Opinion
18-cv-05387-SI (TSH)
08-22-2022
MAKENZIE PAULY, Plaintiff, v. STANFORD HEALTH CARE, Defendant.
REPORT & RECOMMENDATION RE: PLAINTIFF'S MOTION FOR TERMINATING SANCTIONS
RE: DKT. NO. 157
THOMAS S. HIXSON UNITED STATES MAGISTRATE JUDGE
I. INTRODUCTION
Pending before the undersigned is a Motion for Terminating Sanctions, filed by Plaintiff Makenzie Pauly. ECF No. 157. The undersigned heard oral argument on August 18, 2022. The undersigned's views on this motion take the form of a report and recommendation under 28 U.S.C. § 636(b)(1)(B), rather than an order, because Pauly's Motion for Terminating Sanctions is potentially a “dispositive” motion that falls outside the scope of a magistrate judge's authority absent consent of all parties under 28 U.S.C. § 636(c). See Flam v. Flam, 788 F.3d 1043, 1046 (9th Cir. 2015). After carefully reviewing the parties' arguments, the record, and controlling authorities, the undersigned RECOMMENDS the District Court DENY the Motion for Terminating Sanctions for the following reasons.
II. BACKGROUND
The instant action involves Pauly's allegations that Defendant Stanford Health Care (“SHC”) failed to properly provide medical care in November 2008 and December 2008. ECF No. 1. On February 28, 2022, Judge Illston referred this case to the undersigned to address the parties' ongoing discovery disputes and Pauly's related Motion for Terminating Sanctions. ECF No. 137.
On June 2, 2022, the undersigned issued an Order re a sixth discovery dispute involving a color copy of the Medical Transport Program Call Record (“MTPCR”), SHC's 2008 policies and procedures, EMTALA Central Log, and Pauly's medical records. ECF No. 152. The undersigned found that SHC acknowledged that it no longer had the color copy of the MTPCR; Pauly “advance[d] no arguments that SHC's search of the [policies and procedures] documents that are currently available to it was inadequate”; Pauly's medical records were not missing the “Chief Complaint” information; and Pauly “provide[d] no basis to think that SHC has withheld any relevant [EMTALA] log entries.” Id. at 1-3. The undersigned also denied Pauly's request for sanctions without prejudice because “[a]lthough Pauly faults SHC for not producing a color copy of the MTPCR, relevant policy and procedure documents, and additional information in the EMTALA Central Log, Pauly's letter brief [did] not develop any arguments concerning whether there was a duty to preserve such materials at the time.” Id. at 4.
On July 7, 2022, Pauly filed a Motion for Terminating Sanctions and Default Judgement pursuant to FRCP 37(e) and the Court's inherent authority. ECF No. 157. On July 18, 2022, SHC filed an Opposition. ECF No. 161. On July 25, 2022, Pauly filed a reply. ECF No. 171. On August 18, 2022, the undersigned heard oral argument.
III. LEGAL STANDARD
“Rule 37(e) governs the remedies available for the failure to preserve electronically stored information.” Fourth Dimension Software v. DER Tourisktik Deutschland GmbH, Case No. 19-cv-5561, 2021 WL 5919821, at *3 (N.D. Cal. Dec. 15, 2021). Rule 37(e) states that sanctions may be warranted “[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.” FRCP 37(e). If the Court finds the offending party “acted with the intent to deprive another party of the information's use in the litigation,” the Court may require an adverse evidentiary presumption, dismiss the case, or enter default judgment. FRCP 37(e)(2).
Rule 37(e) “authorizes and specifies measures a court may employ if information that should have been preserved is lost, and specifies the findings necessary to justify these measures.” Fed.R.Civ.P. 37 Advisory Committee Notes to the 2015 Amendment. Accordingly, “[t]he detailed language of Rule 37(e) . . . foreclose[s] reliance on [the Court's] inherent authority to determine whether terminating sanctions [a]re appropriate.” Newberry v. County of San Bernardino, 750 Fed.Appx. 534, 537 (9th Cir. 2018).
IV. DISCUSSION
Pauly requests terminating sanctions under FRCP 37(e) and the Court's inherent authority for the alleged spoilation of the MTPCR, 2008 Policies and Procedures, 2008 transfer request call recording, EMTALA Central Log, and medical records. ECF No. 157. Because all of these materials are electronically stored information (“ESI”), whether terminating sanctions should be granted is governed by FRCP 37(e) and not the Court's inherent authority. See Newberry, 750 Fed.Appx. at 537; accord Waymo LLC v. Uber Technologies, Inc., Case No. 17-cv-00939-WHA, 2018 WL 646701, at *14 (N.D. Cal. Jan. 30, 2018) (“Because the evidence in question consists of electronically-stored information, FRCP 37(e), not inherent authority, supplies the controlling legal standard.”); Fiteq Inc. v. Venture Corp., Case No. 13-cv-1946-BLF, 2016 WL 1701794, at *3 (N.D. Cal. Apr. 28, 2016) (“With regard to the Court's ability to impose this sanction under its inherent authority, Venture argues that the Advisory Committee's Notes to Rule 37(e) explicitly foreclose this route.... The Court agrees with Venture.”). Therefore, the undersigned evaluates Pauly's request for terminating sanctions solely under FRCP 37(e).
