United States District Court, S.D. Indiana, Indianapolis Division
REPORT AND RECOMMENDATION ON PLAINTIFF'S MOTION FOR SANCTIONS
MARK J. DINSMORE, Magistrate Judge.
This matter comes before the Court on Plaintiff's Motion for Sanctions Against Defendant for the Intentional Destruction of Material Evidence. [Dkt. 237.] For the reasons set forth below, the Court recommends that the motion be DENIED. Also before the Court is Plaintiff's Motion in Limine to Preclude Defendant's Witnesses from Testifying at the Evidentiary Hearing. [Dkt. 288.] The Court DENIES AS MOOT part of this motion and DENIES the remainder of this motion.
Malibu Media, LLC ("Plaintiff") is a California company that owns a registered copyright for the motion picture "Pretty Back Door Baby." [Dkt. 1 ¶¶ 6, 11-12.] On August 14, 2012, Plaintiff filed suit in this Court, alleging that various unidentified defendants had infringed its copyright by using the peer-to-peer file sharing protocol BitTorrent. [ Id. ¶¶ 7, 14, 33-35.] Each Defendant initially was "known to Plaintiff only by an IP address, " i.e., "a number that is assigned by an Internet Service Provider (an ISP') to devices, such as computers, that are connected to the Internet." [ Id. ¶¶ 7-8.]
On August 27, 2012, Plaintiff issued a subpoena to one such ISP-Comcast Corporation ("Comcast")-ordering Comcast to "produce documents identifying the name, address, and telephone number" associated with the IP addresses that Plaintiff had identified as involved in infringement of its copyright. [ See Dkt. 19.] Comcast's response identified Michael Harrison ("Harrison" or "Defendant") as one of the individuals associated with an infringing IP address. [ See Dkt. 59 ¶ 4.] Plaintiff accordingly filed an amended complaint against Harrison and others, alleging direct and contributory copyright infringement. [ See Dkt. 38.]
During discovery, Plaintiff served Interrogatories and Requests for Production on Harrison. [ See Dkt. 237-2 & 237-3.] Plaintiff also deposed Harrison on August 7, 2014. [ See Dkt. 237-1.]
Plaintiff's Interrogatory No. 4 asked Defendant to identify "each of the Computer Devices used in [Defendant's] home during the preceding two years." [Dkt. 237-2 ¶ 4.] Defendant responded that he had two devices: an Acer 5730 laptop and a custom-built gaming computer. [ Id. ] Interrogatory No. 5 asked Defendant to identify the wireless routers used in his home and to describe whether and how they were password protected. [237-2. ¶ 5.] Defendant responded that he used a Netgear wgr614 v9 router, and that he had "changed the password for it in October " when he received a letter from Comcast. [ Id. ]
At his deposition, Defendant testified about the letter. He said that the document notified him that Plaintiff had issued a subpoena to Comcast in connection with a lawsuit. [Harrison Dep. 15:21-23, Aug. 7, 2014.] Based on the letter, he "knew the lawsuit was pending, " but "didn't know it was a lawsuit directly against [him] at the time." [Harrison Dep. 16:1-4.] He "thought it was just [Plaintiff] looking for information through Comcast." [Harrison Dep. 16:5-6.]
Plaintiff's Request for Production No. 1 asked for a "complete copy of the hard drive for each of the Computer Devices in [Defendant's] house, apartment or dwelling." [Dkt. 237-4 ¶ 1.] Defendant responded that Plaintiff "was provided a complete copy of the hard drive for each of [his] computer devices on July 25, 2013." [237-4 ¶ 1.] At his deposition, Defendant testified about the drive that he had provided from his gaming computer. He stated that the hard drives in his computers "get used pretty hard and die pretty quickly, " such that he "replaced hard drives a lot in all of [his] computers." [Harrison Dep. 17:9-11.] In January 2013, for instance, the hard drive in Defendant's gaming computer "had begun crashing, " and "it needed to be replaced." [Harrison Dep. 15:12-14.] Thus, Defendant replaced the drive shortly thereafter. [Harrison Dep. 15:3-10.]
A replacement hard drive for the "crashing" drive was shipped to Defendant in January 2013, but its purchase was billed to a different individual-John Harlan. [Harrison Dep. 14:15-18; see also Dkt 237-7.] Harrison stated that Harlan "owed [him] a little bit of money" and that purchasing the hard drive "seemed an easy way for him" to pay Harrison back. [Harrison Dep. 14:19-22.] After receiving the new drive, Defendant said it "went into [his] gaming computer." [Harrison Dep. 14:24.]
