CANNELLA et al v. WATCHDOG et al
ORDER THAT PLAINTIFFS MOTION FOR SANCTIONS BASED ON SPOILATION OF EVIDENCE IS GRANTED IN PART AND DENIED IN PART; ETC.. SIGNED BY HONORABLE J. CURTIS JOYNER ON 4/3/14. 4/3/14 ENTERED AND E-MAILED.(jl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FIRST SENIOR FINANCIAL GROUP :
LLC, PHILLIP J. CANNELLA, III :
AND JOANN SMALL,
“WATCHDOG,” AND JOHN DOE
MEMORANDUM AND ORDER
Before the Court are Plaintiff’s Motion for Sanctions Based
on Defendant Watchdog’s Spoliation of Evidence (Doc. No. 134) and
Defendant Watchdog’s Response in Opposition thereto (Doc. No.
138); Plaintiffs’ (Doc. No. 153) and Defendant Watchdog’s (Doc.
No. 154) Supplemental Briefs; as well as Defendant’s Response to
Plaintiffs’ Supplemental Brief (Doc. No. 158). For the following
reasons, it is hereby ORDERED that the Motion for Sanctions is
GRANTED in part and DENIED in part. An Order follows.
Defendant Krista Brennan (“Brennan”) is the creator of
websites, including truthaboutcannella.com and
truthaboutcannella.net, which contain information portraying the
business and ethical practices of Plaintiffs First Senior
Financial Group LLC, Phillip J. Cannella III, and Joann Small in
a severely negative light. Brennan, or “Watchdog” as she refers
to herself on these websites, insists that the information on her
sites is true. Plaintiffs, however, argue that it is disparaging
Brennan’s educational background consists of bachelor’s
degrees in communication studies and business, a master’s degree
in organizational and industrial psychology, and significant
credits toward a master of science in information science
focusing on the management of information technology. (Tr. 1556). She has held jobs for which she acquired domain names for
clients and designed websites for them. (Tr. 157). Among other
positions she has held, Brennan worked for 4 years as the
Director of Technology for the Vanguard Charitable Endowment
Program, and worked as a Senior Executive at Stellar Financial,
Inc., where she was responsible for management of the company’s
financial software product, software development, and technology
operations, among other things. (Pl. Ex. L, Resume of Krista
Cantrell Brennan). Although she knows how to install most kinds
of software, Brennan asserts that she does not know how to
install an operating system on a computer. (Tr. 156). Brennan
once applied for a position as Chief Operating Officer with
Plaintiff First Senior Financial Group prior to the commencement
of litigation, but was not given an offer of employment. (Tr.
157-8, 160.) At present, Brennan has a diagnosis of an advanced
form of secondary progressive multiple sclerosis (“MS”) with
associated loss of sensory ability and mobility, which impedes
her ability to walk, read, or type; she also suffers from
nystagmus, which makes it difficult for her to read or use a
computer. (Tr. 166-67).
In March 2012, Plaintiffs commenced suit in this Court
alleging defamation, tortious interference with business
relationships, civil conspiracy, and violations of the Lanham
Act. See (First Amended Complaint, Doc. No. 9). In August 2012,
the Court granted Plaintiff’s Motion for Alternative Service,
allowing service by e-mail upon Defendant Watchdog. (Order of
August 29, 2012, Doc. No. 17). Default Judgment for failure to
appear, plead, or otherwise defend the action was entered against
Watchdog in November 2012. (Doc. No. 56). Brennan maintains that
she did not learn of the lawsuit until December 2012. (Def. Resp.
Ex. A ¶ 3).
In February 2013, Brennan first appeared in the present
action by filing a Motion to Vacate the Default Judgment that had
been entered against her. (Doc. No. 82). The Court scheduled an
evidentiary hearing to determine whether Brennan had received
notice of the action and whether service had been effectuated by
e-mail. (Doc. No. 89). On June 13, 2013, the Court ordered the
[I]dentify any and all electronic
devices from which she accessed her email
accounts email@example.com and
firstname.lastname@example.org and any
documents or records related to the website
truthaboutcannella.net. Defendant Watchdog
shall then submit these devices and computers
for a forensic examination. Defendant
Watchdog may select the expert used for the
forensic examination, and the Plaintiffs
shall pay for the forensic examination. (Doc.
No. 97 ¶ 1).
On June 25, Brennan identified the computer of her mother
Rose Ann Cantrell (the “target computer”) to be the only readilyidentifiable and accessible computer from which she accessed
these email accounts.1 (Defendant Watchdog’s Identification of
Computers, Pl. Ex. D). Plaintiffs’ counsel did not respond to
Brennan’s identification of computers at that time. (Doc. No.
112-1 at ¶¶ 13-15).
The target computer at Ms. Cantrell’s residence, 160
Whispering Oaks Drive in West Chester, PA, was always located in
the kitchen area. (Tr. 31, 70, 153). Ms. Cantrell used the target
computer on a daily basis to check her bank statements. (Tr. 35,
70, 154). While living with her mother, Brennan had frequent and
easy access to the target computer as well. (Tr. 154). At the
time, she lived on the ground floor of the house, the same floor
Brennan also identified several other computers, including computers
owned by Immaculata University, a computer she sold at a yard sale in April
2012, computers belonging to personal friends, a laptop she borrowed from a
man in Texas, a computer belonging to Steve Watts in Texas, a computer
belonging to stranger in Panera Bread, and publicly-available computers at a
K-Mart store. (Pl. Ex. D). None of these are accessible at present.
where the computer was located. Id. On two occasions with unknown
dates, Ms. Cantrell asked individual contractors to make repairs
to her computer; she also asked her son-in-law, David Borda, to
help her access her email at times. (Tr. 41-44). Brennan was not
always at Ms. Cantrell’s house while she was living there; she
took three trips away of approximately 4-6 weeks, including in
the summer of 2012 and the winter of 2012-2013. (Tr. 185).
