TERESA J. JAMES, Magistrate Judge.
Plaintiff brings this action under the Lanham Act, 15 U.S.C. §§ 1051 et seq., for trademark infringement and unfair competition. This matter is before the Court on Defendant's Motion for Spoliation Sanctions (ECF No. 85). Pursuant to Fed. R. Civ. P. 37(e), Defendant requests an order sanctioning Plaintiff for failing to preserve the computer internet history of one of Plaintiff's employees, who Defendant alleges posted some of the infringing job listings that Plaintiff accuses Defendant of posting. After the motion was fully briefed, the Court held a telephone conference and motion hearing on January 13, 2015, at which it took the motion under advisement, granted Defendant leave to take one additional deposition,
The Court has reviewed all of the briefing and considered the arguments of counsel at the hearing on the instant motion, as well as the Declarations submitted by Plaintiff in accordance with the Court's instructions following the hearing.
Defendant operates trucking websites that advertise open driver positions on behalf of commercial trucking companies and permit individuals interested in obtaining those positions to complete and submit job applications. These websites also allow the commercial trucking companies to post job listings for their open truck driving positions. Defendant currently owns and operates the following trucking websites: FindATruckingJob.com, JustTruckingJobs.com, EliteTruckDrivingJobs.com and TruckDrivingJobFinder.com. Plaintiff contracted with and paid Defendant to advertise commercial truck driving positions on FindATruckingJob.com ("FaTJ") and JustTruckingJobs.com (jointly, the "Trucking Websites"). Per this agreement, Defendant was authorized to use Plaintiff's trademarks and identifying information. However, Plaintiff accuses Defendant of continuing to make job postings using Plaintiff's trademarks and information without its authorization, after Plaintiff terminated its agreement with Defendant.
On September 13, 2013, Plaintiff's attorneys sent a cease and desist letter to Defendant accusing it of improperly using Plaintiff's trademarks and identifying information on Defendant's Trucking Websites and Craigslist, and demanding that Defendant stop listing Plaintiff's job postings. On September 30, 2013, Defendant's general counsel e-mailed a response to Plaintiff's attorneys advising that, on September 17, 2013, Defendant had removed Plaintiff's job postings from its Trucking Websites and Craigslist. On October 28, 2013, Plaintiff's attorneys faxed a follow-up letter to Defendant's general counsel again threatening litigation.
On December 5, 2013, Defendant's website marketing manager, Joel Mackey, noticed that someone was logging into the FaTJ website's customer access portal system using the unique user ID and password assigned to Plaintiff and posting Plaintiff's truck driving positions. That day, Mackey redirected the delivery of job applications resulting from such postings to his own email address, turned off the postings so that they could not be viewed externally, and disabled Plaintiff's ability to log-in. As early as December 2013, Defendant suspected Plaintiff had logged in and created the job postings, but Defendant was unable to verify its suspicions because it could not identify the internet protocol ("IP") address of the individual who logged in and created the job postings using Plaintiff's account.
Plaintiff filed this lawsuit on September 15, 2014, claiming that Defendant improperly used Plaintiff's intellectual property without authorization by making postings on the Trucking Websites and Craigslist.
On January 30, 2015, Plaintiff served its Rule 26 disclosures identifying one of its employees, recruiter Jolene Vinck ("Vinck"), as an individual "believed to have discoverable information relating to the matter."
On June 16, 2015, Defendant's counsel sent a letter to Plaintiff alleging that after Defendant removed all of Plaintiff's job postings from the FaTJ website on September 17, 2013, Plaintiff logged back in and created six job postings on five separate dates: September 23, 2013, October 21, 2013, November 7, 2013, November 26, 2013, and December 2, 2013.
On September 11, 2015, Plaintiff served its supplemental responses to Defendant's First Request for Production. The supplemental production contained a December 12, 2013 e-mail from Meagan Clark, an account manager with ACS Advertising (a third party which assists Plaintiff with its job postings) to Vinck, advising her that Plaintiff had discontinued its relationship with FaTJ. In response, Vinck emailed back: "OK, Thanks! I didn't know this and had been posting on there all along! They must have just figured it out! lol[.]"
