Resolute Forest Products, Inc. et al v. Greenpeace International et al

Filing 486

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS MOTION FOR SANCTIONS; GRANTING IN PART AND DENYING IN PART DEFENDANTS MOTION FOR SANCTIONS Re: Dkt. Nos. 459 , 461 . Signed by Judge Kandis A. Westmore on November 2, 2022. Motions due by 12/1/2022. (dts, COURT STAFF) (Filed on 11/2/2022)

Case 4:17-cv-02824-JST Document 486 Filed 11/02/22 Page 1 of 31

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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RESOLUTE FOREST PRODUCTS, INC.,
et al.,
Plaintiffs,

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v.
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GREENPEACE INTERNATIONAL, et al.,

Case No. 17-cv-02824-JST (KAW)
ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFFS’
MOTION FOR SANCTIONS;
GRANTING IN PART AND DENYING
IN PART DEFENDANTS’ MOTION
FOR SANCTIONS

United States District Court
Northern District of California

Defendants.
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Re: Dkt. Nos. 459, 461

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Plaintiffs Resolute Forest Products, Inc., Resolute FP US, Inc., Resolute FP Augusta, LLC,
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Fibrek General Partnership, Fibrek U.S., Inc., Fibrek International, Inc., and Resolute FB Canada,
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Inc. (collectively, “Resolute”) filed the instant action against Defendants Greenpeace

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International, Greenpeace, Inc., Greenpeace Fund, Inc., Daniel Brindis, Amy Moas, Matthew
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Daggett, and Rolf Skar (collectively, “Greenpeace”). (First Am. Compl. (“FAC”) at 1, Dkt. No.
185.) Resolute brings defamation claims based on Defendants’ December 2016 and May 2017
statements that Resolute was operating in the Montagnes Blanches (“Challenged Statements”).
Pending before the Court are: (1) Resolute’s motion for sanctions, and (2) Greenpeace’s motion

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for sanctions. (Resolute Mot. for Sanctions, Dkt. No. 461; Greenpeace Mot. for Sanctions, Dkt.
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No. 459.)
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Having considered the parties’ filings, the relevant legal authority, and the arguments made
at the October 20, 2022 hearing, the Court GRANTS IN PART AND DENIES Resolute’s motion
for sanctions, and GRANTS IN PART AND DENIES IN PART Greenpeace’s motion for

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sanctions.
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I.

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Resolute is comprised of corporate entities in the forest products industry, which harvest

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wood for the manufacture and sale of paper products. (FAC ¶¶ 24-30.) Greenpeace is comprised

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of non-profit environmental advocacy and several of their employees. (FAC ¶¶ 31-33, 36-39.)

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Resolute alleges that in December 2012, non-party Greenpeace Canada released a false report

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about Resolute’s purported failure to comply with the Canadian Boreal Forest Agreement

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(“CBFA”). (FAC ¶¶ 89, 225.) Resolute alleges that this was part of a Greenpeace campaign to

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target Resolute with misrepresentations regarding their sustainability practices in Canada. (See

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FAC ¶¶ 5-7.) Plaintiffs subsequently filed suit against Greenpeace Canada (“Greenpeace Canada

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Action”). (Tabaksblat Decl., Exh. 11 (“Resolute Litig. Hold”), Dkt. No. 459-1.)
On May 21, 2015, Resolute sent Greenpeace USA1 a cease and desist letter, complaining

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United States District Court
Northern District of California

BACKGROUND

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of statements made by Defendant Brindis that Resolute was destroying Canada’s boreal forest and

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negatively affecting caribou, and that Resolute’s Forest Stewardship Council (“FSC”) certificate

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had been suspended. (Tabaksblat Decl., Exh. 5.) On May 31, 2016, Resolute filed the instant

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action. (Dkt. No. 1.) That same day, Quebec’s Minister of Forests, Wildlife, and Parks issued a

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statement that a map used by Greenpeace Canada to demonstrate that Resolute was operating in

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the Montagnes Blanches was misleading. (FAC ¶¶ 212, 217.) Greenpeace subsequently issued

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the Challenged Statements; specifically, in December 2016, Defendant Moas wrote a letter to

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Resolute’s customers, claiming that Resolute was operating in the Montagnes Blanches. (FAC ¶

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304.) In May 2017, Defendant Greenpeace, Inc. published a report titled “Clearcutting Free

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Speech,” which again stated that Resolute was logging in the Montagnes Blanches. (FAC ¶¶ 308-

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09.)
A highly contentious discovery process followed, culminating in the instant competing

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motions for sanctions. Both parties assert significant discovery failures warranting a multitude of

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sanctions, as described below.

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Resolute has alleged that non-party Greenpeace Fund and Defendant Greenpeace, Inc. constitute
an entity called “Greenpeace USA.” (See Dismissal Order at 14, Dkt. No. 246.) The presiding
judge has found that “‘Greenpeace USA’ is purely a creature of Resolute’s nomenclature.” (Id.)
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Northern District of California

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Resolute’s Motion for Sanctions

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A.

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On March 15, 2022,2 Resolute filed its motion for sanctions, asserting that Greenpeace had

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destroyed Skype messages, including those between May 31, 2016 (the date of the Quebec

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minister’s statement regarding the Montagnes Blanches map) and December 16, 2016 (the date of

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Defendant Moas’s letter). (Resolute Mot. for Sanctions at 3.)

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On June 9, 2015, after receipt of the cease and desist letter, Greenpeace’s counsel

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circulated a litigation hold to Defendants Skar, Brindis, and Daggett; the litigation hold was also

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forwarded to Defendant Moas. (Dkt. No. 461-7 at 3.) On June 8, 2016, after the filing of the

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instant action, Greenpeace’s counsel sent a litigation hold, requiring staff to preserve any data that

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may relate to the lawsuit, including all “electronic records.” (Id. at 2-3.) On January 22, 2019, the

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presiding judge dismissed all claims except for Resolute’s defamation claim based on the

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Challenged Statements, specifically noting that Resolute had adequately alleged that Defendants

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knew of the Quebec Minister’s public statement at the time they made or distributed the

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Challenged Statements. (Dismissal Order at 19.)
Greenpeace witnesses have stated that they communicated extensively through Skype.

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(E.g., Brindis Depo. at 331:10-12, Dkt. No. 461-16.) Most Greenpeace witnesses also testified

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that they made sure not to delete any of their Skype chats. (E.g., Moas Depo. at 314:3-19, Dkt.

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No. 460-9; Daggett Depo. at 16:10-15, Dkt. No. 460-11.) Defendant Brindis, however, testified

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that he realized “at a certain moment” after the lawsuit was filed that he had an auto-delete setting

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on his personal Skype account, resulting in messages being saved for only a few days or weeks.

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(Brindis Depo. at 330:16-331:5, Dkt. No. 460-12.) Once he realized it, he changed the setting to

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make sure they were being maintained. (Id. at 330:18-20.) At the hearing, Greenpeace stated that

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it was not sure when this occurred, but assumes it was around December 2017 based on Defendant

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Brindis’s available Skype data.
On September 18, 2020, Greenpeace produced Skype messages for four custodians:

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Resolute’s motion for sanctions was originally filed on March 15, 2022, and Greenpeace’s
motion for sanctions was originally filed on May 20, 2022. (Dkt. Nos. 435, 455.) On May 24,
2022, the Court ordered the parties to file revised motions and briefs, noting the excessive exhibits
and lack of pincites. (Dkt. No. 457.)
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Defendants Moas, Skar, Brindis, and Daggett. (Tabaksblat Decl. ¶ 8.) This production consisted

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of over 9,600 Skype messages during the period between December 20, 2016 and December 21,

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2017. (Tabaksblat Decl. ¶ 8.) For these custodians, Skype data from the Cloud was only available

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from April 20, 2017 on. (See Greenpeace Opp’n at 4-5.) It appears that in 2016 and 2017,

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Microsoft migrated Skype from a peer-to-peer system to a centralized system, impacting where

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data was stored. (Williams Decl. ¶ 36(c), Dkt. No. 460-1.) Skype has a published statement on its

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website that messages will not be available if they are “dated back to April 2017.” (Williams

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Decl. ¶ 37.) It is not apparent that Microsoft warned of the loss or provided notice of the loss prior

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to August 2020. (Williams Decl. ¶¶ 37, 42.) Older messages were retrieved from laptops and

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United States District Court
Northern District of California

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phones. (See Greenpeace Opp’n at 4-5.)
Following the September 18, 2020 production, the parties subsequently agreed to an

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attorney-supervised call between the parties’ forensic technology experts to discuss the issue of

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the lost Skype data. (Tabaksblat Decl. ¶ 9.) Greenpeace’s counsel also responded to a list of

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written questions on February 4, 2021. (Tabaksblat Decl. ¶ 9, Exh. 6.) Thereafter, Greenpeace’s

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counsel did not respond to follow-up questions and stated they would not participate in the call

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between the experts. (Tabaksblat Decl. ¶ 10.) Greenpeace’s counsel instead stated that if

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Resolute wanted additional information, they would need to pursue it through formal discovery.

