to preserve data that is generated—and automatically deleted—for many customers and, on the other hand, the affirmative deletion of data for one specific customer. Here, the undersigned has not been presented with credible evidence that Peerless took steps specifically to delete the sought-after rated CDRs.
The undersigned was not the presiding magistrate judge at the time of the February 2018 proceedings where Local Access sought the rated CDRs for long-distance termination traffic. However, the undersigned has not been presented with any direct evidence that the Kell Declaration or Mr. Kelly's statements at the hearing were perjurious or misleading to the Court. Therefore, the undersigned has no basis to conclude that Peerless acted in bad faith at that hearing. Of course, because this case went into a very lengthy sanctions-litigation phase related to Peerless's misconduct on an unrelated issue, many years passed before this issue was addressed again with the Court. According to Local Access, it did not seek this data again until 2023. While Peerless has never identified when this data was deleted, it is possible that Peerless's rated-CDRs for the relevant CTAR period were long gone by then. The undersigned does not adopt Local Access's inference from this timeline that Peerless deleted this data to significantly reduce what it would owe to Local Access or that this was part of an “on-going scheme.” Peerless's failure to preserve this data is certainly sanctionable conduct, but the undersigned does not find from this evidence and timeline that Peerless acted in bad faith.
B. Sanctions
Local Access requests that the Court establish the MOU and rate per minute for calculating Local Access's CTAR damages for long-distance termination traffic and instruct the jury as a result. (Doc. S-1328 at 19.) Rule 37 contemplates that “[t]he range of such measures [to cure prejudice] is quite broad.” Fed. R. Civ. P. 37 advisory committee notes to 2015 amendment. It includes remedies such as “forbidding the party that failed to preserve information from putting on certain evidence, permitting the parties to present evidence and argument to the jury regarding the loss of information, or giving the jury instructions to assist in its evaluation of such evidence or argument.” Id.
1. Minutes of Use (MOUs)
Local Access claims that it is undisputed that Peerless delivered approximately 3.775 billion MOUs of traffic during the CTAR period, which Local Access derived from its own CDRs. (Tr. 104:6–19.) However, the parties disagree on the MOUs for the calculation of CTAR damages, i.e., what the mix of traffic was between long-distance and local out of that 3.775 billion. Local Access claims that Peerless billed all traffic as long-distance, because all calls were VOIP (voice over internet protocol), which Local Access contends was interstate (or long-distance) in nature. (Compare Tr. 120:1–9 with Tr. 149:25–150:2.) To support this, Local Access also points to billing evidence from another Peerless customer, which is the only billing evidence of Peerless that Local Access was able to obtain. Local Access says these bills demonstrate that, using a sample of 20,000 calls that Peerless billed as long-distance, the calls originated and terminated in the same LATA (as opposed to billing as long distance only calls between different LATAs). Therefore, Local Access encourages the Court not to disregard the traffic mix of the 3.775 billion MOUs and instruct the jury that CTAR damages should be calculated using the full amount of MOUs that Peerless delivered to Local Access.
*6 Peerless asks the Court to reject Local Access's argument that all traffic is VOIP and thus, long-distance traffic. (Doc. S-1337 at 16–17.) Peerless argues that Local Access's expert, David Gabel, previously opined that approximately 23% of the traffic that Peerless delivered to Local Access was long-distance traffic because it was interLATA or interMTA. (Id. at 16.) Peerless asserts that Local Access never argued that it was unable to accurately estimate the long-distance MOUs or that its own expert's estimate was incorrect. (Id. at 16–17.) Peerless contends that Local Access should, therefore, continue to rely on its expert's analysis regarding the traffic mix. Peerless asserts Local Access's attempt to characterize a much greater percentage of its traffic as long-distance or “all VOIP” should be rejected. Although not directly stated in its response, Peerless seems to imply that the Court should not determine the MOUs as a sanction and the jury should rely on the expert testimony to do so.
The undersigned is not persuaded that the loss of Peerless's rated CDRs prevents Local Access from determining how many MOUs comprised long-distance termination traffic. Rule 37(e) counsels that sanctionable conduct should not be greater than necessary. The undersigned determines that the jury should decide whether all traffic was VOIP and, therefore, long-distance traffic for which Local Access should be compensated under the First Amendment. Moreover, each party has its own experts to address the number of MOUs. Therefore, it is the undersigned's recommendation that the amount of MOUs for long-distance termination traffic be determined by the jury.
