Opinion
No. 3:20-cv-00344
06-02-2021
Margo BLACK and Mark Black, Plaintiffs, v. COSTCO WHOLESALE CORPORATION, Defendant.
Donald Neil Capparella, Kimberly MacDonald, Dodson, Parker, Behm & Capparella, P.C., Nashville, TN, for Plaintiffs. Gregory W. Callaway, Howell & Fisher, PLLC, Nashville, TN, for Defendant.
Donald Neil Capparella, Kimberly MacDonald, Dodson, Parker, Behm & Capparella, P.C., Nashville, TN, for Plaintiffs.
Gregory W. Callaway, Howell & Fisher, PLLC, Nashville, TN, for Defendant.
MEMORANDUM OPINION AND ORDER
WAVERLY D. CRENSHAW, JR., CHIEF UNITED STATES DISTRICT JUDGE Pending before the Court is Plaintiffs' Motion for Sanctions due to Spoliation of Evidence (Doc. No. 43). Defendant filed a response, (Doc. No. 53), and Plaintiffs filed a reply, (Doc. No. 57). For the following reasons, Plaintiffs' motion will be granted in part and denied in part.
On July 14, 2018, Margo Black slipped and fell inside a Nashville-area Costco. (Doc. No. 10 ¶¶ 10–17). The incident resulted in injuries to her arm and back. (Id. ¶ 29). In the instant motion, Ms. Black alleges that Costco "knowingly and intentionally allowed" surveillance footage of the incident "to be destroyed, despite being on notice of its duty to preserve it for" this litigation. (Doc. No. 44 at 1–2). Ms. Black argues that because of this spoliation, the Court should impose sanctions on Costco, including a default judgment, or, alternatively, a negative inference that the footage would have been unfavorable to Costco. (Id. at 21–22). Costco contends that the Court should deny Ms. Black's motion because (1) there was no spoliation; and (2) the proposed sanctions are, as a matter of law, "disproportionate to Costco's alleged offense." (Doc. No. 53 at 1).
"Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation." Billiter v. SP Plus Corp., 329 F. Supp. 3d 459, 465 (M.D. Tenn. 2018) (citing Clark Constr. Group, Inc. v. City of Memphis, 229 F.R.D. 131, 136 (W.D. Tenn. 2005) ). Spoliation occurs when a party intentionally destroys evidence "that is presumed to be unfavorable to the party responsible for the destruction." Id. (citing EPAC Technologies, Inc. v. HarperCollins Christian Publishing, Inc., 2018 WL 1542040, at *10 (M.D. Tenn. Mar. 29, 2018) (" EPAC I")); see also United States v. Copeland, 321 F.3d 582, 597 (6th Cir. 2003).
Federal Rule of Civil Procedure 37 prescribes remedies for spoliation. The rule provides that "[i]f electronically stored information that should have been preserved in the anticipation ... 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 ... may order measures no greater than necessary to cure the prejudice." Fed. R. Civ. P. 37(e)(1). And if "the court finds that the party acted with the intent to deprive another party of the information's use in the litigation, it may: (1) presume that the lost information was unfavorable to the party; (2) instruct the jury that it may or must presume the information was unfavorable to the party; or (3) dismiss the action or enter a default judgment." Billiter, 329 F. Supp. 3d at 465 (citing Fed. R. Civ. P. 37(e)(2) ). Federal courts have readily found that Rule 37 broadly contemplates video surveillance. See Wooden v. Barringer, No. 3:16-cv-446-MCR-GRJ, 2017 WL 5140518, at *3–4 (N.D. Fla. Nov. 6, 2017) (collecting cases and finding that video surveillance footage is ESI for purposes of determining Rule 37(e) sanctions).