The first step is to determine whether any of this ESI was lost. See FRCP 37(e). Pauly argues SHC intentionally altered the MTPCR because the MTPCR has internal call history inconsistencies, missing information “likely” contained in the Bed Status section, and pixilations. ECF Nos. 157 at 6-11; 171 at 5. However, Pauly has not shown that the call history actually has any inconsistencies, and her assertions that the call history and Bed Status sections originally recorded additional information that was later redacted fall firmly in the category of speculation. Regarding the pixilations, the undersigned previously held that “the pixilation in the black and white [MTPCR] copy that made the document look like it might have been redacted was the result of the fact that the original document was in color.” ECF No. 152 at 1-2. The color copy of the MTPCR is no longer retrievable because SHC decommissioned its File Maker Pro System, which contained the color copy, in 2016. Id. The undersigned also held that “SHC should not have represented that it had produced a ‘true, correct [and] full' copy of the MTPCR.” Id. at 2.
Regarding the 2008 policies and procedures, SHC admits that it “was able to locate only a single policy and procedure” relevant to Pauly's requests for production, titled “Admission of Patient to the Emergency Department.” ECF No. 161 at 11. SHC is unable to find any other 2008 policies and procedures because of a 2018 “mov[e] to a centralized location in a document system.” ECF No. 158, Exh. D (Nolan Decl.) ¶ 3.
Pauly also argues SHC lost the recording of the 2008 transfer request call between Dr. Gates and Dr. Larkin. ECF No. 157 at 9. SHC admits that “phone recordings from December 2008 no longer exist[] as they were routinely destroyed in shorter intervals prior to the filing of [Pauly's] first lawsuit.” ECF No. 161 at 9.
Pauly filed her first lawsuit on December 9, 2010. Case No.10-cv-5582, ECF No. 1.
Accordingly, the undersigned finds that SHC failed to preserve: the color copy of the MTPCR in 2016, all relevant 2008 policies and procedures other than “Admission of Patient to the Emergency Department” in 2018, and the phone recording of the 2008 transfer request call (“2008 transfer request recording”) before 2010.
However, the Court is unable to conclude that SHC failed to preserve Pauly's medical records and EMTALA central log. As discussed in the undersigned's March 14, 2022 Order re Fifth Discovery Dispute, the undersigned reviewed SHC's medical records and found the records to be complete. ECF No. 140. Regarding the EMTALA central log, Pauly failed to demonstrate that the log lacks information that it previously had. Pauly cites to SHC's current EMTALA training document to argue more information should have been included in the 2008 EMTALA central log. ECF No. 157 at 15. However, Pauly has not established that SHC's current training requirements applied in 2008 or are required by the EMTALA statute, or - even if both of those things are true - that additional information actually was recorded in 2008. The undersigned previously held that the log entries relevant to Pauly “are contained on the tenth line of pages 54 and 55 of 93 in ECF No. 144-2 and show arrival time, arrival department, means of arrival, patient name, patient MRN, alias, gender, age, complaint, chief complaint, departure time, and disposition.” ECF No. 152 at 3. Therefore, the undersigned cannot find that there was a failure to preserve in connection with Pauly's medical records and the EMTALA central log.
The undersigned will now evaluate whether terminating sanctions are warranted for the failure to retain the color copy of the MTPCR, the 2008 policies and procedures, and the 2008 transfer request call under FRCP 37(e). See Williams v. Williams, Case No. 07-cv-4464-CW (LB), 2013 WL 3157910, at *4 (N.D. Cal. June 20, 2013) (“When a district court decides to impose sanctions or discipline, it must clearly delineate under which authority it acts to insure that the attendant requirements are met.”) (citing Weissman v. Quail Lodge, Inc., 179 F.3d 1194, 1200 (9th Cir. 1999)).
Pauly requests terminating sanctions under 37(b)(2) but fails to provide case law or argument in support of her request. The undersigned declines to address terminating sanctions under 37(b)(2).
The majority of courts in this district use a three-part test to determine whether spoilation has occurred:
(1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a ‘culpable state of mind;' and (3) that the 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.See Meta Platforms, Inc. v. BrandTotal Ltd., Case No. 20-cv-7182-JCS, 2022 WL 1990225, at *5 (N.D. Cal. June 6, 2022) (citing Apple Inc. v. Samsung Elecs. Co., 881 F.Supp.2d 1132, 1138 (N.D. Cal. 2012)).
A. Duty to Preserve
Pauly argues SHC's duty to preserve began on February 13, 2009, which is when SHC mailed a letter acknowledging receipt of Pauly's letter regarding her 2008 care and treatment. ECF Nos. 157 at 2; 158 at 30, Exh. B (SHC Feb. 13, 2009 Letter). SHC argues it did not have a duty to preserve from 2009 because SHC was not on notice of a future lawsuit. ECF No. 161 at 4 5. SHC further argues it reasonably relied on the Court's February 6, 2012 dismissal of Pauly's claims as an indication that a future specific lawsuit would not occur. Id. at 5.