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(Tabaksblat Decl. ¶ 10.)

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Resolute subsequently subpoenaed Microsoft for the Skype data. (Tabaksblat Decl. ¶ 13.)

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Greenpeace worked with nine custodians to execute consent forms to allow Microsoft to disclose

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the custodians’ Skype data. (Koonce Decl. ¶ 19, Dkt. No. 460-7.) On March 1, 2021, Microsoft

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stated that the consent forms had been altered, and would need to be resubmitted “without any

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changes to them other than filling them out and signing.” (Tabaksblat Decl., Exh. 11.) Microsoft

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also stated that no data had been preserved as to: (1) matt.daggett, (2) gaia21 st2005, (3) GP

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Amplification Skype group, (4) Boreal Forest Skype Group, (5) CORE TEAM Skype group, (6)

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NRO Skype group, (7) https://join.skype/com/HFJifxA6nz6P, (8)

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https://join.skype.com/mBIWvm7sjP8b, and (9) live.jhpape. (Id.) Resolute made no further

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attempts to subpoena the data from Microsoft. (Koonce Decl. ¶ 20.)
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In summary, the following Skype production has been made (or not made) for Defendants
Brindis, Moas, Skar, and Daggett as custodians:

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United States District Court
Northern District of California

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Custodian
Daniel Brindis
Matthew Daggett
Amy Moas
Rolf Skar

Production Period
1/3/2017 – 11/6/2020
4/20/2017 – 1/31/2020
12/19/2016 – 3/5/2021
9/23/2016 – 3/4/2021

Missing Messages Period
5/31/2016 – 1/3/2017
5/31/2016 – 4/20/2017
5/31/2016 – 12/19/2016
5/31/2016 – 9/23/2016

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(Resolute Reply at 6, Dkt. No. 462; Greenpeace Opp’n at 4-5.) In addition to the above Skype

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production, Greenpeace has produced from other custodians 61 Skype conversations

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(approximately 2,852 pages) from between May 31, 2016 and December 2016, as well as 74

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Skype chats from December 2016. (Koonce Decl. ¶¶ 10-11.) This production included chats with

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Defendants Brindis, Moas, Skar, and Daggett. (Koonce Decl. ¶ 11.)
Greenpeace’s Motion for Sanctions

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B.

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Greenpeace, in turn, has filed a motion for sanctions, asserting that Resolute violated the

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Court’s January 20, 2021 order requiring Resolute to respond to Greenpeace’s damages

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interrogatories. (Greenpeace Mot. for Sanctions at 3-4.) Greenpeace also asserts that Resolute has

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failed to adequately preserve and search for evidence, causing spoliation and the tardy production

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of over 14,000 documents (out of 25,000). (Id. at 13-14.)

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i.

Damages Interrogatories

On September 5, 2019, Greenpeace served Resolute with interrogatories seeking the bases

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for Resolute’s damages claims. (Second Koonce Decl. ¶ 2, Dkt. No. 459-1.) On December 2,

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2020, the parties filed a joint discovery letter to compel Resolute’s response to certain

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interrogatories. Specifically, Interrogatory No. 7 required that Resolute state: (1) all facts showing

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that its reputation had been damaged, (2) a full description of each item or element of damage, (3)

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the amount of each element of damage, (4) how each element of damage was calculated, and (5) a

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description of the source of each calculation of each element of damage. (See Discovery Order at

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1, Dkt. No. 381.) Interrogatory No. 13 required Resolute to identify how its market share

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compared to the market share of their competitors from January 2015 to the present. (Id. at 3-4.)

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Finally, Interrogatory No. 14 required Resolute to identify every asset whose value had diminished
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due to Greenpeace’s conduct. (Id. at 4.) In each instance, Resolute asserted that the

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interrogatories sought premature expert discovery. (Id. at 1, 4.)

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Northern District of California

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On January 20, 2021, the Court found that Resolute’s responses were not adequate. As to

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Interrogatory No. 7, the Court found that Resolute had failed to explain why it could not, for

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example, describe each item of damage or explain how the actionable statements damaged it.

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(Discovery Order at 2.) While the Court acknowledged that damages could be difficult to

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calculate, this did not mean Resolute could avoid identifying and explaining the information it did

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possess. (Id.) Accordingly, the Court ordered Resolute “to respond to Interrogatory No. 7 in full,

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except that Plaintiffs need only identify material facts, rather than all facts. While specific

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calculations of damages may require expert reports, Plaintiffs must still identify and provide the

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underlying information.” (Id. at 3.) The Court also ordered Resolute to provide all information

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needed to substantiate its claim that it lost market share because of the Challenged Statements

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(Interrogatory No. 13), and to identify each asset that diminished in value due to Greenpeace’s

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conduct (Interrogatory No. 14). (Id. at 4.)

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In compliance with the Court’s order, on February 20, 2021, Resolute served its

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supplemental responses to Interrogatory Nos. 7, 13, and 14. (Second Koonce Decl., Exh. 1 (“Feb.

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20, 2021 Interrogatory Resp.”), Dkt. No. 459-2.) In February 2022, Greenpeace sent letters

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seeking clarification regarding damages; for example, Greenpeace noted that Resolute had

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identified lost volumes of sale from UPM, Burrows, Fibermark, Finch Paper, P&G, Clearwater,

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Kimberly Clark, and West Linn, but that no documents had been produced showing that these

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companies received the Challenged Statements or otherwise altered their purchases from Resolute

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as a result. (Second Koonce Decl., Exh. 3.) Greenpeace thus asked Resolute to confirm if they

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did not intend to base their damages claims on their relationships with these customers, and to

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confirm that they did not intend to base their damages claims on relationships with any other

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customers other than those identified in the interrogatory responses. (Id.) On March 1 and 9,

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2022, Greenpeace followed up on this issue, but received no response. (Second Koonce Decl.,

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Exhs. 4, 5.)

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On April 19, 2022, less than three weeks before the fact discovery cut-off, Resolute served
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a new response to Interrogatory Nos. 7, 13, and 14. (Second Koonce Decl., Exh. 8 (“Apr. 19,

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2022 Interrogatory Resp.”); see also Dkt. Nos. 447, 450.) The April 19, 2022 responses included

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the following new information:

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February 20, 2021 Response

Additional Information in April 19, 2022
Response
Interrogatory No. 7 (Facts re Damages)
Lost profits of approximately $40 million
Lost profits from book publishers and end
between April 2014 and December 2017,
users declining to do business with Resolute or
including increased costs and/or lost
declining to purchase from the area defined by
profitability in customer relationships resulting Greenpeace as the Montagnes Blanches,
from the modification or purchasing habits
resulting in higher cost wood fiber and
and/or requirements. Lost sales from UPM,
bleaching costs. Other book publishers
Burrows, Fibermark, Finch Paper, P&G,
declined to expand business or print more
Clearwater, Kimberly Clark, and West Linn.
prominent authors on Resolute’s paper. Some
pulp customers terminated their relationship
with Resolute or declined to do business.
Mitigation costs from addressing customer
No additional information
inquiries regarding the Challenged Statements,
fees and costs from the retention of public
relations and marketing firms, and legal fees
and costs associated with evaluating claims
arising from the Challenged Statements.
Diversion of employee resources to respond
No additional information
to customer inquiries and prepare responses to
the Challenged Statements. The resources
could otherwise have been spent on pursuing
new customers and business, focusing on
strategic business opportunities, and
maintaining and servicing other existing
customers.
Lost opportunities from decrease in paper
demand, requiring Resolute to offline paper
machines in Calhoun and continue to idle
paper machines in Alma. Other paper
competitors did not have any substantial
papermill closures during this time.
Additionally, Resolute did not pursue certain
strategic acquisitions due to an inability to
obtain financing or shareholder buy-in or
because of concern that the acquisitions would
subject Resolute to additional exposure to
Greenpeace’s claims about Resolute’s
activities in the Canadian Boreal Forest.
Impaired investments in the Alma,
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Kenogami, Dolbeau, and St. Felicien mills; in
2015, the projected EBITDA was $800
million, but Resolute’s EBITDA during the
relevant period did not exceed $500 million.
Restrictions on debt capacity and sales of
shares, resulting in the Resolute Board
cautioning management not to take on
additional debt to finance capital projects or
other investments in 2016/2017. Resolute
encountered issues obtaining financing due to
concerns about the Challenged Statements.
Interrogatory No. 13 (Market Share)
Identified documents reflecting indicators of
Resolute required to offline paper machines in
Resolute’s market share.
Alma and close machines in Calhoun, while
competitors did not close paper mills for
substantial periods of time during this period.
Interrogatory No. 14 (Diminished Assets)
Human capital, goodwill, accounts receivable, Loss of market shares, declined enterprise
customer contracts and business relationships, value, depressed share price and shareholder
FSC certifications and credits, supply
equity, foregone profits, and the offlining of
guarantees, wood processing plants and mills, paper machines.
raw materials for wood and paper products,
inventory of wood and paper products.

