J. CURTIS JOYNER, District Judge.
Before the Court are Plaintiff's Motion for Sanctions Based on Defendant Watchdog's Spoliation of Evidence (Doc. No. 134) and Defendant Watchdog's Response in Opposition thereto (Doc. No. 138); Plaintiffs' (Doc. No. 153) and Defendant Watchdog's (Doc. No. 154) Supplemental Briefs; as well as Defendant's Response to Plaintiffs' Supplemental Brief (Doc. No. 158). For the following reasons, it is hereby ORDERED that the Motion for Sanctions is GRANTED in part and DENIED in part. An Order follows.
Defendant Krista Brennan ("Brennan") is the creator of websites, including truthaboutcannella.com and truthaboutcannella.net, which contain information portraying the business and ethical practices of Plaintiffs First Senior Financial Group LLC, Phillip J. Cannella III, and Joann Small in a severely negative light. Brennan, or "Watchdog" as she refers to herself on these websites, insists that the information on her sites is true. Plaintiffs, however, argue that it is disparaging and defamatory.
Brennan's educational background consists of bachelor's degrees in communication studies and business, a master's degree in organizational and industrial psychology, and significant credits toward a master of science in information science focusing on the management of information technology. (Tr. 155-6). She has held jobs for which she acquired domain names for clients and designed websites for them. (Tr. 157). Among other positions she has held, Brennan worked for 4 years as the Director of Technology for the Vanguard Charitable Endowment Program, and worked as a Senior Executive at Stellar Financial, Inc., where she was responsible for management of the company's financial software product, software development, and technology operations, among other things. (Pl. Ex. L, Resume of Krista Cantrell Brennan). Although she knows how to install most kinds of software, Brennan asserts that she does not know how to install an operating system on a computer. (Tr. 156). Brennan once applied for a position as Chief Operating Officer with Plaintiff First Senior Financial Group prior to the commencement of litigation, but was not given an offer of employment. (Tr. 157-8, 160.) At present, Brennan has a diagnosis of an advanced form of secondary progressive multiple sclerosis ("MS") with associated loss of sensory ability and mobility, which impedes her ability to walk, read, or type; she also suffers from nystagmus, which makes it difficult for her to read or use a computer. (Tr. 166-67).
In March 2012, Plaintiffs commenced suit in this Court alleging defamation, tortious interference with business relationships, civil conspiracy, and violations of the Lanham Act.
In February 2013, Brennan first appeared in the present action by filing a Motion to Vacate the Default Judgment that had been entered against her. (Doc. No. 82). The Court scheduled an evidentiary hearing to determine whether Brennan had received notice of the action and whether service had been effectuated by e-mail. (Doc. No. 89). On June 13, 2013, the Court ordered the Defendant to:
On June 25, Brennan identified the computer of her mother Rose Ann Cantrell (the "target computer") to be the only readily-identifiable and accessible computer from which she accessed these email accounts.
The target computer at Ms. Cantrell's residence, 160 Whispering Oaks Drive in West Chester, PA, was always located in the kitchen area. (Tr. 31, 70, 153). Ms. Cantrell used the target computer on a daily basis to check her bank statements. (Tr. 35, 70, 154). While living with her mother, Brennan had frequent and easy access to the target computer as well. (Tr. 154). At the time, she lived on the ground floor of the house, the same floor where the computer was located.
On June 28, 2013, Brennan moved out of her mother's house in West Chester and flew to Texas. (Tr. 188; Def. Ex. A-2). She did not alert her counsel to the fact that she was leaving Pennsylvania. (Tr. 176). Two Facebook posts on June 28 and 29 indicated her location as Houston, Texas. (Pl. Ex. 3,4).
On July 1, Plaintiff's newly-appointed counsel contacted Brennan's counsel to discuss the status of the forensic examination, and Brennan's counsel reminded him of the previous identification of computers. (Doc. No. 112-1 at ¶ 15-16).
On July 3, 2013, counsel for the parties conducted a telephone conference outside of the Court's presence. Counsel for Brennan, Mr. Cohen, suggested the retention of IT Acceleration ("ITA"), a local IT firm, to complete the forensic examination. (Affidavit of Sidney S. Liebesman, Pl. Ex. F at ¶ 5). Brennan's counsel also suggested that a device called "EZ Imager" be used. Id. ¶ 6; Tr. 175. This device could be used by sending a USB drive with imaging software to the house of Ms. Cantrell, where it could be connected to the target computer, directed to run the imaging software, and then returned to ITA. (Tr. 83-86, 112-113, 186-7). While counsel for Plaintiffs affirms that Brennan's counsel suggested that EZ Imager be used by Brennan without Ms. Cantrell's knowledge, (Liebesman Aff. ¶ 6), Brennan testified that she had understood that an ITA employee would use the device (Tr. 175-76). Brennan preferred the EZ Imager method of submitting to forensic examination because Ms. Cantrell vehemently opposed the release of her computer to the custody of forensic examiners. (Tr. 187). Counsel for Plaintiffs strongly opposed the use of EZ Imager, citing concerns for Ms. Cantrell's privacy interests if the exam were completed without her knowledge and a desire to observe strict compliance with the Court order requiring that the target computer itself be produced to a forensic examiner. (Liebesman Aff. ¶ 7). In the expert opinion of Gary Hunt, a Forensic Analyst at ITA, the use of EZ Imager is a typical, authenticated practice which is forensically equivalent to having a technician examine a hard drive in person. (Tr. 86, 113).
