MEMORANDUM AND ORDER RE: SPOLIATION ISSUE
MARVIN J. GARBIS, District Judge.
The Court has before it Plaintiffs' Objections to The Magistrate's April 2, 2015 Order Pursuant to Rule 72 and Local Rule 301(5)(A) [ECF No. 543] ("the Objections") and the materials submitted by the parties relating thereto.
I. BACKGROUND
In Plaintiffs' Motion for Sanctions for Defendants' Failure to Produce Discovery [ECF No. 376], Plaintiffs included an allegation that Defendants had failed to make required production of "recent technical documents." Id. at 19.1 In her Order of May 21, 2014 [ECF No. 233] at 4, Magistrate Judge Gauvey required Defendants to produce certain testing data or certify that it was not maintained. In her Order of June 27, 2014 [ECF No. 341], Magistrate Judge Gauvey stated that Defendants' representatives had "certified that the testing data [referred to] is not stored or maintained by Defendants in the ordinary course of business." Id. at 42.
On September 30, 2014, Plaintiffs filed Plaintiffs' Motion for Sanctions [ECF No. 459] seeking sanctions for, among other things, Defendants' having deleted the underlying data from certain testing.
In her January 22, 2015 Order [ECF No. 497], Magistrate Judge Gallagher denied sanctions regarding the failure to produce the testing data in question.
On February 6, 2015, Plaintiffs' Motion for Clarification [ECF No. 507] was filed, seeking to have Magistrate Judge Gallagher "clarify," i.e. reconsider and change, her Order of January 22, 2015 and sanction Defendant Hyundai "for its spoliation of evidence." Id. at 11. Plaintiffs stated:
Here, in light of Hyundai's willfulness and the prejudice to Plaintiffs, an adverse inference instruction is warranted. Alternatively, the jury should be instructed to consider and decide for themselves whether an adverse inference is warranted. At a minimum, the jury should be informed about Hyundai's spoliation. Plaintiffs request that the jury be informed that Hyundai destroyed testing data describing how the accused vehicles operate, and that the jury may infer that this information showed that the accused vehicles infringed the patents in suit.
Id. (footnote omitted).
In her April 2, 2015 Order [ECF No. 539], here at issue, Magistrate Judge Gallagher again denied Plaintiffs' request for sanctions.
She stated:
A party seeking sanctions for spoliation must prove the following three elements:
(1) [T]he party having control over the evidence had an obligation to preserve it when it was destroyed or altered; (2) the destruction or loss was accompanied by a culpable state of mind; and (3) the evidence that was destroyed or altered was relevant to the claims or defenses of the party that sought the discovery of the spoliated evidence, to the extent that a reasonable factfinder could conclude that the lost evidence would have supported the claims or defenses of the party that sought it. Furthermore, "a finding of `relevance' for purposes of spoliation sanctions is a twopronged finding of relevance and prejudice. Spoliation of evidence causes prejudice when, as a result of the spoliation, the party claiming spoliation cannot present evidence essential to its underlying claim."
Id. at 2 (citing Goodman v. Praxair Servs., Inc., 632 F.Supp.2d 494, 509 (D. Md. 2009) (internal quotation marks omitted) and quoting Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497, 532 (D. Md. 2010)).
The Magistrate Judge found that Plaintiffs had not proved that Defendants had a duty to preserve the data at issue because they had not shown that it was relevant. Id. at 3. She further stated: "Plaintiffs have not persuaded the Court that the underlying testing data constitutes relevant evidence to the extent that a reasonable factfinder could conclude it would have supported their infringement claims." Id. at 4. Thus, the Magistrate Judge denied Plaintiffs' request for sanctions.
II. DISCUSSION
By the instant objections, Plaintiffs seek to have the Court "reconsider, modify or set aside" Magistrate Judge Gallagher's April 2, 2015 Order [ECF No. 539] ("the April 2 Order"). Objections at 18. Plaintiffs also seek to have the Court permit them to introduce at trial the evidence of Defendants' alleged spoliation of evidence and then decide whether to give the jury an "adverse inference" instruction. Objections at 1.
A. Rule 72(a) Review of the April 2 Order
The April 2 Order was issued with regard to referred discovery matters. Pursuant to Rule 72(a) of the Federal Rules of Civil Procedure, the Court "must consider timely objections and modify or set aside any part of the [nondispositive] order that is clearly erroneous or is contrary to law." The Court does not find the April 2 Order clearly erroneous or contrary to law.
Magistrate Judge Gallagher based her decision on a correct standard for relevance, i.e., whether "a reasonable factfinder could conclude that the lost evidence would have supported the claims or defenses of the party that sought it." April 2 Order at 2.
Plaintiffs contend that the Magistrate Judge erred when stating, in regard to the standard for prejudice: "Spoliation of evidence causes prejudice when, as a result of the spoliation, the party claiming spoliation cannot present evidence essential to its underlying claim." Id. (quoting from Judge Grimm's decision in Victor Stanley, 269 F.R.D. at 532).