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(Feb. 20, 2021 Interrogatory Resp.; Apr. 19, 2022 Interrogatory Resp.3)
Resolute asserts that this response merely “expounded on the information provided in prior

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responses based on new information learned through the course of ongoing discovery and

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Plaintiffs’ extensive work with experts during the intervening year.” (Second Tabaksblat Decl. ¶

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25, Dkt. No. 469-1.) Resolute also states it made a corresponding document production in March

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2022. (Second Tabaksblat Decl. ¶ 25.) Greenpeace, in turn, asserts that Resolute made a

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document production of several dozen additional documents that appeared related to the new

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damages claims a few days after sending the April 2022 interrogatory responses. (Second Koonce

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Decl. ¶ 18.)
On April 28, 2022, Resolute’s Rule 30(b)(6) representative on damages, Richard Garneau,

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was deposed. (Second Koonce Decl. ¶ 20.) When asked what book publisher customer-related

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It appears other new information regarding damages were added in response to interrogatories
not at issue in the Court’s January 20, 2021 discovery order. (See Apr. 19, 2022 Interrogatory
Resp. at 17-22.)
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damages Resolute had suffered because of the Challenged Statements, Mr. Garneau repeatedly

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stated that these facts would be addressed by the damages expert, and that: “my understanding is

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that the discovery is still going on and that we’re going to, at some point, have all the facts . . . .”

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(Garneau Depo. at 148:3-149:25, Dkt. No. 459-11.)

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Northern District of California

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Additionally, on September 12, 2022, Resolute moved to extend various deadlines because

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its damages expert had “requested and reviewed several hundred documents that were not . . .

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produced to Defendants.” (Dkt. No. 475 at 2-3.) Greenpeace opposed on the ground that Resolute

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was essentially asking for additional time “to collect and produce more documents that already

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should have been produced in fact discovery.” (Dkt. No. 476 at 2-3.) On September 16, 2022, the

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presiding judge denied Resolute’s motion in a text-only entry. (Dkt. No. 477.) On September 21,

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2022, in a written order expanding on the prior denial, the presiding judge observed that

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Resolute’s damages “expert has now uncovered hundreds of new documents ‘concerning damages

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theories that were previously disclosed to defendants and explored during fact discovery,’ a

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description that suggests these documents should have been produced during fact discovery.”

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(Dkt. No. 478 at 2.)

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ii.

Document Production
a. Litigation Hold

Greenpeace asserts that Resolute failed to institute a litigation hold in this case, resulting in

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the failure to preserve evidence. Specifically, in April 2014, Plaintiffs issued a “Litigation Hold

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and Document Preservation Notice” (“Resolute Litigation Hold”), requiring that recipients

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preserve all actions related to the Greenpeace Canada Action. (Second Koonce Decl., Exh. 11

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(“Resolute Litigation Hold”).) The Resolute Litigation Hold stated that the Greenpeace Canada

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Action alleged that “the Defendants made false and defamatory statements about Resolute and that

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the Defendants are threatening and intimidating Resolute’s customers.” (Id.) The Resolute

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Litigation Hold required the retention of records, which “were likely prepared or generated in the

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period between 2009 to present and may relate to” allegations regarding Resolute harvesting in the

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Broadback Valley Forest, Resolute’s pensions, Resolute’s Align family of paper products,

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Resolute’s use of recycled content in its products, Greenpeace Canada’s December 2012
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publications, and Greenpeace’s communications with Resolute’s customers, stakeholders, and

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investors. (Id. at 2.) The Resolute Litigation Hold was ultimately circulated among 56 Resolute

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employees. (Vachon Decl. ¶ 13, Dkt. No. 469-25.) Resolute’s legal department also circulated

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quarterly litigation hold update e-mails to employees subject to the litigation hold, and received

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audit committee reports. (Vachon Decl. ¶ 14.) Questionnaires were also distributed to employees;

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the questionnaire listed categories of documents that should be preserved, including “[d]ocuments

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regarding the Montagne Blanches region and Greenpeace’s false allegation that Resolute built

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logging roads in violation of the Canadian Boreal Forest Agreement (CBFA).” (Vachon Decl. ¶ 7,

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Exh. 1.)

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Northern District of California

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Although it appears no litigation hold was issued specific to the instant action, custodians

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in this action testified that they understood the Resolute Litigation Hold extended to records

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concerning all of Greenpeace’s statements, not just those in the Greenpeace Canada Action. (See

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Romeo Depo. at 105:1-2, Dkt. No. 469-13 (explaining that he preserved all documents that

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referred to Greenpeace), Goulding Depo. at 329:22-24, Dkt. No. 469-20 (explaining that if it

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mentioned Greenpeace, he would not delete it).) Additionally, Resolute backed up all e-mail

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account data at the end of the year. (Papps Decl. ¶ 13, Dkt. No. 46-29.) Individuals were also

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given more e-mail storage or overflow e-mail folders (the “Archives”) to store e-mail

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communications that needed to be preserved. (Papps Decl. ¶ 6.) Several custodians, including

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Seth Kursman, Kevin Goulding, and Carolyn Pinto, had documents stored on the Archives.

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(Papps Decl. ¶ 12.)

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b. Document Production
Greenpeace also asserts that Resolute failed to adequately identify, collect, search, and

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produce documents, resulting in spoliation. Greenpeace served their initial discovery requests in

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September 2019. (Second Tabaksblat Decl. ¶ 2.) Resolute then requested Greenpeace’s input on

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e-discovery metrics such as search terms and proposed custodians, but Greenpeace did not

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respond. (Second Tabaksblat Decl. ¶¶ 2, 5.) Accordingly, Resolute identified five custodians,

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including Richard Garneau (CEO), Yves Laflamme (successor President and CEO), Seth Kursman

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(Vice President, Communications, Sustainability & Government Affairs with responsibility for
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customer communications), John Lafave (Senior Vice President, Pulp and Paper Sales and

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Marketing), Marc Bedard (Vice President, Forestry), and Francois Dumoulin (predecessor Vice

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President, Forestry). (Second Tabaksblat Decl. ¶ 8.) Resolute asserts it advised collecting

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documents from the supervisor of each relevant department because it was Resolute’s business

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practice to copy or forward all substantive communications to the department supervisor.

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(Resolute Opp’n at 6.) Between January 31, 2020 and December 31, 2020, Resolute

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“substantially completed” the production of these custodians’ responsive documents, as well as all

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documents produced by Resolute in the Greenpeace Canada Action. (Second Tabaksblat Decl. ¶¶

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10-11.) This amounted to approximately 10,564 documents. (Second Koonce Decl. ¶ 60.) Of

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these, approximately 1,000 documents lack custodian metadata, 700 lack date metadata, and half

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lack hash value metadata. (Second Koonce Decl. ¶ 60.) Greenpeace states that Resolute

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represented that they completed their document production in December 2020. (Second Koonce

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Decl. ¶ 64.)

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In August 2021, Greenpeace asserts it first became aware of “holes” in Resolute’s

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discovery during the deposition of Mr. Goulding, during which Mr. Goulding identified several

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categories of documents that had not been produced. (Second Koonce Decl. ¶ 27.) On September

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9 and 13, 2021, Greenpeace’s counsel inquired about documents that appeared missing, including

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documents related to damages and mill closures. (Second Koonce Decl., Exhs. 12, 13.) On

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October 7, 2021, Resolute produced 1,200 documents. (Second Koonce Decl. ¶ 30.) On October

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8, 2021, Greenpeace for the first time inquired about the search metrics Resolute used to collect

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and produce documents. (Second Koonce Decl. ¶ 31; Second Tabaksblat Decl. ¶ 15.) Resolute, in

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response, informed Greenpeace that it had searched the documents of the six custodians, out of

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sixteen witnesses originally identified by Resolute as having relevant knowledge. (Second

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Koonce Decl. ¶ 32.)

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Between October 2021 and January 2022, Resolute collected and produced documents for

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the additional custodians requested by Greenpeace. (Second Tabaksblat Decl. ¶ 19.) Greenpeace

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asserts that “these productions often came mere days before depositions.” (Second Koonce Decl.

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¶ 32.) The parties would adjourn the depositions to give Greenpeace additional time to review the
11

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1

production. (Second Tabaksblat Decl. ¶ 22.) On February 10, 2022, Resolute also disclosed that

2

it had not searched the Archives, which totaled nearly 4,000 documents. (Second Koonce Decl. ¶

3

43.) Resolute asserts that the Archives were compromised almost entirely of duplicates of

4

previously produced documents but from different custodian inboxes. (Second Tabaksblat Decl. ¶

5

21.) In total, approximately 14,362 additional documents were produced between October 2021

6

and February 2022. (Second Koonce Decl. ¶ 62; see also Second Tabaksblat Decl. ¶ 22.)

United States District Court
Northern District of California

7

Greenpeace also asserts that during depositions, individuals testified as to the existence of

8

documents that were not produced or, in some instances, not searched. For example, Mr.

