Kettler International, Inc. v. Starbucks Corporation
Filing
163
OPINION AND ORDER entered 4/13/15 and filed 4/14/15, DENYING Defendant Starbucks Corporation's 149 Motion to Certify Order for Immediate Appeal and For Stay Pending Appeal. On April 9, 2015, the Court heard oral arguments on the Motion at the Final Pretrial Conference. Ruling from the bench, the Court DENIED the Motion. The Court now issues this Opinion and Order explaining its reasoning. (See Opinion and Order for Specifics) (Signed by District Judge Henry C. Morgan, Jr on 4/13/15). Copies provided as directed 4/14/15. (ecav, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Norfolk Division
KETTLER INTERNATIONAL, INC.,
Plaintiff,
v>
Civil Action No. 2:14cvl89
STARBUCKS CORPORATION,
Defendant.
OPINION & ORDER
This matter is before the Court on Defendant Starbucks Corporation's ("Defendant" or
"Starbucks") Motion to Certify Order for Immediate Appeal and For Stay Pending Appeal
("Motion"). Doc. 149. On April 9, 2015, the Court heard oral arguments on the Motion at the
Final Pretrial Conference. Ruling from the bench, the Court DENIED the Motion. The Court
now issues this Opinion and Order explaining its reasoning.
I. BACKGROUND
A. Factual Background
This declaratory judgment action arises out ofallegedly defective patio furniture sold by
Plaintiff Kettler International Inc. ("Plaintiff or "Kettler") to Defendant. From approximately
2009 to 2013, Plaintiff began selling Carlo Model chairs ("Carlo chairs" or "chairs") to
Starbucks, its agents, and/or its contractors. Compl. at 1, 4. Over the course ofthis relationship,
Starbucks, its agents, and/or its contractors ultimately purchased approximately 13,870
individual Carlo chairs. Doc. 77 at 1. Of these 13,870 chairs, it was determined that 4,791
chairs were unaccounted for and had likely been destroyed in the ordinary course of prior store
renovations. Id at 29. Following a series of personal injury complaints involving the Carlo
chair between 2011 and 2013, Starbucks elected to remove the remaining chairs from its stores.
Doc. 43 at 3.
On February 17, 2014, Starbucks Legal and DAVACO, Inc. ("DAVACO") entered into a
contract for the removal and "recycling" of all Carlo chairs, Doc. 36, Ex. 5 at 2; Doc. 43, Ex. 1at
1, but Starbucks asked DAVACO to set aside and store a 200 chair sample. Doc. 43, Ex. 2 at 2.
In April 2014, Starbucks informed Kettler of its intent to initiate legal proceedings, Doc. 36, Ex.
1 at 9., and on May 2, 2014, Kettler responded by alerting Starbucks of its "obligation to
preserve every chair upon which a claim is being made." Doc. 36, Ex. 1 at 19 (emphasis in
original). Starbucks, however, "destroyed 1.584 chairs after KETTLER demanded Starbucks
preserve them and 489 chairs after KETTLER served this lawsuit on Starbucks." Doc. 44 at 1
(emphasis in original).
B. Procedural History
On May 2, 2014, Kettler filed its three-count Complaint, Doc. 1, and on October 29,
2014, Starbucks filed its Answer and Counterclaim. Doc. 31. Shortly thereafter, Plaintiff filed a
Motion for Sanctions requesting a limitation of Starbucks' claims to the 200 remaining sample
chairs. Doc. 35. At a hearing on the Motion for Sanctions, "the Court found that Starbucks'
conduct amounted to spoliation" because, "[a]fter anticipating litigation, Starbucks engaged in a
course of conduct that resulted in the destruction of over 7,000 chairs." Doc. 62 at 8. In a
subsequent Order, the Court granted the relief sought by Kettler in part, limiting the damages
Starbucks can recover in this matter to the 200 remaining sample chairs and one chair remaining
from the personal injury disputes. Doc. 145. Kettler's prayer for attorney fees and costs was
denied. Id.
Following entry ofthe Court's Order granting sanctions relief, Starbucks filed the present
Motion seeking certification ofthe Order for immediate appeal and a stay ofany pending legal
2
proceedings. Doc. 149. Starbucks claimed that in a "design defect case ... the question as to
whether the recycling of Carlo chairs by STARBUCKS warrants the ultimate sanction of
dismissal ofSTARBUCKS damage claims, except for the 200 chairs preserved as a sample, is a
controlling question of law." Doc. 150 at 5. Defendant bases this argument on the alleged
difference of opinion between the Court of Appeals for the Third Circuit's ruling in Schmid v.
Milwaukee Elec. Tool Corp., 13 F.3d 76 (3d Cir. 1994) and the Fourth Circuit's holding in
Silvestri v. General Motors Corp., 271 F.3d 583 (4th Cir. 2001). For the reasons set forth herein,
the Court FOUND that these cases were not factually analogous and do not differ in their
respective holdings.
