Dewhurst et al v. Century Aluminum Company et al
Filing
168
MEMORANDUM OPINION AND ORDER denying 155 MOTION for Award of Sanctions for Plaintiffs' Spoliation of Relevant Evidence. Signed by Judge John T. Copenhaver, Jr. on 2/12/2014. (cc: attys; any unrepresented parties) (tmh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
HAROLD DEWHURST and DAVID BRYAN,
on behalf of themselves
and all other persons
similarly situated, and
UNITED STEEL, PAPER AND FORESTRY,
RUBBER, MANUFACTURING, ENERGY,
ALLIED INDUSTRIAL AND SERVICE
WORKERS INTERNATIONAL UNION,
Plaintiffs
v.
Civil Action No. 2:09-1546
CENTURY ALUMINUM COMPANY,
CENTURY ALUMINUM OF
WEST VIRGINIA, INC.,
CENTURY ALUMINUM MASTER WELFARE BENEFIT PLAN,
DOES 1 THROUGH 20,
Defendants
MEMORANDUM OPINION AND ORDER
Pending is the motion filed October 7, 2013, by
defendants’ Century Aluminum Company, Century Aluminum Master
Welfare Benefit Plan, and Century Aluminum of West Virginia,
Inc., for an award of sanctions for plaintiffs' spoliation of
relevant evidence (“motion for sanctions”).
Having received the
reply brief on November 20, 2013, the matter is ripe for
disposition.
I.
A.
Introduction
This class action involves Century’s putative
obligation to restore certain retiree healthcare benefits.
B.
Procedural History
On October 19, 2009, Century announced that it
intended to modify or terminate retiree health benefits for
certain former employees of its Ravenswood, West Virginia, plant
on January 1, 2010.
On November 2, 2009, Century instituted an
action in this district (“Century action”).
It named the United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union, AFL-CIO/CLC
(“USW”) and Local 5668.
It sought a declaratory judgment that
its decision to modify or terminate benefits did not violate
either the Employee Retirement Income Security Act (“ERISA”), 29
U.S.C. §§ 1132, et seq. or the Labor Management Relations Act
(“LMRA”), 29 U.S.C. §§ 185, et seq. (“LMRA”).
On November 13, 2009, the plaintiffs in this action,
the USW, David Bryan, and Harold Dewhurst, on behalf of
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approximately 437 retires, their eligible spouses, and
dependents (“plaintiffs”), instituted suit in the Southern
District of Ohio (“USW action”).
They alleged that Century’s
decision to modify or terminate benefits violated ERISA and the
LMRA.
The lawyers who represented the USW in both actions also
represented Local 5668 in the Century action.
On December 16, 2009, plaintiffs moved for a
preliminary injunction in the USW action.
They sought to enjoin
Century’s modification of retiree benefits.
They relied, in
part, on a sworn declaration by Elijah Morris, a Local 5668
official.
Mr. Morris recounted his recollection of what
transpired during collective bargaining negotiations at the
Ravenswood facility in 1994, 1999, and 2006.
He quoted from
alleged notes he took during those bargaining sessions.
He also
noted other pieces of extrinsic evidence, including alleged
email exchanges between Local 5668 and Century.
On December 23, 2009, the USW action was transferred
to the undersigned and consolidated with the Century action.
In
their January 29, 2010, reply respecting their preliminary
injunction motion, plaintiffs again relied in part on a
supplementary declaration by Mr. Morris.
Mr. Morris disputed
the relevance of certain evidence cited by Century, noting that
he had “searched [Local 5668’s] files” for certain documents.
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Inasmuch as the factual and legal issues in both
actions were essentially identical, on June 24, 2010, the court
dismissed the Century action for “efficiency and simplicity of
proceeding with one instead of two civil actions,” and held
entry of judgment in the Century action in abeyance, pending the
final adjudication of the USW action.
On that same date, Local
5668 ceased to be a party.
On June 24, 2010, the court denied the retirees'
request for a preliminary injunction.
On June 30, 2010, the
retirees noticed an appeal of the June 24, 2010, order.
On
August 24, 2011, the court of appeals affirmed, with the
appellate mandate following on September 13, 2011.