9

Goulding, the direct supervisor of the salespeople who interacted with publishing customers that

10

allegedly received the Challenged Statements, testified that he used texts for “[t]ypically short

11

messages that have some urgency for you to issue the text,” but that he was never asked to

12

produce any text messages related to Greenpeace. (Second Koonce Decl. ¶ 44; Goulding Depo. at

13

326:23-327:7, 331:2-7, Dkt. No. 459-18.) Mr. Romeo testified that he texted with other

14

employees and customers, but that he had no ability to go back and look at his texts. (Romeo

15

Depo. at 107:12-18, 109:13-110:2, Dkt. No. 459-19.) Mr. Romeo also testified that he would take

16

handwritten notes from meetings with customers, but that he was never asked to produce them.

17

(Romeo Depo. at 99:23-100:8.) Mr. Kursman, Vice President, Communications, Sustainability &

18

Government Affairs, testified that he sent “tens of thousands” of e-mails, while Resolute states

19

that Mr. Kursman was the custodian or duplicate custodian of more than 3,700 documents.

20

(Kursman Depo. at 147:15-16, Dkt. No. 459-22; Blair Decl. ¶ 20, Dkt. No. 469-30.)
II.

21

LEGAL STANDARD

22

A.

Rule 37(e)

23

Federal Rule of Civil Procedure 37(e) concerns the failure to preserve electronically stored

24

information (“ESI”). “Rule 37(e) sets forth three criteria to determine whether spoliation of ESI

25

has occurred: (1) the ESI ‘should have been preserved in the anticipation or conduct of litigation’;

26

(2) the ESI ‘is lost because a party failed to take reasonable steps to preserve it’; and (3) ‘[the ESI]

27

cannot be restored or replaced through additional discovery.’” Porter v. City & Cty. of S.F., No.

28

16-cv-03771-CW (DMR), 2018 U.S. Dist. LEXIS 151349, at *6-7 (N.D. Cal. Sep. 5, 2018)
12

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1

(quoting Fed. R. Civ. P. 37(e)). If these criteria are satisfied and there is “prejudice to another

2

party from loss of the information,” the court “may order measures no greater than necessary to

3

cure the prejudice.” Fed. R. Civ. P. 37(e)(1).

4

If, however, the court finds that “the party acted with the intent to deprive another party of

5

the information’s use in the litigation,” the court may impose more severe sanctions, including an

6

adverse inference jury instruction or terminating sanctions. Fed. R. Civ. P. 37(e)(2). “Unlike Rule

7

37(e)(1), there is no requirement that the court find prejudice to the non-spoliating party under

8

Rule 37(e)(2).” Porter, 2018 U.S. Dist. LEXIS 151349, at *7. Intent, in turn, requires more than

9

“[n]egligent or even grossly negligent behavior.” Fed. R. Civ. P. 37 advisory committee’s note

10

(2015). Rather, “courts have found that a party’s conduct satisfies Rule 37(e)(2)’s intent

11

requirement when the evidence shows or it is reasonable to infer, that a party purposefully

12

destroyed evidence to avoid its litigation obligations.” Porter, 2018 U.S. Dist. LEXIS 151349, at

13

*8.

14

B.

Rule 37(b)

15

Rule 37(b)(2)(A) concerns the impositions for sanctions for failure to comply with “an

16

order to provide or permit discovery.” Sanctions may include evidentiary sanctions, adverse jury

17

instructions, or terminating sanctions. A district court “has great latitude in imposing sanctions for

18

discovery abuse.” Dahl v. City of Huntington Beach, 84 F.3d 363, 367 (9th Cir. 1996). Any such

19

sanction, however, must be “just” in light of the particular circumstances of the case. Ins. Corp. of

20

Ireland v. Compagnie des Bauxites, 456 U.S. 694, 707 (1982). When choosing among possible

21

sanctions, the court should consider a sanction designed to: (1) penalize those whose conduct may

22

be deemed to warrant such a sanction; (2) deter parties from engaging in the sanctioned conduct;

23

(3) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (4)

24

restore a prejudiced party to the same position he or she would have been in absent the

25

wrongdoing. See Nat’l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 643 (1976);

26

Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d 585, 589 (9th Cir. 1983).

27
28

Rule 37 also mandates the imposition of monetary sanctions on a party that fails to obey a
discovery order, requiring that the offending party “pay the reasonable expenses, including
13

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1

attorney’s fees, caused by the failure, unless the failure was substantially justified or other

2

circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C). “Willfulness,

3

fault, or bad faith is not required for the imposition of monetary sanctions under Rule 37(b)(2).”

4

In re NCAA Student-Athlete Name & Likeness Licensing Litig., No. C 09-1967 CW, 2012 U.S.

5

Dist. LEXIS 155511, at *22 (N.D. Cal. Oct. 30, 2012)
III.

6

8

United States District Court
Northern District of California

Resolute Motion for Sanctions – Skype Production

A.

7

DISCUSSION

i.

Reasonable Steps to Preserve Skype Messages

9

With respect to the three criteria for finding spoliation, the parties do not dispute that the

10

Skype messages should have been preserved. Thus, the Court first considers whether the Skype

11

messages were “lost because a party failed to take reasonable steps to preserve it.” Fed. R. Civ. P.

12

37(e).

13

Here, Greenpeace contends that it took reasonable steps to preserve the Skype messages by

14

issuing a litigation hold, ensuring that custodians understood not to delete ESI, and utilizing cloud-

15

based systems to retain data. (Greenpeace Opp’n at 14.) Moreover, Greenpeace contends that the

16

data loss was outside of its control, as the loss of Skype messages on the cloud was due to the

17

system-wide Microsoft change in April 2017. (Id.) Resolute, in turn, points to Defendant

18

Brindis’s admission that he failed to turn off the auto-delete setting on his personal Skype account.

19

(See Resolute Reply at 10.) Resolute further argues that Greenpeace should have taken further

20

actions to preserve the Skype messages, such as backing up their existing messages onto a central

21

laptop. (Id. at 10-11.)

22

In support, Resolute cites Colonies Partners, L.P. v. County of San Bernardino, No.

23

518CV00420JGBSHK, 2020 WL 1496444 (C.D. Cal. Feb. 27, 2020), report and recommendation

24

adopted, No. 518CV00420JGBSHK, 2020 WL 1491339 (C.D. Cal. Mar. 27, 2020). (Resolute

25

Reply at 10.) There, the custodian deleted e-mails by closing his e-mail account, such that the

26

account was no longer accessible. Colonies Partners, L.P., 2020 WL 1496444, at *3-4. The

27

custodian also lost text messages when he obtained a new cell phone, and regularly deleted text

28

messages when he received and read them. Id. at *4, 5. The district court further found that the
14

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1

defendants failed to take reasonable steps to preserve the evidence because it appeared no one had

2

informed the custodian “of his obligation to retain such information, which suggests there was no

3

formal litigation hold in place[.]” Id. at *8.

United States District Court
Northern District of California

4

The Court finds that Resolute has not demonstrated that Greenpeace failed to take

5

reasonable steps to preserve the Skype messages. Unlike Colonies Partners, L.P., Greenpeace did

6

issue a litigation hold. More importantly, with the exception of Defendant Brindis’s failure to turn

7

off the auto-delete setting on his personal Skype account, there is no showing that individual

8

Defendants actively deleted or caused Skype messages to be lost. Rather, it appears that the

9

individual Defendants assumed that the Skype messages would be saved as long as they did not

10

delete them. Instead, in April 2017, Microsoft migrated Skype to a new system, affecting the

11

storage of data. (Williams Decl. ¶ 36.) As the Advisory Committee has noted, Rule 37(e) “is

12

inapplicable when the loss of information occurs despite the party’s reasonable steps to preserve.

13

For example . . . information the party has preserved may be destroyed by events outside the

14

party’s control--the computer room may be flooded, a ‘cloud’ service may fail, a malign software

15

attack may disrupt a storage system, and so on.” Fed. R. Civ. P. 37(e) advisory committee’s notes

16

(2015). In such circumstances, the courts “need to assess the extent to which a party knew of and

17

protected against such risks.” Id. Yet here, Resolute provides no information to suggest this data

18

migration did not occur, that messages saved on the Cloud prior to April 2017 were actually

19

saved, or that users were warned of this potential loss.

20

While Resolute argues that Greenpeace should have backed up the messages on a

21

computer, it does not adequately explain why Greenpeace’s reliance on the messages being

22

retained is not reasonable, particularly in the absence of any evidence in the record that such

23

reliance was not warranted. In its papers and at the hearing, Resolute pointed to Greenpeace’s

24

failure to back up the messages, issue a notice to Microsoft to preserve the messages, or use a paid

25

plan to preserve the messages, but Resolute cites no authority in support.