2. Rate per MOU
Without Peerless's rated CDRs, Local Access has been unable to make a precise calculation of what Peerless billed for Local Access's long-distance termination traffic. Therefore, Local Access requests that the Court set the rate as a sanction under Rule 37(e)(1). Local Access has offered the Court a variety of options to determine the rate per MOU in the absence of the actual billing data: (1) Peerless's tariff rate ($.35); (2) the highest rate Peerless billed one of Peerless's actual customers ($.17); (3) Peerless's default rate ($.06); (4) the highest “average rate” from random Peerless invoices ($.012); or (5) a range of market rates previously provided by Peerless's CEO, John Barnicle ($.008 to .03). (Doc. S-1328 at 21–23.)
The highest rate Local Access has advocated for, which is $.35, derives from a document on Peerless's website called “Statement of Generally Available Terms (SGAT).” It listed $0.35 as the rate for all interstate and intrastate traffic. As to the $.17 rate, Local Access derived this from the only available billing that it was able to obtain from one of Peerless's customers. Local Access says that Peerless billed the other customer $.17 per minute for traffic to Local Access. While Local Access concedes that this was not the rate Peerless billed for all traffic to Local Access, it is the highest number available from actual billing data and would serve as an appropriate sanction. Next, Local Access offers the “default rate” of $.06. In August 2015 (the first month of the CTAR Period), Peerless notified its customers that it was changing its “Voice pricing” to a default rate of $0.06 per MOU. Fourth, Local Access offers a rate of $.012 derived from Peerless's invoices. Local Access took random samplings from each of the months of production to assess an “average” rate billed on those invoices. Finally, Local Access offers a rate of between $.008 and $.03. Local Access obtained this rate from Peerless's CEO's declaration that if Peerless had to route traffic from Local Access to another carrier, Local Access would have to pay those carriers between $0.008 and $.03 for domestic traffic. This establishes a market rate that other carriers were charging to terminate calls.
Peerless, for its part, agreed to stipulate to a much lower rate of $.001223, which was the average rate that Peerless billed on switched access or LERG-routed traffic; Local Access rejected this. (Doc. S-1337 at 9.) Peerless asserted that this rate was in line with its own expert's rates. (Id. at 3.) Its expert, James D. Webber, testified at the hearing that, as part of the process for writing his updated August 16, 2024, report, he looked at the production of Peerless's invoices in April 2024 and determined that the rate for long-distance termination traffic was $.001442[4] for August 2015 through March 2022. (Tr. 179:20–24.) That rate was on par with the rate from his previous report dated November 3, 2022, of $.00166 derived from Peerless's revenue data. (Tr. 180:19–23.) Mr. Webber also reviewed billing related to the Peerless customer that Local Access identified, which included calls that terminated to Local Access. (Tr. 181:11–21.) Upon analyzing that data, he determined the rate to be $.00155. (Id.) Finally, Webber testified that he analyzed records relating to Inteliquent, which also had a revenue sharing agreement with Local Access. (Tr. 183:22–184:2, 185:5–15.) He found that for about 6 billion minutes that Inteliquent delivered to Local Access, it paid Local Access an average rate of $.000277 per MOU. (Id.) Peerless asserts that the consistency among these numbers is strong evidence that the actual rate it would have billed is much lower than the rates that Local Access seeks.
*7 The issue of the rate was discussed at the evidentiary hearing at some length. The Court agrees with Local Access's assertion that Webber's rates and Peerless's stipulated rates are likely to be artificially low because they contain rates based on Peerless's invoices that were billed to large network carriers, like Verizon or AT&T, and should not be considered by the jury. (Tr. 85:17–86:2, 92:8–14.) These networks can negotiate much lower rates due to the volume of their business. (See id.) Moreover, Peerless appears to have distanced itself from the rate Webber obtained from Peerless's customer data, as it asserted in post-trial briefing that such traffic was not comparable. (Doc. 1344 at 11 (“[A]s a general matter, the traffic that Peerless routed for [redacted] was not comparable to the traffic that Peerless delivered to Local Access.”); Tr. 142:25–143:10.) Finally, Webber's rate based on Inteliquent data is not persuasive because what is relevant here is the rate that Peerless billed Local Access—not Local Access's deal with another company. Therefore, the undersigned declines to adopt Peerless's proposed rates as a sanction for its conduct.
