Zamora v. Stellar Management Group, Inc.
ORDER(1) denying 148 motion for sanctions; (2) amending order 257 regarding access to DeLeon's cell phone, (3) permitting access to DeLeon's second cell phone, and (4) granting 149 motion for reconsideration regarding Plaintiff' s current work cell phone. (Plaintiff and QSI Defendants are to notify the Court by 4/19/2017 of an agreed to special master regarding production of Plaintiff's work cell phone.) Signed on 4/11/2017 by District Judge Roseann Ketchmark. (Russell, Elizabeth)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
STELLAR MANAGEMENT GROUP,
INC., D/B/A QUALITY SERVICE
INTEGRITY; AND STELLAR
MANAGEMENT GROUP III, INC., AND
THE VINCIT COMPANY, LLC,
Case No. 3:16-05028-CV-RK
ORDER (1) DENYING MOTION FOR SANCTIONS (DOC. 148), (2) AMENDING
ORDER (DOC. 257), (3) PERMITTING ACCESS TO DELEON’S SECOND PHONE,
AND (4) GRANTING MOTION TO RECONSIDER ORDER (DOC. 149)
Before the Court is Defendants Stellar Management Group, Inc. d/b/a Quality Service
Integrity and Stellar Management Group III, Inc. (“QSI Defendants”)’s Motion for Sanctions for
Failure to Preserve Electronically Stored Information. (Doc. 148.) Plaintiff filed opposing
suggestions (doc. 170), QSI Defendants filed reply suggestions (docs. 192), and a hearing on the
motion for sanctions was then held on April 7, 2017. Also pending is QSI Defendants’ Motion
to Reconsider Order Granting Plaintiff’s Motion to Clarify (doc. 149), which has been fully
briefed (docs. 170,2 192). For the reasons below, the Court now DENIES the motion for
sanctions, and orders additional discovery by AMENDING its Order (doc. 257) that precluded
access to Plaintiff’s current work phone, permitting access to non-party witness David DeLeon’s
second phone, and GRANTING the motion to reconsider (doc. 149).
Plaintiff brings this diversity action against QSI Defendants for wrongful retaliation and
discharge for reporting wrongdoing under Fleshner v. Pepose Vision Institute, P.C., 304 S.W.3d
81 (Mo. 2010) (en banc). Plaintiff filed this action on March 9, 2016. (Doc. 1)
QSI Defendants’ request that Plaintiff produce for copying and inspection any cell phone
used by Plaintiff to contact any current or former employee and request that Plaintiff execute a
Plaintiff’s doc. 170 addresses both the motion for sanctions and motion to reconsider.
cell phone authorization, among other issues, were the subject of the fifth discovery dispute
telephone conference in this case. Following the call, on January 6, 2017, the Court ordered (a)
Plaintiff to produce her personal cell phones for copying to preserve a mirror image, but not to be
disclosed until further order; (b) Plaintiff to request a call/text log from her cell phone provider,
and identify any numbers she knows to belong to any current or former employee of QSI
Defendants. (Doc. 113 at Part.I.3) Plaintiff then filed a motion to clarify and/or modify this
order, stating among other things, that she primarily uses the phone for business work purposes,
that the phone contains non-public information regarding her employer, and that she does not
recall any communication on the phone that is related to this lawsuit. (Doc. 123.) The Court
granted Plaintiff’s motion and clarified that the January 6, 2017 Order did not extend to the work
cell phone given to Plaintiff by her current employer (“Simmons phone”). (Doc. 125.)
QSI Defendants’ motion to reconsider seeks the production of the Simmons phone to
determine if she has used the phone to contact individuals for reasons related to this lawsuit other
than business reasons based on Plaintiff’s history of using work phone for personal use and the
fact that all other personal phones have been lost or discarded. (Doc. 149.)
QSI Defendants allege in their Motion for Sanctions that Plaintiff deleted text messages
and destroyed phones after filing suit. (Doc. 148 at 4.) QSI Defendants also contend Plaintiff
was aware that QSI Defendants had requested her correspondence with their current or former
employees of QSI Defendants yet she deliberately deleted a Facebook message Plaintiff sent to
QSI Defendants’ employee Erika Ortiz. (Id.) QSI Defendants maintain Plaintiff was aware of
her obligation to preserve evidence because she took steps to preserve other evidence she
believed was favorable to her case. (Id.) QSI Defendants are seeking dismissal, or a finding
presuming that the lost information was unfavorable to Plaintiff, and a jury instruction directing
for the presumption that the information was unfavorable to Plaintiff. (Id. at 19.)
In response, Plaintiff argues that neither did she intentionally destroy evidence nor has
QSI Defendants been prejudiced to establish that sanctions are warranted. (Doc. 170 at 1-3.)