Plaintiff asked what happened to the previous hard drive, and Defendant stated that he "got rid of it" by taking the drive to his former employer, GGI Recycling LLC. [Harrison Dep. 15:17-19.] He said he "was taking some other electronic scrap" to GGI to be recycled, and "just tossed [the previous hard drive] in the piles [GGI] had." [Harrison Dep. 16:10-11.] Defendant then explained that GGI "melt[s]" the electrical scrap it receives, and "sell[s] it to refineries and stuff like that." [Harrison Dep. 16:13-15.] It was thus his belief that "GGI recycled the hard drive." [Harrison Dep. 16:16-18.]
After Defendant's deposition, Plaintiff filed its current Motion for Sanctions Against Defendant for the Intentional Destruction of Material Evidence. [Dkt. 237.] Plaintiff contends that Defendant received notice of this lawsuit in October 2012 through the letter from Comcast, [ id. at 2], and that the hard drive that Defendant replaced in early 2013 could have "contained evidence of Plaintiff's copyrighted works." [ Id. at 8.] Thus, Plaintiff argues that Defendant's recycling of the hard drive violated Plaintiff's duty to preserve evidence relevant to this litigation. [ Id. at 6.] Plaintiff also contends that Defendant tried to conceal his alleged wrongdoing: Plaintiff notes that its Requests for Production instructed Defendant to disclose the existence of and circumstances surrounding the destruction of any hard drives that Defendant had used but that Defendant no longer had in his possession. [ Id. at 4; see also 237-3 at 5.] Defendant, however, allegedly did not reveal the existence of the hard drive he replaced in early 2013 until his August 2014 deposition, several months after he responded to Plaintiff's requests for production. [Dkt. 237 at 4-5.]
Based on these allegations, Plaintiff asks the Court to enter default judgment against Defendant, [ id. at 7], or "at minimum, " issue "an adverse inference instruction requiring the jury to infer that Plaintiff would have found its copyrighted movies on the destroyed drive." [ Id. at 10.] The Court referred Plaintiff's motion to the Magistrate Judge for proposed findings and recommendations, [Dkt. 263], and the Court set an evidentiary hearing for December 18, 2014. [Dkt. 261.]
Before the hearing, Plaintiff filed its Motion in Limine to Preclude Defendant's Witnesses from Testifying at the Evidentiary Hearing. [Dkt. 288.] Plaintiff sought to exclude Jason Bosaw, Delvan Neville, Eric Goldsmith, Rhonda Arnold, and John Harlan from testifying at the hearing. [ Id. at 1.] The Court took that motion under advisement and conducted the hearing on December 18, 2014.
Plaintiff in this case seeks imposition of sanctions for spoliation of evidence resulting from the destruction of Defendant's hard drive. [Dkt. 237 at 1.] The Seventh Circuit notes that "courts have found a spoliation sanction to be proper only where a party has a duty to preserve evidence because it knew, or should have known, that litigation was imminent." Trask-Morton v. Motel 6 Operating L.P., 534 F.3d 672, 681 (7th Cir. 2008); see also Norman-Nunnery v. Madison Area Technical Coll., 625 F.3d 422, 429 (7th Cir. 2010) (observing that plaintiff "fail[ed] every element of the test for the spoliation inference" where evidence was destroyed "before [defendant] knew or should have known that litigation was imminent").
Furthermore, a showing of "bad faith" is "a prerequisite to imposing sanctions for the destruction of evidence." Trask-Morton, 534 F.3d at 681. "[B]ad faith' means destruction for the purpose of hiding adverse information." Mathis v. John Morden Buick, Inc., 136 F.3d 1153, 1155 (7th Cir. 1998); see also Bracey v. Grondin, 712 F.3d 1012, 1019 (7th Cir. 2013), reh'g denied (May 1, 2013), cert. denied, 134 S.Ct. 900 (2014) (citation omitted) ("A party destroys a document in bad faith when it does so for the purpose of hiding adverse information."). Sanctions for spoliation therefore may not be imposed simply because evidence was destroyed; instead, such sanctions are appropriate only if the evidence was destroyed for the purpose of hiding adverse information. See, e.g., Park v. City of Chicago, 297 F.3d 606, 615 (7th Cir. 2002) (citation omitted) ("[T]he crucial element is not that evidence was destroyed but rather the reason for the destruction."). The movant bears the burden to make this showing. Bracey, 712 F.3d at 1019.
Based on this standard, Plaintiff must establish 1) that Defendant had a duty to preserve evidence because he knew or should have known that litigation was imminent; and 2) that while under this duty, Defendant ...