On June 28, 2013, Brennan moved out of her mother’s house in
West Chester and flew to Texas. (Tr. 188; Def. Ex. A-2). She did
not alert her counsel to the fact that she was leaving
Pennsylvania. (Tr. 176). Two Facebook posts on June 28 and 29
indicated her location as Houston, Texas. (Pl. Ex. 3,4).
On July 1, Plaintiff’s newly-appointed counsel contacted
Brennan’s counsel to discuss the status of the forensic
examination, and Brennan’s counsel reminded him of the previous
identification of computers. (Doc. No. 112-1 at ¶ 15-16).
On July 3, 2013, counsel for the parties conducted a
telephone conference outside of the Court’s presence. Counsel for
Brennan, Mr. Cohen, suggested the retention of IT Acceleration
(“ITA”), a local IT firm, to complete the forensic examination.
(Affidavit of Sidney S. Liebesman, Pl. Ex. F at ¶ 5). Brennan’s
counsel also suggested that a device called “EZ Imager” be used.
Id. ¶ 6; Tr. 175. This device could be used by sending a USB
drive with imaging software to the house of Ms. Cantrell, where
it could be connected to the target computer, directed to run the
imaging software, and then returned to ITA. (Tr. 83-86, 112-113,
186-7). While counsel for Plaintiffs affirms that Brennan’s
counsel suggested that EZ Imager be used by Brennan without Ms.
Cantrell’s knowledge, (Liebesman Aff. ¶ 6), Brennan testified
that she had understood that an ITA employee would use the device
(Tr. 175-76). Brennan preferred the EZ Imager method of
submitting to forensic examination because Ms. Cantrell
vehemently opposed the release of her computer to the custody of
forensic examiners. (Tr. 187). Counsel for Plaintiffs strongly
opposed the use of EZ Imager, citing concerns for Ms. Cantrell’s
privacy interests if the exam were completed without her
knowledge and a desire to observe strict compliance with the
Court order requiring that the target computer itself be produced
to a forensic examiner. (Liebesman Aff. ¶ 7). In the expert
opinion of Gary Hunt, a Forensic Analyst at ITA, the use of EZ
Imager is a typical, authenticated practice which is forensically
equivalent to having a technician examine a hard drive in person.
(Tr. 86, 113).
On July 7, 2013, Ms. Cantrell “checked in” on Facebook at a
Starbucks; her location was posted as Katy, Texas. (Def. Ex. A5).
In early August 2013, Ms. Cantrell was hospitalized after
suffering a heart attack. (Def. Ex. E). When Plaintiffs sought to
subpoena Ms. Cantrell to produce the target computer (Doc. No.
107), Brennan objected and requested that the Court vacate its
June 13, 2013 Order. See (Doc. No. 112). On August 6, the Court
ordered that Rose Ann Cantrell’s computer be produced for
forensic examination. (Doc. No. 115). When the computer was still
not delivered, the Court verbally reiterated its order in an
August 20 conference call with the parties. (Doc. No. 119). The
computer was produced to ITA the next day by David Borda, Ms.
Cantrell’s son-in-law. (Tr. 69-70). It was the results of this
forensic examination which led Plaintiffs to file the present
Motion for Sanctions Based Upon Spoliation of Evidence.
Gary Hunt, the ITA Forensic Analyst, obtained a mirror image
of the target computer, returned the target computer to Ms.
Cantrell, and then performed a forensic examination of the mirror
image. (Declaration of Gary Hunt, Pl. Ex. K at ¶ 2-3). He found
no user-created documents on the computer. Id. ¶ 8. He also
discovered that on July 7, 2013, Windows 7 had been reinstalled
on the computer. Id. ¶ 9. The only current user profile on the
target computer, “roseanncantrell,” was created at the same time.
Id. ¶ 10. It was not possible to determine who had completed the
reinstallation, nor who was logged on to the computer prior to
the reinstallation. Id. ¶ 11; (Tr. 97-98, 120). Mr. Hunt also
concluded that two different types of data-wiping software,
Tracks Eraser Pro and CCleaner, had been installed and used on
the target computer. (Hunt Decl. ¶ 12). Though it is not possible
to determine when exactly these two types of software were used,
they were used prior to July 7, 2013 by the user profile “Rose”
which no longer resides on the computer. Id. ¶ 12-13, 16. It was
also not possible for Mr. Hunt to determine who had employed
these two types of software, and what, if any, data was deleted.
In addition to their data-wiping capabilities, Tracks Eraser Pro
and CCleaner have functions related to system optimization. Id.
¶ 14. While CCleaner is sometimes pre-installed on computers,
Tracks Eraser Pro must typically be installed on a computer after
it is purchased. (Tr. 93). Mr. Hunt testified that the use of
both programs on one computer is “fairly rare” in his experience.
Lastly, Mr. Hunt conducted searches for certain keywords
provided to him by counsel for the parties. Nearly all of the
Plaintiffs’ search terms hit on words in the target computer.
(Pl. Ex. I). The search term hits were either system-related
files or fragments from the unallocated space, which is disk
space not being used by active files which can be over-written by
the computer. (Hunt Decl. ¶ 8). Files or fragments are moved to a
computer’s unallocated space when files are deleted. (Tr. 126).