Plaintiff concedes her failure to preserve a single Facebook message and all communications
with non-party witnesses Joel Ortiz and David DeLeon, but argues she did not intend to destroy
evidence. (Id. at 2.) Plaintiff maintains she has cooperated in obtaining phone records related to
the messages and that any negative light cast on her by the messages is not indicative of a motive
to destroy, but instead, it is consistent with her feelings as a result of QSI Defendants subjecting
her to mistreatment and retaliation. (Id. at 2.) Plaintiff asserts QSI Defendants have not been
prejudiced because responsive correspondence identified by QSI Defendants is available to QSI
Defendants from their current or former employees, namely, Joel Ortiz (current employee),
David DeLeon (former employee), and Erika Ortiz (former employee). (Id. at 1-3.)
In reply, QSI Defendants states that Plaintiff does not dispute that she failed to properly
preserve six or seven phones, including that she intentionally conducted a factory reset of her
QSI work phone. QSI Defendants state Plaintiff also does not dispute she deleted the Facebook
message. QSI Defendants point out that at the same time, Plaintiff preserved information she
believed was favorable to her claim. (Doc. 192 at 1-2.) QSI Defendants contend it is unknown
what other messages Plaintiff failed to preserve and she cannot be relied on to disclose all
relevant communications unless those communications have already been discovered by QSI
Defendants. (Id. at 2.)
Federal Rule of Civil Procedure 37(e) provides a federal court with authority to sanction
a party for failing to preserve electronically stored information. Rule 37(e), in its entirety,
provides as follows:
If electronically stored information that should have been preserved in the
anticipation or conduct of litigation is lost because a party failed to take
reasonable steps to preserve it, and it cannot be restored or replaced through
additional discovery, the court:
(1) upon finding prejudice to another party from loss of the information,
may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive
another party of the information’s use in the litigation may:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information
was unfavorable to the party; or
(C) dismiss the action or enter a default judgment.
QSI Defendants, as the party seeking the sanction, bear the burden of showing the
requisite intent and prejudice. See Johnson v. Ready Mixed Concrete Co., 424 F.3d 806, 811
(8th Cir. 2005) (internal quotation marks omitted). Whether a court imposes discovery sanctions
is a discretionary decision, and the scope of that discretion narrows as the severity of the sanction
increases. Bergstrom v. Frascone, 744 F.3d 571, 576 (8th Cir. 2014).
The Eighth Circuit has elaborated that a district court must make the following two
findings before an adverse inference instruction for spoliation is warranted: “(1) there must be a
finding of intentional destruction indicating a desire to suppress the truth, and (2) there must be a
finding of prejudice to the opposing party.” Lincoln Composites, Inc. v. Firetrace USA, LLC,
825 F.3d 453, 463 (8th Cir. 2016). “Intent is rarely proved by direct evidence, and a district
court has substantial leeway to determine intent through consideration of circumstantial
evidence, witness credibility, motives of the witnesses in a particular case, and other factors.”
Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1035 (8th Cir. 2007) (quoting Morris v. Union
Pac. R.R., 373 F.3d 896, 902 (8th Cir. 2004)).
The obligation to preserve evidence begins when a party knows or should have known
that the evidence is relevant to future or current litigation. E*Trade Secs. LLC v. Deutsche Bank
AG, 230 F.R.D. 582, 588 (D. Minn. 2005) (imposing sanctions where company failed to issue
litigation hold on emails in reliance on its backup tapes, which it then destroyed pursuant to
retention policy). An explicit finding of bad faith is not required to impose sanctions on a party
that destroys specifically-requested evidence after litigation has commenced.
Magner, 619 F.3d 823, 845 (8th Cir. 2010) (citation omitted).
Application of Standard
The sources of evidence at issue here that were not preserved include (1) a Facebook
message, (2) the work cell phone issued to Plaintiff by QSI Defendants (“QSI phone”), and (3)
five or six personal phones utilized by Plaintiff during the relevant time frame.
First, it is also not disputed that while discovery was occurring in this case, Plaintiff
deleted a Facebook message she sent to QSI Defendants former employee, Erika Ortiz. (Doc.
148-5, Plt’s Dep. at p. 184.)
Second, after Plaintiff’s employment ended, she deleted everything on her QSI phone by
conducting a factory reset before returning the phone to QSI. (Doc. 148-5, Plt’s Dep. at p. 158,
177.) Plaintiff also testified that she had her QSI phone set to auto delete text messages, another
reason why information was deleted from her QSI phone. (Id. at p. 159-60.) By contrast, it is
undisputed that before her last day with QSI Defendants and before turning in her QSI phone,
Plaintiff took photos of certain QSI documents and of text messages between herself and Erika
Ortiz to preserve the information. (See Doc. 148-5, Plt’s Dep. at p. 163-64, 169, 181-83; doc.
148-6 (Ex. 30 in Plaintiff’s deposition).) As a result, the only information from Plaintiff’s QSI
phone produced in discovery is this information that Plaintiff specifically preserved.