26

Resolute speculates that Greenpeace intentionally deleted the Skype messages, the Court

27

finds no such showing. (Resolute Mot. for Sanctions at 14.) Resolute points to the timing,

28

arguing that the fact that the Skype messages were preserved three days after the December 16,
15

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Northern District of California

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1

2016 letter “smacks of bad faith.” (Id.) Yet Resolute acknowledges in its reply that Defendant

2

Skar did provide messages from September 23, 2016 on. (See Resolute Reply at 6.) Additionally,

3

there is no evidence that the individual Defendants deleted or were even capable of deleting the

4

Skype messages from a certain period. Indeed, Greenpeace’s expert notes that when analyzing the

5

Skype interface, he “found no settings that would permit a user to execute automated deletes

6

and/or remove all messages prior to a specified date.”4 (Williams Decl. ¶ 29.) Thus, it does not

7

appear possible for the individual Defendants to have intentionally deleted Skype messages prior

8

to a certain date. Moreover, if Greenpeace truly intended to delete Skype messages, it is unclear

9

why they did not delete Skype messages from all custodians. Indeed, other custodians and

10

Greenpeace Canada provided messages from the relevant period, including messages with the

11

individual Defendants. (See Greenpeace Opp’n at 4.) Resolute’s reliance on the loss of Skype

12

messages is insufficient; “[t]he bare fact that evidence has been altered or destroyed does not

13

necessarily mean that the party has engaged in sanctions-worthy spoliation.” Reinsdorf v.

14

Skechers U.S.A., Inc., 296 F.R.D. 604, 626 (C.D. Cal. 2013); see also Solutions v. Falck N. Cal.

15

Corp., No. 19-cv-06104-SBA (JCS), 2021 U.S. Dist. LEXIS 202622, at *22 (N.D. Cal. Sep. 10,

16

2021) (“Falck’s insistence that any inconsistency or missing documentation is proof of misconduct

17

is similarly speculative.”).
Accordingly, on this record, the Court finds that with the exception of Defendant Brindis’s

18
19

admitted failure to turn off the auto-delete setting on his personal Skype account, Resolute has

20

failed to demonstrate that Greenpeace failed to take reasonable steps to preserve the evidence.

21

Thus, the Court next considers the third criteria for spoliation as to the Skype messages lost as a

22
23
24
25
26
27
28

4

In a footnote, Resolute asserts a right to depose Mr. Williams in connection with his declaration,
but does not otherwise dispute Mr. Williams’s declaration, provide a declaration from its own
expert, or provide any basis to doubt Mr. Williams’s findings and conclusions. (Resolute Reply at
13 n.7.) As the party seeking sanctions under Rule 37(e)(2), Resolute has “the burden of
establishing spoliation by demonstrating that [the non-moving party] destroyed documents and
had some notice that the documents were potentially relevant to the litigation before they were
destroyed.” Ryan v. Editions Ltd. West, Inc., 786 F.3d 754, 766 (9th Cir. 2015); see also Hinitz v.
Intero Real Estate Servs., No. 18-cv-05623-BLF, 2020 U.S. Dist. LEXIS 247947, at *12 (N.D.
Cal. May 13, 2020) (finding that the moving party had not satisfied its burden of demonstrating
that the destruction of Facebook videos and posts was intentional, particularly where the nonmoving party had put forth evidence that it only intended to remove the videos and posts from its
public page and did not know that the posts would not be preserved when it did so).
16

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1
2

United States District Court
Northern District of California

3

result of Defendant Brindis’s failure.
ii.

Restoration or Replacement Through Additional Discovery

As an initial matter, Greenpeace disputes whether there are any Skype messages lost. On

4

the record, it is unclear when Defendant Brindis had the auto-delete setting on, although

5

Greenpeace indicated at the hearing that it was likely until December 2017. Moreover,

6

Greenpeace points to the fact that other custodians and Greenpeace Canada did provide Skype

7

messages for the period between May and December 2016, including conversations with

8

Defendant Brindis. (See Koonce Decl. ¶ 10, Exh. A.) Thus, Greenpeace argues that while

9

Defendants Moas, Skar, Brindis, and Daggett may have lost Skype messages, any conversations

10

between them and other custodians or Greenpeace Canada would have been produced.

11

(Greenpeace Opp’n at 17-18.) As Resolute points out, however, this would not cover

12

conversations between the individual Defendants or other employees and third-parties for whom

13

Skype data was not produced or restored. (Resolute Reply at 7.) Thus, the Court finds it likely

14

that Skype messages have, in fact, been lost.

15

Next, Greenpeace contends that Resolute cannot demonstrate that Defendant Brindis’s

16

Skype messages could not be restored or replaced through additional discovery, namely subpoenas

17

to Microsoft. (Greenpeace Opp’n at 18.) The parties worked together to execute consent forms to

18

allow Microsoft to disclose Skype data, but the parties dispute whether Resolute made further

19

attempts to subpoena the data from Microsoft after the original consent forms were rejected.

20

(Koonce Decl. ¶ 20.) Notably, at the hearing, Greenpeace itself seemed rather doubtful that

21

Microsoft would have the messages. Indeed, given that Microsoft deleted data prior to April

22

2017, the Court is skeptical that the data Resolute is most concerned about would have been

23

available. Accordingly, the Court disagrees that the missing Skype messages could have been

24

restored by seeking discovery through Microsoft.

25

Based on the record, the Court cannot find that there was no prejudice to Resolute. “For a

26

finding of prejudice under Rule 37(e)(1), the Court has discretion to determine whether the loss of

27

the information is prejudicial; neither party carries a burden of proving or disproving prejudice.”

28

Chinitz, 2020 U.S. Dist. LEXIS 247947, at *7 (internal quotation omitted). Here, the lost
17

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Northern District of California

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1

messages would have included those between Defendant Brindis and the other named Defendants,

2

non-custodian employees, and third-parties during a critical period, namely between the date of

3

the Quebec minister’s statement regarding the Montagnes Blanches map and the first Challenged

4

Statement. While Greenpeace may argue that no “smoking gun” messages existed at this time,

5

Resolute had a right to review the Skype messages from this period and to understand

6

Greenpeace’s rationale and thought process in issuing the Challenged Statements. (See

7

Greenpeace Opp’n at 20.) Thus, Resolute was prejudiced by this loss.

8

That said, the Court does not find that terminating sanctions or an adverse jury instruction

9

are warranted, particularly given the limited scope of the Court’s finding of spoliation -- namely,

10

any messages lost by Defendant Brindis’s failure to turn off the auto-delete function that were not

11

otherwise turned over through the production of other custodians or Greenpeace Canada.

12

Moreover, there is no evidence Defendant Brindis intentionally spoliated these Skype messages.

13

Accordingly, the Court RECOMMENDS a jury instruction of a short factual statement regarding

14

the spoliation of this evidence. The statement should inform the jury that Defendant Brindis had a

15

duty to preserve all Skype messages, but that despite this duty, certain Skype messages were lost

16

during the period that Defendant Brindis failed to turn off the auto-delete function on his Skype

17

account. Compare with Porter, 2018 U.S. Dist. LEXIS 151349, at *12-13 (denying the request for

18

an adverse jury instruction where the defendant failed to preserve a piece of central evidence but

19

there was no showing of intentional malfeasance, and instead ordering that “the jury may hear a

20

short factual statement at trial regarding the spoliation of this evidence”). The Court also

21

ORDERS Greenpeace to pay Plaintiff’s attorney’s fees for the time spent meeting and conferring

22

on Defendant Brindis’s failure to turn off the auto-delete function, as well as 10% of the time

23

spent on the instant motion for sanctions.

24
25
26

B.

Greenpeace Motion for Sanctions
i.

Damages Interrogatories

First, Greenpeace seeks sanctions under Rule 37(b) for failure to comply with the Court’s

27

January 20, 2021 order. (Greenpeace Mot. for Sanctions at 15.) The Court finds that Resolute

28

failed to comply, and that sanctions are warranted.
18

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Here, the Court ordered Resolute to identify all material facts supporting its damages,

United States District Court
Northern District of California

1
2

substantiate its claims that it lost market share, and to identify each asset that diminished in value

3

due to Greenpeace’s conduct. (Discovery Order at 3-4.) In its February 2021 responses, Resolute

4

identified three categories of damages (lost profits, mitigation costs, and diversion of employee

5

resources) in response to Interrogatory No. 7, identified documents reflecting Resolute’s market

6

share in regard to Interrogatory No. 13, and various categories of diminished assets. (Feb. 20,

7

2021 Interrogatory Resp.) In April 2022, however, Resolute added significant new information

8

that should have been disclosed before. For example, with respect to Interrogatory No. 7,

9

Resolute identified additional categories of damages such as lost opportunities from decreases in

10

paper demand, the offlining of paper machines, and the decision not to pursue strategic

11

acquisitions; impaired investments in certain mills; and restrictions on debt capacity and sales of

12

shares, resulting in the decision not to take on additional debt to finance capital projects or other

13

investments. (Apr. 19, 2022 Interrogatory Resp.)
Resolute argues that “the majority of information that was set forth in the April 2022

14
15

responses were previously disclosed, and the limited new information is merely additional

16

examples of the categories of damages (lost profits, lost opportunities, and loss of market share)

17

that were previously identified.” (Resolute Opp’n at 22.) Contrary to Resolute’s assertions,

18

however, these were not “merely” additional examples. These are new categories of damages that

19

were not disclosed in the February 10, 2021 responses; the need to offline paper machines, the