Following the filing of plaintiffs' First and Second
Amended Complaints on October 19 and December 29, 2011,
respectively, and the entry of a scheduling order on December
29, 2011, the court, on April 23, 2012, granted the parties'
joint motion to stay the case pending a ruling on the as-thenyet unfiled Joint Motion for Final Approval of Class Action
Settlement Agreement.
The settlement negotiations anticipated
to lead to that document apparently stalled later in the summer,
and evaporated entirely in the fall, on dates unknown.
Throughout those negotiations, Century apparently insisted that
Local 5668, by then a non-party, assent to the settlement terms.
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On June 26, 2012, the retirees filed their Third Amended
On December 19, 2012, the court denied Century’s
Complaint.
motion to dismiss the Third Amended Complaint.
The court set a
September 6, 2013, discovery deadline, which was subsequently
extended to October 4, 2013.
During the discovery period,
certain document retention matters arose relating to Local 5668.
Those matters are discussed more fully below.
C.
Document Retention Issues Relating to Local 5668
Shortly after the Century Action was filed, counsel
for the USW and Local 5668 asked Mr. Morris to gather helpful
evidence that might be found in Local 5668’s records.
Those
efforts had borne some fruit already, in light of the
aforementioned assistance that Mr. Morris offered by declaration
during the preliminary injunction proceedings.
Plaintiffs are additionally expected to rely upon, at
the dispositive motions stage of the case and perhaps at trial,
certain disclosed documents and deposition testimony from Local
5668, Mr. Morris, and other Local 5668 officers.
Century,
however, now asserts that neither plaintiffs nor their counsel
took steps to preserve relevant documents in the possession of
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Local 5668 or Mr. Morris at any time after the Century action
was instituted.
For example, Jason Miller, President of Local 5668,
testified that, prior to receiving a subpoena from Century on
June 21, 2013, there were no steps taken to preserve
conventional or electronically stored documents at Local 5668 at
any time after the Century action was filed.
On September 9, 2013, Century learned additional
information during Mr. Morris’ deposition.
They assert Mr.
Morris claimed that he could not recall whether counsel for the
plaintiffs issued him a document preservation directive at the
outset of the Century action.
They learned as well that
relevant Local 5668 documents had been inadvertently destroyed.
For example, Mr. Morris testified that, at some point
after filing of the two actions, all of the electronic mail that
he had sent from his official union electronic mail account on
his union-provided computer was lost, including correspondence
with USW counsel.
Mr. Morris additionally testified that other
Local 5668 officials took notes during the relevant bargaining
sessions but that a search was not done to locate those
documents until 2013.
bargaining notes.
No one was able to locate those
Century asserts that there is a strong
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likelihood that those notes were lost after the litigation
commenced, along with other bargaining documents given “the
paucity of other bargaining documents produced by the Local in
response to Defendants’ subpoena for relevant documents . . . .”
(Defs.’ Mem. in Supp. at 9).
Century accuses plaintiffs of “gross negligence” for
failing to preserve the aforementioned items.
Supp. at 2).
(Defs.’ Mem. in
Century moves the court to preclude plaintiffs
from using during dispositive motions briefing or trial any of
the following: (1) documentary evidence and accompanying
testimony provided by Local 5668 or any of its officers, and (2)
documentary evidence or testimony provided by the USW regarding
collective bargaining negotiations or related meetings between
it, Local 5668, and Century.
Century additionally seeks an
award of attorney fees expended to pursue this matter.
II.
A.
Governing Standard and Analysis
Our court of appeals recently encapsulated the
familiar standard governing spoliation claims in Turner v.
United States, 736 F.3d 274 (4th Cir. 2013):
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A party seeking sanctions based on the spoliation of
evidence must establish, inter alia, that the alleged
spoliator had a duty to preserve material evidence.
This duty arises “not only during litigation but also
extends to that period before the litigation when a
party reasonably should know that the evidence may be
relevant to anticipated litigation.” Generally, it is
the filing of a lawsuit that triggers the duty to
preserve evidence. Moreover, spoliation does not
result merely from the “negligent loss or destruction
of evidence.” Rather, the alleged destroyer must have
known that the evidence was relevant to some issue in
the anticipated case, and thereafter willfully engaged
in conduct resulting in the evidence's loss or
destruction. Although the conduct must be
intentional, the party seeking sanctions need not
prove bad faith.