Third, Plaintiff submitted a declaration (doc. 123 at 4-6) and status reports (docs. 124,
127) with the Court that explain the background of her personal cell phone use in 2016 as
follows: (1) she was unable to locate the “713 phone” (for which multiple handsets have been
assigned) despite testifying during her December deposition that she believed she had it; (2) the
“8899 phone” that she has used at times belonging to her husband was produced to a third-party
vendor for imaging but the phone only has a couple of weeks of stored data because her husband
had discarded the previous SIM card sometime around new year’s eve after it stopped working;
and (3) Plaintiff understands the “2556” phone that she has used at times belonging to her
husband was discarded by her husband after it stopped working.
The Court is unwilling at this point to base a finding of prejudice on speculation about the
content of material that is not in the record, when at least some of that absent material is
available through other discovery. In particular, prior to the pending Motion for Sanctions, the
Court denied QSI Defendants’ access to Plaintiff’s current work cell phone (doc. 125) and
allowed limited access by search terms to non-party witness David DeLeon’s personal cell phone
(doc. 257). The Court finds sufficient justification in the current record to allow QSI Defendants
access to this additional discovery.
Because a finding of prejudice is premature, the Court need not determine the issue of
intent—whether the conduct was the result of bad intent or accidental oversight. While the Court
is somewhat sympathetic to a lay witness in contrast to a corporation subject to a formal
litigation hold, the Court observes that the record might permit a reasonable inference that
Plaintiff was aware of the importance of preserving evidence when she reset her company phone
belonging to QSI Defendants and deleted the Facebook message. It is clear that Plaintiff’s
memory cannot be relied upon with respect to her communications with former or current QSI
Defendants’ employees. Moreover, under the circumstances, Plaintiff’s continued use of the
auto-delete feature on all of her phones despite the discovery rulings for the production of
information contained on phones shows a low regard for the necessity of preserving evidence in
Based on the briefs, argument, live witness testimony, and exhibits introduced at the
hearing, the Court finds that while Plaintiff cannot be relied on to disclose all relevant
communications, QSI Defendants’ request for dismissal, or a finding presuming that the lost
information was unfavorable to Plaintiff, and a jury instruction directing for the presumption that
the information was unfavorable to Plaintiff are premature. However, at this juncture, the Court
finds additional discovery is warranted. Accordingly, the Court orders as follows:
QSI Defendants’ motion for sanctions for failure to preserve electronically-stored
information (doc. 148) is DENIED.
The Court AMENDS its March 28, 2017 Order (doc. 257) and GRANTS in full
QSI Defendants’ Motion to Access David DeLeon’s Phone (doc. 240) in which QSI Defendants
seek full and unrestricted access to the mirror image copy of DeLeon’s cell phone. The mirror
image copy of DeLeon’s cell phone, previously provided to the Court in camera pursuant to the
Court’s January 6, 2017 Order (doc. 113), will be made accessible to QSI Defendants at the
Court’s Southern Division Courthouse as of Thursday, April 13, 2017 (The Clerk’s Office is
open from 9:00 a.m. to 4:30 p.m.).
QSI Defendants may subpoena DeLeon to produce his second cell phone, and any
passcode information necessary for access to the phone, to the third-party vendor previously
utilized by QSI Defendants in this case for mirror imaging. Costs of production of DeLeon’s
second phone will be borne by QSI Defendants.
QSI Defendants’ Motion to Reconsider Order Granting Plaintiff’s Motion to
Clarify (doc. 149) seeking the production of the Simmons phone is GRANTED.
a. Plaintiff is directed to produce a text/call log identifying activity on the Simmons
b. Pursuant to the following protocol, the Court will order Plaintiff to produce her
Plaintiff, at her cost, will produce for copying and inspection her Simmons
phone to a third-party vendor for the purpose of obtaining a mirror image.
The Court will appoint a special master to review the mirror image and
identify any relevant communications, including but not limited to, texts
On or before Wednesday, April 19, 2017, Plaintiff and QSI Defendants are
to notify the Court of an agreed to special master and third-party vendor or
alternatively, Plaintiff and QSI Defendants can each submit a list of two
proposed special masters and two third-party vendors for the Court’s
After the special master has identified relevant communication, those
communications will be provided to Plaintiff’s employer (Simmons) for
the purpose of conducting a review for any protected business information
and to Plaintiff for the purpose of conducting a review for any attorneyclient communications. Within one week of the communications being
provided to Simmons and Plaintiff, both are to notify the special master of
any objections to the production of communications on these grounds.
Thereafter, the special master will provide the Court with a report
recommending his or her rulings on any objections lodged by Simmons
and/or Plaintiff and the Court will determine the information to be
produced to QSI Defendants.
Fifty percent of the cost of the special master is to be borne by Plaintiff
and fifty percent of the cost is to be borne by QSI Defendants.
IT IS SO ORDERED.
s/ Roseann A. Ketchmark
ROSEANN A. KETCHMARK, JUDGE
UNITED STATES DISTRICT COURT
DATED: April 11, 2017
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