On July 7, 2013, Ms. Cantrell "checked in" on Facebook at a Starbucks; her location was posted as Katy, Texas. (Def. Ex. A-5).
In early August 2013, Ms. Cantrell was hospitalized after suffering a heart attack. (Def. Ex. E). When Plaintiffs sought to subpoena Ms. Cantrell to produce the target computer (Doc. No. 107), Brennan objected and requested that the Court vacate its June 13, 2013 Order.
Gary Hunt, the ITA Forensic Analyst, obtained a mirror image of the target computer, returned the target computer to Ms. Cantrell, and then performed a forensic examination of the mirror image. (Declaration of Gary Hunt, Pl. Ex. K at ¶ 2-3). He found no user-created documents on the computer.
Lastly, Mr. Hunt conducted searches for certain keywords provided to him by counsel for the parties. Nearly all of the Plaintiffs' search terms hit on words in the target computer. (Pl. Ex. I). The search term hits were either system-related files or fragments from the unallocated space, which is disk space not being used by active files which can be over-written by the computer. (Hunt Decl. ¶ 8). Files or fragments are moved to a computer's unallocated space when files are deleted. (Tr. 126). Additionally, fragments may end up in the unallocated space as a result of clearing one's browser history or having temporary files running on the computer.
On January 27, 2014, Plaintiffs withdrew their opposition to Brennan's Motion to Vacate Default Judgment.
The Court held an evidentiary hearing on Plaintiff's Motion for Sanctions Based on Defendant Watchdog's Spoliation of Evidence on February 18, 2014. The Court heard testimony from Rose Ann Cantrell, David Borda, Krista Brennan, and Gary Hunt.
Spoliation usually refers to the alteration or destruction of evidence.
Spoliation occurs when (a) the evidence was in the party's control, (b) the evidence is relevant to the claims or defenses in the case, (c) there has been actual suppression or witholding of evidence, and (d) the duty to preserve the evidence was reasonably foreseeable to the party.
The Court concludes that these factors are met in the present case, and imposes appropriate sanctions.
To succeed on its motion, Plaintiffs must prove that Brennan had control over the target computer. Whether the alleged spoliator's control is exclusive is considered in the spoliation analysis.
Defendant Brennan argues that the target computer was frequently outside of Brennan's exclusive control, that it belonged to her mother, and that Brennan was frequently away from the computer on trips taken out of state. Brennan also avers that "Ms. Cantrell, other family members, and even an independent contractor accessed the Target Computer at various times." (Def. Response at 18). Critically, Brennan argues that "[w]hatever non-exclusive control Watchdog exercised over the Target Computer departed entirely as she departed her mother's house on June 28, 2013" to go to Houston, Texas.
Based on testimony adduced at the evidentiary hearing, the Court credits Ms. Cantrell's testimony that the computer was used almost exclusively, with very few exceptions, by Ms. Cantrell and by Brennan. The Court gives more weight to Ms. Cantrell's in-person testimony, which was adamant on this point, than to her declaration stating that guests to Ms. Cantrell's home frequently used the computer as well.
The Court further finds that Brennan took a plane to Texas on June 28, 2013, (Tr. 188; Def. Ex. A-2),
After reviewing the evidence before it, the Court finds that the target computer was sufficiently within Brennan's control to meet the first element of the spoliation test. While she lived at her mother's house, Brennan unquestionably had sufficient physical access to and unfettered use of the computer to exercise control over it.
Further, Brennan's legal control of the target computer was not dissolved by her decision to depart for Texas. Lack of physical possession does not necessarily negate a party's control over evidence. In
Likewise, in
Similarly here, Brennan's unfettered access to, use of, and responsibility for the target computer define her control. Though Ms. Cantrell, not Brennan, was the ultimate owner of the target computer, Brennan was made responsible by court order for turning over the target computer for a forensic exam and had at her disposal the means of doing so, or could have petitioned the Court for assistance. Brennan's voluntary relinquishment of physical access to the target computer does not allow her to argue that she did not have legal control when the computer's reinstallation of Windows 7 occurred.