20

impairment of investments in certain mills, and the inability to obtain financing or sell stock are

21

simply not examples of lost profits from changes in customer relationships, mitigation costs from

22

addressing customer inquiries or hiring public relations and law firms, or diversion of employee

23

resources to respond to customer inquiries about the Challenged Statements.5 A reasonable person

24
25
26
27
28

5

To the extent Resolute also points to its August 12, 2020 response to Interrogatory No. 10, the
Court also finds that this response would not have put a reasonable person on notice of Resolute’s
newly claimed damages. (Resolute Opp’n at 22.) Interrogatory No. 10 requires Resolute to
identify all facts and communications relating to its claim that business transactions Resolute had
an interest in were harmed. (Second Tabaksblat Decl., Exh. 23 (Aug. 12, 2020 Interrogatory
Resp.) at 12.) In its response, Resolute identifies costs to rebut the Challenged Statements,
specifically supplying Hachette with FSC credits, written correspondence to and a helicopter tour
for Macmilliam, and responses to and a tour for Penguin Random House. (Id. at 13.) Again, none
19

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1

would not view an inability to obtain financing as an “example” of lost profits, mitigation costs, or

2

diversion of employee resources. The Court ordered Resolute to disclose all material facts

3

supporting its damages in January 2021, yet Resolute did not identify these significant categories

4

of damages -- including allegedly $300 million in impaired investments -- until April 2022, a few

5

weeks before the fact discovery cut off. This is not only a violation of the Court’s discovery

6

order, but an abuse of the discovery process.

7

In the alternative, Resolute contends that it was simply supplementing its discovery

8

responses. (Resolute Opp’n at 23.) It is certainly true that Rule 26(e) requires that a party

9

supplement or correct its responses, but Rule 26(e) also requires that the supplementation occur

10

“in a timely manner.” Fed. R. Civ. P. 26(e) (emphasis added). It certainly does not “create a

11

loophole through which a party who . . . .wishes to revise her disclosures in light of her opponent’s

12

challenges to the analysis and conclusions therein, can add to them to her advantage after the

13

court’s deadline for doing so has passed. Rather, ‘supplementation under the Rules means

14

correcting inaccuracies, or filling the interstices of an incomplete report based on information that

15

was not available at the time of the initial disclosure.’” Luke v. Family Care & Urgent Med.

16

Clinics, 323 Fed. Appx. 496, 500 (9th Cir. 2009) (quoting Keener v. United States, 181 F.R.D.

17

639, 640 (D. Mont. 1998)). While Resolute argues that it provided its revised interrogatory

18

responses after document production and depositions, Resolute fails to explain why document

19

production or the depositions were necessary when the damages concern information in Resolute’s

20

own possession. None of this was new information; rather, the offlining of the Calhoun paper

21

machines occurred in the fall of 2017, the projected EBITDA for the Alma, Kenogami, Dolbeau,

22

and St. Felicien mills was for 2015, and the inability to obtain financing included a 2017 incident

23

with Bank of America. Moreover, this failure to provide damages-related information appears to

24

be an ongoing pattern; indeed, in September 2022, Resolute again attempted to extend deadlines in

25

order to produce “several hundred documents” related to damages. (Dkt. No. 475 at 2-3.) In

26

denying Resolute’s motion, the presiding judge noted that Resolute’s description of the documents

27
28

of this is related to the need to offline machines, the impairment of investments, or the inability to
obtain financing.
20

Case 4:17-cv-02824-JST Document 486 Filed 11/02/22 Page 21 of 31

1

“suggests these documents should have been produced during fact discovery.” (Dkt. No. 478 at

2

2.)

3
4

had been provided to Greenpeace, such as documents regarding the mills. This, however, would

5

require Greenpeace to review tens of thousands of documents and speculate as to what Resolute’s

6

damages theories are. This is not the law. Resolute was required to disclose its damages theories

7

in response to Greenpeace’s interrogatories, per the Court’s January 2021 order. It cannot simply

8

rely on unspecified documents productions to satisfy this obligation. Thus, the Court concludes

9

that Resolute’s actions were not substantially justified.

10

United States District Court
Northern District of California

Finally, at the hearing, Resolute argued that there was no prejudice because the documents

While Greenpeace requests terminating sanctions, the Court finds that evidentiary

11

sanctions are adequate to penalize Resolute for its misconduct. Accordingly, the Court

12

RECOMMENDS evidentiary sanctions; any damages theories first disclosed in the April 2022

13

interrogatory responses, as well as any supporting evidence, should be excluded. Additionally,

14

having found that Resolute violated the Court’s discovery order, the Court ORDERS Resolute to

15

pay Greenpeace’s attorney’s fees caused by the failure. As discussed above, Resolute failed to

16

timely update its interrogatory responses without a reasonable explanation. Resolute’s behavior is

17

not in good faith. Accordingly, Resolute shall be required to pay attorney’s fees required to

18

contact Resolute to clarify the bases for their alleged damages. The Court will also award certain

19

attorney’s fees incurred in bringing the instant motion for sanctions, as discussed in the

20

conclusion.

21
22

ii.

Spoliation

Next, Greenpeace seeks sanctions under Rule 37(e) for spoliation. (Greenpeace Mot. for

23

Sanctions at 20.) Greenpeace asserts that Resolute committed spoliation in a number of ways; the

24

Court will discuss each alleged act and whether it demonstrates spoliation that warrants sanctions.

25
26

a. Litigation Hold
First, Greenpeace argues that Resolute failed to implement a litigation hold in this case,

27

instead relying on the Resolute Litigation Hold issued in 2014 pertaining to the Greenpeace

28

Canada Action. (Greenpeace Mot. for Sanctions at 21.)
21

Case 4:17-cv-02824-JST Document 486 Filed 11/02/22 Page 22 of 31

United States District Court
Northern District of California

1

The Court finds that Greenpeace has not demonstrated that the failure to implement a

2

litigation hold specific to this case resulted in the failure to preserve ESI. While Resolute did not

3

issue a litigation hold specific to this case, it appears that custodians in this case understood the

4

Resolute Litigation Hold to extend to records making any reference to Greenpeace, not simply to

5

records related to the Greenpeace Canada Action. (See Romeo Depo. at 105:1-2, Goulding Depo.

6

at 329:22-24.) Resolute also circulated questionnaires that referred to the Montagnes Blanches

7

allegations, backed up its e-mail account data, and gave additional storage to certain custodians to

8

ensure preservation. (Papps Decl. ¶¶ 6, 12, 13.) Thus, while the Court finds below that Resolute

9

failed to preserve or produce certain categories of documents, it is not apparent to the Court that

10

ESI was lost as a result of the litigation hold, or that Resolute failed to take reasonable steps to

11

preserve ESI.
b. Texts

12
13

The Court finds that Greenpeace has demonstrated that Resolute failed to search and

14

permitted the destruction of text messages. Mr. Goulding testified that he used texts for work, and

15

would use it to send “short messages that have some urgency for you to issue the text,” but that he

16

only understood the Resolute Litigation Hold to pertain to e-mails. Mr. Goulding also stated that

17

he never checked to ensure that texts were being preserved, and was never asked to provide any

18

text messages. (Goulding Depo. at 326:11-327:7, 327:18-21, 330:7-331:7.) Mr. Romeo testified

19

that he texted with other employees and customers, but that the texts were not preserved and he

20

had no way of going back to look at his texts. (Romeo Depo. at 107:16-108:11; 109:13-8.)

21

Additionally, Resolute produced no texts, and apparently conducted no search of any text

22

accounts.

23

Resolute argues that the text messages did not include relevant information, pointing to

24

Mr. Romeo’s testimony that he did not believe he texted anything relevant to the litigation to other

25

employees, and that he would use texts to set up meetings with customers or let them know he was

26

on his way. (Resolute Opp’n at 18; Romeo Depo. at 108:12-19, 109:1-6, 109:14-22.) Mr.

27

Goulding, however, testified that he used texts to send short messages with “some urgency,”

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which does not suggest they were all non-substantive. Greenpeace also points to deposition
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testimony in which Mr. Romeo acknowledged an e-mail in which Mr. Goulding noted that he had

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texted with Mr. Romeo on the day they attended the 2017 Book Expo. (Greenpeace Reply at 12,

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Dkt. No. 471.) Resolute has alleged that Defendants Moas, Skar, and Brindis were distributing the

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challenged “Clearcutting Free Speech” report at that 2017 Book Expo. (FAC ¶ 311.) Moreover, it

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is unclear how Resolute could unilaterally determine that the text messages contained no relevant

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information when they never searched them. Resolute’s failure to take any reasonable steps to

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produce or preserve the texts has deprived Greenpeace of communications between employees and

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with customers, with no ability to determine if they were, in fact, non-substantive. Moreover,

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unlike above where Greenpeace noted that Resolute could search for the missing Skype messages

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by subpoenaing Microsoft, Resolute does not suggest that there are any alternative means to

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search for the text messages, including those that have been destroyed.