II. LEGAL STANDARDS
Pursuant to Title 28, United States Code Section 1292(b),
When a district judge, in making in a civil action an order not otherwise
appealable under this section, shall be of the opinion that such order involves a
controlling question oflaw as to which there is substantial ground for difference
of opinion and that an immediate appeal from the order may materially advance
the ultimate termination of the litigation, he shall so state in writing in such order.
Provided, however. That application for an appeal hereunder shall not stay
proceedings in the district court unless the district judge or the Court of Appeals
or a judgethereof shall so order.
(emphasis added) (third emphasis in original). In the Fourth Circuit, as well as the Eastern
District of Virginia, it is well "settled that because ยง 1292(b) is contrary to the general rule that
appeals may be had only after a final judgment, it should be used sparingly and its requirements
must be strictly construed." Difelice v. U.S. Airways. Inc., 404 F. Supp. 2d 907, 908 (E.D. Va.
2005) (citing Mvles v. Laffitte. 881 F.2d 125, 127 (4th Cir. 1989)); see also LaFleur v. Dollar
Tree Stores. Inc., No. 2:12-cv-363, 2013 WL 150722, at *1 (E.D. Va. Oct. 16, 2013). "[T]he
Fourth Circuit has made clear that 'certainly the kind of question best adapted to discretionary
interlocutory review is a narrow question of pure law whose resolution will be completely
dispositive of the litigation, either as a legal or practical matter, whichever way it goes'." Id,
(quoting Fannin v. CSX Transp.. Inc.. No. 88-8120, 1989 WL 42583, at *5 (4th Cir. 1989)).
III. ANALYSIS
In Schmid. the plaintiff was injured when a circular saw manufactured by the defendant
"kicked back" without warning. 13 F.3d at 77. The defendant argued that when the plaintiffs
expert witness disassembled the saw to determine cause of injury and in the process certain
trapped particles were lost, when he reassembled the saw without the particles this amounted to
spoliation as the particle build-up may have caused the injury. 13 F.3d at 77-78. The court held
that "there was very little fault that could be laid at Dr. Bratspies's [the expert's] feet [and] very
little nonspeculative prejudice to the defendant." Id. at 81. Further, "[w]hen Dr. Bratspies
conducted his investigation, no suit had been filed and Schmid did not know whether he had a
basis for instituting suit." Id, The court held that, considering plaintiffs minimal level of fault,
the case could proceed because "[t]his is not a case in which the plaintiff contends that the
particular saw causing injuries was defectively manufactured; there is no claim that the saw had
a defect not shared by all saws of the same model;" accordingly, the defendant suffered little
prejudice. Id at 79.
Contrarily, the plaintiff in Silvestri alleged that the airbag in a General Motors vehicle he
was driving did not deploy properly when the plaintiff crashed into a utility pole. 271 F.3d at
585. After anticipating litigation, the plaintiff did not notify the defendant, General Motors, of
the claim such that it could investigate the allegations before the vehicle was spoliated. Id, The
Fourth Circuit upheld the district court's dismissal of the case because "General Motors was
'highly prejudiced'" when, without the car, it had no way of proving if the alleged defective
airbag failed or the speed of the car at the time of impact, matters central to its defense. Id, at
594-95. Unlike in Schmid. the court in this case also found that the spoliators conduct was not
4
accidental, but "either deliberate or negligent." Id, at 593. Schmid and Silvestri are not in
conflict. In each case the court utilized its discretion in applying a unique set of facts to its
circuit's respective legal standards governing spoliation. There is neither a controlling question
of law nor difference of opinion present.
In its Order granting sanctions relief, the Court tacitly acknowledged that the sanctions
requested by Kettler were severe and, if granted, would likely result in a de facto dismissal of the
case. Accordingly, the Court analyzed the facts under the Fourth Circuit's standards governing
the sanction of dismissal, applying the test as set forth in Silvestri and weighing all six factors
from United States v. Shaffer Equipment Co.. 11 F.3d 450, 462-63 (4th Cir. 1993). In applying
the facts to existing and non-conflicting Fourth Circuit law, the Court determined that Starbucks',
specifically Starbucks Legal's, significant degree of culpability, the prejudice suffered by Kettler
due to Starbucks' willful destruction of over ninety-nine (99) percent of the evidence, and
Starbucks' preservation of only an unrepresentative 200 chair sample, merited a limitation of the
damages Starbucks can recover to only the remaining chairs. Doc. 145 at 15. The Court's ruling
was fact specific, not a "question of pure law whose resolution" was "completely dispositive of
the litigation." Fannin, 1989 WL 42583, at *5.
IV. CONCLUSION
For the reasons set forth herein, the Court DENIED Defendant's Motion.
The Clerk is REQUESTED to send a copy of this Order to all counsel of record.
It is so ORDERED.
/s/
Henry Coke Morgan, Jr.
Senior United Slates District Judge
henry coke morgan, jr.
Senior united states district judge
Norfolk, Virginia
April 13 ,2015
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