In sum, the Court concludes that Brennan had control of the evidence at issue, the information on the target computer.
At the time that the reinstallation of Windows 7 occurred on July 7, 2013, at least some of the documents or files on the target computer were unequivocally relevant to the present suit. By that time, Brennan had admitted to using the target computer in connection with the websites central to the present case. (Third Declaration of Krista Brennan, Pl. Ex. B). Unlike the other computers Brennan used in connection with her websites, the target computer was the only one to which she still had access during the summer of 2013, further increasing its standing in this case.
Though Brennan's counsel argued during the evidentiary hearing that any relevance to the Motion to Vacate Default Judgment was mooted by the Plaintiffs' withdrawal of their opposition to this motion, the spoliation inquiry must focus on the claims and defenses in the case at the time of spoliation, not at this later date.
The fragments of data found in the unallocated space of the target computer further bolster the Court's conclusion that it contained relevant evidence. Prior to the forensic examination, counsel for the parties provided 59 search terms to Mr. Hunt. (Tr. 87). The search terms returned numerous hits, including 196 hits for "Cannella," 13 hits for "Metaphysicalgrrl," and 2,749 hits for "Watchdog," (Pl. Ex. I), terms unlikely to produce false positive hits. (Tr. 136-37). Though these terms may have appeared on the computer as a result of filings associated with the present litigation, these hits are nonetheless strongly suggestive of the presence of relevant evidence. Moreover, during the evidentiary hearing, counsel for Plaintiffs demonstrated that ITA found in the unallocated space of the target computer a paragraph mentioning Mr. Cannella which contained the same exact language, word-for-word, as a posting that later appeared on truthaboutcannella.com. (Tr. 198-202). This longer fragment, even more so than the hits for search terms conducted by ITA, demonstrates that the hard drive of the computer did contain relevant evidence. At minimum, it shows that Brennan accessed the truthaboutcannella.com website from the computer, and later cleared her browser history, moving the language into the unallocated space. In either case, it is highly likely that the information stored on the target computer was relevant to claims or defenses of the parties.
The Court finds that the second element of the spoliation test is met.
The party asserting spoliation must prove that evidence was actually suppressed or withheld.
After the Third Circuit's decision in
On the other hand, "a reckless disregard for the consequences of an intentional and conscious destruction of evidence, previously specially preserved for purposes of subsequent litigation, at a time when litigation is necessarily foreseeable," may constitute bad faith.
There is no question that actual suppression of evidence has been effectuated by someone in this case. On July 7, 2013, an individual reinstalled Windows 7 on the target computer, thus wiping clean the information that previously existed on the computer, discarding the previous installation, and creating a new user profile. (Tr. 96-98). Such a reinstallation would not occur spontaneously without significant input by a user of the computer (Tr. 96-97); by its very nature, such action requires human intent, and typically, though not necessarily, specific intent by a person with an IT background.
The determinative question in this fourth factor, however, is whether Plaintiffs have proven that Brennan's actions, taken as a whole, display bad faith. As required by the Third Circuit, the Court must place Brennan's behavior on the spectrum between misrepresentation, bad faith, and intentional or knowing behavior on the one hand; and inadvertence, accidental loss, and properly-explained withholding of evidence on the other.
The Court concludes that Brennan acted intentionally and in bad faith. First, Brennan knew with absolute certainty that the Plaintiffs sought the information on the target computer and that the Court had mandated its submission to a forensic exam.
The Court concludes that, on balance, Brennan did not act in good faith to preserve the data on the target computer and produce it in a timely fashion. Nor was the evidence on the computer subjected to a risk of destruction due to her simple negligence or inadvertence. Instead, Brennan acted knowingly and intentionally in resisting production of the target computer for a period of over two months. She acted recklessly by departing for Texas without notification or care for compliance with the Court's order. Even if Brennan's counsel was forced to wait for periods of time on Plaintiffs' newly-appointed attorneys before initiating the exam, Brennan has not properly accounted for how Windows 7 could be reinstalled on her watch if she had been making good faith efforts to preserve the computer's data. When looked at in its totality, Brennan's course of conduct rises above mere negligence and inadvertence to effectuating actual suppression of evidence.
At the time that Windows 7 was reinstalled on the target computer Brennan had a duty to preserve the computer and any or all files contained on it in connection with this lawsuit. The duty to preserve evidence begins when litigation is pending or reasonably foreseeable.