Additionally, fragments may end up in the unallocated space as a
result of clearing one’s browser history or having temporary
files running on the computer. Id. Mr. Hunt advised counsel that,
at times, some keyword searches may result in “false positive”
hits. (Tr. 117-118). For example, a positive hit for the word
“complaint” may not refer to a complaint in a legal action. (Tr.
118). However, uncommon words such as “metaphysicalgrrl” and
“Watchdog” are less likely to produce false positives. (Tr. 137).
On January 27, 2014, Plaintiffs withdrew their opposition to
Brennan’s Motion to Vacate Default Judgment. See (Doc. No. 146).
The Court subsequently vacated the default. (Doc. No 147).
The Court held an evidentiary hearing on Plaintiff’s Motion
for Sanctions Based on Defendant Watchdog’s Spoliation of
Evidence on February 18, 2014. The Court heard testimony from
Rose Ann Cantrell, David Borda, Krista Brennan, and Gary Hunt.
Spoliation usually refers to the alteration or destruction
of evidence. Bull v. United Parcel Serv., 665 F.3d 68, 73 (3d
Cir. 2012). However, “the trier of fact generally may receive the
fact of the document’s nonproduction or destruction as evidence
that the party that has prevented production did so out of the
well-founded fear that the contents would harm him.” Id. (citing
Gumbs v. International Harvester, Inc., 718 F.2d 88, 96 (3d Cir.
1983)). Thus, because a party’s failure to produce a document can
have the same practical effect as destroying it, failure to
produce evidence can, in certain circumstances, be characterized
as spoliation. Id.
Spoliation occurs when (a) the evidence was in the party’s
control, (b) the evidence is relevant to the claims or defenses
in the case, (c) there has been actual suppression or witholding
of evidence, and (d) the duty to preserve the evidence was
reasonably foreseeable to the party. Id. (citing Brewer v. Quaker
State Oil Ref. Corp., 72 F.3d 326, 334 (3d Cir. 1995)). The party
asserting that spoliation of evidence has taken place carries the
burden of proof. Stream Cos., Inc. v. Windward Adver., 2013 WL
376121 at *2 (E.D. Pa. 2013); Tabon v. University of Pennsylvania
Health System, 10-cv-2781, 2012 WL 2953216 at *2 (E.D. Pa. 2012).
The Court concludes that these factors are met in the
present case, and imposes appropriate sanctions.
To succeed on its motion, Plaintiffs must prove that Brennan
had control over the target computer. Whether the alleged
spoliator’s control is exclusive is considered in the spoliation
analysis. See, e.g., Patel v. Havana Bar, Rest. & Catering, 2011
WL 6029983 at *9 (E.D. Pa. Dec. 5, 2011); Kvitka v. Puffin Co.,
LLC, 2009 WL 385582 at *7 (M.D. Pa. Feb. 13, 2009). However,
exclusivity is not necessary for a finding of control. Indeed,
courts have found that control may exist even if a third party
physically possesses the evidence at issue. See, e.g., Klett v.
Green, 3:10-cv-02091, 2012 WL 2476368 (D. N.J. June 27, 2012);
Haskins v. First American Title Ins. Co., Civ. 10-5044, 2012 WL
5183908 at *5 (D.N.J. Oct. 18, 2012)(“documents may be within
[defendant’s] control even if it does not have physical
possession of the documents.”); Pennsylvania Trust Co. v. Dorel
Juvenile Grp., Inc., Civ.A. 07-4029, 2011 WL 2789336 (E.D. Pa.
July 18, 2011); Indem. Ins. Co. Of N. Am. v. Electrolux Home
Products, Inc., Civ.A. 10-4113, 2011 WL 6099362 (E.D. Pa. Dec. 7,
2011), aff’d 520 Fed. App’x 107 (3d Cir. 2013); Centimark Corp.
v. Pegnato & Pegnato Roof Mgmt., Inc., Civ. A. 05-708, 2008 WL
1995305 (W.D. Pa. May 6, 2008).
Defendant Brennan argues that the target computer was
frequently outside of Brennan’s exclusive control, that it
belonged to her mother, and that Brennan was frequently away from
the computer on trips taken out of state. Brennan also avers that
“Ms. Cantrell, other family members, and even an independent
contractor accessed the Target Computer at various times.” (Def.
Response at 18). Critically, Brennan argues that “[w]hatever nonexclusive control Watchdog exercised over the Target Computer
departed entirely as she departed her mother’s house on June 28,
2013" to go to Houston, Texas. Id. Plaintiffs respond that
Brennan lived in the house with the computer, had easy access to
it, and in fact proposed on July 3, 2013, to opposing counsel
that she could perform the mirror imaging of the computer using
EZ Imager without Ms. Cantrell’s knowledge. (Pl. Motion at 15).
Based on testimony adduced at the evidentiary hearing, the
Court credits Ms. Cantrell’s testimony that the computer was used
almost exclusively, with very few exceptions, by Ms. Cantrell and
by Brennan. The Court gives more weight to Ms. Cantrell’s inperson testimony, which was adamant on this point, than to her
declaration stating that guests to Ms. Cantrell’s home frequently
used the computer as well.2 See (Tr. 41-42, 59-60). The Court
also finds that this testimony accords with that of Brennan, who
testified that she resided on the first floor of her mother’s
home, on the same floor as the computer, and was able to use the
computer without restrictions. (Tr. 154). However, Brennan was
not always at home when she lived with her mother. (Tr. 185). The
Court also finds that, on July 3, 2013, four days before Windows
was reinstalled on the target computer, Defendant Watchdog’s
counsel suggested to Plaintiffs’ counsel that Brennan use EZ
Imager to obtain an image of the target computer herself. See
(Pl. Suppl. Brief, Doc. No. 153, at Ex. B).