In its October 14, 2015 Responses to Defendant's Second Request for Production Nos. 35 and 36, Plaintiff advised Defendant that Vinck's internet history was no longer available as Vinck received a new work station in February 2015 in the ordinary course of business, and Plaintiff did not have access to any web browsing history relating to any computer assigned to her prior to February 2015.
After attempting to confer, Defendant filed this motion seeking spoliation sanctions due to Plaintiff's failure to preserve Vinck's internet history on Computer 1.
Relying upon the December 2013 Vinck email, Defendant claims Vinck posted some of the job listings that Plaintiff accuses Defendant of posting on the FaTJ website in Fall 2013. Defendant has requested the internet history from Vinck's computer for Fall 2013, which it believes will prove Vinck did in fact access the FaTJ website on the days the job listings at issue were posted. Defendant contends that Plaintiff should have preserved this information and the failure to do so should result in an adverse jury instruction or dismissal of Plaintiff's causes of action as they relate to the FaTJ website.
Plaintiff responds that it preserved relevant information possessed by Vinck in Fall 2013, but did not preserve the internet history on Vinck's computers because it did not know or have reason to know that the internet history would be relevant in this case at that time. Plaintiff claims it first learned about Defendant's allegation that Vinck made the Fall 2013 job postings on the FaTJ website in June 2015, when Plaintiff received the June 16, 2015 letter from Defendant's counsel raising the issue. At that time, Plaintiff no longer had access to Vinck's internet history because, in April 2014, Vinck had been relocated to a new workstation and assigned a different computer. Plaintiff does not track information regarding the specific personnel assigned to its computers, and consequently, it has been unable to locate the computer that was being used by Vinck in Fall 2013. Plaintiff argues that it should not be sanctioned for failing to preserve the internet history of Computer 1 (the computer Vinck used in Fall 2013) because, prior to June 2015, it did not know and could not have reasonably known this information would be relevant to this case.
As the alleged spoliation is due to Plaintiff's failure to preserve internet history, the Court looks to recently amended Federal Rule of Civil Procedure 37(e), which addresses the failure of a party to preserve electronically stored information ("ESI").
The advisory committee's notes to the 2015 amendments clarify that Rule 37(e) "applies only if the lost information should have been preserved in the anticipation or conduct of litigation and the party failed to take reasonable steps to preserve it."
Although the 2015 amendments significantly changed Rule 37(e), the amended Rule 37(e) does not alter existing federal law concerning when the duty to preserve attaches.
"A litigant has a duty to preserve evidence that it knows or should know is relevant to imminent or ongoing litigation,"
With respect to timing, the duty to preserve definitely exists upon the filing of a lawsuit, but the duty may arise even before a lawsuit is filed if a party has notice that future litigation is likely.
The determination of what particular evidence must be preserved is more difficult. Generally, the scope of the evidence to be preserved is what a litigant "knows or should know is relevant to imminent or ongoing litigation."
Rule 37(e) only applies when ESI is lost before a duty to preserve attaches. Further, "Rule 37(e) directs that the initial focus should be on whether the lost information can be restored or replaced through additional discovery."
Plaintiff's discovery responses and briefing indicate that it did not preserve and is unable to provide the internet history sought by Defendant and for which Defendant seeks spoliation sanctions. As directed by the Court during the hearing on the subject motion, Plaintiff subsequently filed Declarations regarding the efforts it made to search for and locate Computer 1 and regarding whether Plaintiff otherwise had the capability to log Vinck's internet history. Based upon the Court's review of the briefing and Plaintiff's Declarations, the Court is satisfied that Plaintiff has made thorough and reasonable good faith efforts to locate Computer 1, but it cannot be located.
The Court further concludes that the internet history on Computer 1 is lost and cannot be restored or retrieved by other means. Plaintiff's Vice President of Information Systems, Randy Baier, states in his Declaration that Plaintiff's general practice is to assign its desktop computers to specific work stations and to cycle each of its computers out of use every five years.