At the very latest, Brennan's duty to preserve information in connection with this litigation arose in December 2012, when she asserts that she first became aware of the suit against her. The Court's June 13, 2013 Order directing that Brennan identify all electronic devices she used unequivocally put Brennan on notice that the target computer was evidence that had to be preserved: "Defendant Watchdog shall then submit these devices and computers for a forensic examination." (Doc. No. 97 at ¶ 1). Thus, when Windows 7 was reinstalled on the target computer on July 7, 2013, Brennan was under a duty to preserve evidence on the target computer.
The determination of an appropriate sanction for spoliation, if any, rests with the discretion of the trial court.
The key considerations in determining an appropriate sanction should be (1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and, where the offending party is seriously at fault, will serve to deter such conduct by others in the future.
Plaintiffs have asked that the following sanctions be imposed by the Court: that judgment be entered against Brennan; that Brennan and Mr. Cohen be ordered to pay attorneys' fees and costs of the independent expert and fees and costs associated with various motions;
At the outset, the Court notes that the prejudice to Plaintiffs resulting from the spoliation appears minimal. The original impetus for obtaining the forensic examination of the target computer was to discern whether Brennan had received alternative service of process and thus inform the Court's analysis of the Motion to Vacate Default. Prior to the spoliation hearing, Plaintiffs withdrew their opposition to Brennan's Motion to Vacate Default Judgment and the Court subsequently vacated the Default. Since the vacatur, Plaintiffs have not presented any arguments as to how the spoliation has prejudiced the ultimate merits of their case.
The Court thus finds only the following sanctions to be appropriate: Brennan will pay the costs of the ITA independent expert Gary Hunt and attorneys' fees associated with Plaintiffs' Motion for Sanctions Based On Spoliation of Evidence (Doc. No. 134). This sanction will compensate Plaintiffs for the money and effort expended on determining whether Brennan received alternative service of process and those relating to the present motion.
The Court denies, at this time,
The Court will not order Brennan to pay the costs associated with non-spoliation motions given that Plaintiffs abruptly dropped their opposition to Brennan's Motion to Vacate Default Judgment after extensive briefing by both parties.
Nor will the Court enter judgment against Brennan because the evidence before the Court does not rise to the nefarious level typically needed to impose such a severe sanction. See, e.g., U.S. v. $8,221,887.16 in U.S. Currency, 330 F.3d 141, 161 (3d Cir. 2003)("the sanction of dismissal is disfavored absent the most egregious circumstances."); Micron Technology, Inc. v. Rambus Inc., 917 F.Supp.2d 300, 324 (D. Del. 2013);
The Court will not impose a spoliation inference on Brennan because Plaintiffs' suggested inference is no longer relevant to the present proceedings. A spoliation inference typically allows a jury to assume that the destroyed evidence would have been unfavorable to the position of the offending party.
The Court will also not sanction Mr. Cohen for professional misconduct. Though Ms. Cantrell did not read her affidavit before signing it, Mr. Cohen did ask her to read it very closely. (Tr. 60). Moreover, at the evidentiary hearing, Mr. Cohen did not dispute that he suggested that Brennan use EZ Imager to obtain a copy of the target computer. There is evidence that EZ Imager is a viable, legally-valid alternative to delivering the target computer to ITA. (Def. Ex. C). And despite Plaintiffs' characterizations to the contrary, Mr. Hunt testified that he could not remember whether Mr. Cohen had suggested that Brennan would be the one to use the USB Drive to obtain a mirror image without Ms. Cantrell's knowledge.
For the foregoing reasons, the Court GRANTS in part and DENIES in part Plaintiffs' Motion for Sanctions Based on Spoliation of Evidence.
AND NOW, this 3
(1) Krista C. Brennan shall pay all fees associated with IT Acceleration's work performed in connection with the forensic examination of the Target Computer.
(2) Krista C. Brennan shall pay for all of Plaintiffs' fees and costs associated with Plaintiffs' Motion for Sanctions (Doc. No. 134), Supplemental Brief in Further Support thereof (Doc. No. 153), as well as costs and fees associated with the Evidentiary Hearing held on February 18, 2014 (Doc. Nos. 149, 150).
(3) Plaintiffs are MANDATED to submit, within fourteen (14) days of the date of entry of this Order, an affidavit and/or other materials detailing their costs and fees associated with (2) above. Plaintiffs' submission of costs and fees should contain, at minimum, a description of work completed, time expended on various tasks, and the hourly rate charged.
Defendant Brennan shall have 14 days after submission of this affidavit to file a response, if any.
However, as explained in further detail below, Brennan's physical location on the date of July 7, 2013, is not a dispositive factor in the Court's analysis of her legal control of the target computer.
Plaintiffs also requested the Court to deny Brennan's motion to vacate default judgment; however, Plaintiffs have since withdrawn their opposition to this motion and the Court has vacated the default judgment. (Doc. No. 147).