Upon consideration of the five rates Local Access has proposed, the undersigned finds that an appropriate sanction for Peerless's destruction of its rated CDRs is to instruct the jury that it should calculate Local Access's damages related to long-distance termination traffic at a rate not lower than $.008 and not higher than $.35. The undersigned believes that it is the role of the jury, as the finder of fact, to receive testimony and to determine what rate should be utilized for those damages, within the confines set forth above, if the jury finds that Local Access is entitled to damages on this issue. Peerless will be able to challenge the applicability of each of those rates through cross-examination and to advocate for the lowest rate. But, as a sanction for its conduct, Peerless should not be able to offer to the jury potentially artificially low rates when it failed to preserve the rated CDRs for long-distance termination traffic that would conclusively establish those rates.
3. Expenses
Local Access also seeks the expenses it has incurred over the course of seven years in its attempt to obtain this data. As part of the sanctions imposed against Peerless for vexatious discovery practices, it argues that the Court should order that Peerless reimburse Local Access for all expenses, including, but not limited to, the attorney fees and costs that it has incurred in seeking the rated CDRs, and processing and analyzing the information it did receive from Peerless to calculate its damages. Because Local Access must still prove to the jury that it is entitled to damages stemming from long-distance termination traffic as part of CTAR, the undersigned recommends this issue be deferred until after a jury award in Local Access's favor on this issue. If successful, the undersigned recommends that Local Access be given 60 days after the resolution of all appeals to file a properly supported motion for attorney fees and costs directly related to the issue of the rated CDRs, from March 20, 2023 (when Local Access served the RFPs that led to this point), through the date of the resolution of any appeals.
4. Other Sanctions
Local Access also argues that Peerless should be barred from introducing evidence opposing Counts I, II & V, and barred from presenting defenses on those counts. Because the undersigned has concluded that Peerless did not act in bad faith, the undersigned does not find good cause to recommend any additional sanctions.
IV. RECOMMENDATION
Upon consideration of the foregoing, I RESPECTFULLY RECOMMEND that the Court GRANT IN PART Plaintiff's Amended Motion for Sanctions for Failure to Comply with Orders and for Spoliation of Evidence (Doc. 1324, S-1328) as follows:
1. Find that sanctions under Federal Rule 37(e)(1) are appropriate due to Peerless's failure to preserve its rated CDRs;
2. Find that, if the jury determines that Local Access is entitled to long-distance termination traffic as part of CTAR:
a. The jury will determine the MOUs utilizing expert testimony; and*8 b. The jury will be instructed to utilize a rate of not lower than $.008 and not higher than $.35 in making its damages calculation.
3. Order that Local Access be given 60 days after the resolution of all appeals to file a properly supported motion for attorney fees and costs directly related to the issue of the rated CDRs, from March 20, 2023, through the date of the resolution of any appeals.4. Otherwise, DENY the Motion for Sanctions.
NOTICE TO PARTIES
The party has fourteen days from the date the party is served a copy of this report to file written objections to this report's proposed findings and recommendations or to seek an extension of the fourteen-day deadline to file written objections. 28 U.S.C. § 636(b)(1)(C). A party's failure to file written objections waives that party's right to challenge on appeal any unobjected-to factual finding or legal conclusion the district judge adopts from the Report and Recommendation. See 11th Cir. R. 3-1; 28 U.S.C. § 636(b)(1).
Recommended in Orlando, Florida on September 6, 2024.
Footnotes
This Report & Recommendation (“R&R”) cites to material that has been filed under seal. However, consistent with Judge Berger's prior statement that proceedings in this Court are public and court filings are matters of public record, this R&R has been filed publicly. (Doc. 1201 at 1 n.2.)
Peerless appears to have received a litigation hold letter from its counsel on May 23, 2017; however, the contents of that letter are privileged and were redacted. (Def. Ex. 8 at Doc. 1347-2.) Thus, the undersigned cannot discern whether Peerless was told to retain the rated CDRs (Tr. 152:10–14), and the undersigned does not attribute any value to the purported litigation hold letter.
The Court may take judicial notice of “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.” Fed. R. Evid. 201(b)(2). The Court takes judicial notice of filings on its docket. See Fed. R. Evid. 201(c)(1); United States. v. Clayton, No. 3:16-cv-404-J-34MCR, 2020 WL 3428065, at *2 n.2 (M.D. Fla. June 23, 2020) (taking judicial notice of its own docket).