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c. Personal E-Mail Accounts
The Court finds that Greenpeace has not demonstrated that ESI from personal e-mail

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accounts was lost, such that Greenpeace suffered any prejudice. Carolyn Pinto testified that when

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she had technical issues or wanted to work on something on her own time or after work, it was

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possible she would send things between her personal and work e-mail addresses. (Pinto Depo. at

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88:23-89:3, Dkt. No. 459-17.) She also testified, however, that any e-mail in her personal e-mail

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account that related to Greenpeace would have originated from her work e-mail. (Pinto Depo. at

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140:17-23.) Greenpeace argues that Resolute should have been required to search Ms. Pinto’s

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personal e-mail, but there is nothing in the record to suggest that any e-mails sent to or from Ms.

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Pinto’s personal e-mail would have been produced as part of the search of her work e-mail.

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(Greenpeace Reply at 13.) Resolute further states that it has produced e-mails that included Ms.

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Pinto’s personal e-mail address. (Tabaksblat Decl., Exh. 7.)

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Greenpeace also points to testimony by Francois Dumoulin, in which he acknowledged an

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e-mail that had been sent between his work and personal e-mail address. (Dumoulin Depo. at

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175:2-6, 193:6-10 Dkt. No. 459-24.) Mr. Dumoulin also testified that he very rarely used his

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personal e-mail address at all, and would send things from his work e-mail address “most of the

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time.” (Dumoulin Depo. at 175:4-12.) Again, however, it is not apparent that e-mails sent to or
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from Mr. Dumoulin’s personal e-mail would not already have been included in the production

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from his work e-mails. Thus, Greenpeace has failed to demonstrate that ESI was lost or

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unavailable from an alternate source.

United States District Court
Northern District of California

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d. Local Documents on Personal Devices

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The Court finds that Greenpeace has not demonstrated that ESI in the form of local

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documents on personal devices was lost. While Ms. Pinto testified that she would edit documents

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on her personal computer, she further stated that if she made changes to a document on her

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personal computer, she would have sent it back to her work e-mail so that she would have

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everything in the same place. (Pinto Depo. at 141:20-143:19.) Any such documents would

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therefore have been produced through Ms. Pinto’s e-mails or documents saved on her work

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computer. Likewise, Greenpeace relies on Ms. Pinto’s testimony that she used her personal

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computer after becoming a consultant, but Ms. Pinto made clear that she logged in using a VPN to

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a remote or virtual desktop. (Pinto Depo. at 246:21-25.) Thus, as Resolute points out, any

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materials saved on that remote desktop would be on Resolute’s servers, not on Ms. Pinto’s

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personal computer. (Tabaksblat Decl., Exh. 7 at 2.)

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Greenpeace further points to Mr. Goulding’s testimony that no one searched his personal

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computer, but does not identify any testimony that he actually used his personal computer for

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work purposes. (Goulding Depo. at 405:21-406:5.) It is therefore unclear any evidence existed on

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Mr. Goulding’s personal devices.

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e. Hard Copies of Documents
As an initial matter, the Court notes that hard copies of documents would not warrant

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sanctions under Rule 37(e) because it is not ESI. The Court, however, does observe that it appears

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Resolute failed to search and permitted the destruction of hard copies. Indeed, Mr. Romeo

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testified that he took handwritten notes after client meetings, but was never asked to produce them.

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(Romeo Depo. at 99:23-100:8.) He also stated that he did not know if he would have been able to

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produce them anyway because he did not hold onto them for long. (Romeo Depo. at 100:10-11.)

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f. Seth Kursman E-mails and Custodial Documents
The Court finds that Greenpeace has demonstrated that Resolute lost or failed to produce
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documents from Mr. Kursman. Mr. Kursman, who is the Vice President of Communications,

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Sustainability & Government Affairs, testified that he sent “tens of thousands” of e-mails, or been

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in the loop on them. (Kursman Depo. at 147:15-16.) Mr. Kursman further testified that there is

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“hardly a day that goes by” where he is not sending e-mails or working on documents. (Kursman

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Depo. at 230:24-231:2.) Yet Greenpeace contends that Resolute initially produced only 1,050

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documents from Mr. Kursman, despite Mr. Kursman being one of the original custodians searched

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by Resolute, and produced no documents during the relevant time periods surrounding the

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Challenged Statements. (Second Koonce Decl. ¶ 44.) A later production from the “Archive”

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included 776 documents from 2015-2017, which was half the size of Ms. Pinto’s production

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despite Ms. Pinto being one of Mr. Kursman’s reportees and being on parental leave for twelve

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months during that period. (Second Koonce Decl., Exh. 22.) Indeed, when Greenpeace asked Mr.

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Kursman about this production, he himself stated that it did not make sense and hoped Greenpeace

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would address it with Resolute. (Kursman Depo. at 230:16-231:2.)

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Resolute contends that of its document production, Mr. Kursman was the custodian of

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more than 3,700 documents. (Blair Decl. ¶ 20.) This amount seems concerningly small given Mr.

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Kursman’s own testimony that he sent “tens of thousands” of e-mails and either sent or worked on

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documents daily. Moreover, Mr. Kursman was one of the original custodians searched by

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Resolute and chosen because, as the supervisor of the department, he would have received a copy

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of all substantive communications. (Resolute Opp’n at 6.) Thus, based on Resolute’s own

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assertions, it would seem reasonable that Mr. Kursman would have significantly more documents,

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as he would have possessed his own e-mails as well as a copy of all substantive communications

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from his department. Given this significant disparity, the Court finds that spoliation occurred, and

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that there is no explanation for the loss or failure to produce. Moreover, given Mr. Kursman’s

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importance in this case and the sheer volume of documents at issue, the Court finds that this loss is

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prejudicial.

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g. Kevin Goulding Documents
The Court finds that Greenpeace has not demonstrated that Resolute lost or failed to
produce documents from Mr. Goulding. While Greenpeace points to what it asserts is the
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relatively low number of documents produced by Mr. Goulding despite being the direct supervisor

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of the salespeople who interacted with the book publishing customers, it is unclear from the record

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how large his production should have been. (Second Koonce Decl., Exh. 22.) It appears Resolute

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found that Mr. Goulding was the custodian or duplicate custodian of more than 1,600 documents,

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and the custodian or sender/recipient of 216 documents between December 2016 and May 2017.

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(Blair Decl. ¶ 19.) Without more information, however, the Court cannot determine if this is

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inexplicably low or not.

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United States District Court
Northern District of California

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h. E-mail Blasts
The Court finds that Greenpeace has demonstrated that Resolute lost or failed to produce e-

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mail blasts. These e-mail blasts were e-mails sent to a mailing group, usually to send positive

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news or anything that was noteworthy and worth sharing. (Pinto Depo. at 187:10-23.)

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Greenpeace states that it received only a few blasts from Resolute, although it received such blasts

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from third-parties. (Second Koonce Decl., Exh. 22.) As an example, Greenpeace produces a blast

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ostensibly sent from Mr. Kursman to HarperCollins Publishers, which specifically discusses a

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podcast that Mr. Kursman participated in to discuss Resolute’s “decision to hold Greenpeace

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accountable for their actions.” (Second Koonce Decl., Exh. 24.) Additionally, almost no drafts or

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e-mails were produced despite Ms. Pinto testifying that she drafted the blasts and had them

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reviewed by as many people as who were responsible, as well as Nathalie Guilbault and Mr.

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Kursman. (Pinto Depo. at 188:5-14.)

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In response, Resolute merely states that the blasts are not missing, but that “they were

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simply sent from e-mail accounts that were not custodians in this action.” (Tabaksblat Decl., Exh.

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7.) At the hearing, Resolute further clarified that the e-mail blasts were sent by a third-party.

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While this does not explain why drafts of the e-mail blasts were not produced, it also appears that

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the parties did not meet and confer on this matter. Thus, the Court is not inclined to find

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spoliation on a matter raised for the first time in a motion for sanctions.

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i. Specific Documents Found in Third-Party Productions
The Court finds that Greenpeace has not demonstrated that Resolute lost or failed to
produce documents from third-parties. While Greenpeace identifies eleven documents that were
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produced by third-parties and not Resolute, it does not argue that these documents were lost by

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Resolute. Rather, it argues that this “underscore[s] how limited and haphazard Plaintiffs’ apparent

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search was.” (Greenpeace Reply at 15.) Resolute, in turn, argues that the exemplar documents

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were either not responsive or were inadvertently not produced. (Resolute Opp’n at 20.) It is not

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clear from the record that the failure to produce these eleven documents demonstrates the

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spoliation of ESI, even if it may demonstrate a “haphazard” search.

United States District Court
Northern District of California

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j. Disaggregated Document Drafts

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The Court finds that Greenpeace has not demonstrated that Resolute lost or failed to

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produce e-mails including document drafts. Greenpeace argues that there are drafts of documents

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that were clearly passed among employees, but no e-mails showing the exchange of the drafts.

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(Second Koonce Decl., Exh. 22 at 3.) Resolute, in turn, states that those drafts were likely stored

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in a shared drive and then produced in the format in which it was held. (Tabaksblat Decl., Exh. 7.)