The Court further finds that Brennan took a plane to Texas
on June 28, 2013, (Tr. 188; Def. Ex. A-2),3 and that her Facebook
In fact, Ms. Cantrell testified that she did not read her Declaration
before signing it, despite her counsel’s urging to do so. She signed the
Declaration because she believed that if she did so “everything would be okay”
regarding the litigation. (Tr. 60). Though the Court finds Ms. Cantrell’s
testimony on the whole to display some lapses in memory, especially about the
dates of certain events, her testimony regarding who used the computer was
clear, consistent, and resolute.
The Court gives less weight to Watchdog’s testimony that she was in
Texas continuously from June 28, 2013 until the day before the hearing, for
the following reasons. First, the Court has been presented with Watchdog’s
plane ticket to Texas but not copies of ticket(s) back to Philadelphia.
Second, Watchdog’s counsel suggested to opposing counsel on July 3 rd that
Brennan could herself obtain a mirror image of the target computer using EZ
posts on June 28, June 29, and July 7 indicated her location as
Texas. (Pl. Ex. A-3, A-4, A-5).
After reviewing the evidence before it, the Court finds that
the target computer was sufficiently within Brennan’s control to
meet the first element of the spoliation test. While she lived at
her mother’s house, Brennan unquestionably had sufficient
physical access to and unfettered use of the computer to exercise
control over it.
Further, Brennan’s legal control of the target computer was
not dissolved by her decision to depart for Texas. Lack of
physical possession does not necessarily negate a party’s control
over evidence. In Indem. Ins. Co. of N. Am. v. Electrolux Home
Products, Inc., Civ. A. 10-4113, 2011 WL 6099362 (E.D. Pa. Dec.
7, 2011), the Plaintiff’s experts assessed fire damage after a
fire had occurred in a school. Id. at *2. The experts preserved
some evidence, but left behind a small metal can on the scene.
Id. at *5. Later, the can was lost by the school, which was
repairing the fire-damaged area. Id. at *3. The district court
reasoned that “[t]he evidence here was within Plaintiff’s
Imager. Third, the Court found Watchdog’s testimony on the whole to be less
credible than that of other witnesses due to her bias and admission that she
represents to her web followers that her MS medicine costs over $60,000 per
year but makes no mention of the fact that she pays only $260 out of pocket
(Tr. 180-81). Additionally, Brennan’s facebook posts that “[t]hese particular
lawyers, attorneys, are very harassing. They are stupid too. I’m way smarter
than these people” (Tr. 183) evidence a certain disregard for the seriousness
of the claims against her.
However, as explained in further detail below, Brennan’s physical
location on the date of July 7, 2013, is not a dispositive factor in the
Court’s analysis of her legal control of the target computer.
control. It is true that the School District, not Plaintiff, was
responsible for the school grounds. Nevertheless . . .
Plaintiff’s experts had the authority and ability to control
potential evidence and remove it from the scene of the fire.” Id.
at *8. In affirming the district court, the Third Circuit
explained that “despite the fact that the experts should have
known that the metal can and its contents would be discoverable
and likely destroyed if not preserved at that time, they decided
not to preserve the metal can . . . Therefore, the District Court
did not abuse its discretion in determining that spoliation
occurred.” 520 Fed. App’x 107, 111 (3d Cir. 2013). Thus, the
district court and the Third Circuit agreed that the Plaintiffs’
legal control over the metal can did not conclude when Plaintiffs
relinquished physical control of it.
Likewise, in Klett v. Green, 3:10-cv-02091, 2012 WL 2476368
(D.N.J. June 27, 2012), the Plaintiff’s car was impounded by New
Jersey State Police after an accident. Id. at *10. It was later
destroyed while outside of Plaintiff’s physical possession. Id.
at *9. The Court held that, even though the vehicle was impounded
and not at plaintiff’s house, “there is no evidence that
Plaintiff relinquished ownership, and thus control, of the
vehicle prior to filing suit . . . As a result, the vehicle was
under Plaintiff’s control, insofar as she had access to and
ownership of it.” Id. (citing Zaloga v. Borough of Moosic, No.
3:10-cv-2604, 2012 WL 1899665 at *2 (M.D. Pa. 2012)(“Control is
defined as the legal right to obtain the documents required on
demand.”)) As in Indem. Ins. Co. of N. Am., the court in Klett
found that ownership of, access to, and responsibility for an
item determined control, not physical possession.
Similarly here, Brennan’s unfettered access to, use of, and
responsibility for the target computer define her control. Though
Ms. Cantrell, not Brennan, was the ultimate owner of the target
computer, Brennan was made responsible by court order for turning
over the target computer for a forensic exam and had at her
disposal the means of doing so, or could have petitioned the
Court for assistance. Brennan’s voluntary relinquishment of
physical access to the target computer does not allow her to
argue that she did not have legal control when the computer’s
reinstallation of Windows 7 occurred.
In sum, the Court concludes that Brennan had control of the
evidence at issue, the information on the target computer.
Relevance to Claims or Defenses
At the time that the reinstallation of Windows 7 occurred on
July 7, 2013, at least some of the documents or files on the
target computer were unequivocally relevant to the present suit.