A party's obligation to preserve evidence for use in litigation arises when litigation is pending or becomes “reasonably foreseeable.” See Hynix Semiconductor Inc. v. Rambus Inc., 645 F.3d 1336, 1345-46 (Fed. Cir. 2011) (applying Ninth Circuit law). Whether “litigation is ‘reasonably foreseeable' is a flexible fact-specific standard that allows a district court to exercise the discretion necessary to confront the myriad factual situations inherent in the spoliation inquiry.” Oracle Am., Inc. v. Hewlett Packard Enter. Co., 328 F.R.D. 543, 549 (N.D. Cal. 2018) (simplified).
Here, Pauly produced evidence demonstrating that SHC learned of her possible EMTALA claim as of March 17, 2009. See ECF No. 158 at 32, Exh. C (March 17, 2009 SHC Letter) (“It is [SHC's] understanding that your questions primarily concern whether [Pauly's] emergency room care in December 2008 complied with the requirements of EMTALA). The Court finds the March 17, 2009 letter gave SHC sufficient notice of possible litigation because the letter recognized the Pauly's specific EMTALA claims. See Fourth Dimension Software, 2021 WL 5919821, at *9 (finding duty to preserve arose “during the following months-long discussion between the parties about how to resolve the claims.”); In re Napster, Inc. Copyright Litig., 462 F.Supp.2d 1060, 1067 (N.D. Cal. 2006) (“As soon as a potential claim is identified, a litigant is under a duty to preserve evidence which it knows or reasonably should know is relevant to the action.”).
The Court's February 6, 2012 dismissal of Pauly's case did not relieve SHC of its duty to preserve evidence. The Court dismissed the case “without prejudice” and stated that Pauly “may pursue the [EMTALA] claim when she reaches the age of majority.” Faiza Marie Pauly v. Stanford Hospital, Case No. 10-cv-5582-SI, ECF No. 97 at 2. SHC knew that Pauly would reach the age of majority in 2018 and therefore knew litigation was reasonably foreseeable.Accordingly, the undersigned finds SHC had a duty to preserve evidence since 2009.
The original complaint in the 2010 case alleged that Pauly was ten years old as of November 7, 2008. Case No.10-cv-5582, ECF No. 1 at ¶ 7.
B. Culpable State of Mind
Pauly argues SHC acted with the intent to delete or destroy evidence and that the timeline of evidence demonstrates SHC's culpability. ECF Nos. 157 at 5; 171 at 8-15.
The undersigned finds Pauly failed to establish the requisite intent for terminating sanctions under FRCP 37(e). The record shows that SHC was unable to retrieve SHC's 2008 policies and procedures because of a 2018 “mov[e] to a centralized location in a document system,” ECF No. 158, Exh. D (Nolan Decl.) ¶ 3, and SHC was unable to retrieve a color copy of the MTPCR because SHC's maker pro system was decommissioned in 2016. ECF No. 158, Exh. M at ¶¶ 4-6. While this may be evidence of negligence that could support less drastic sanctions, there is insufficient evidence of SHC acting with the intent to deprive Pauly of the information's use in the litigation. Compare Porter v. City and County of San Francisco, Case No. 16-cv-3771-CW, 2018 WL 4215602, *4 (N.D. Cal. Sept. 5, 2018) (“There is no evidence that CCSF intentionally spoliated the Okupnik call. The record shows that CCSF erased the call pursuant to its 2-year ESI retention policy. Declaration of Gregory J. Chase. At most, CCSF's behavior amounts to gross negligence, not intentional malfeasance.”) with First Fin. Sec., Inc. v. Freedom Equity Grp., LLC, Case No. 15-CV-1893-HRL, 2016 WL 5870218, at *3 (N.D. Cal. Oct. 7, 2016) (finding that defendant's agents acted with intent in deleting text messages based on evidence of an “explicit agreement to avoid communicating electronically,” which “suggest[ed] a shared intent to keep incriminating facts out of evidence.”). Regarding the 2008 transfer request recording, there is no evidence that SHC's destruction occurred outside the course of routine business procedure or with the intent to deprive Pauly of the recording. Although Pauly asserts serious questions regarding SHC's discovery practices, ECF No. 157 at 6-14, her request for terminating sanctions “must be supported by some credible evidence, not implications and innuendo” because “a defendant remains free to operate their business in its ordinary course in the absence of the reasonable probability of a certain lawsuit and so long as it does not render data inaccessible purely with the intent of stymying such legal action.” U.S. ex rel. Carter v. Bridgepoint Educ., Inc., 305 F.R.D. 225, 243 (S.D. Cal. 2015).
Accordingly, the undersigned recommends denying Pauly's request for terminating sanctions.
V. CONCLUSION
For the reasons stated above, the undersigned recommends that Pauly's Motion for Terminating Sanctions be DENIED. Pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b)(2), a party may serve and file any objections within 14 days after being served. Failure to file objections within the specified time may waive the right to appeal the district court's order.
IT IS SO RECOMMENDED.