Having determined that the internet history of Computer 1 is lost and cannot be restored or retrieved, the Court must next determine whether Plaintiff had a duty to preserve Vinck's internet history, and, if so, when such duty arose. Plaintiff does not dispute that it had a duty to preserve all relevant information, including ESI, beginning in Fall 2013. Plaintiff claims it preserved all such information, includingVinck's email communications and attachments, her Outlook calendar, and all electronic and physical files in her possession, custody or control concerning Defendant or any of its websites and/or any applicants for commercial driving positions with Plaintiff. Defendant argues that Plaintiff also had a duty to preserve Vinck's internet history and breached its duty insofar as it is unable to locate the computer Vinck was using in Fall 2013 (Computer 1) or otherwise provide her internet history for that time period.
To determine when Plaintiff's duty to preserve arose, the Court looks to the events leading up to the filing of this lawsuit. Plaintiff sent a cease and desist letter to Defendant dated September 13, 2013, indicating it was considering legal options and expressly "not" waiving its rights to commence litigation. Defendant's general counsel sent an email response on September 30, 2013, acknowledging that Defendant had posted information pertaining to Plaintiff on three websites and that the postings were removed September 17, 2013. Plaintiff sent a follow up letter dated October 28, 2013, threatening to pursue numerous civil claims against Defendant. About a year later, in September of 2014, Plaintiff filed this trademark infringement action.
Based upon these facts, Plaintiff's duty to preserve relevant evidence began at the time of the above correspondence between counsel for Plaintiff and Defendant (hereinafter referred to as "Fall 2013").
The Court's inquiry does not stop with the finding that Plaintiff had a duty to preserve relevant information, and that duty commenced in Fall 2013. The Court must next determine the scope of that duty to preserve, including whether and, if so, when the duty extended to Vinck's Fall 2013 internet history. The Court finds the following guidance from the Rule 37(e) Avisory Committee's Notes to the 2015 amendment instructive:
Plaintiff argues the central issues in this case involve Defendant's alleged actions and alleged unauthorized use of Plaintiff's trademarks and information. It argues that Defendant has not asserted any counterclaims alleging that Plaintiff improperly accessed Defendant's websites and, until June 2015, did not raise any defenses that Plaintiff itself was responsible for any of the disputed postings on Defendant's websites.
Prior to receiving the June 16, 2015 letter from Defendant's counsel, Plaintiff contends it had no reason to believe the internet history on Computer 1 (used by Vinck in Fall 2013) would be relevant to any issues in this case, and thus it had no duty to preserve the internet history. It is undisputed that Defendant did not advise Plaintiff that Defendant believed Vinck made the disputed FaTJ postings until the June 16, 2015 letter. Plaintiff contends that prior to that time it had no reason to believe that any of its employees, including Vinck, made any postings on the FaTJ website. Plaintiff attaches the Declaration of Timothy Norlin, who has been actively involved in Plaintiff's litigation matters and is very familiar with Plaintiff's obligation to preserve evidence relevant to litigation, in support of this contention.
Plaintiff also relies upon a Declaration from its computer forensics expert, Ronald Fischer, who states it was "his experience that businesses do not take any additional steps to save, backup or maintain Internet history files. Consequently, Internet history is typically lost when a computer stops working and/or is replaced."
Finally, Plaintiff argues even if it had preserved Vinck's Fall 2013 internet history, it would not provide the evidence that Defendant is seeking to obtain. That is, according to Plaintiff, Vinck's internet history would show only the websites she accessed, not whether she actually logged into those websites and posted the disputed job listings on the FaTJ website. Defendant counters that if Vinck's internet history reflected that she had accessed the websites on the days the disputed listings were posted, it would be very strong circumstantial evidence that Vinck made the postings. The Court agrees with Defendant on this point. The internet history would not be conclusive evidence. However, if it revealed that Vinck accessed the FaTJ website on the same days as the disputed FaTJ job postings, that—along with the December 2013 email—would be strong circumstantial evidence that Vinck posted the job listings.
