Nuvasive, Inc. v. Madsen Medical, Inc. et al
Filing
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ORDER Denying 167 Motion for an Amended Instruction Regarding Spoliation. Signed by Judge Barry Ted Moskowitz on 9/24/15. (dlg)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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NUVASIVE, INC., a Delaware
corporation,
Plaintiff,
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vs.
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MADSEN MEDICAL, INC., et al.,
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Case No.: 13cv2077 BTM(RBB)
ORDER DENYING MOTION FOR
AN AMENDED INSTRUCTION
REGARDING SPOLIATION
Defendants.
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MADSEN MEDICAL, INC., a
Nevada corporation,
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Counterclaimant,
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vs.
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NUVASIVE, INC., a Delaware
corporation,
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Counterdefendant.
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Plaintiff and Counterdefendant Nuvasive, Inc. (“Nuvasive”), has filed a
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motion for an amended jury instruction regarding spoliation. For the reasons
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discussed below, Nuvasive’s motion is DENIED.
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13cv2077 BTM(RBB)
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I. BACKGROUND
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Previously, Defendants Kris Madsen (“Madsen”) and Madsen Medical, Inc.
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(“MMI”), filed a motion for sanctions for NuVasive’s spoliation of evidence. In an
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order filed on July 22, 2015, the Court granted in part Defendants’ motion and ruled
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that it would give the following adverse inference instruction:
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NuVasive has failed to prevent the destruction of evidence for MMI’s
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and Ms. Madsen’s use in this litigation after its duty to preserve the
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evidence arose.
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circumstances, you may, but are not obligated to, infer that the
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evidence destroyed was favorable to MMI and unfavorable to
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NuVasive.
After considering all of the pertinent facts and
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II. DISCUSSION
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NuVasive seeks to amend the adverse inference jury instruction to allow the
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jury to draw an adverse inference from Defendants’ alleged spoliation of evidence.
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NuVasive’s proposed instruction is:
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NuVasive, MMI, and Ms. Madsen each failed to prevent the destruction
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of relevant evidence for use in this litigation. After considering all of
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the pertinent facts and circumstances, you may, but are not obligated
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13cv2077 BTM(RBB)
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to, infer that the evidence destroyed was favorable to one party or
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another.
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The Court does not find that NuVasive’s amended instruction is warranted.
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As discussed in the Court’s prior order, in deciding what spoliation sanction
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to impose, courts generally consider the following three factors: (1) the degree of
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fault of the party who altered or destroyed the evidence; (2) the degree of prejudice
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suffered by the opposing party; and (3) whether there is a lesser sanction that will
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avoid substantial unfairness to the opposing party.
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Electronics Co., Ltd., 888 F. Supp. 2d 976, 992 (2012).
Apple, Inc. v. Samsung
The prejudice inquiry
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“looks to whether the [spoiling party’s] actions impaired the non-spoiling party’s
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ability to go to trial or threatened to interfere with the rightful decision of the case.”
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Leon v. IDX Systems Corp., 464 F.3d 951, 960 (9th Cir. 2006) (quoting United
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States ex rel. Wiltec Guam, Inc. v. Kahaluu Constr. Co., 857 F.2d 600, 604 (9th
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Cir. 1988)).
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NuVasive argues that Defendants themselves failed to preserve evidence.
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Specifically, NuVasive alleges that: (1) Defendants failed to disclose the transcript
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of a secret deposition of James Pinto until a year after this lawsuit was filed;
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(2) Defendants failed to preserve text messages of Pinto, Stephen Kordonowy,
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and Frank Orlando; and (3) Kris Madsen intentionally wiped the iPad that was
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issued to her by NuVasive.
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13cv2077 BTM(RBB)
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The deposition transcript does not pertain to spoliation of evidence. Even
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though NuVasive disputes the timeliness of the production of the transcript, the
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transcript was provided to NuVasive.
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As for the iPad, it is unclear whether the iPad tested by Ryan Maxwell, who
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was hired by NuVasive to analyze and preserve data on certain iPhones and
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iPads, was in the same condition as when it was returned by Kris Madsen. Madsen
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returned the iPad in September 2012. (Madsen Decl. ¶ 5.) On December 3, 2013,
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more than a year later, Maxwell received an iPad “described as belonging to Kris
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Madsen.” (Maxwell Decl. ¶ 3.) Maxwell does not provide a serial number for this
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iPad. Upon inspection, Maxwell observed that the iPad was in a state of default
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configuration. (Id.) NuVasive told Maxwell that no forensic preservation would be
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required at that time. (Id.)
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On October 27, 2014, more than two years after Madsen returned her iPad,
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Maxwell received a FedEx delivery of an iPad described as belonging to Kris
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Madsen with a serial number of DLXGCZRDFJ3. (Maxwell Decl. ¶ 4.) It appears
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that an iPad with this serial number was assigned to Madsen. (NuVasive Ex. 11.)
