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Wakefield v. Visalus, Inc.

United States District Court, D. Oregon

March 27, 2019

LORI WAKEFIELD, individually and on behalf of a class of others similarly situated, Plaintiffs,
VISALUS, INC., Defendant.

          Scott F. Kocher and Stephen J. Voorhees, Forum Law Group, Benjamin H. Richman, Rafey S. Balabanian, Eve-Lynn J. Rapp, J. Aaron Lawson, and Lily E. Hough, Edelson PC, Gregory S. Dovel, Simon Franzinim, and Jonas Jacobson, Dovel & Luner LLP, of Attorneys for Plaintiff and the Certified Class.

          Joshua M. Sasaki and Nicholas H. Pyle, Miller Nash Graham & Dunn LLP, John M. O'Neal and Zachary S. Foster, Quarles & Brady LLP, of Attorneys for Defendant.


          Michael H. Simon, United States District Judge.

         Trial is set to begin in this class action lawsuit on April 10, 2019. On February 25, 2019, Plaintiff filed a motion for sanctions, alleging spoliation of electronically stored information. Specifically, Plaintiff asks the Court to instruct the jury that Defendant deleted its call records, which Plaintiff contends would have provided conclusive proof as to at least one of the elements of Plaintiff's class claim. Because Plaintiff waited more than two years after learning about the destruction of the call records to bring her motion for sanctions, Plaintiff's motion is DENIED.


         Plaintiff Lori Wakefield brings two causes of action against Defendant ViSalus, Inc. The first is an individual claim under the general private right of action enforcement provision of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(c)(5), alleging that Defendant violated the TCPA's implementing regulations, specifically 47 C.F.R. § 64.1200(c), by initiating more than one telemarketing call within a 12-month period to Plaintiff's landline telephone number that had been registered with the National Do Not Call Registry for at least 30 days. Plaintiff's second claim is a class claim, alleging that Defendant violated § 227(b)(1)(A)(iii) and (b)(1)(B)[1] of the TCPA by improperly using an artificial or prerecorded voice in telemarketing calls to people's residential landline or cellular telephones without their prior express consent.

         Plaintiff filed this putative class action lawsuit in October 2015. The next day, Plaintiff's counsel sent a letter to Defendant to provide notice of Defendant's “instant and continuing duty to preserve all documents, records, data, information, and other tangible evidence.” ECF 298-1 (Letter from Benjamin H. Richman to ViSalus, Inc.).

         Defendant used an automated telephone system called the “Progressive Outreach Manager” (“POM”). Plaintiff contends that the POM system generated and maintained historical records of each calling campaign and each call attempted by Defendant and could generate “Campaign Detail” reports showing the name and telephone number of the contact, the time the call was placed, and the outcome of the call, including whether the call was answered by a live person or an answering machine. This information is all vital to Plaintiff's claims.

         The POM system's electronically stored information about a calling campaign, however, was programmed to be automatically deleted after three months. Even though Defendant was on notice since October 2015 that it had a duty to preserve the information contained in the POM system, Plaintiff claims that Defendant failed to suspend the automatic deletion of the call records stored in the POM system. Plaintiff points to statements made by Scott Gidley, Defendant's corporate representative and compliance analyst, during his deposition on December 12, 2016 as evidence that these call records had been automatically deleted. Plaintiff asserts that Defendant could have programmed the POM system to maintain the call records forever or Defendant could have programmed the POM system to back up the call data so that it would be preserved. Defendant disputes Plaintiff's characterization of how the POM system stored data. Defendant contends that, although the POM system is capable of generating call reports if configured correctly, Defendant never programmed the POM system to generate and store the call records that Plaintiff claims existed and therefore Defendant never possessed the data that Plaintiff claims Defendant deleted.

         For many of the calls, however, Defendant maintained contact information spreadsheets containing all of the information also available in the POM system. Thus, for many calls, the lost data from the POM system was replaced through other sources. Plaintiff contends that there are 1.7 million calls that were not recorded on the contact information spreadsheets and were deleted from the POM system. Plaintiff asserts that the lost call records would have provided Plaintiff with conclusive proof that 350, 228 of those calls delivered a message using an artificial or prerecorded voice to class members. Plaintiff now asks the Court to order appropriate relief to cure the prejudice caused to Plaintiff by Defendant's destruction of the call records, including instructing the jury that Defendant deleted call records and that the lost information was unfavorable to Defendant.


         A. Spoliation Generally and Appropriate Relief

         “Spoliation is the destruction or significant alteration of evidence, or failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation.” Gregory P. Joseph, Sanctions: The Federal Law of Litigation Abuse, § 52 (5th ed. 2013) (quoting Allstate v. Hamilton Beach/Proctor Silex, Inc., 473 F.3d 450, 457 (2d Cir. 2007)). Rule 37(e)(2) of the Federal Rules of Civil Procedure permits the Court to impose sanctions “if electronically stored information that should have been preserved . . . is lost because a party failed to take reasonable steps to preserve it.” Rule 37(e) directs that “the initial focus should be on whether the lost information can be restored or replaced through additional discovery.” Fed.R.Civ.P. 37(e) advisory committee's note to 2015 amendment. If, however, the information lost cannot be restored or replaced by additional discovery, and the lost information causes a party prejudice, Rule 37(e)(1) allows a court to employ measures “no greater than necessary to cure the prejudice.” This rule applies even if the electronically stored information was destroyed inadvertently, rather than intentionally. The Court may impose additional sanctions, including instructing the jury that it may or must presume that the lost information was unfavorable to the party who lost it, if the Court finds that a party intentionally spoliated evidence. Fed.R.Civ.P. 37(e)(2).

         Defendant urges the Court to reject Plaintiff's motion for several reasons. First, Defendant argues that Plaintiff's motion is untimely because Plaintiff first learned that the POM system automatically deletes call records every three months in December 2016 but waited more than two years, until the eve of trial, to bring her motion. Second, Defendant argues that Plaintiff misunderstands the POM system configuration, and disputes that Defendant ever programmed the POM system to generate and store the reports in question. Third, Defendant rejects Plaintiff's calculations of how many of the 1.7 million lost calls actually played an artificial or ...

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