Defendant argues there is no doubt that when Plaintiff lost or destroyed Vinck's Fall 2013 internet history Plaintiff was under a duty to preserve the information. In support, it cites the demand letter that Defendant sent to Plaintiff on September 13, 2013. Defendant also points out the filing of this lawsuit on September 15, 2014; and Plaintiff's identification of Vinck in Plaintiff's Rule 26(a) initial disclosures, served on January 30, 2015, indicating Vinck was a key player in the case.
As noted above, a duty to preserve relevant ESI arose in Fall 2013. In its September 30, 2013 email response to Plaintiff's cease and desist letter, however, Defendant acknowledged it had posted information pertaining to Plaintiff on the three websites at issue and that the postings were not removed until September 17, 2013. Given Defendant's response admitting that
The next event upon which Defendant bases its argument that Plaintiff had a duty to preserve Vinck's internet history is the filing of the Complaint on September 15, 2014. The Court has already concluded that the Fall 2013 correspondence did not create a duty for Plaintiff to preserve Vinck's Fall 2013 internet history. Defendant cites nothing in the interim (between delivery of the demand letter and filing of the Complaint) to support its contention that Plaintiff had a duty to preserve Vinck's internet history when she moved to a new work station and left behind Computer 1 in April 2014. The subsequent filing of the Complaint could not have invoked a duty to preserve internet history upon Plaintiff in April 2014. The same is true of Plaintiff's subsequently served initial disclosures, on January 30, 2015. Moreover, even the Answer
Defendant does, however, argue that Plaintiff, in doing due diligence for this case, should have been aware of the December 12, 2013 email in which Vinck indicated she did not know the FaTJ website was cancelled and "had been posting on there all along!" Defendant relies heavily upon this Vinck email. But again, as of April 2014, Defendant had made no allegations that Plaintiff had improperly accessed Defendant's websites. Indeed, as noted previously, Defendant's September 30, 2013 response to Plaintiff's demand letter acknowledged that Defendant had made postings to the Trucking Websites and Craigslist.
When Vinck moved to a new work station with a new desktop computer in April 2014, she left behind Computer 1. Norlin's Declaration indicates this was consistent with Plaintiff's company practice. The advisory committee's notes to Rule 37(e) instruct the Court to take into consideration the routine, good-faith operation of an electronic information system as a relevant factor in evaluating whether a party failed to take reasonable steps to preserve lost information.
In his Declaration, Plaintiff's computer forensics expert, Ronald Fischer, opines that in his experience businesses do not take any additional steps to save, backup or maintain Internet history files and internet history is typically lost when a computer stops working and/or is replaced."
Defendant cites two cases, Helget v. City of Hays,
In Nacco,
Helget and Nacco are thus dissimilar to the facts in this case. There was no allegation until June 2015—more than a year after Vinck had been reassigned a different computer in April 2014—that it was Plaintiff's own employee Vinck who posted the alleged infringing job postings on the FaTJ website. Although Defendant indicates that it first suspected the disputed FaTJ postings were made by Plaintiff in December 2013, Defendant did not raise the issue until June 16, 2015, when its counsel emailed Plaintiff's counsel. There is nothing in this record to support a conclusion that Plaintiff knew or should have known that Vinck's Fall 2013 internet history would be relevant in this case until Plaintiff received the June 16, 2015 letter from Defendant's counsel.
The stated reasons behind the 2015 amendments to Rule 37(e) further support the Court's conclusions in this case. The general intent of amended Rule 37(e) was to address the excessive effort and money being spent on ESI preservation as a result of the continued exponential growth in the volume of ESI, along with the uncertainty caused by significantly differing standards among the federal circuits for imposing sanctions or curative measures on parties who failed to preserve ESI.
In summary, the Court finds that Plaintiff did not have a duty to preserve Vinck's Fall 2013 internet history prior to June of 2015. As a result, the Court rules that Vinck's Fall 2013 internet history was lost before Plaintiff's duty to preserve it arose and, therefore, there was no breach of any duty to preserve under the facts presented in this case. As no duty was breached, the Court need not reach the issue of whether curative measures or sanctions under Rule 37(e) are appropriate.
IT IS SO ORDERED.