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Maxwell observed that the iPad exhibited the same default configuration state as
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the iPad he examined in December 2013. (Maxwell Decl. ¶ 4.) Based on his
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analysis of the data preserved on the iPad, the dates of the database files “indicate
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that the iPad was likely reset on September 7, 2012.” (Maxwell Decl. ¶ 6.)
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Due to the amount of time that passed before Maxwell examined the iPad
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returned by Madsen and the lack of information regarding custody of the iPad in
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the interim, the Court is unable to conclude that when Maxwell examined the iPad,
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it was in the same condition as it was when returned by Madsen. Furthermore,
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there is no showing that Madsen used the iPad to email or create documents that
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might be relevant to this litigation. According to Madsen, to the best of her
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recollection, “the only information on the iPad was the pre-loaded sales information
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provided by NuVasive. I do not recall any information specific to me that was on
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the iPad.” (Madsen Decl. ¶ 5.)
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Defendants failed to preserve text messages of Pinto, Kordonowy and
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Orlando. However, Defendants’ failure is mitigated by the fact that the time period
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in question was very short. By mid-August of 2012, Defendants had informed
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NuVasive of its duty to preserve evidence of communications between NuVasive
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and MMI employees. [Docs. 109-2, 109-3.] Orlando and Kordonowy left to work
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for NuVasive starting on August 31, 2012.
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terminated as an employee in September 2012. (Id.)
(Madsen Decl. ¶ 4.)
Pinto was
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Madsen should have taken steps to preserve evidence herself given that she
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instructed NuVasive to do so. However, taking into consideration Defendants’ lack
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of knowledge that MMI would be terminated on August 31, 2012, and the upheaval
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13cv2077 BTM(RBB)
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Defendants were experiencing at this time, their failure to preserve text messages
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is understandable.
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In contrast, as explained in the Court’s prior order, NuVasive had plenty of
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time to take steps to ensure that its employees complied with the litigation hold but
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failed to do so. Jeff Moore was not asked to turn over his phone until January
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2014, at which time it was discovered that all of Moore’s text messages prior to
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September 20, 2012 were missing. In mid-2014, Kordonowy wiped his phone
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clean before giving it to his son. Ed Graubart turned in his phone for an upgrade
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on two occasions after MMI’s termination. Frank Orlando did not provide the
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phone he used in 2012 to NuVasive until 2013, at which point Orlando believes he
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may have deleted relevant text messages. Defendants’ culpability in failing to
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preserve text messages during a half-month or month period pales in comparison
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to that of NuVasive’s prolonged negligence.
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Furthermore, NuVasive has not shown prejudice. Because Orlando and
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Kordonowy ended up working for NuVasive, NuVasive had the ability to ask them
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about their text messages. As for Pinto, NuVasive has not established that Pinto’s
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text messages might have helped NuVasive’s case. NuVasive suggests that the
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missing Pinto text messages cut against the theory that there was a secret plot
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against Defendants. NuVasive points to a text message from Pinto to Orlando
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which refers to talks between NuVasive and Madsen about transitioning to a direct
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13cv2077 BTM(RBB)
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sales force. However, even though NuVasive may have had talks with Madsen
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about the possibility of entering into a deal with MMI whereby MMI’s salesforce
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would work directly for NuVasive, that does not mean that NuVasive was not also
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actively pursuing the possibility of cutting MMI and Madsen out of the deal and
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hiring their salesforce from under them.
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NuVasive has not established that it is entitled to a spoliation sanction
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against Defendants. Therefore, the Court declines to amend the adverse inference
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jury instruction so that it is bilateral. However, the Court will allow both sides to
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offer evidence at trial regarding the other side’s failure to preserve evidence. This
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evidence would be part of the “pertinent facts and circumstances” the jury can
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consider in determining whether to make an adverse inference against NuVasive.
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In their Opposition, Defendants request that the Court sanction NuVasive
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under Fed. R. Civ. P. 11 in the amount of the attorney’s fees incurred by
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Defendants in responding to NuVasive’s motion. When sanctions are sought
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under Rule 11, counsel must comply with Rule 11's “safe harbor” provision, which
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requires that counsel serve the Rule 11 motion but not file the motion if the
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challenged claim or filing is withdrawn or corrected within 21 days after service.
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Fed. R.Civ.P. 11(c)(2).
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Radcliffe v. Rainbow Constr. Co., 254 F.3d 772, 789 (9th Cir. 2001).
Compliance with the safe harbor rule is mandatory.
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It does not appear that Defendants have satisfied the safe-harbor
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requirement. Therefore, Defendants’ motion for sanctions under Rule 11 is denied.
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III. CONCLUSION
For the reasons discussed above, NuVasive’s motion for an amended jury
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instruction [Doc. 167] is DENIED.
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IT IS SO ORDERED.
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Dated: September 24, 2015
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13cv2077 BTM(RBB)
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