If the foregoing statement is viewed as a prerequisite for a prejudice determination — rather than as an example of prejudice — the Court disagrees with it.
The Court, as stated at argument,2 would not adopt, as a requirement for prejudice, that the evidence at issue was essential to the claims of a party claiming spoliation. Rather, it would consider that the loss of evidence essential to a party's case is an example, but not the only possible example, of prejudice. The Court would consider a loss of evidence to be prejudicial if the party claiming spoliation suffered any material prejudice.
In any event, the Magistrate Judge's bottom line decision was not at all erroneous. The Magistrate Judge found — as did Magistrate Judge Gauvey — that Plaintiffs had not made the requisite showing of relevance. In the absence of relevance, there is no prejudice.
Accordingly, the Court shall not reconsider, modify or set aside the April 2 Order.
B. Admissibility of Evidence
Plaintiffs seek to have the Court allow them to introduce at the jury trial, evidence regarding their claim of spoliation and, after the evidence is presented, determine whether an "adverse inference" instruction is warranted.3
Rule 104 of the Federal Rules of Evidence provides, in relevant part:
(a) The court must decide any preliminary question about whether . . . evidence is admissible.
. . . .
(c) The court must conduct any hearing on a preliminary question so that the jury cannot hear it if: . . . (3) justice so requires.
The Court, finding that justice so required, heard the evidence regarding Plaintiffs' spoliation claims out of the presence of the jury. The Court finds that Plaintiffs presented no persuasive evidence — if it can be said that they presented any evidence at all — to support a claim that the "raw data" deleted by Hyundai could reasonably be considered relevant to the issues presented in the instant case.
There could, of course, be cases in which raw data of the type deleted would be relevant. For example, in the context of a product defect claim. And, presumably, there could be patent litigation in which it would be relevant. But, this is not such a case.
The Court stated to counsel at the commencement of the argument: "I want you to be sure in your arguments to include everything that you want to be considered . . . . So don't leave anything out." Hr'g Tr. 90:25-91:4, July 10, 2015. Plaintiffs' argument, however, presented little — if anything — more than conclusory references to a contention of relevance. The emphasis, indeed essentially the entirety, of Plaintiffs' argument, was based upon the contention that Hyundai wrongfully deleted the raw data and should be punished for so doing, regardless of the absence of a showing of relevance.
THE COURT: Look, I know we're being academic, but what do I tell the jury? Ladies and gentlemen, look it's got nothing to do with the case, because the evidence isn't important, but they did bad things in discovery. Is that where — I know that's not this case, but that seems to be your argument.
MR. GOETZ: Well, that — okay. I'm sorry, Your Honor, maybe I misunderstood you. So that's not this case.
. . . .
MR. GOETZ:
And we think that there has been spoliation of evidence in this case. And we think that a sanction is appropriate. We do think that a sanction — appropriate sanction would be to put this issue in front of the jury. And we can make our arguments about whether it's relevance, and whether an adverse inference is appropriate. And we can let the jury decide. And we do think that's appropriate in this case.
And we think that one of the reasons that that is appropriate is because the culpability of Hyundai in this case is very bad.
Hr'g Tr. 106:25-107:7, 110:15-23, July 10, 2015.
The Court finds that Hyundai was not negligent in deleting the raw data in the ordinary course of business. Hr'g Tr. 96:24-97:21, July 10, 2015. However, the question presented is whether the ordinary course of business should have been changed in light of the litigation. The Court concludes that — in the context of the instant case and the issues presented — it was not wrong to continue to delete the raw data.
Certainly, the Court does not find that Hyundai was "innocent" in the sense that it did everything right in meeting its discovery obligations. Indeed, it appears that Hyundai was subjected to a substantial monetary sanction for discovery failures. Moreover, it is possible that Hyundai should have objected to Plaintiffs' demand for the raw data at issue and obtained a judicial determination prior to making the unilateral decision not to impose a litigation hold after the suit was filed. However, the Court does not agree with Plaintiffs that it is appropriate to punish Hyundai by admitting at trial evidence not shown materially relevant that would serve only to prejudice Hyundai and divert the jury from the issues that they must decide.
Accordingly, Plaintiffs may not introduce evidence of, or refer to, Hyundai's deletion of the raw data at issue.
III. CONCLUSION
For the foregoing reasons, upon consideration of Plaintiffs' Objections to The Magistrate's April 2, 2015 Order Pursuant to Rule 72 and Local Rule 301(5)(A) [ECF No. 543]:
1. The Magistrate's April 2, 2015 Order shall not be reconsidered, modified or set aside.
2. Plaintiffs request to present at trial evidence of Hyundai's deletion of the "raw data" at issue is DENIED.
a. Plaintiffs shall neither present evidence, nor refer to, Hyundai's deletion of the "raw data."
SO ORDERED.