Id. at 282.
Century asserts that plaintiffs were grossly negligent
in not securing the documentary and electronic evidence set out
above.
It asserts as follows:
As noted above, Morris has been gathering evidence
under the direction of Plaintiffs’ counsel since the
inception of the suit, and has filed two sworn
declarations in support of Plaintiffs’ PI Motion
relying upon and quoting select documents in his or
the Local’s possession. Despite the Local and Morris
playing an integral role in Plaintiffs’ case since the
earliest stages of this litigation, Plaintiffs took no
discernible steps to preserve evidence in the Local’s
or Morris’ possession as to the instant case, all the
while relying on materials provided by the Local and
Morris in support of their claims. In short,
Plaintiffs showed an utter disregard for its document
preservation obligations.
(Defs.’ Mem. in Supp. at 12).
The plaintiffs seem to admit they
lacked the most basic of record retention policies.
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They
emphasize, however, the severity of the sanction sought by
Century with reference to the actual parties in the case:
Defendants seek to preclude Plaintiffs from offering
any evidence from Local 5668, its officers, or Morris
regarding any fact in this case and any evidence from
USW regarding 40 years of collective bargaining, or
meetings between USW, Local 5668 and CAWV. Preclusion
of this evidence would assure that only Defendants’
evidence regarding 40 years of negotiations and
bargaining history would be considered by this Court
in determining whether the medical benefits of the
Plaintiff Retirees and the certified class are vested.
(Pls.’ Resp. at 1-2).
mitigation.
They also note circumstances in
First, Local 5668 is a small labor association.
It
lacked studied document retention policies in 2009 and suffered
staffing setbacks when Century closed its facility in February
2009.
The only fulltime positions on that date were President,
Grievance Chair, and an office secretary.
and email products are outmoded.
The computer system
Local 5668 treated the notes
taken by its officials during bargaining sessions as the
officials’ notes and did not require that they be provided to or
copied for Local 5668.
Second, Local 5668 appears to have been diligent in
trying to gather up relevant documents once litigation
commenced.
For example, Mr. Miller helped search Local 5668’s
files in response to Century’s 2013 subpoena.
He testified that
(1) there are multiple file locations at the union hall, (2)
Local 5668 has accumulated many documents related to collective
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bargaining with Century back to the early 1970s, (3) as of June
2013, the bargaining materials included approximately 12 feet of
binders and other materials standing up vertically on two
bookshelves on one side of the copier room and approximately 4
medium-sized boxes stacked on top of file cabinets on the other
side of the copier room, all of which were searched for
responsive documents which were then produced.
Counsel for the
plaintiffs assisted in this effort.
Third, there appears to be no way for anyone to
determine whether documents that cannot now be found were lost
in the years prior to or following 2009.
For example, Kevin
Gaul, who became the Grievance Chair on May 1, 2012, discovered
in June 2013 that there were no emails in the “sent” box of the
Grievance Chair’s email account from earlier than January 18,
2012.
Fourth, while there were tens of thousands of pages of
bargaining materials personally reviewed by counsel, plaintiffs
assert that only a fraction were responsive to the documents
request.
The court has considered these mitigating factors
among others, along with the concerns expressed by Century.
It
is noteworthy that none of the existing plaintiffs shoulder any
blame for the negligence of Local 5668.
5668 is an autonomous organization.
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Additionally, Local
It elects its own officers
and sets its own policies.
While it was a party to this case at
one time, it is no longer so and was never a party plaintiff.
Additionally, as noted, no one apparently knows when the subject
records were destroyed.
That fact alone presents a considerable
hurdle for Century to overcome as it advocates some of the
harshest of sanctions available to the court.
Based upon the foregoing discussion, the court ORDERS
that the motion for sanctions be, and hereby is, denied.
The Clerk is directed to forward copies of this
written opinion and order to all counsel of record and any
unrepresented parties.
DATED: February 12, 2014
John T. Copenhaver, Jr.
United States District Judge
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