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Padgett v. City of Monte Sereno

March 20, 2007

DARLA PADGETT, ET AL., PLAINTIFFS,
v.
CITY OF MONTE SERENO ET AL., DEFENDANTS



The opinion of the court was delivered by: James Ware, United States District Judge.

ORDER GRANTING PLAINTIFFS' MOTION FOR SANCTIONS AND REFERRING DEFENDANTS' MOTION FOR CLARIFICATION TO THE SPECIAL MASTER

I. INTRODUCTION

Plaintiffs Joseph and Darla Padgett ("Plaintiffs") move for terminating sanctions, monetary sanctions, and entry of default judgment against Defendants City of Monte Sereno, Brian Loventhal, Erin Garner, A. Curtis Wright, Mark Brodsky, Barbara Nesbet, David Baxter, and Lisa Rice ("Defendants") based on Defendants' failure to permit discovery pursuant to a Court Order and for spoliation of evidence. The Court conducted a hearing on March 12, 2007. Based on the papers submitted to date and the arguments of the parties at the hearing, the Court reserves its ruling with respect to terminating sanctions or entry of default judgment. However, the Court imposes monetary sanctions for spoliation of evidence.

II. BACKGROUND

The factual allegations of this case may be found in the Court's Order Partially Granting Defendants' Motion to Dismiss Without Prejudice. ( See Docket Item No. 26.) The relevant procedural history to the current motion is as follows:

Plaintiffs initiated the underlying action on September 17, 2004, and filed the Second Amended Complaint on January 9, 2006. (Second Amended Complaint for Violation of Civil Rights (42 U.S.C. § 1983); Violation of California Civil Code § 52.1; Abuse of Process; Civil Extortion; Intentional Infliction of Emotional Distress; Negligent Infliction of Emotional Distress, hereafter, "SAC," Docket Item No. 115.) Among other things, the Second Amended Complaint alleged that certain employees of the City of Monte Sereno sent Plaintiffs an anonymous, threatening letter in March 2004. (SAC ¶¶ 52-54.) Enclosed with the letter was a newspaper article from 1994, downloaded off the Internet, that had reported Mr. Padgett's conviction of a misdemeanor crime. Id. at ¶ 52.

In 2005, City employee Lisa Rice admitted to authoring and sending the threatening letter from her workstation at City Hall. ( See Declaration of Todd H. Master in Opposition to Plaintiffs' Motion for Terminating Sanctions at ¶ 58, Ex. D, Docket No. 296.) Rice indicated that she wrote the letter at her own direction without telling anyone about it. Id. According to Plaintiffs, however, Rice wrote the letter at the direction of other City employees, including City Manager Brian Loventhal. (SAC ¶ 54.) To explore this allegation, Plaintiffs brought a Motion to Compel inspection of the City's computers, printers, and backup tapes. (Notice of Motion and Motion to Compel Further Responses for Production of Documents and to Allow Inspection of Computer Equipment, Docket No. 118.)

On March 20, 2006, Judge Seeborg denied the Motion to Compel on the ground that the burden and expense to the City outweighed the potential benefit of the inspection. (Order re Demand to Inspect Computer Systems at 3, Docket Item No. 201.) On March 27, 2006, Plaintiffs filed a motion for reconsideration before the Court. (Objections and Request for District Court to Reconsider Magistrate Judge's Ruling on Plaintiffs' Demand to Inspect Computer System, Docket Item No. 218.) The Court conducted a hearing on April 14, 2006. At the hearing, the Court specifically ordered counsel to "continue to preserve everything." Counsel for the City asked the Court to permit that the computers in question remain in use and represented that "nothing is being deleted." (Transcript at 49.) On December 28, 2006, the Court ordered the inspection of certain computer workstations, hard drives, and laptop computers used by City employees Rice, Wright, and Loventhal. (Order Granting Plaintiffs' Motion to Allow Inspection of Computer Equipment ¶ 1-2, hereafter "Order," Docket Item No. 280.)

In January 2007, Plaintiffs learned that the City had destroyed Loventhal's laptop hard drive in August 2006. (Reply for Sanctions at 11.) According to Defendants, a City employee with no connection to the current litigation serviced Loventhal's laptop after it had "crashed," and then inadvertently discarded the defective hard drive. (Notice of Motion and Motion for Protective Order re: Computer Inspection/Clarification of December 28, 2006 Order, Declaration of Sue L'Heureux ¶ 4.)

Plaintiffs dispute the City's explanation for replacing and discarding the laptop hard drive, and point to other deficiencies in Defendants' discovery responses as evidence of sanctionable discovery abuse. (Reply for Sanctions at 2-4, 6-8.) In a separate and related motion, Defendants indicate that these perceived "deficiencies" result from the parties' confusion over the manner of discovery under the Order, and request an order of clarification or a protective order. (Notice of Motion and Motion for Protective Order re: Computer Inspection/Clarification of December 28, 2006 Order, hereafter "Motion for Protective Order," Docket Item No. 290.)

Presently before the Court are (1) Plaintiffs' motion for terminating sanctions, monetary sanctions, and entry of default judgment; and (2) Defendants' motion for an order of clarification or a protective order.

III. DISCUSSION

A. Plaintiffs' Motion for Sanctions

Plaintiffs request terminating sanctions, attorneys fees, and entry of default judgment on the ground that (1) Defendants had a duty to preserve the hard drive on Loventhal's computer laptop, (2) Defendants destroyed the hard drive in bad faith, and (3) Plaintiffs' are prejudiced by the spoliation. (Motion at 8-11.) Defendants do not dispute they had a duty to preserve the laptop computer hard drive. (Opposition to Sanctions at 8.) However, Defendants contend that sanctions are not ...


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