Upon a finding that spoliation has occurred, courts maintain "broad discretion to craft proper sanctions for spoliated evidence." Id. (internal citations omitted); see also Adkins v. Wolever, 554 F.3d 650, 651 (6th Cir. 2009). "Because failures to produce relevant evidence fall along a continuum of fault—ranging from innocence through the degrees of negligence to intentionality, the severity of such a sanction may, depending on the circumstances of the case, correspond to the party's fault." United States v. Houston, No. 17-5169, 2018 U.S. App. LEXIS 11738, at *5–6 (6th Cir. May 3, 2018) (internal citations and quotations omitted). But to establish that severe sanctions, such as default judgment or adverse inferences, are warranted, a party must show that: "(1) the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the evidence was destroyed with a culpable state of mind; and (3) the destroyed evidence was relevant to the party's claim or defense such that a reasonable trier of fact could find that it would support that claim or defense." Billiter, 329 F.Supp.3d at 466 ; see also Yoder & Frey Auctioneers, Inc. v. EquipmentFacts, LLC, 774 F.3d 1065, 1070 (6th Cir. 2014) ). The Court will address each factor in turn.
Ms. Black begins by arguing that Costco had a duty to preserve the evidence at the time it was destroyed. (See Doc. No. 44 at 13–14). She points to record evidence showing Costco had a duty to preserve any footage, especially considering its retention policy that required it to maintain footage for two hours on either side of any incident. (Doc. No. 44 at 14 (citing Doc. No. 43-1, Lilly Dep. 46:24–25, 47:1–2, 47:8–16)). Ms. Black also argues that Costco's mere awareness of the incident was enough to trigger its duty to preserve. (Doc. No. 44 at 14 (citing Decker v. Target Corp., No. 116-CV-00171-JNP-BCW, 2018 WL 4921534, at *2 (D. Utah Oct. 10, 2018) ). Costco counters that it had no duty to preserve because there was no surveillance footage of the incident in the first place. (Doc. No. 53 at 4).
Having thoroughly reviewed the record, the Court finds that the record evidence establishes that relevant video surveillance existed, and that Costco did have an obligation to preserve the evidence at issue here. A party's duty to preserve evidence must be triggered by an event that places the party on "notice that the evidence is relevant to litigation or ... should have known that the evidence may be relevant to future litigation." John B. v. Goetz, 531 F.3d 448, 459 (6th Cir. 2008) (internal citations omitted); see also United States v. Florence, No. 2:13-cv-00035, 2020 WL 1047377, at *4 (M.D. Tenn. Mar. 4, 2020) ("While a litigant is under no duty to keep or retain every document in its possession ... it is under a duty to preserve what it knows, or reasonably should know, is relevant in the action....") (internal quotations omitted). Ms. Black argues that Costco's filing of the incident report, coupled with its surveillance footage preservation policy, placed it on notice. (Doc. No. 53 at 4). Although triggering events in spoliation cases are typically limited to demand letters, preservation requests, threats of litigation, or a party's decision to pursue a claim, see EPAC I, 2018 WL 1542040, at *16 (collecting cases), courts have found a duty to preserve in instances where, as here, an incident report and internal preservation policy put the party on ample notice of future litigation. See Rivera v. Sam's Club Humacao, 386 F. Supp. 3d 188, 208–09 (D.P.R. 2018) (collecting cases); see also Culhane v. Wal-Mart Supercenter, 364 F. Supp. 3d 768, 774 (E.D. Mich. 2019) ("[E]ven if Defendants did not receive actual notice, the fact that [the loss prevention employee] knew enough to preserve one of the videos (and to choose which one to preserve, no less) demonstrates that [Defendant] was ‘on notice that litigation was likely’ and that video footage ‘would be relevant.’ ") (citing Fed. R. Civ. P. 37(e) ). Here, there is comparable record evidence that establishes Costco had sufficient notice that future litigation would occur. Costco had a duty to retain video pursuant to its internal retention policy and because it filed an incident report following Ms. Black's fall. Indeed, the store's general manager instructed Mr. Mike Lilly, Costco's loss prevention employee, to review whether relevant video footage existed. Although Costco did not have a duty to preserve all video or only video of the actual incident, once Lilly copied a portion of the video to provide to Costco's claims manager, it should have preserved all such video, pursuant to its policy two hours before and after. If the video was important for Costco to provide to its claims manager to protect its own interests, surely it was subject to preservation under Rule 37(e). See Rivera, 386 F. Supp. 3d at 208–09. Accordingly, the Court finds that Costco had an obligation to preserve evidence, such that sanctions are warranted.