By that time, Brennan had admitted to using the target computer
in connection with the websites central to the present case.
(Third Declaration of Krista Brennan, Pl. Ex. B). Unlike the
other computers Brennan used in connection with her websites, the
target computer was the only one to which she still had access
during the summer of 2013, further increasing its standing in
this case. See id. Moreover, Brennan argued in her pending Motion
to Vacate Default Judgment (Doc. No. 82) that she never received
e-mail service of the First Amended Complaint and Summons. By
raising this defense to default judgment, Brennan reinforced the
relevancy of the information on the target computer, including
any emails, files, or other data regarding the lawsuit.
Though Brennan’s counsel argued during the evidentiary
hearing that any relevance to the Motion to Vacate Default
Judgment was mooted by the Plaintiffs’ withdrawal of their
opposition to this motion, the spoliation inquiry must focus on
the claims and defenses in the case at the time of spoliation,
not at this later date.
The fragments of data found in the unallocated space of the
target computer further bolster the Court’s conclusion that it
contained relevant evidence. Prior to the forensic examination,
counsel for the parties provided 59 search terms to Mr. Hunt.
(Tr. 87). The search terms returned numerous hits, including 196
hits for “Cannella,” 13 hits for “Metaphysicalgrrl,” and 2,749
hits for “Watchdog,” (Pl. Ex. I), terms unlikely to produce false
positive hits. (Tr. 136-37).
Though these terms may have
appeared on the computer as a result of filings associated with
the present litigation, these hits are nonetheless strongly
suggestive of the presence of relevant evidence. Moreover, during
the evidentiary hearing, counsel for Plaintiffs demonstrated that
ITA found in the unallocated space of the target computer a
paragraph mentioning Mr. Cannella which contained the same exact
language, word-for-word, as a posting that later appeared on
truthaboutcannella.com. (Tr. 198-202). This longer fragment, even
more so than the hits for search terms conducted by ITA,
demonstrates that the hard drive of the computer did contain
relevant evidence. At minimum, it shows that Brennan accessed the
truthaboutcannella.com website from the computer, and later
cleared her browser history, moving the language into the
unallocated space. In either case, it is highly likely that the
information stored on the target computer was relevant to claims
or defenses of the parties.
The Court finds that the second element of the spoliation
test is met.
Actual Suppression or Withholding
The party asserting spoliation must prove that evidence was
actually suppressed or withheld. See Bull, 665 F.3d at 77. The
Third Circuit has recently clarified that “[a] finding of bad
faith is pivotal to a spoliation determination.” Id. at 79.
Ordinary negligence does not suffice to establish spoliation.
Bozic v. City of Washington, Pa., 912 F.Supp.2d 257, 270 (W.D.
Pa. 2012)(collecting cases). The party asserting spoliation must
prove that evidence was intentionally withheld, altered, or
destroyed. Bull, 665 F.3d at 79. Thus, no unfavorable inference
of spoliation arises if the evidence was lost, accidentally
destroyed, or where the failure to produce it is otherwise
properly accounted for. Id. (citing Brewer, 72 F.3d at 334).
After the Third Circuit’s decision in Bull, courts within
this Circuit have sought to distinguish conduct constituting bad
faith from conduct equivalent to mere accidental destruction or
loss of evidence. See Bozic v. City of Washington, Pa., 912 F.
Supp. 257, 269 (W.D. Pa. 2012)(“[w]hat remains to be determined
after Bull is the requisite mental state or level of scienter for
Bull “bad faith” . . . .). Typically, the destruction of evidence
by an automated system pursuant to an even-handed policy, such as
the re-recording of videotapes in the usual course of business,
does not constitute bad faith. See, e.g., U.S. v. Nelson, 481
Fed. Appx. 40, 42 (3d Cir. 2012). In these situations, the lack
of bad faith stems in part from the fact that the party
controlling the evidence had no reason to believe that it would
be required in litigation. See, e.g., id; McCann v. Kennedy
University Hosp., Inc., Civ. 12-1535, 2014 WL 282693 at *7
(D.N.J. Jan. 24, 2014)(“the Court finds that prior to the
videotapes being taped over, it was not ‘objectively foreseeable’
to defendant that the videotapes from the emergency room lobby
were relevant to plaintiff’s claim . . .”); Tabon v. University
of Pennsylvania Health System, 10-cv-2781, 2012 WL 2953216 at *45 (E.D. Pa. July 20, 2012)(defendants destroyed records as part
of routine protocol, prior to the records being requested by
plaintiff); Heck v. Memorial Health Systems, 1:10-cv-1675, 2012
WL 3597175 at *2 (M.D. Pa. Aug. 20, 2012). Similarly, imperfect
measures that fail to preserve some evidence from destruction by
an automated system do not establish bad faith if active efforts
were made to preserve other evidence. See Victor v. Lawler, 3:08cv-1374, 2012 WL 1642603 at *105-6 (M.D. Pa. May 10, 2012),
aff’d, 520 Fed. Appx. 103 (3d Cir. 2013).
On the other hand, “a reckless disregard for the
consequences of an intentional and conscious destruction of
evidence, previously specially preserved for purposes of
subsequent litigation, at a time when litigation is necessarily
foreseeable,” may constitute bad faith. Bozic, 912 F. Supp. at
269; see also Capogrosso v. 30 River Court East Urban Renewal
Co., 482 Fed. Appx. 677, 682 (3d Cir. 2012), cert. denied, – U.S.