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Thus, it is not apparent that e-mails including these drafts existed.

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k. Missing Metadata
Finally, the Court finds that Greenpeace has not demonstrated that Resolute lost or failed

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to produce metadata. While Resolute admits that 700 documents were produced without

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metadata, Resolute only states that this is “because the documents were hard copy documents or

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such metadata does not exist.” While this fails to explain why documents that were not hard

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copies lacked metadata to begin with, it does not demonstrate Resolute destroyed the metadata.

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Rather, as Greenpeace complains, it is possible those documents lacking metadata “were simply

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copied from Plaintiffs’ production in the Canadian litigation.” (Greenpeace Reply at 14.) This

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neither demonstrates destruction of metadata, nor does Greenpeace explain why the lack of

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metadata is prejudicial.

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l. Conclusion
As discussed above, the Court finds that Resolute has committed spoliation of ESI as to:

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(1) text messages and (2) Mr. Kursman’s e-mails and custodial documents. Accordingly, the

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Court RECOMMENDS a jury instruction of a short factual statement regarding the spoliation of

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this evidence. The statement should inform the jury that Resolute had a duty to preserve and
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produce this evidence, but that despite this duty, Resolute failed to do so. The Court also

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ORDERS Resolute to pay all attorney’s fees Greenpeace incurred to address the production (or

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failure to produce) these two categories of documents, e.g., meeting and conferring, as well as

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other efforts taken to search for these documents. The Court will also award certain attorney’s

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fees incurred in bringing the instant motion for sanctions, as discussed in the conclusion.

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United States District Court
Northern District of California

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iii.

Abuse of Discovery Process

Finally, Greenpeace seeks monetary sanctions based on Resolute’s “belated and ad hoc”

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production, including the production of more than over 14,000 documents between October 2021

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and February 2022, nearly a year after Resolute “substantially completed” its production. (See

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Greenpeace Mot. for Sanctions at 24; Second Koonce Decl. ¶ 64.) Specifically, Greenpeace

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requests that the Court exercise its inherent powers to impose “monetary sanctions in the form of

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attorney’s fees against a party or counsel who acts ‘in bad faith, vexatiously, wantonly, or for

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oppressive reasons.’” (Greenpeace Mot. for Sanctions at 24; Toppan Photomasks, Inc. v. Park,

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No. 13-cv-03323-MMC (JCS), 2014 U.S. Dist. LEXIS 74063, at *35 (N.D. Cal. May 29, 2014)

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(quoting Leon v. IDX Sys. Corp., 464 F.3d 951, 961 (9th Cir. 2006)). “Before awarding such

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sanctions, the court must make an express finding that the sanctioned party’s behavior constituted

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or was tantamount to bad faith. A party demonstrates bad faith by delaying or disrupting the

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litigation . . . .” Leon, 464 F.3d at 961 (internal quotation omitted). “[T]he amount of monetary

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sanctions must be reasonable.” Id. (internal quotation omitted).

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The Court finds that Resolute’s discovery misconduct was in bad faith. In opposition,

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Resolute argues that the delayed production was due to Greenpeace’s failure to respond to

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Resolute’s inquiries as to search metrics. (Resolute Opp’n at 16.) Resolute, however, cites no

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authority that Greenpeace was required to assist in crafting Resolute’s search metrics, such that the

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failure to do so abrogated Resolute’s obligation to provide all responsive documents. See U.S.

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Legal Support, Inc. v. Hofioni, No. 2:13-cv-01770-MCE-AC, 2015 U.S. Dist. LEXIS 137984, at

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*14 (E.D. Cal. Oct. 7, 2015) (“Plaintiff has an obligation to produce all responsive documents in

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its possession, custody, or control within thirty (30) days of the request for production.”).

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Resolute also contends that it was a mere “oversight” that resulted in its failure to search the
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Archives, namely due to a new document management team when Lotus Notes was transitioned to

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Outlook. (Resolute Opp’n at 20; Papps Decl. ¶ 11.) Resolute, however, also states that these

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Archives were backed up annually. (Resolute Opp’n at 5; Papps Decl. ¶ 17.) Thus, it would

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appear Resolute was fully aware of the Archives given its great pains to maintain them; the

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suggestion that Resolute then overlooked them rings hollow.

United States District Court
Northern District of California

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Resolute also argues that many of the documents from its Archives were duplicates of

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previously produced documents, but that does not mean that the entire later production was from

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the Archives or duplicates. (Resolute Opp’n at 20-21.) The duplicates from the Archives also

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does not explain the sheer number of documents that were produced nearly a year after Resolute

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“substantially completed” its production; indeed, it appears Resolute disclosed to Greenpeace that

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the Archives included 4,000 documents. (Second Tabaksblat Decl. ¶ 21; Second Koonce Decl. ¶

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43.) Yet the production between October 2021 and February 2022 consisted of over 14,000

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documents, in comparison to its prior production of 10,564 documents. At the hearing, Resolute

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admitted that not all of these documents were duplicates. Thus, Greenpeace was still required to

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go through these later productions to find the documents that were not duplicates. While a party

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may supplement its responses, the supplementation is “not . . . improper as long as [the] initial

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search was done diligently and in good faith.” Id. at *16; see also id. (“While the court is aware

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that discovery can, at times, prove a burdensome and lengthy enterprise, that fact does not justify

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what would effectively be a period of endless discovery.”). Here, Resolute’s attempts to shift

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blame to Greenpeace for failing to provide feedback as to search metrics or custodians, or to

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suggest its late production due to an oversight with the Archives, does not justify the late

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production. Furthermore, as noted above, these late productions appear to be a pattern, the most

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recent example being Resolute’s September 2022 request to extend deadlines in order to produce

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“several hundred documents” related to damages for the first time.

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Moreover, this delayed production was not without consequence. Greenpeace states that

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Resolute would routinely “produce large tranches of a deponent’s custodial documents on the eve

27

of depositions, which required Defendants to last-minute reschedule the depositions or scramble to

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review new documents, sometimes hours before a deposition.” (Second Koonce Decl. ¶ 63.)
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Significantly, Resolute does not dispute this behavior. Rather, Resolute argues that there was no

2

prejudice because it agreed to adjourn the depositions and continue the existing discovery

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deadlines. (Resolute Opp’n at 17; Second Tabaksblat Decl. ¶ 22.) Yet such adjournments and

4

continuances of discovery deadlines would not have been required if Resolute had not delayed in

5

producing the custodial documents of the deponent. Indeed, the fact that this behavior happened

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repeatedly before a custodian’s deposition further demonstrates bad faith and improper

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gamesmanship.

United States District Court
Northern District of California

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Accordingly, the Court finds that the imposition of sanctions is warranted. Here, the

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primary prejudice identified by Greenpeace is the rescheduling of depositions and review of late-

10

produced documents. Therefore, the Court ORDERS Resolute to pay attorney’s fees required to

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reschedule depositions and review of newly produced documents in preparation for the

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rescheduled depositions. The Court will also award certain attorney’s fees incurred in bringing the

13

instant motion for sanctions, as discussed below.
IV.

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CONCLUSION

For the reasons stated above, the Court GRANTS IN PART AND DENIES IN PART

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Resolute’s motion for sanctions, and RECOMMENDS a jury instruction of a short factual

17

statement regarding the spoliation of Skype messages lost by Defendant Brindis’s failure to turn

18

off the auto-delete function. The Court also awards Resolute attorney’s fees, namely the

19

attorney’s fees incurred from meeting and conferring on Defendant Brindis’s failure to turn off the

20

auto-delete function, as well as 10% of the time spent on Resolute’s motion for sanctions.

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The Court GRANTS IN PART AND DENIES IN PART Greenpeace’s motion for

22

sanctions. The Court RECOMMENDS evidentiary sanctions, specifically the exclusion of any

23

damages theories first disclosed in the April 2022 interrogatory responses and any supporting

24

evidence. The Court also RECOMMENDS a jury instruction of a short factual statement

25

regarding Resolute’s failure to preserve and produce text message and Mr. Kursman’s e-mails and

26

custodial documents.

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As to attorney’s fees, the Court awards Greenpeace attorney’s fees, specifically the
attorney’s fees incurred from: (1) contacting Resolute to clarify the bases for their alleged
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1

damages, (2) addressing the two categories of spoliated documents, e.g., meeting and conferring

2

with Resolute and efforts undertaken to locate the documents, and (3) rescheduling depositions

3

and reviewing newly produced documents in preparation for the rescheduled depositions.

4

Additionally, taking into account Greenpeace’s limited success on the spoliation issue, the Court

5

awards 80% of the time spent on Greenpeace’s motion for sanctions.

6

The parties shall meet and confer as to the attorney’s fees amounts. If the parties are

7

unable to come to an agreement on the amount, the parties shall file their motions for attorney’s

8

fees by December 1, 2022, absent a stipulation to extend the deadlines.

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10

IT IS SO ORDERED.
Dated: November 2, 2022
__________________________________
KANDIS A. WESTMORE
United States Magistrate Judge

United States District Court
Northern District of California

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