The Court finds, however, that the record evidence does not support the requisite culpable state of mind required for severe sanctions, such as default judgment or adverse jury instructions. "The more severe sanctions available under Rule 37(e)(2), including an adverse inference jury instruction, may be imposed only on a finding of specific intent ‘to deprive another party of the information's use in the litigation.’ " EPAC Technologies, Inc. v. Harpercollins Christian Publishing, Inc., No. 3:12-cv-00463, 2019 WL 109371, at *15 (M.D. Tenn. Jan. 4, 2019) (" EPAC II") (citing Fed. R. Civ. P. 37(e)(2) ). In instances such as these, "[a] showing of negligence or even gross negligence will not do the trick." Applebaum v. Target Corp., 831 F.3d 740, 745 (6th Cir. 2016).
Here, Ms. Black argues that because Costco took no reasonable steps to preserve the surveillance footage despite its policy and awareness of the incident, it knowingly destroyed any footage with a culpable state of mind. (Doc. No. 44 at 15). Ms. Black further argues that Costco displayed the requisite culpability because: (1) it is a sophisticated corporate entity whose employees understood the importance of the ignored retention policies at issue, (Doc. No. 44 at 15–16); (2) it took no action to review the footage even though it knew its system would automatically delete that footage after seven to ten days, (Doc. No. 44 at 16); and (3) it did not lose the footage in a good-faith operation of its surveillance system because it failed to entirely replace its antiquated system until late 2018, (Doc. No. 44 at 16 (citing Fed. R. Civ. P. 37(e), adv. comm'n cmt. 2015 (noting that courts may consider a good-faith operation as a factor in considering whether a party destroys ESI with a culpable state of mind)).
But the Court is not persuaded by Ms. Black's arguments, because the evidence she presents falls short of establishing "specific intent" on the part of Costco to deprive her of any use of evidence in this litigation. See EPAC II, 2019 WL 109371, at *15. Instead, the only evidence before the Court is that Costco's management instructed Mr. Lilly to review the surveillance footage relevant to the accident. (See Doc. Nos. 43-1, 53 at 2). Mr. Lilly then confirmed that no footage captured Ms. Black's fall. (See Doc. No. 43-1 at 42–45). Nonetheless, Mr. Lilly saved a short video clip that showed the closest view of the incident's location, though he had to do so on his personal cell phone because of a malfunction with the store's aged security system equipment. (See Doc. Nos. 43-1, 53 at 2). Although Mr. Lilly could have accessed two hours before and after the fall, he did not do so, and the remaining video was automatically erased. (See Doc. No. 43-1 at 45–52). This record evidence is insufficient for a finding of culpability and severe sanctions here. Rule 37 "explicitly rejects" the authorization of adverse inference jury instructions in cases where either no specific intent is found, or a party can prove no more than "negligence or gross negligence." EPAC I, 2018 WL 1542040, at *12. This is one such case.
But the Court nonetheless retains "broad discretion in crafting a proper sanction for spoliation." Adkins, 554 F.3d at 652. "Among the measures that may be considered are ‘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.’ " Wright & Miller, 8B Fed. Prac. & Proc. Civ. § 2284.2 (3d 3d.); see also Stedeford v. Wal-Mart Stores, Inc., 2:14-cv-01429-JAD-PAL, 2016 WL 3462132, at *7, 2016 U.S. Dist. LEXIS 83019, at *44–46 (D. Nev. June 24, 2016) (finding evidentiary sanctions to be an appropriate). The Court concludes that Ms. Black has established that Costco had a duty to preserve certain surveillance footage. Given Costco's level of intentionally failing to do so, the Court concludes that at least some evidentiary sanctions would be appropriate. However, the Court will reserve a final decision on such sanctions pending additional briefing by the parties.
For the foregoing reasons, Ms. Black's Motion for Sanctions, (Doc. No. 43), is GRANTED IN PART AND DENIED IN PART . The Court finds that Costco had a duty to preserve the surveillance footage at issue, but not that it had the culpable state of mind required for severe sanctions. No later than July 2, 2021 , the parties shall file supplemental briefing on appropriate lesser sanctions. Additionally, Defendant's Motion for Leave to file a sur-reply, (Doc. No. 58), is DENIED AS MOOT .
IT IS SO ORDERED.