–, 133 S.Ct. 544, 184 L.Ed.2d 341 (2012)(finding “no reason” to
justify licensed attorney’s disposal of evidence she knew “would
be essential in her lawsuit”). Additionally, a party’s
obfuscation or lying can show that she is acting in bad faith.
See Bull, 665 F.3d at 77.
There is no question that actual suppression of evidence has
been effectuated by someone in this case. On July 7, 2013, an
individual reinstalled Windows 7 on the target computer, thus
wiping clean the information that previously existed on the
computer, discarding the previous installation, and creating a
new user profile. (Tr. 96-98). Such a reinstallation would not
occur spontaneously without significant input by a user of the
computer (Tr. 96-97); by its very nature, such action requires
human intent, and typically, though not necessarily, specific
intent by a person with an IT background. See id. The Court
credits Gary Hunt’s testimony that, with the reinstallation,
“everything was just started new.” Id. In addition, Mr. Hunt
discovered the installation and use prior to July 7th of CCleaner
and Tracks Eraser Pro. (Tr. 98-99). Mr. Hunt testified that at
least some files were deleted using Tracks Eraser Pro, and that
finding both of these tools on one computer is “fairly rare” in
his experience. (Tr. 125, 131-32). Although Tracks Eraser Pro and
CCleaner have benign uses such as system optimization, (Tr. 93,
127, 128), the Court finds innocent explanations of their use to
be tenuous in the face of the fact that they were both used, and
Windows 7 was later reinstalled as well.
The determinative question in this fourth factor, however,
is whether Plaintiffs have proven that Brennan’s actions, taken
as a whole, display bad faith. As required by the Third Circuit,
the Court must place Brennan’s behavior on the spectrum between
misrepresentation, bad faith, and intentional or knowing behavior
on the one hand; and inadvertence, accidental loss, and properlyexplained withholding of evidence on the other. See Bull, 665
F.3d at 77, 79.
The Court concludes that Brennan acted intentionally and in
bad faith. First, Brennan knew with absolute certainty that the
Plaintiffs sought the information on the target computer and that
the Court had mandated its submission to a forensic exam. Cf.
Bull, 665 F.3d at 77 (“there is not one instance in which we can
verify that [plaintiff] knew that [defendant] wanted the original
notes.”) Thus, Brennan was on notice that preservation of the
data on the target computer was of the utmost importance. Second,
after identifying computers from which she accessed her websites,
Brennan abruptly departed Pennsylvania for Texas. Despite the
impending production of the target computer, there is no evidence
that Brennan took any measures to safeguard its data in her
absence: she did not communicate to Ms. Cantrell the high
importance of preservation of the computer in its current form,
she did not notify her counsel of her departure, and she took no
other measures to ascertain that the computer would be secure or
available for examination in her absence. Third, Brennan’s lack
of communication with her counsel caused him to misrepresent on
July 3rd that Brennan could obtain a mirror image using EZ Imager,
while in fact Brennan maintains that she was in Texas at the
time. Fourth, Brennan resisted examination of the target computer
until the Court reiterated, in written form on August 6th and
verbally on August 20th, that the computer must be produced. The
computer was eventually turned over for forensic examination not
by Brennan or her counsel, but by Ms. Cantrell’s son-in-law David
Borda. Meanwhile, Windows 7 was mysteriously reinstalled on the
target computer on July 7th and Tracks Eraser Pro and CCleaner
were employed at an unascertainable earlier date.
The Court concludes that, on balance, Brennan did not act in
good faith to preserve the data on the target computer and
produce it in a timely fashion. Nor was the evidence on the
computer subjected to a risk of destruction due to her simple
negligence or inadvertence. Instead, Brennan acted knowingly and
intentionally in resisting production of the target computer for
a period of over two months. She acted recklessly by departing
for Texas without notification or care for compliance with the
Court’s order. Even if Brennan’s counsel was forced to wait for
periods of time on Plaintiffs’ newly-appointed attorneys before
initiating the exam, Brennan has not properly accounted for how
Windows 7 could be reinstalled on her watch if she had been
making good faith efforts to preserve the computer’s data. When
looked at in its totality, Brennan’s course of conduct rises
above mere negligence and inadvertence to effectuating
actual suppression of evidence.
Duty to Preserve
At the time that Windows 7 was reinstalled on the target
computer Brennan had a duty to preserve the computer and any or
all files contained on it in connection with this lawsuit. The
duty to preserve evidence begins when litigation is pending or
reasonably foreseeable. Micron Technology, Inc., v. Rambus Inc.,
645 F.3d 1311, 1320 (Fed. Cir. 2011). The standard is objective,
asking not whether the party in fact foresaw litigation, but
whether a reasonable party in the same circumstances would have
reasonably foreseen litigation. Id. The question of reasonable
foreseeability is a “flexible fact-specific standard that allows
a district court to exercise the discretion necessary to confront
the myriad factual situations inherent in the spoliation
inquiry.” Bull, 665 F.3d at 78 (citing Micron Technology, Inc.,
645 F.3d at 1320). The fact that a party does not have complete
control of evidence does not relieve her duty to preserve the
evidence, or at least notify opposing counsel of any risk of
destruction. See, e.g., Silvestri v. General Motors Corp., 271
F.3d 583, 591 (4th Cir. 2001)(“[i]f a party cannot fulfill this
duty to preserve because he does not own or control the evidence,
he still has an obligation to give the opposing party notice of
access to the evidence or of the possible destruction of the
evidence if the party anticipates litigation involving that
evidence.”); Centimark Corp. v. Pegnato & Pegnato Roof
Management, Inc., Civ.A. 05-708, 2008 WL 1995305 at *6 (W.D. Pa.
At the very latest, Brennan’s duty to preserve information
in connection with this litigation arose in December 2012, when
she asserts that she first became aware of the suit against her.
The Court’s June 13, 2013 Order directing that Brennan identify
all electronic devices she used unequivocally put Brennan on
notice that the target computer was evidence that had to be
preserved: “Defendant Watchdog shall then submit these devices
and computers for a forensic examination.” (Doc. No. 97 at ¶ 1).
Thus, when Windows 7 was reinstalled on the target computer on
July 7, 2013, Brennan was under a duty to preserve evidence on
the target computer.
The determination of an appropriate sanction for spoliation,
if any, rests with the discretion of the trial court. Zubulake v.
UBS Warburg LLC, 229 F.R.D. 422, 430 (S.D.N.Y. 2004). The court
has authority to sanction litigants from the joint power of the
Federal Rules of Civil Procedure and the court’s inherent powers.
Id. Potential sanctions for spoliation include dismissal of a
claim or granting judgment in favor of the prejudiced party,
suppression of evidence, an adverse inference, fines, and
attorneys’ fees and costs. Mosaid Technologies Inc. v. Samsung
Electronics Co., Ltd., 348 F.Supp.2d 332, 335 (D.N.J. 2004).
Dismissal or suppression of evidence are the most drastic
The key considerations in determining an appropriate
sanction should be (1) the degree of fault of the party who
altered or destroyed the evidence; (2) the degree of prejudice
suffered by the opposing party; (3) whether there is a lesser
sanction that will avoid substantial unfairness to the opposing
party and, where the offending party is seriously at fault, will
serve to deter such conduct by others in the future. Schmid v.
Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir. 1994).
Plaintiffs have asked that the following sanctions be
imposed by the Court: that judgment be entered against Brennan;
that Brennan and Mr. Cohen be ordered to pay attorneys’ fees and
costs of the independent expert and fees and costs associated
with various motions;4 that the Court order that a copy of the
mirror image of the target computer be produced to Plaintiffs’
counsel at Brennan’s expense; and that Brennan’s counsel, Mr.
Cohen, be sanctioned for “intentionally misl[eading] the court
about a key conference call among counsel in violation of Fed. R.
Civ. P. 11(b)(4) and Pennsylvania Rule of Professional Conduct
3.3 (Candor Toward the Tribunal), and violat[ing] Rule 11(b)(3)
These include the motion to vacate default judgment, motion to modify
the June 13 Order, and all fees and costs associated with the motion for
sanctions for spoliation of evidence. (Pl. Motion For Sanctions at 23).
Plaintiffs also requested the Court to deny Brennan’s motion to vacate
default judgment; however, Plaintiffs have since withdrawn their opposition to
this motion and the Court has vacated the default judgment. (Doc. No. 147).
by improperly presenting an affidavit that contained false, selfserving statements.” (Pl. Supp. Brief at 7). Brennan opposes
these sanctions and argues that, even assuming spoliation
occurred, plaintiffs cannot show prejudice because they justified
their need for the data of the target computer based on their
opposition to Brennan’s Motion to Vacate Default, (Def. Supp.
Brief at 4-5), to which they later withdrew their opposition. See
(Doc. No. 147).
At the outset, the Court notes that the prejudice to
Plaintiffs resulting from the spoliation appears minimal. The
original impetus for obtaining the forensic examination of the
target computer was to discern whether Brennan had received
alternative service of process and thus inform the Court’s
analysis of the Motion to Vacate Default. Prior to the spoliation
hearing, Plaintiffs withdrew their opposition to Brennan’s Motion
to Vacate Default Judgment and the Court subsequently vacated the
Default. Since the vacatur, Plaintiffs have not presented any
arguments as to how the spoliation has prejudiced the ultimate
merits of their case.5
The Court thus finds only the following sanctions to be
Plaintiffs argued prior to the hearing that “Brennan’s spoliation
causes incalculable prejudice not only with respect to both the motion to
vacate and the ultimate merits in this case, but also to a related case
pending in the Montgomery Court of Common Pleas.” (Pl. Mot. at 3). Any
prejudice to the Motion to Vacate is now moot, and the Court of Common Pleas
case is not relevant in this Court’s analysis. Plaintiffs do not further show,
in either their Motion for Sanctions (Doc. No. 134) or in their supplemental
brief (Doc. No. 153), how the ultimate merits of their case are prejudiced.
appropriate: Brennan will pay the costs of the ITA independent
expert Gary Hunt and attorneys’ fees associated with Plaintiffs’
Motion for Sanctions Based On Spoliation of Evidence (Doc. No.
134). This sanction will compensate Plaintiffs for the money and
effort expended on determining whether Brennan received
alternative service of process and those relating to the present
The Court denies, at this time,6 Plaintiffs’ request for a
mirror image of the target computer to be produced to Plaintiffs’
counsel at Brennan’s expense. Plaintiffs argue that they “need
the copy of the mirror image for the continued prosecution of
this action and the action pending in the Montgomery County Court
of Common Pleas to the extent that the bits of data in the
unallocated space provide additional information.” (Pl. Mot. at
23). The Court will not order a mirror image so that Plaintiffs
may use it in another court case. Moreover, Plaintiffs have not
explained what sort of “additional information” expected to be on
the target computer would aid in their prosecution of this case,
and how it would do so. Instead, the fact that the unallocated
space may contain privileged communications between Brennan and
counsel (Def. Resp. at 37) or privileged information belonging to
Ms. Cantrell cautions against the production of a mirror image of
the target computer at the present time.
The Court may entertain the request for production of a mirror image
of the target computer as a separate motion, if Plaintiffs wish to pursue it.
The Court will not order Brennan to pay the costs associated
with non-spoliation motions given that Plaintiffs abruptly
dropped their opposition to Brennan’s Motion to Vacate Default
Judgment after extensive briefing by both parties.
Nor will the Court enter judgment against Brennan because
the evidence before the Court does not rise to the nefarious
level typically needed to impose such a severe sanction. See,
e.g., U.S. v. $8,221,887.16 in U.S. Currency, 330 F.3d 141, 161
(3d Cir. 2003)(“the sanction of dismissal is disfavored absent
the most egregious circumstances.”); Micron Technology, Inc. v.
Rambus Inc., 917 F.Supp.2d 300, 324 (D. Del. 2013); Medina ex
rel. Beteta v. Rose Art Industries, Inc., Civ. A. 02-cv-1864,
2003 WL 1877563 at *1 (E.D. Pa. Feb. 28, 2003)(citing Baliotis v.
McNeil, 870 F.Supp. 1285, 1289 (M.D. Pa. 1994)(“[a] sanction that
has the drastic result of judgment being entered against the
party who has lost or destroyed evidence must be viewed as a last
resort, to be imposed only if no alternative remedy by way of a
lesser, but equally efficient sanction is available.”)).
The Court will not impose a spoliation inference on Brennan
because Plaintiffs’ suggested inference is no longer relevant to
the present proceedings. A spoliation inference typically allows
a jury to assume that the destroyed evidence would have been
unfavorable to the position of the offending party. Williams v.
Klem, 3:07-cv-1044, 2010 WL 3812350 at *2 (M.D. Pa. Sep. 22,
2010)(citing Schmid, 13 F.3d at 78); see also See Medina, 2003 WL
1877563 at *1. Plaintiffs requested an inference that Brennan
received alternative service of process on August 30, 2012, and
had appropriate notice of the litigation. (Pl. Mot. at 1, 22).
Such an inference would have no bearing on the merits of this
case given the vacatur of default.
The Court will also not sanction Mr. Cohen for professional
misconduct. Though Ms. Cantrell did not read her affidavit before
signing it, Mr. Cohen did ask her to read it very closely. (Tr.
60). Moreover, at the evidentiary hearing, Mr. Cohen did not
dispute that he suggested that Brennan use EZ Imager to obtain a
copy of the target computer. There is evidence that EZ Imager is
a viable, legally-valid alternative to delivering the target
computer to ITA. (Def. Ex. C). And despite Plaintiffs’
characterizations to the contrary, Mr. Hunt testified that he
could not remember whether Mr. Cohen had suggested that Brennan
would be the one to use the USB Drive to obtain a mirror image
without Ms. Cantrell’s knowledge. See (Tr. 84-85). The Court does
not believe that the evidence proves that Mr. Cohen has engaged
in sanctionable conduct.
For the foregoing reasons, the Court GRANTS in part and
DENIES in part Plaintiffs’ Motion for Sanctions Based on
Spoliation of Evidence.
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FIRST SENIOR FINANCIAL GROUP :
LLC, PHILLIP J. CANNELLA, III :
AND JOANN SMALL,
“WATCHDOG,” AND JOHN DOE
AND NOW, this 3rd, day of April, 2014, upon consideration of
Plaintiffs’ Motion for Sanctions Based on Spoliation of Evidence
(Doc. No. 134) and Defendant’s Response in Opposition thereto
(Doc. No. 138); Plaintiffs’ (Doc. No. 153) and Defendant’s (Doc.
No. 154) Supplemental Briefs; as well as Defendant’s Response to
Plaintiff’s Supplemental Brief (Doc. No. 158), it is hereby
ORDERED as follows:
(1) Krista C. Brennan shall pay all fees associated with IT
Acceleration’s work performed in connection with the forensic
examination of the Target Computer.7 Because Plaintiffs have
already paid $850.00 to IT Acceleration, Krista C. Brennan shall
reimburse Plaintiffs for those fees. The sum of $5,665.26, which
constitutes the remaining fees, shall be the responsibility of
Krista C. Brennan. To the extent that the Court previously
The “Target Computer” is the HP Pavilion Notebook Computer in the
possession of Rose Ann Cantrell. See (Order of August 6, 2013, Doc. No. 115).
ordered Plaintiffs to pay for the forensic examination, such
portion of those orders are hereby rescinded.
(2) Krista C. Brennan shall pay for all of Plaintiffs’ fees
and costs associated with Plaintiffs’ Motion for Sanctions (Doc.
No. 134), Supplemental Brief in Further Support thereof (Doc. No.
153), as well as costs and fees associated with the Evidentiary
Hearing held on February 18, 2014 (Doc. Nos. 149, 150).
(3) Plaintiffs are MANDATED to submit, within fourteen (14)
days of the date of entry of this Order, an affidavit and/or
other materials detailing their costs and fees associated with
(2) above. Plaintiffs’ submission of costs and fees should
contain, at minimum, a description of work completed, time
expended on various tasks, and the hourly rate charged.
Defendant Brennan shall have 14 days after submission of
this affidavit to file a response, if any.
BY THE COURT:
/s/ J. Curtis Joyner
J. CURTIS JOYNER, J.
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